SEC v Andrew DeFrancesco Fair Fund

The purpose of the Plan Notice is to inform you that you may be eligible to share in the proceeds of the SEC v Andrew DeFrancesco Fair Fund. To be potentially eligible to share in the SEC v Andrew DeFrancesco Fair Fund, you must file a Claim Form in accordance with the steps set forth in the Plan Notice and in the Plan of Distribution (the “Plan”) approved by the Securities and Exchange Commission (“SEC” or “Commission”).

A copy of the Notice can be found here.

On January 6, 2023, the SEC filed a Complaint against Andrew DeFrancesco (“DeFrancesco”), Marlio Mauricio Diaz Cardona (“Diaz”), Carlos Felipe Rezk (“Rezk”), Nikola Faukovic (“Faukovic”), and Catherine DeFrancesco (collectively, the “Defendants”). In the Complaint, the SEC alleged that beginning in March of 2018, Defendants DeFrancesco, Diaz, and Rezk, officers and directors of Cool Holdings, Inc. (“Cool Holdings”), orchestrated a fraudulent scheme to deceive the investing public about the operations and prospects of their company through repeated, materially false and misleading misstatements and omissions in SEC filings and in a promotion campaign. From March 2018 through early June 2019, Cool Holdings made materially false and misleading statements and omissions in its SEC filings including about its critical business relationship with Apple Inc. Certain Defendants signed Cool Holdings’ false and misleading quarterly reports, annual reports, and registration statement and amendments. The registration statement, which never became effective, sought to offer and sell up to $25,000,000 worth of securities.

The Defendants also orchestrated a “pump and dump” of Cool Holdings’ stock which included secretly funding a series of fraudulent articles promoting Cool Holdings as a profitable and expanding company. The false news released during mid-September 2018 caused Cool Holdings’ share price and trading volume to spike during the week the articles were published and to remain elevated for a period of weeks after. During the promotional campaign, DeFrancesco secretly sold, through accounts controlled by nominee entities and nominally controlled by his ex-wife Catherine DeFrancesco, millions of shares of Cool Holdings generating proceeds of more than $11.5 million. Diaz, Faukovic, and Rezk also sold Cool Holdings stock while the company was disseminating false and misleading information in its SEC filings. As a result of the false information published during the promotional campaign, investors overpaid for shares of Cool Holdings and suffered losses when the share price collapsed.

On June 15, 2023, the Court entered final judgments as to Catherine DeFrancesco and Faukovic. The Court found Catherine DeFrancesco liable for a civil penalty of $122,782.00 and found Faukovic liable for disgorgement of $11,779.43, prejudgment interest of $2,570.89, and a civil penalty of $111,614.00 for a total of $125,964.32. On July 5, 2023, the Court entered a final judgment as to Andrew DeFrancesco and ordered him liable for disgorgement of $1,034,051.52, prejudgment interest of $242,018.97, and a civil penalty of $1,737,224.52 for a total of $3,013,295.01. On November 21, 2023, the Court entered final judgments as to Diaz and Rezk and ordered them each liable for a civil penalty of $223,229.

On July 22, 2024, the Court entered an order establishing a Fair Fund, including post-judgment interest and any future funds collected from the Defendants in the Fair Fund. The Commission holds $2,283,537.34 collected from the Defendants pursuant to the Final Judgments. As of January 28, 2025, the Fair Fund balance is $2,400,755.96. The Fair Fund has been deposited in an SEC-designated account at the United States Department of the Treasury, and any accrued interest will be added to the Fair Fund. The Court approved the Plan in its entirety on May 2, 2025.

To qualify for a payment from the SEC v Andrew DeFrancesco Fair Fund, you must satisfy certain eligibility criteria that are described in detail in the Plan. The Plan can be found under the Important Documents page or on the Commission’s public website at https://www.sec.gov/enforcement-litigation/distributions-harmed-investors/cool-holdings. You can also request a copy of the Plan by calling the Distribution Agent at 888-788-6473 or by emailing info@SECvAndrewDeFrancesco.com. The eligibility criteria include the following:

• You must have purchased or acquired Cool Holdings Inc. common stock during the Relevant Period.
• Your approved transactions must calculate to a Recognized Loss as calculated under the Plan and your Distribution Payment must equal or exceed $20.00.

PLEASE NOTE: RECEIPT OF THE NOTICE DOES NOT MEAN THAT YOU ARE AN ELIGIBLE CLAIMANT AS THAT TERM IS DEFINED IN THE PLAN.

