UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 17, 2018
The Crypto Company
(Exact name of registrant as specified in its charter)
| Nevada | 000-55726 | 46-4212105 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification No.) |
|
23805 Stuart Ranch Road, Suite 235 Malibu, CA |
90265 | |
| (Address of principal executive offices) | (Zip Code) |
(424) 228-9955
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
The information provided in Items 5.02 of this Current Report on Form 8-K is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Directors
Effective as of April 17, 2018 (the “Effective Date”), Jeffrey Berman and Holly Ruxin were appointed directors of The Crypto Company, a Nevada corporation (the “Company”).
The following is biographical information about Mr. Berman and Ms. Ruxin.
Jeffrey Berman. Mr. Jeffrey Berman, 56, Managing Director at Katalyst Securities LLC, a New York based brokerage firm specializing in raising funds for private equity investments into emerging growth companies. Mr. Berman started his career at Merrill Lynch and, over the past 25 years, he has headed the Investment Banking departments at several boutique investment banks. Mr. Berman has worked with corporate management teams during his career, helping them meet their capital requirements and business development needs. Working with a broad range of businesses, from pre-revenue to successful multimillion dollar operating entities, Mr. Berman has raised over one billion dollars for companies across the globe. Mr. Berman received his Master of Business Administration from New York University, Leonard N. Stern School of Business and a Bachelor of Science degree from The American University. We determined that Mr. Berman should serve as a director because of his extensive experience with management and capital raising.
Holly Ruxin. Ms. Holly Ruxin, 48, is the Chief Executive Officer of Montcalm TCR, a San Francisco-based wealth management and capital markets trading firm. She began her investment career at Goldman Sachs in the fixed income derivatives arena, and she has managed client assets and led private client teams at Morgan Stanley, Montgomery Securities and Bank of America for over twenty years. Ms. Ruxin is also the founder of Trevor TCR, a non-profit organization designed to invest in what matters and achieve transformation through giving. She received a Master of Business Administration in Finance from Columbia University and a Bachelor of Arts in Economics from the University of Michigan. We determined that Ms. Ruxin should serve as a director because of her extensive asset management and capital markets experience.
There are no family relationships between any of our executive officers and directors.
Director Services Agreements
The Company entered into a Director Services Agreement with each of Mr. Berman and Ms. Ruxin, effective April 17, 2018. Pursuant to the Director Service Agreements, each of Mr. Berman and Ms. Ruxin will be entitled to receive (i) a fee of $80,000 per annum, payable quarterly, and (ii) a ten-year option to purchase 100,000 shares of common stock of the Company at an exercise price of $10.00 per share, which option shall be fully vested on the six-month anniversary of the date of grant, pursuant to the terms set forth in their respective Non-Qualified Stock Option Agreements, discussed below. Additionally, subject to certain exceptions, each of Mr. Berman and Ms. Ruxin will be entitled to receive reimbursement for reasonable expenses incurred for the benefit of the Company.
Each of Mr. Berman and Ms. Ruxin shall serve on the Company’s board of directors for a term of six months from the Effective Date or until their earlier death, resignation or removal. Finally, the agreements contain customary indemnification and confidentiality provisions
Non-Qualified Stock Option Agreements
Effective as of April 17, 2018, the Company entered into a Non-Qualified Stock Option Agreement with each of Mr. Berman and Mr. Ruxin, pursuant to a form of Non-Qualified Stock Option Agreement attached hereto as an exhibit. The stock options are subject to the terms set forth in the Company’s 2017 Equity Incentive Plan.
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Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits |
| 10.1 | Form of Non-Qualified Stock Option Agreement |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE CRYPTO COMPANY | ||
| Date: April 17, 2018 | ||
| By: | /s/ Michael Poutre | |
| Name: | Michael Poutre | |
| Title: | Chief Executive Officer | |
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Non-Qualified Stock Option Agreement
This Non-Qualified Stock Option Agreement (this “ Agreement ”) is made and entered into as of ___________, 20___, by and between The Crypto Company, a Nevada corporation (the “ Company ”), and ______________________________ (the “ Participant ”).
