13D Filing: Iroquois Capital Management, LLC and Digital Power Corp (DPW)

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).

(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%.

(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%.

(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.

(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%.

(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 751,000 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 6.4%.

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.

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.

(a)        This
statement is filed by:

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.

(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.

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.

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.

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.

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.

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%.

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%.

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

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%.

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.

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.

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

SCHEDULE A

Directors of Iroquois Master Fund
Ltd.