You are excluded from participation in the SEC v Andrew DeFrancesco Fair Fund if you are an Excluded Party as defined in the Plan, including:

• The Defendants;
• Present or former officers or directors of Defendants or any assigns, creditors, heirs, distributees, spouses, parents, dependent children or controlled entities of any of the foregoing Persons or entities;
• Any employee or former employee of the Defendants or any of its affiliates who has been terminated for cause or has otherwise resigned, in connection with the conduct alleged in the Complaint;
• Any Person who, as of the Claims Bar Date, has been the subject of criminal charges related to the conduct alleged in the Complaint or any related Commission action;
• Any firm, trust, corporation, officer, or other entity in which Defendants have or had a controlling interest;
• The Distribution Agent, its employees, and those Persons assisting the Distribution Agent in its role as the Distribution Agent; or
• Any purchaser or assignee of another Person’s right to obtain a recovery from the Fair Fund for value; provided, however, that this provision shall not be construed to exclude those Persons who obtained such a right by gift, inheritance or devise.

On February 20, 2025, the Court appointed Epiq Class Action & Claims Solutions, Inc. (“Epiq”) as the Distribution Agent.

“Relevant Period” means the period of time between September 16, 2018 and October 26, 2018, inclusive.

The Commission holds $2,283,537.34 collected from the Defendants pursuant to the Final Judgments. As of January 28, 2025, the Fair Fund balance is $2,400,755.96. The Fair Fund has been deposited in an SEC-designated account at the United States Department of the Treasury, and any accrued interest will be added to the Fair Fund.

To participate in the Fair Fund, you must timely submit a completed and signed Claim Form with supporting documents to:

SEC v Andrew DeFrancesco Fair Fund
Distribution Agent
P.O. Box 5654
Portland, OR 97228 - 5654

A Claim Form was included with the Plan Notice and is available for download here. You can also submit a Claim Form online here. If you do not complete and timely submit a Claim Form, you will not be considered for eligibility to receive a Distribution Payment under the Plan.

The completed and signed Claim Form, with supporting documentation, must be postmarked, or if not sent by U.S. Mail, received at the above address by October 29, 2025. Claims postmarked or, if not sent by U.S. mail, received after October 29, 2025 will not be eligible to participate in the distribution of the SEC v Andrew DeFrancesco Fair Fund.

Please note that filing a Claim Form does not assure that you will share in the proceeds of the Fair Fund created in this matter. A Potential Claimant’s eligibility for a Distribution Payment under the Plan will be determined by the Distribution Agent in accordance with the Plan.

You must document each transaction that you include on your Claim Form. Acceptable forms of supporting documentation include, but are not limited to:

1. Trade confirmation slips from brokerage firms that list the security name, the name of the beneficial owner, the type of transaction, the date of the transaction, the number of shares, and the total amount of the transaction; or
2. Monthly statements from brokerage firms that detail all activity within a month.

Acceptable documentation must include the name of the owner or owners of the account for which you are filing a claim, the name of the broker through whom the security was traded, trade date, number of shares purchased, acquired and/or sold, and price paid (excluding brokers’ commissions, taxes and fees).

Acceptable documentation includes contract notes, brokers’ confirmation slips, account activity pages from brokers’ computer printouts (including the front page), or account activity pages from brokers’ monthly statements (including the front page), if those statements contain the required information. Letters from your broker are acceptable only if they are on the brokers’ letterhead and contain the required information listed above. Your own records or certificates DO NOT constitute acceptable documentation. We cannot pre-approve any documentation as acceptable without seeing it first.

Depending on how you acquired your investment in Cool Holdings Inc., you can generally obtain the necessary documentation to submit with a Claim Form from:

1. your broker;
2. your tax advisor; and/or
3. the person/party from whom you purchased, or through whom you sold, the security.

Acceptable supporting documentation must be included with your completed Claim Form, or your claim may be rejected.

Most brokerage firms and financial institutions assign account numbers to your account for easier reference. This number is typically included on the statements you receive. Please include your account number on Part II of the Claim Form.

The deadline to submit a completed and signed Claim Form with the necessary documentation is October 29, 2025. The Claim Form must be postmarked, or, if not sent by U.S. mail, received by the Distribution Agent (Epiq) by this date.

Yes. If your Claim Form is deficient, you will receive a Deficiency Notice setting forth the reason why the claim is deficient and advising you of the opportunity to cure such deficiency.

Until all claims have been fully processed, it is not possible to determine the amount of any individual payment because the amount will depend on a variety of factors, including the number of valid claims processed and the details of your specific investment(s). In order for a claim to be paid, the Distribution Payment must equal or exceed $20.00.

As a long-established firm, Epiq's electronic systems, software applications, and employee and operational protocols are all designed to protect and secure the case information provided to us. Further, Epiq is obligated to fulfill the security requirements mandated by the various court jurisdictions and governmental entities that oversee the various types of cases it administers.

You may contact the Distribution Agent by calling toll-free 888-788-6473, sending an email to info@SECvAndrewDeFrancesco.com, or by writing to P.O. Box 5654, Portland, OR 97228 - 5654 for more information.

The Ticker symbol for Cool Holdings Inc. common stock is: AWSM

The CUSIP for Cool Holdings Inc. common stock is: 21640C105