0001193805-17-001120.txt : 20170615 0001193805-17-001120.hdr.sgml : 20170615 20170615172410 ACCESSION NUMBER: 0001193805-17-001120 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20170615 DATE AS OF CHANGE: 20170615 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DIGITAL POWER CORP CENTRAL INDEX KEY: 0000896493 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 941721931 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-50273 FILM NUMBER: 17914271 BUSINESS ADDRESS: STREET 1: 48430 LAKEVIEW BLVD. CITY: FREMONT STATE: CA ZIP: 94538 BUSINESS PHONE: 5106572635 MAIL ADDRESS: STREET 1: 48430 LAKEVIEW BLVD. CITY: FREMONT STATE: CA ZIP: 94538 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Iroquois Capital Management, LLC CENTRAL INDEX KEY: 0001481867 IRS NUMBER: 010786483 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 641 LEXINGTON AVENUE STREET 2: 26TH FLOOR CITY: NEW YORK, STATE: NY ZIP: 10022 BUSINESS PHONE: 212.974.3070 MAIL ADDRESS: STREET 1: 641 LEXINGTON AVENUE STREET 2: 26TH FLOOR CITY: NEW YORK, STATE: NY ZIP: 10022 SC 13D 1 e616300_sc13d-dpc.htm

CUSIP No. 253862 10 6

13D

Page 1 of 14 Pages

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. )*

DIGITAL POWER CORPORATION

(Name of Issuer)

Common Stock, no par value

(Title of Class of Securities)

253862 10 6

(CUSIP Number)

Richard Abbe

Iroquois Capital Management, LLC

205 East 42nd Street, 20th Floor

New York, New York 10017

(212) 974-3070

Michael Adelstein, Esq.

Kelley Drye & Warren LLP

101 Park Avenue, 27 Floor

New York, New York 10178

(212) 808-7800

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

June 15, 2017

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 253862 10 6

13D

Page 2 of 14 Pages

1	NAME OF REPORTING PERSON Iroquois Capital Management, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER -0-
	8	SHARED VOTING POWER 334,332 (1)
	9	SOLE DISPOSITIVE POWER -0-
	10	SHARED DISPOSITIVE POWER 334,332 (1)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 334,332 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.9% (2)
14	TYPE OF REPORTING PERSON IA

(1) This does not include certain Warrants that are not exercisable within 60 days of this Schedule 13D. Including such Warrants, and without regard to any beneficial ownership limitations on the Warrants pursuant to the terms therein, the Reporting Person has shared voting power, shared dispositive power and beneficial ownership of 584,332 Shares.

(2) This does not include certain Warrants that are not exercisable within 60 days of this Schedule 13D. Including such Warrants, and without regard to any beneficial ownership limitations on the Warrants pursuant to the terms therein, the percentage of class represented by the amount in Row 11 is 5.0%.

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13D

Page 3 of 14 Pages

1	NAME OF REPORTING PERSON Iroquois Capital Investment Group LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 83,335 (1)
	8	SHARED VOTING POWER -0-
	9	SOLE DISPOSITIVE POWER 83,335 (1)
	10	SHARED DISPOSITIVE POWER -0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 83,335 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.8% (2)
14	TYPE OF REPORTING PERSON IA

(1) This does not include certain Warrants that are not exercisable within 60 days of this Schedule 13D. Including such Warrants, the Reporting Person has sole voting power and sole dispositive power of 166,668 Shares.

(2) This does not include certain Warrants that are not exercisable within 60 days of this Schedule 13D. Including such Warrants, the percentage of class represented by the amount in Row 11 is 1.5%.

CUSIP No. 253862 10 6

13D

Page 4 of 14 Pages

1	NAME OF REPORTING PERSON Iroquois Master Fund Ltd.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 334,332 (1)
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 334,332 (1)
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 334,332 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.9% (2)
14	TYPE OF REPORTING PERSON CO

(1) This does not include certain Warrants that are not exercisable within 60 days of this Schedule 13D. Including such Warrant, and without regard to any beneficial ownership limitations on the Warrants pursuant to the terms therein, the Reporting Person has sole voting power, sole dispositive power and beneficial ownership of 584,332 Shares.

CUSIP No. 253862 10 6

13D

Page 5 of 14 Pages

1	NAME OF REPORTING PERSON Richard Abbe
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER -0-
	8	SHARED VOTING POWER 417,667 (1)
	9	SOLE DISPOSITIVE POWER -0-
	10	SHARED DISPOSITIVE POWER 417,667 (1)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 417,667 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.6% (2)
14	TYPE OF REPORTING PERSON IN, HC

CUSIP No. 253862 10 6

13D

Page 6 of 14 Pages

The following constitutes the Schedule 13D filed by the undersigned (the “Schedule 13D”). The Reporting Persons are voluntarily filing this Schedule 13D in connection with the occurrence of a default under the terms of a Convertible Note held by one of the Reporting Persons, and in anticipation of action that the Reporting Persons may take thereunder, as described in Item 4 of this Schedule 13D.

