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HELIX TCS, INC. (OTCMKTS:HLIX) Files An 8-K Entry into a Material Definitive Agreement

HELIX TCS, INC. (OTCMKTS:HLIX) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

On June 2, 2017, Helix TCS, Inc. (the Company) entered into a
Membership Interest Purchase Agreement (the Purchase Agreement)
by and among the Company, Security Grade Protective Services,
LTD. (Security Grade), and the following members of Security
Grade, each, an individual: Derek Porter, David Beckett, Guy
Cerasoli, David Keyes, Ryan Shields, and Mark Mergo (such
members, collectively, the Sellers).

to the Purchase Agreement, upon the closing of the Purchase
Agreement (the Closing), which took place on June 2, 2017 (the
Closing Date), the Company purchased from Sellers 100% of the
membership interests of Security Grade, comprised of both Class A
and Class B Units (collectively the Units), in exchange for the
following (collectively, the Purchase Price):

(i) Cash consideration to be allocated among the Sellers pro rata
in accordance with their ownership and the terms of the Purchase
Agreement (the Cash Consideration), paid to the following
schedule:

(a) $800,000 due at Closing
(b) $800,000 due sixty (60) days following the Closing Date; and
(c) 500,372.52 due nine (9) months following the Closing Date;

(ii) options to purchase 207,427 shares of the Companys common
stock at a strike price of $0.001, to be allocated to the Sellers
on the Closing Date (the Initial Options); and

(iii) additional options to purchase an additional 207,427 shares
of the Companys common stock, par value $0.001, at a strike price
of $0.001, to be allocated to the Sellers sixty one days after
closing, subject to no material customer identified in the
Purchase Agreement terminating its contractual relationship with
the Company and that all contracts with such material customers
are in full force and effect without default or cancellation as
of the sixtieth (60th) day following the Closing Date (the Future
Options, and, together with the Initial Options, the Options).

All of the Options have a term of 36 months and vest within one
year of the Closing Date and are subject to reduction and or
forfeiture in the event of termination, cancellation or default
of any contract with one or more Material Customers (as defined
in the Purchase Agreement) within the first sixty (60) days
following the Closing Date, as more fully described in the
Purchase Agreement.

The Purchase Agreement contains typical representations,
warranties and covenants.

In connection with the Purchase Agreement, Security Grade entered
into an Employment Agreement with Mr. Derek Porter, to which Mr.
Porter will serve as Chief Executive Officer of Security Grade
(the Porter Employment Agreement).Mr. Porters duties will focus
on implementing strategic initiatives including but not limited
to developing the Companys intelligence platform.The term of the
Porter Employment Agreement is for one year unless otherwise
terminated to the terms and conditions thereof. to the Porter
Employment Agreement, Security Grade will pay Mr. Porter (i)
$110,000 per annum, (ii) a retention bonus of $200,000 payable
nine (9) months from the Closing Date and (iii) cash bonuses
based on the Companys revenues as further described in the
Purchase Agreement. Provided Mr. Porter remains employed by the
Company 60 days after the Closing Date, the Porter Employment
Agreement provides that Mr. Porter will be appointed to the board
of directors.

Additionally, in connection with the Purchase Agreement, Security
Grade entered into an Employment Agreement with David Beckett, to
which Mr. Beckett will serve as Director of Surveillance
Operations for Security Grade (the Beckett Employment Agreement
together with the Porter Employment Agreement, the Employment
Agreements).Mr. Becketts duties will focus on (a) ensuring the
operation of all electronic security operations for all employer
clientele, to include effective installation, servicing and
maintenance of electronic systems clientele; (b) managing all
personnel and technicians hired for the purpose of security
installation, servicing and maintenance, with regards to
scheduling, delegation of duties and proper equipment
maintenance; (c) ensuring high level of service to customer
accounts by ensuring that the employer’s electronic security
clientele services are provided on a timely basis,; and (d)
operating the technology vendor/product suite that Security Grade
and Helix TCS will use to service its clients.The term of the
Beckett Employment Agreement is for one years unless otherwise
terminated to the terms and conditions thereunder. Security Grade
shall pay Mr. Beckett $100,000 per annum as well as 5% of sales
revenue received by either Helix TCS or Security Grade as a
result of securities monitoring services directly sold by Mr.
Beckett.

Commencing on the sixty first (61st) day following employment,
Mr. Beckett shall be entitled to a position as a Board Observer
with Helix TCS. As a Board Observer, Mr. Beckett shall be
entitled to attend all meetings of the Board of Directors of
Helix TCS and provide input at such meetings, but will not be
entitled to vote on any matter presented to the Board of
Directors of Helix TCS.

The above descriptions of the Purchase Agreement and the
Employment Agreements do not purport to be complete and are
qualified in their entirety by the full text of such documents,
which are included as exhibits to this Current Report on Form 8-K
and is incorporated by reference.

Item 2.01 Completion of Acquisition or Disposition of
Assets.

As described in Item 1.01, on June 2, 2017, as a result of the
Purchase Agreement Security Grade became a wholly-owned
subsidiary of the Company.

The information set forth in Item1.01 is incorporated into this
Item 2.01 by reference.

Item 3.02Unregistered Sales of Equity
Securities.

The information described in Item1.01 is incorporated by
reference into this Item3.02.

The issuance of the securities to the Purchase Agreement was not
registered under the Securities Act of 1933, as amended (the
Securities Act), but qualified for exemption under Section
4(a)(2) of the Securities Act.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

ExhibitNo. Description
10.1* Formof Membership Interest Purchase Agreement, dated June 2,
2017
10.2* Form of Employment Agreement, dated June 2, 2017 by and
between the Company and Derek Porter
10.3*

Form of Employment Agreement, dated June 2, 2017 by and
between the Company and David Beckett

*filed herewith

About HELIX TCS, INC. (OTCMKTS:HLIX)
Helix TCS, Inc. is a provider of integrated operating environment solutions for the legal cannabis industry. The Company provides security, compliance, and technology services to the legal cannabis industry. Its technology service offers clients a technology platform, allowing clients to manage inventory and supply costs through Cannabase, as well as bespoke monitoring and transport solutions. It focuses on utilizing technology as an operations multiplier, bringing in and managing a range of partnerships across the technology spectrum to give desired outcomes for its clients. The Company develops a range of compliance services to firms in the cannabis industry. It safeguards the clients’ ability to operate while increasing their access to services. The Company delivers a range of security operations, such as transport, armed and unarmed guarding, training, investigation and special services. Its include Cannabase, BOSS Security Solutions, Helix TCS LLC and Security Consultants LLC.

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