Item 8.01 Other Events.

On December 10, 2019, Mr. Zohar Levy, on behalf of Eroll Grow Tech Ltd., a wholly owned subsidiary of the registrant, incorporated in Israel ("Eroll"), filed a petition (the "Petition") for a debt settlement in the Nazareth District Court (the "Court"), in accordance with Section 321 of Chapter A of Part G of the Israeli Insolvency and Economic Rehabilitation Law, seeking a debt settlement and a stay of proceedings in order to protect Eroll's creditors from economic damages and other future damages, and to allow Eroll to maintain its business while seeking a proposal of an acquisition of Eroll and/or its activities and assets.

On December 11, 2019, Eroll received an offer to acquire Eroll and/or its assets and business from a potential buyer (the "Acquisition Offer" and the "Potential Buyer," respectively). As part of the Acquisition Offer, the Potential Buyer agreed to provide a bridge loan to Eroll in the amount of $400,000 (the "Bridge Loan") to be repaid within 20 days, which Eroll will use for payroll, payment of debt to a certain Chinese manufacturer, and certain other enumerated urgent payments necessary to keep Eroll's assets active.

On December 17, 2019, the Court approved Erolls' entering into the Acquisition Offer subject to several conditions. Additionally, the Court issued an order of stay of all legal proceedings against Eroll, and on December 19, 2019, the Court appointed a debt settlement manager (the "Settlement Manager") with authority to execute actions in accordance with the Israeli Insolvency and Economic Rehabilitation Law.

Due to the fact that Eroll was not able to secure the Bridge Loan under the conditions determined by the Court, on January 2, 2020, the Settlement Manager filed a request to the Court for entering into an interim funding agreement with the Potential Buyer (the "Interim Funding Agreement"). As part of the Interim Funding Agreement, the Potential Buyer agreed to provide a loan in the amount of $294,000 (the "Loan"), which the Eroll will use for payroll, and certain other enumerated urgent payments necessary to keep Eroll's assets active, until a creditors meeting is convened in order to approve a debt settlement based on a final acquisition offer from the Potential Buyer. To ensure the repayment of the Loan, the Potential Buyer will receive a lien over certain intellectual property of Eroll, future payments to Eroll from PayPal and Eroll's property.

On January 5, 2020, the Court approved the Settlement Managers' request to enter into the Interim Funding Agreement.

Additionally, on January 8, 2020, the Court issued an order of stay of all legal proceedings against Eroll, and an order prohibiting any disposition of the Eroll's property. Any transfer of any of Eroll's property and rights, including patents, shall be done subject to the Courts approval. In addition, the Court ordered that Eroll will continue its activities temporarily, and appointed the Settlement Manager as Eroll's trustee, who will, among others, convene a creditors meeting to approve a debt settlement based on a final acquisition offer from the Potential Buyer, to be convened no later than January 19, 2020.


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