Item 1.

Security and Issuer.

This statement relates to the Common Stock, no par value per share (the “Shares”), of Digital Power Corporation, a California corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 48430 Lakeview Blvd, Fremont, California 94534.

Item 2.

Identity and Background.

(a) This statement is filed by:

	(i)	Iroquois Capital Management, LLC, a Delaware limited liability company (“Iroquois Capital”), with respect to the Shares beneficially owned by it by virtue of its position as investment advisor to Iroquois Master Fund (as defined below) and the Shares which are issuable upon exercise of the Warrants directly and beneficially owned by it;

	(ii)	Iroquois Master Fund Ltd., a Cayman Islands exempted limited company (the “Iroquois Master Fund”), with respect to the Shares directly and beneficially owned by it and the Shares which are issuable upon exercise of the Warrants and upon conversion of the Convertible Note directly and beneficially owned by it;

	(ii)	Iroquois Capital Investment Group LLC, a Delaware limited liability company (the “Iroquois Investment”), with respect to the Shares directly and beneficially owned by it and the Shares which are issuable upon exercise of the Warrants directly and beneficially owned by it;

(iv)

Richard Abbe, with respect to the Shares he beneficially owns as the Director of Iroquois Master Fund, President of Iroquois Capital and Managing Member of Iroquois Investment.

Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to that certain Joint Filing Agreement, as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.

The filing of this statement on Schedule 13D and any future amendments hereto, and the inclusion of information herein and therein, shall not be construed as an admission that any of the Reporting Persons, for the purpose of Section 13(d) of the Act or otherwise, is the beneficial owner of any shares of Common Stock.

(b) The address of the principal office of each of the Reporting Persons is 205 East 42nd Street, 20th Floor, New York, New York 10017. The officers and directors of Iroquois Master Fund and their principal occupations and business addresses are set forth on Schedule A to this Schedule 13D and are incorporated by reference in this Item 2.

(c) The principal business of Iroquois Capital is serving as an investment adviser that provides investment advisory services to Iroquois Master Fund. Iroquois Master Fund and Iroquois Investment each have been formed for the purpose of making equity investments and, on occasion, taking an active role in the management of portfolio companies in order to enhance shareholder value. The principal business of both Iroquois Master Fund and Iroquois Investment is serving as a private investment fund. The principal occupation of Mr. Abbe is serving as the President of Iroquois Capital. Mr. Abbe is also the Managing Member of Iroquois Investment.

CUSIP No. 253862 10 6

13D

Page 7 of 14 Pages

(d) No Reporting Person, nor any person listed on Schedule A to this Schedule 13D, has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) No Reporting Person, nor any person listed on Schedule A to this Schedule 13D, has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Mr. Abbe and each of the other persons listed on Schedule A to this Schedule 13D is a citizen of the United States of America.

Item 3.

Source and Amount of Funds or Other Consideration.

The Shares, Warrants and Convertible Note purchased by the Reporting Persons were purchased with working capital.

November 2016 Subscription

On November 15, 2016, the Issuer entered in a subscription agreement (the “November 2016 Subscription Agreement” with a number of different investors (the “November 2016 Offering,” including Iroquois Master Fund and Iroquois Investment, to purchase an aggregate of 901,666 units (the “Units”) at $0.60 per Unit for an aggregate purchase price of approximately $541,000. Each Unit consisted of one Share and one warrant to purchase one Share at an exercise price of $0.80 per Share (the “November 2016 Warrants”). In the November 2016 Offering, Iroquois Master Fund subscribed to 166,665 Units and Iroquois Investment subscribed to 83,335 Units. Under the terms of the November Subscription Agreement, Iroquois Master Fund, Iroquois Investment, and other investors who purchased at least $100,000 thereunder received the right to participate in the purchase of up to 50% of the securities offered by the Issuer in any future financing transactions, with limited exceptions.

In connection with the November 2016 Offering, the Issuer entered into a registration rights agreement with such investors (the “Registration Rights Agreement”). Pursuant thereto, the Issuer filed a registration statement on Form S-3 on December 21, 2016 (File No. 333-215237) which was declared effective by the Securities and Exchange Commission (the “SEC”) on January 9, 2017, which registered the Shares and the Shares underlying the November 2016 Warrants sold in the November 2016 Offering, including those comprising part of the Units subscribed to by Iroquois Master Fund and Iroquois Investment.