Grant Date: _____________________________________
Exercise Price per Share: __________________________
Number of Option Shares: _________________________
Expiration Date: _________________________________
1. Grant of Option .
1.1 Grant; Type of Option . The Company hereby grants to the Participant an option (the “ Option ”) to purchase the total number of shares of Common Stock of the Company equal to the number of Option Shares set forth above, at the Exercise Price set forth above. The Option is being granted pursuant to the terms of the Company’s 2017 Equity Incentive Plan (the “ Plan ”). The Option is intended to be a Non-qualified Stock Option and not an Incentive Stock Option within the meaning of Section 422 of the Internal Revenue Code.
1.2 Consideration; Subject to Plan . The grant of the Option is made in consideration of the services to be rendered by the Participant to the Company and is subject to the terms and conditions of the Plan. Capitalized terms used but not defined herein will have the meaning ascribed to them in the Plan.
2. Exercise Period; Vesting .
2.1 Vesting Schedule . The Option will become vested and exercisable with respect to ______ shares on __________________ until the Option is 100% vested. The unvested portion of the Option will not be exercisable on or after the Participant’s termination of Continuous Service.
2.2 Expiration . The Option will expire on the Expiration Date set forth above, or earlier as provided in this Agreement or the Plan.
3. Termination of Continuous Service .
3.1 Termination for Reasons Other Than Cause, Death, Disability . If the Participant’s Continuous Service is terminated for any reason other than Cause, death or Disability, the Participant may exercise the vested portion of the Option, but only within such period of time ending on the earlier of (a) the date three months following the termination of the Participant’s Continuous Service or (b) the Expiration Date.
3.2 Termination for Cause . If the Participant’s Continuous Service is terminated for Cause, the Option (whether vested or unvested) shall immediately terminate and cease to be exercisable.
3.3 Termination due to Disability . If the Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise the vested portion of the Option, but only within such period of time ending on the earlier of (a) the date 12 months following the Participant’s termination of Continuous Service or (b) the Expiration Date.
3.4 Termination due to Death . If the Participant’s Continuous Service terminates as a result of the Participant’s death, or the Participant dies within a period following termination of the Participant’s Continuous Service during which the vested portion of the Option remains exercisable, the vested portion of the Option may be exercised by the Participant’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by the person designated to exercise the Option upon the Participant’s death, but only within the time period ending on the earlier of (a) the date 12 months following the Participant’s death or (b) the Expiration Date.
4. Manner of Exercise .
4.1 Election to Exercise . To exercise the Option, the Participant (or in the case of exercise after the Participant’s death or incapacity, the Participant’s executor, administrator, heir or legatee, as the case may be) must deliver to the Company a notice of intent to exercise in the manner designated by the Committee.
4.2 Payment of Exercise Price . The entire Exercise Price of the Option shall be payable in full at the time of exercise in the manner designated by the Committee, which may include, to the extent permitted by applicable statutes and regulations, either:
| (a) | in cash or by certified or bank check at the time the Option is exercised; | |
| (b) | by reduction in the number of shares otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate Exercise Price at the time of exercise; | |
| (c) | by any combination of the foregoing methods; or | |
| (d) | in any other form of legal consideration that may be acceptable to the Committee. |
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4.3 Withholding . Prior to the issuance of shares upon the exercise of the Option, the Participant must make arrangements satisfactory to the Company to pay or provide for any applicable federal, state and local withholding obligations of the Company. The Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise of the Option by any of the following means:
| (a) | tendering a cash payment; | |
| (b) | authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise of the Option; provided, however , that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or | |
| (c) | delivering to the Company previously owned and unencumbered shares of Common Stock. |
The Company has the right to withhold from any compensation paid to a Participant.
