Item 1.01Entry into a Material Definitive Agreement.

Consulting Agreement

On December 30, 2019, Cool Holdings, Inc. (the "Company") entered into a consulting agreement (the "Consulting Agreement") with Fountain Asset Corp., Cher Holdings Inc. and Mr. Kevin Reid (collectively, the "Consultants"). Pursuant to the Consulting Agreement, the Company appointed the Consultants to perform for the benefit of the Company certain services (the "Services"). Such Services the Consultants have agreed to perform include: advise on the Company's capital restructuring, providing strategic planning, assisting with implementing business planning and strategy as well as financing strategy, and assist with prospective merger and acquisitions targets.

The Consultants have agreed to perform the Services in exchange for a consulting fee payable by the Company through the issuance of an aggregate of 10,000,000 shares of its common stock (the "Shares") and warrants (the "Warrants", collectively with the Shares, the "Equity Securities") to purchase up to an additional 10,000,000 Shares (the "Warrant Shares"). Each Warrant is exercisable for a period of twelve months from the date of issuance thereof, at a price of $0.05 per Warrant Share.

The Consulting Agreement's other provisions include the Consultants being appointed, on an exclusive basis by the Company, to perform the Services as independent contractors without the right or authority to otherwise obligate the Company in any manner. The Consultants and the Company are also obligated to treat as confidential and not disclose important information that is communicated or provided to one of them, by the other, in connection with the performance of the Services. The Consultants, while being permitted to carry on providing similar Services to other companies, are required to notify the Company upon a serious conflict which arises as a result of their consulting activities. The Consulting Agreement will terminate on February 29, 2020, unless otherwise extended by the Company and the Consultants.

Amendment Agreements

On December 30, 2019, Company also entered into amendment agreements (the "Amendments") with the Consultants as holders of a principal amount of $1,300,000 of debt pursuant to convertible notes issued in October 2018 (the "Convertible Notes"). The Amendments extend the maturity date of the Convertible Notes until February 29, 2020, and grant each of the Consultants a security interest over the assets of the Company (the "Security Interest") equal to the amount of debt outstanding under their Convertible Note.

The Security Interest ranks below the security interest granted to GameStop Corp. ("GameStop") pursuant to the promissory note, reimbursement and indemnification agreement and security agreement the Company entered into with GameStop, and previously disclosed on the Current Report on Form 8-K filed on September 26, 2019. The Company is obligated to use commercially reasonable efforts to ensure the Security Interest ranks senior to all its other debt. The Consultants and the Company will both use commercially reasonable efforts to enter into a general security agreement, or other applicable customary documentation, by January 31, 2020, to evidence the Security Interest.

The foregoing is a summary of certain material terms and conditions of the Consulting Agreement and Amendments, and are not a complete description thereof. Accordingly, the foregoing is qualified in its entirety by reference to the full text of the forms of the Consulting Agreement and Amendments attached to this Current Report on Form 8-K as Exhibits 4.1, 4.2 and 4.3, and incorporated herein by reference.

Item 3.02Unregistered Sales of Equity Securities.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. In connection with the Consulting Agreement, the issuance of Equity Securities, being shares of common stock and warrants to purchase shares of common stock of the Company, will be made in reliance on the exemption from registration provided by Section 4(a)(2) the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits.




(d)Exhibits.



Exhibit
  No.       Description
  4.1         Form of Consulting Agreement
  4.2         Form of Amendment No. 4 to October 2018 12.0% Unsecured Convertible
            Note
  4.3         Form of Amendment No. 3 to October 2018 12.0% Unsecured Convertible
            Note

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