The November 2016 Warrants became exercisable on May 15, 2017 and entitle the holders to purchase Shares at an exercise price of $0.80 per share for a period of three years from the date of issuance. The November 2016 Warrants may be exercised for cash or, upon the failure to maintain an effective registration statement, on a cashless basis. The November 2016 Warrants are subject to a beneficial ownership limitation such that the holder may not acquire Shares upon the exercise thereof if the holder, with its affiliates, would beneficially own (as defined in the November 2016 Warrants) in excess of 4.99% of the number of Shares outstanding immediately after such exercise; provided, that such limitation may be decreased at any time by the holder, or may be increased up to 9.99% by the holder upon not less than 61 days’ prior written notice to the Issuer.

The foregoing are only brief descriptions of the material terms of the November 2016 Subscription Agreement, the November 2016 Warrants, and Registration Rights Agreement, which are filed as Exhibits 99.1, 99.2, and 99.3, respectively, and incorporated by reference herein. The foregoing descriptions are qualified in their entirety by reference to the full text of such exhibits.

CUSIP No. 253862 10 6

13D

Page 8 of 14 Pages

February 2017 Warrant

On February 15, 2017, Iroquois Master Fund and Iroquois Investment each acquired warrants to purchase 83,333 shares of Common Stock (collectively, the “February 2017 Warrants”). The February 2017 Warrants become exercisable on August 15, 2017 and entitle the holders to purchase Shares at an exercise price of $0.90 per share for a period of five years of the date of issuance. The February 2017 Warrants may be exercised for cash or on a cashless basis. The February 2017 Warrants are subject to a beneficial ownership limitation such that the holder may not acquire Shares upon the exercise thereof if the holder would beneficially own (as defined in the February 2017 Warrants) in excess of 4.99% of the number of Shares outstanding immediately after such exercise, or the holder, with its affiliates, would beneficially own in excess of 9.99% of the number of Shares outstanding immediately after such exercise; provided, that such limitation may be increased or decreased at any time by the holder upon not less than 61 days’ prior written notice to the Issuer.

The foregoing is only brief descriptions of the material terms of the February 2017 Warrant. The foregoing descriptions are qualified in their entirety by reference to the full text of the form of the February 2017 Warrant, which is filed as Exhibit 99.4 hereto and incorporated by reference herein.

April 5, 2017 Warrant

On April 5, 2017, Iroquois Master Fund acquired a warrant to purchase 83,333 shares of Common Stock (the “April 5, 2017 Warrant”). The April 5, 2017 Warrant becomes exercisable on October 5, 2017 and entitles the holder to purchase Shares at an exercise price of $0.90 per share for a period of five years of the date of issuance. The April 5, 2017 Warrant may be exercised for cash or on a cashless basis. The April 5, 2017 Warrant is subject to a beneficial ownership limitation such that the holder may not acquire Shares upon the exercise thereof if the holder would beneficially own (as defined in the April 5, 2017 Warrant) in excess of 4.99% of the number of Shares outstanding immediately after such exercise, or the holder, with its affiliates, would beneficially own in excess of 9.99% of the number of Shares outstanding immediately after such exercise; provided, that such limitation may be increased or decreased at any time by the holder upon not less than 61 days’ prior written notice to the Issuer.

The foregoing is only brief descriptions of the material terms of the April 5, 2017 Warrant. The foregoing descriptions are qualified in their entirety by reference to the full text of the form of the April 5, 2017 Warrant, which is filed as Exhibit 99.5 hereto and incorporated by reference herein.

April 17, 2017 Subscription

On April 17, 2017, Iroquois Master Fund entered in to a Securities Purchase Agreement the (“April 17, 2017 SPA”) with the Issuer, under which Iroquois Master Fund purchased a convertible promissory note (the “Convertible Note”) and a warrant to purchase up to 83,334 Shares at $0.90 per Share (the “April 17, 2017 Warrant”, and together with the November 2016 Warrants, the February 2017 Warrants, and the April 5, 2017 Warrant, the “Warrants”).

The Convertible Note has a principal amount of $125,000, with interest at 7% per annum, and matured on June 2, 2017. The Convertible Note is convertible into Common Stock at $0.75 per Share.

The April 17, 2017 Warrant becomes exercisable on October 17, 2017 and entitles the holder to purchase Shares at an exercise price of $0.90 per share for a period of five years of the date of issuance. Such exercise price is subject to adjustment for stock splits, stock dividends, combinations or similar events. The April 17, 2017 Warrant may be exercised for cash or, upon the failure to maintain an effective registration statement, on a cashless basis. The April 17, 2017 Warrant is subject to the same beneficial ownership limitation as the November 2016 Warrants.

