DPW Ault Global Holdings Inc

On November 17, 2022, Circle 8 Newco LLC, a Delaware limited liability company (“Circle 8 Newco”), entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Circle 8 Crane Services LLC, a Delaware limited liability company (“Circle 8 Crane Services”) pursuant to which Circle 8 Newco agreed to purchase substantially all of the assets (the “Acquired Assets”) and assume certain specified liabilities of Circle 8 Crane Services. Circle 8 Newco is a wholly owned subsidiary of Circle 8 Holdco LLC, a Delaware limited liability company (“Circle 8 Holdco”). Circle 8 Holdco is a subsidiary of Ault Alliance, Inc., a Delaware corporation (“Ault Alliance”) which is a wholly owned subsidiary of BitNile Holdings, Inc., a Delaware corporation (the “Company”). Ault Alliance owns a controlling interest in Circle 8 Holdco and has made a capital commitment to Circle 8 Holdco in the amount of $11,400,000, to be funded immediately prior to the closing of the acquisition. Additionally, Ault Alliance owns a controlling interest in Circle 8 Crane GP LLC, a Delaware limited liability (“Circle 8 Crane GP”), and has made a capital commitment of $650,000 to Circle 8 Crane GP, to be funded immediately prior to the closing of the acquisition. Circle 8 Crane GP has been organized to acquire Class B Units issued by Circle 8 Holdco in exchange for a capital commitment of $1,000,000 to Circle 8 Holdco, to be funded immediately prior to the closing of the acquisition.

As consideration for the acquisition of the Acquired Assets, at the closing of the transaction, Circle 8 Crane Services will receive Class D equity interests in Circle 8 Holdco and will be eligible to receive cash earnout payments in an aggregate maximum amount of up to $2,100,000 based on the achievement by Circle 8 Newco of certain EBITDA targets over the three year period following the completion of the acquisition of the Acquired Assets by Circle 8 Newco. Additionally, Circle 8 Newco has agreed that it will be initially capitalized with an aggregate amount of at least $16,000,000, up to $1,350,000 of which will be used to pay the expenses of Circle 8 Newco and Circle 8 Crane Services at closing incurred in connection with their negotiation and execution of the Asset Purchase Agreement, approximately $3,000,000 of which will be used to pay off Circle 8 Crane Services’ subordinated debt facility in full at the closing and approximately $11,650,000 of which will be used to pay down a portion of the Circle 8 Crane Services’ senior debt facility at the closing, the remainder of which will be assumed by Circle 8 Newco pursuant to a new line of credit issued by Circle 8 Crane Services’ current senior lender. Any remaining cash amounts will be retained by Circle 8 Newco as working capital to operate its business following the closing of the acquisition of the Acquired Assets.

The closing of the acquisition is expected to occur on or prior to December 9, 2022. The consummation of the transactions contemplated by the Asset Purchase Agreement are subject to various customary closing conditions and the receipt of certain third party consents. In addition to customary closing conditions, the closing of the Acquisition is also conditioned upon the receipt by Circle 8 Newco of financing (representing the capital commitment of Ault Alliance and other parties) in an amount sufficient to consummate the transaction.

The Asset Purchase Agreement contains customary termination provisions for each of Circle 8 Newco and Circle 8 Crane Services under certain circumstances, including the right to terminate the Asset Purchase Agreement if the closing has not occurred prior to December 9, 2022.

The Asset Purchase Agreement also includes customary representations, warranties and covenants of Circle 8 Crane Services and Circle 8 Newco. The representations and warranties made by each party were made solely for the benefit of the other party and: (i) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk between the parties to the Asset Purchase Agreement if those statements prove to be inaccurate; (ii) may have been qualified in the Asset Purchase Agreement by disclosures that were made to the other party in disclosure schedules to the Asset Purchase Agreement; (iii) may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws; and (iv) were made only as of the date of the Asset Purchase Agreement or such other date or dates as may be specified in the Asset Purchase Agreement.

The Asset Purchase Agreement also contains post-closing indemnification provisions pursuant to which the Circle 8 Crane Services and Circle 8 Newco have agreed to indemnify each other against losses resulting from certain events, including breaches of representations and warranties, covenants and certain other matters.

In connection with the closing of the transactions contemplated by the Asset Purchase Agreement, Circle 8 Crane Services and Circle 8 Newco will enter into certain other agreements, including a lease agreement for the former headquarters of Circle 8 Crane Services and a promissory note securing Circle 8 Crane Services’ post-closing indemnification obligations to Circle 8 Newco under the Asset Purchase Agreement.

This summary of the Asset Purchase Agreement and related transactions does not purport to be complete and is qualified in its entirety by reference to the provisions of Asset Purchase Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.