4.4 Issuance of Shares . Provided that the exercise notice and payment are in form and substance satisfactory to the Company, the Company shall issue the shares of Common Stock registered in the name of the Participant, the Participant’s authorized assignee, or the Participant’s legal representative, and shall deliver certificates representing the shares with the appropriate legends affixed thereto.
5. No Right to Continued Employment; No Rights as Stockholder . Neither the Plan nor this Agreement shall confer upon the Participant any right to be retained in any position, as an employee, consultant or director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Participant’s Continuous Service at any time, with or without Cause. The Participant shall not have any rights as a stockholder with respect to any shares of Common Stock subject to the Option prior to the date of exercise of the Option.
6. Transferability . The Option is not transferable by the Participant other than to a designated beneficiary upon the Participant’s death or by will or the laws of descent and distribution, and is exercisable during the Participant’s lifetime only by him or her. No assignment or transfer of the Option, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary upon death by will or the laws of descent or distribution) will vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Option will terminate and become of no further effect.
7. Change in Control .
7.1 Acceleration of Vesting . Unless otherwise determined by the Committee at the time of a Change in Control, a Change in Control shall have no effect on the Option.
7.2 Cash-out . In the event of a Change in Control, the Committee may, in its discretion and upon at least ten (10) days’ advance notice to the Participant, cancel the Option and pay to the Participant the value of the Option based upon the price per share of Common Stock received or to be received by other stockholders of the Company in the event. Notwithstanding the foregoing, if at the time of a Change in Control the Exercise Price of the Option equals or exceeds the price paid for a share of Common Stock in connection with the Change in Control, the Committee may cancel the Option without the payment of consideration therefor.
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8. Adjustments . The shares of Common Stock subject to the Option may be adjusted or terminated in any manner as contemplated by Section 5 of the Plan.
9. Tax Liability and Withholding . Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“ Tax-Related Items ”), the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting, or exercise of the Option or the subsequent sale of any shares acquired on exercise; and (b) does not commit to structure the Option to reduce or eliminate the Participant’s liability for Tax-Related Items.
10. Compliance with Law . The exercise of the Option and the issuance and transfer of shares of Common Stock shall be subject to compliance by the Company and the Participant with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s shares of Common Stock may be listed. No shares of Common Stock shall be issued pursuant to this Option unless and until any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Participant understands that the Company is under no obligation to register the shares of Common Stock with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.
11. Notices . Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Secretary of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Participant under this Agreement shall be in writing and addressed to the Participant at the Participant’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
12. Governing Law . This Agreement will be construed and interpreted in accordance with the laws of the state of incorporation of the Company (as applicable from time to time), without regard to conflict of law principles.
13. Interpretation . Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.
14. Options Subject to Plan . This Agreement is subject to the Plan as approved by the Company’s stockholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
15. Successors and Assigns . The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Participant and the Participant’s beneficiaries, executors, administrators and the person(s) to whom the Option may be transferred by will or the laws of descent or distribution.
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16. Severability . The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
17. Discretionary Nature of Plan . The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Option in this Agreement does not create any contractual right or other right to receive any Options or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with the Company.
18. Amendment . The Committee has the right to amend, alter, suspend, discontinue or cancel the Option, prospectively or retroactively; provided, that , no such amendment shall adversely affect the Participant’s material rights under this Agreement without the Participant’s consent.
19. No Impact on Other Benefits . The value of the Participant’s Option is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.
20. Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.
21. Acceptance . The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions thereof, and accepts the Option subject to all of the terms and conditions of the Plan and this Agreement. The Participant acknowledges that there may be adverse tax consequences upon exercise of the Option or disposition of the underlying shares and that the Participant should consult a tax advisor prior to such exercise or disposition.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| THE CRYPTO COMPANY, a Nevada corporation | ||
| By: | ||
| Name: | ||
| Title: | ||
| PARTICIPANT | ||
| By: | ||
| Name: | ||