The foregoing is only brief descriptions of the material terms of the April 17, 2017 SPA, April 17, 2017 Warrant and Convertible Note. The foregoing descriptions are qualified in their entirety by reference to the full text of the form of the April 17, 2017 SPA, April 17, 2017 Warrant and Convertible Note, which are filed as Exhibit 99.6, 99.7, and 99.9 respectively, hereto and incorporated by reference herein.

CUSIP No. 253862 10 6

13D

Page 9 of 14 Pages

Item 4.

Purpose of the Transaction.

On June 2, 2017, the maturity date of the Convertible Note occurred and the Company failed to pay the amounts outstanding under the Convertible Note. Consequently, as of the time of this filing the Convertible Note remains outstanding, a default has occurred under the Convertible Note and all amounts outstanding under Convertible Note are currently overdue. The Reporting Persons reserve the right to take any actions they deem appropriate in connection with such default, including without limitation, taking legal action, at the expense of the Issuer (as permitted by the terms and conditions of the Convertible Note) to obtain a cash payment of all of the Issuer’s obligations under the Convertible Note. As the permitted amount of legal expense reimbursement under the Convertible Note is unlimited, the aggregate maximum liability of the Issuer in connection with an enforcement action to obtain a cash payment of all of the Issuer’s obligations under the Convertible Note is impossible to determine as of the time of this filing and may exceed the $125,000 aggregate principal amount, plus interest thereon, of the Convertible Note.

On June 2, 2017, the maturity date of the Convertible Note, Iroquois Master Fund delivered a letter to Amos Kohn, President and Chief Executive Officer of the Issuer, which served as Notice of Default under the terms of the Convertible Note, a copy of which is filed as Exhibit 99.9 hereto and is incorporated by reference herein.

Although none of the Reporting Persons has any specific plan or proposal to acquire or dispose of the shares of Common Stock, each Reporting Person at any time and from time to time may (i) acquire additional securities of the Issuer, (ii) dispose of any or all of its securities of the Issuer, (iii) enter into privately negotiated derivative transactions with institutional counterparties to hedge the market risk of some or all of its positions in the securities of the Issuer, depending upon the factors described below and/or other investment considerations, or (iv) exercise their rights, if any, as holders of the Notes and Warrants in connection with a bankruptcy case of the Issuer.

In addition, the Reporting Persons intend to review their investment in the Issuer on a continuing basis and may seek to influence or change the Issuer’s operations or business development plans, business strategy, management or directors, competitive position, capital structure or capital management policy, including, without limitation, through potential discussions with management, directors, other shareholders and noteholders, existing or potential strategic partners or competitors of the Issuer, industry analysts, investment and financing professionals and/or other third parties. Such matters and discussions may materially affect, and result in, the Reporting Persons modifying their investment in the Issuer, exchanging information with any of such persons pursuant to appropriate confidentiality or similar agreements or otherwise, working together with any of such persons pursuant to joint agreements or otherwise, proposing changes in the Issuer’s operations, governance, capitalization or strategic plans, or in proposing or engaging in one or more other actions set forth under subsections (a) through (j) of Item 4 of Schedule 13D. Factors that may influence the Reporting Persons’ actions include, but are not limited to, their views regarding the Issuer’s operations, business strategy, prospects, financial position and/or strategic direction, the outcome of the discussions and actions referenced herein, price levels of the Common Stock, availability of funds, subsequent developments affecting the Issuer, other investment and business opportunities available to the Reporting Persons, conditions in the securities market, general economic and industry conditions and other factors that the Reporting Persons may deem relevant from time to time.

Except as described herein, none of the Reporting Persons has any plans or proposals which relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto.

Item 5.

Interest in Securities of the Issuer.

The aggregate percentage of Shares reported herein is based upon 11,059,301 Shares outstanding as of June 8, 2017, which includes (1) 9,216,853 Shares outstanding as of May 15, 2017, as reported in the Issuer’s quarterly report on Form 10-Q filed with the SEC on May 17, 2017; plus (2) 1,842,448 Shares issued pursuant to a Share Exchange Agreement, dated April 28, 2018, by and among the Issuer, Microphase Corporation and certain shareholders thereof, that closed on June 8, 2017, as reported in the Issuer’s Current Report on Form 8-K filed with the SEC on June 8, 2017. In addition, the percentage of Shares owned by the Reporting Persons includes Shares issuable upon the exercise of Warrants and/or conversion of the Convertible Note beneficially owned by such Reporting Persons. All of the Warrants are subject to beneficial ownership limitations as described in Item 3 hereunder.

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13D

Page 10 of 14 Pages

A.	Iroquois Capital

(a)

As of the date of this Schedule 13D, Iroquois Investment beneficially owns 334,332 Shares, which includes (i) 166,665 Shares which are issuable upon the exercise of the November 2016 Warrant owned by Iroquois Master Fund, (ii) 166,667 Shares which are issuable upon the conversion of the Convertible Note owned by Iroquois Master Fund, and (iii) 1,000 Shares owned by Iroquois Master Fund. This does not include an aggregate of 250,000 Shares which are issuable upon exercise of the February 2017 Warrant, April 5, 2017 Warrant and April 17, 2017 Warrant owned by Iroquois Master Fund, none of which is exercisable within 60 days of this Schedule 13D. Including such Warrants, and without regard to any beneficial ownership limitation on the Warrants, Iroquois Investment beneficially owns 584,332 Shares.

Percentage: Approximately 2.9%. Including Warrants that are not exercisable within 60 days of this Schedule 13D, and without regard to any beneficial ownership limitation on the Warrants, the percentage is approximately 5.0%.

(b)

1. Sole power to vote or direct vote: 0

2. Shared power to vote or direct vote: 334,332

3. Sole power to dispose or direct the disposition: 0

4. Shared power to dispose or direct the disposition: 334,332

(c)

Iroquois Capital has not entered into any transactions in the Shares during the past 60 days. The transactions in the Shares by Iroquois Master Fund during the past 60 days are set forth in Item 5(B)(c) of this Schedule 13D and are incorporated by reference herein.

B.	Iroquois Master Fund

(a)

As of the date of this Schedule 13D, Iroquois Master Fund directly and beneficially owns 334,332 Shares, which includes (i) 166,665 Shares which are issuable upon the exercise of Warrants owned by Iroquois Master Fund, (ii) 166,667 Shares which are issuable upon the conversion of the Convertible Note owned by Iroquois Master Fund, and (iii) 1,000 Shares owned by Iroquois Master Fund. This does not include an aggregate of 250,000 Shares which are issuable upon exercise of the February 2017 Warrant, April 5, 2017 Warrant and April 17, 2017 Warrant owned by Iroquois Master Fund, none of which is exercisable within 60 days of this Schedule 13D. Including such Warrants, and without regard to any beneficial ownership limitation on the Warrants, Iroquois Master Fund beneficially owns 584,332 Shares.

(b)

1. Sole power to vote or direct vote: 334,332

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 334,332

4. Shared power to dispose or direct the disposition: 0

(c)

On April 27, 2017, Iroquois Master Fund acquired a Warrant to purchase 83,334 Shares and the Convertible Note convertible into 166,667 Shares, as described in Item 4 of this Schedule 13D. Iroquois Master Fund has not entered into any other transactions in the Shares during the past 60 days.

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B.	Iroquois Investment

(a)

As of the date of this Schedule 13D, Iroquois Investment directly and beneficially owns 83,335 Shares which are issuable upon the exercise of the November 2016 Warrant owned by Iroquois Investment. This does not include 83,333 Shares which are issuable upon exercise of the February 2017 Warrant owned by Iroquois Investment, which is not exercisable within 60 days of this Schedule 13D. Including such Warrants, Iroquois Investment beneficially owns 166,668 Shares.

Percentage: Approximately 0.8%. Including Warrants that are not exercisable within 60 days of this Schedule 13D, the percentage is approximately 1.5%.

(b)

1. Sole power to vote or direct vote: 83,333

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 83,333

4. Shared power to dispose or direct the disposition: 0

(c)

Iroquois Investment has not entered into any transactions in the Shares during the past 60 days.

D.	Richard Abbe

(a)

As of the date of this Schedule 13D, Mr. Abbe beneficially owns 417,667 Shares, which includes (i) 83,335 Shares which are issuable upon exercise of the November 2016 Warrant owned by Iroquois Investment, (ii) 166,665 Shares which are issuable upon the exercise of the November 2016 Warrant owned by Iroquois Master Fund, (iii) 166,667 Shares which are issuable upon the conversion of the Convertible Note owned by Iroquois Master Fund, and (iv) 1,000 Shares owned by Iroquois Master Fund. This does not include (i) 83,333 Shares which are issuable upon exercise of the February 2017 Warrant owned by Iroquois Investment, or (ii) an aggregate of 250,000 Shares which are issuable upon exercise of the February 2017 Warrant, April 5, 2017 Warrant and April 17, 2017 Warrant owned by Iroquois Master Fund, none of which is exercisable within 60 days of this Schedule 13D. Including such Warrants, and without regard to any beneficial ownership limitation on the Warrants, Mr. Abbe beneficially owns 751,000 Shares.

Percentage: Approximately 3.6%. Including Warrants that are not exercisable within 60 days of this Schedule 13D, and without regard to any beneficial ownership limitation on the Warrants, the percentage is approximately 6.4%.

(b)

1. Sole power to vote or direct vote: 0

2. Shared power to vote or direct vote: 417,667

3. Sole power to dispose or direct the disposition: 0

4. Shared power to dispose or direct the disposition: 417,667

(c)

Mr. Abbe has not entered into any transactions in the Shares during the past 60 days. The transactions in the Shares by Iroquois Master Fund during the past 60 days are set forth in Item 5(B)(c) of this Schedule 13D and are incorporated by reference herein.

Each Reporting Person, as a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons. Each Reporting Person disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.

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Page 12 of 14 Pages

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

On June 15, 2017 the Reporting Persons entered into a Joint Filing Agreement in which the Reporting Persons agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached hereto as Exhibit 99.10 and is incorporated by reference herein.

Item 3 and Item 4 are incorporated by reference herein.

Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.

Item 7.

Material to be Filed as Exhibits.

99.1

Form of November 2016 Subscription Agreement (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Issuer, filed with the SEC on November 16, 2016)

99.2

Form of November 2016 Warrant (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K of the Issuer, filed with the SEC on November 16, 2016)

99.3

Form of November 2016 Registration Rights Agreement (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K of the Issuer, filed with the SEC on November 16, 2016)

99.4

Form of February 2017 Warrant

99.5

Form of April 5, 2017 Warrant

99.6

Securities Purchase Agreement, dated April 17, 2017, by and between Iroquois Master Fund and the Issuer

99.7

Form of April 17, 2017 Warrant

99.8

Convertible Note dated April 17, 2017

99.9

Notice of Default, dated June 2, 2017, from Iroquois Master Fund to Amos Kohn, President and Chief Executive Officer of the Issuer

99.10

Joint Filing Agreement by and among Iroquois Capital, Iroquois Master Fund, Iroquois Investment and Richard Abbe, dated June 15, 2017

CUSIP No. 253862 10 6

13D

Page 13 of 14 Pages

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: June 15, 2017

IROQUOIS CAPITAL MANAGEMENT, LLC

By:	/s/ Richard Abbe
	Name:	Richard Abbe
	Title:	President

IROQUOIS MASTER FUND LTD

By:	Iroquois Capital Management, LLC,
	its investment manager

By:	/s/ Richard Abbe
	Name:	Richard Abbe
	Title:	President

IROQUOIS CAPITAL INVESTMENT GROUP LLC

By:	/s/ Richard Abbe
	Name:	Richard Abbe
	Title:	Managing Member

/s/ Richard Abbe
RICHARD ABBE

CUSIP No. 253862 10 6

13D

Page 14 of 14 Pages

SCHEDULE A

Directors of Iroquois Master Fund Ltd.

Name and Position

Present Principal Occupation

Business Address

Richard Abbe, Director

President of Iroquois Capital

205 East 42nd Street, 20th Floor,

New York, New York 10017

Kimberly Page, Director

Chief Operating Officer and Compliance Officer of Iroquois Capital

205 East 42nd Street, 20th Floor,

New York, New York 10017

EX-99.4 2 e616300_ex99-4.htm

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE TRANSFERRED, UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144 OR OTHER APPLICABLE EXEMPTION FROM APPLICABLE SECURITIES LAWS. THE ISSUER MAY REQUIRE AN OPINION OF COUNSEL TO THE HOLDER OF THESE SECURITIES, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER, THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

COMMON STOCK PURCHASE WARRANT

DIGITAL POWER CORPORATION

Warrant Shares:

Issue Date: February 15, 2017 (the “Issue Date”)

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that _________________, or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time commencing on the six month after the Issue Date and ending on or prior to 5:00 P.M. on February 15, 2022 (the “Termination Date”), to purchase from Digital Power Corporation, a California corporation (the “Company”), up to _________ shares (as subject to adjustment hereunder, the “Warrant Shares”) of common stock, no par value per share, of the Company (“Common Stock”), at the per share Exercise Price as defined in Section 2(b). This Warrant is issued in connection with that certain Demand Promissory Note in the principal amount of $100,000.00 dated as the same date herewith between Holder and the Company.

Section 1. Definitions.

“Affiliate” means, as to any Person (the “subject Person”), any other Person (a) that directly or indirectly through one or more intermediaries controls or is controlled by, or is under direct or indirect common control with, the subject Person, (b) that directly or indirectly beneficially owns or holds ten percent (10%) or more of any class of voting equity of the subject Person, or (c) ten percent (10%) or more of the voting equity of which is directly or indirectly beneficially owned or held by the subject Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, through representation on such Person’s board of directors or other management committee or group, by contract or otherwise.

“Alternate Consideration” shall have the meaning set forth in Section 3(c).

“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the United States are authorized or required by law or other governmental action to close.

“Beneficial Ownership Limitation” shall have the meaning set forth in Section 2(e). “Commission” means the United States Securities and Exchange Commission.

“Common Stock” means the Company’s common stock, no par value per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed.

“Common Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any convertible debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Fundamental Transaction” shall have the meaning set forth in Section 3(c). “Holder” shall have the meaning given such term in the first paragraph. “Notice of Exercise” shall have the meaning set forth in Section 2(a).

“Person” means an individual or Company, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Trading Day” means a day on which the principal Trading Market is open for business.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

“Warrant Shares” means, collectively, the shares of Common Stock issuable upon the exercise of this Warrant in accordance with the terms hereof.

“Warrant Share Delivery Date” shall have the meaning set forth in Section 2(d)(i).

Section 2. Exercise.

(a) Upon delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed notice of exercise (the “Notice of Exercise”) in substantially the form of the Notice of Exercise Form annexed hereto and the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise, the Holder shall be entitled to Exercise the rights represented by this Warrant, in whole or in part, to acquire Warrant Shares at any time or times on or before the Termination Date by facsimile. Notwithstanding anything herein to the contrary (although the Holder may surrender the Warrant to, and receive a replacement Warrant from, the Company), the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. In the case of a partial exercise of this Warrant, the Holder may request that the Company deliver to the Holder a certificate representing such new warrant, with terms identical in all respects to this Warrant (except that such new warrant shall be exercisable into the number of Warrant Shares with respect to which this Warrant shall remain unexercised); provided, however, that the Holder shall be entitled to exercise all or any portion of such new warrant, regardless of whether the Company has actually issued such new warrant or delivered to the Holder a certificate thereof. The Company shall deliver any objection to any Notice of Exercise Form within one (1) Trading Day of delivery of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

(b) Exercise Price. The exercise price per share of the Warrant Shares under this Warrant shall be $0.70 subject to adjustment hereunder (the “Exercise Price”).

(c) Cashless Exercise. This Warrant may also be exercised at the Holder’s election, in whole or in part, at such time by means of a “cashless exercise.” The Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) x (X)] by (A), where:

(A) = the VWAP on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;

(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (or other reliable source) based on a Trading Day from 9:30 a.m. (New York City time) (or such other time as the Trading Market publicly announces is the official open of trading) to 4:00 p.m. (New York City time) (or such other time as the Trading Market publicly announces is the official close of trading), (b) if no daily volume weighted average prices are reported by Bloomberg (or other reliable source), the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets LLC, or (c) in all other cases, the fair market value of a share of Common Stock as mutually determined by the Company and Holder.

(d) Mechanics of Exercise.

i. Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the Transfer Agent (“Transfer Agent” means the transfer agent employed by the Company from time to time, for its Common Stock) to the Holder by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the date of delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Notwithstanding the above, Warrant Shares may be issued and delivered in uncertificated form (with a notice of share issuance delivered to Holder) and maintained in electronic form on the transfer agent’s books and records. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date of delivery to the Company of the Notice of Exercise.

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares (or delivery of notice of issuance, if shares are issued in uncertificated form), deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

iv. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder.

v. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

(e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, (i) the Holder would beneficially own in excess of the Holder Beneficial Ownership Limitation (as defined below) or (ii) the Holder, together with the Holder’s Affiliates and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, would beneficially own in excess of the Affiliates Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and conversion of any Warrant Shares so acquired upon exercise, and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any other securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock, hereinafter “Common Stock Equivalents”) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the 1934 Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the reasonable judgment of the Holder, in each case subject to the Holder Beneficial Ownership Limitation or the Affiliates Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Holder Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant (including shares issuable upon conversion of Warrant Shares issued upon exercise). The “Affiliates Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant (including shares issuable upon conversion of Warrant Shares issued upon exercise). The Holder Beneficial Ownership Limitation together with the Affiliates Beneficial Ownership Limitation is collectively known as the “Beneficial Ownership Limitation.” The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant and shall cease to apply only (x) upon sixty-one (61) days’ written notice from the Holder to the Company of an election to increase or decrease or remove one or both of the Holder Beneficial Ownership Limitation and the Affiliate

(f) Beneficial Ownership Limitation or (y) immediately upon written notice from the Holder to the Company at any time after the public announcement or other disclosure of a Fundamental Transaction (as defined in Section 3(c)).

Section 3. Certain Adjustments.

(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions of shares of its Common Stock to the record holders of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged in the case of an exercise for Common Stock only. In the event that any adjustment of the Exercise Price required herein results in a fraction of a cent, the Exercise Price shall be rounded down to the nearest one hundredth of a cent. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.

(b) Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to the Holder) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security of the Company other than the Common Stock (which shall be subject to Section 3(b)) (a “Distribution”), then in each such case the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including, without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.

(c) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person pursuant to which the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation are converted into or exchanged for shares of another company or entity and represent, or are converted into or exchanged for equity securities that represent, immediately following such merger or consolidation, less than a majority, by voting power, of the equity securities of (1) the surviving or resulting party or (2) if the surviving or resulting party is a wholly owned subsidiary of another party immediately following such merger or consolidation, the parent of such surviving or resulting party, (ii) the Company, directly or indirectly, effects any sale of all or substantially all of its assets in one or a series of related transactions and the consideration is distributed to holders of Common Stock, (iii) any tender offer or exchange offer by the Company is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the number of shares of common stock of the successor or acquiring company or of the Company, if it is the surviving Company, and any additional consideration (the “Alternate Consideration”) receivable by holders of Common Stock as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.

(d) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

(e) Notice to Holder.

Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

(f) Adjustments. In the event that at any time, as a result of an adjustment made pursuant to this Section 3, the Holder shall, upon exercise of this Warrant, become entitled to receive securities or assets (other than Common Stock) then, wherever appropriate, all references herein to shares of Common Stock shall be deemed to refer to and include such shares and/or other securities or assets; and thereafter the number of such shares and/or other securities or assets shall be subject to adjustment from time to time in a manner and upon terms as nearly equivalent as practicable to the provisions of this Section 3.

Section 4. Transfer of Warrant.

(a) Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole but not in part, only to an Affiliate of the Holder and upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

(b) Warrant Register. The Company shall register this Warrant, upon record to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

Section 5. Miscellaneous.

(a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(a)(i).

(b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

(c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.

(d) Authorized Shares.

i. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Principal Market upon which the Common Stock may be listed.

ii. Except and to the extent as waived or consented to by the Holder, the Company shall not by any action to avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (ii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

iii. Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

(e) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the laws of the state of California (excluding its choice of law rules).

(f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if Holder does not utilize cashless exercise and Rule 144 is available, will have restrictions upon resale imposed by state and federal securities laws.

(g) Nonwaiver. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies.

(h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of this Warrant.

(i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

(j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

(k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of bany Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

(l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

(m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

(n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

(Signature Page Follows)

IN WITNESS WHEREOF, the parties have executed and delivered this Warrant as of the date first above indicated.

	DIGITAL POWER CORPORATION

	By:
		Name: Amos Kohn
		Title: President and CEO


	[ ]

	By:
		Name:
		Title:

NOTICE OF EXERCISE

TO: DIGITAL POWER CORPORATION

(1) The undersigned hereby elects to purchase __________ Warrant Shares (to be comprised of __________ shares of Common Stock of the Company pursuant to the terms of the attached Warrant and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

(2) Payment shall take the form of (check applicable box):

☐

in lawful money of the United States; or

☐

the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

______________________________________________

(4) After giving effect to this Notice of Exercise, the undersigned will not have exceeded the Beneficial Ownership Limitation.

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

______________________________________________

[SIGNATURE OF HOLDER]

Name of Investing Entity:

______________________________________________

Signature of Authorized Signatory of Investing Entity:

______________________________________________

Name of Authorized Signatory:

______________________________________________

Title of Authorized Signatory:

______________________________________________

Date

ASSIGNMENT FORM

(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)

DIGITAL POWER CORPORATION

FOR VALUE RECEIVED, [________] all of or [________] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

________________________________ whose address is

______________________________________________

Dated: _____________, __________

Holder’s Signature: _______________________________

Holder’s Address: ________________________________

______________________________________________

Signature Guaranteed: _____________________________

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of the company and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

EX-99.5 3 e616300_ex99-5.htm

COMMON STOCK PURCHASE WARRANT
DIGITAL POWER CORPORATION

Warrant Shares: 83,334

Issue Date: April 5, 2017 (the “Issue Date”)

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that Iroquois Master Fund Ltd., or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time commencing on the six month after the Issue Date and ending on or prior to 5:00 P.M. on April 5, 2022 (the “Termination Date”), to purchase from Digital Power Corporation, a California corporation (the “Company”), up to 83,334 shares (as subject to adjustment hereunder, the “Warrant Shares”) of common stock, no par value per share, of the Company (“Common Stock”), at the per share Exercise Price as defined in Section 2(b).