Item 3.03 Material Modification to Rights of Security Holders
On May 15, 2017, Helix TCS, Inc., a Delaware corporation (the "Company") filed a
certificate of designations, preferences and rights (the "Certificate of
Designations") with the Secretary of State of the State of Delaware pursuant to
which the Company set forth the designation, powers, rights, privileges,
preferences and restrictions of the Company's Series B Preferred Stock, par
value $0.001 per share (the "Series B Preferred"). The Series B Preferred is
convertible into the Company's common stock ("Common Stock") at the holder's
option at any time after May 12, 2018 and automatically converts into Common
Stock at any time after May 12, 2018 upon either the affirmative vote of a
majority of Series B Preferred holders or a "Qualified Initial Public Offering"
of the Company's securities, as defined in the Certificate of Designations.
The number of shares of the Common Stock to which a holder of the Series B
Preferred shall be entitled upon conversion shall be the product obtained by
multiplying the Preferred Conversion Rate, as defined below, then in effect by
the number of shares of the Series B Preferred Stock being converted. The
conversion rate in effect at any time for conversion of the Series B Preferred
Stock (the "Preferred Conversion Rate") shall be the quotient obtained dividing
the Preferred Stock Original Issue Price (as defined in the Certificate of
Designations) by the preferred stock conversion price which shall initially be
equal to the Preferred Stock Original Issue Price, for an effective initial
conversion ratio equal to 1:1, subject to adjustment.
The Series B Preferred shall vote together with the Common Stock and all other
classes and series of stock of the Company as a single class on all actions to
be taken by the stockholders of the Company including, but not limited to,
actions amending the Certificate of Incorporation of the Company to increase the
number of authorized shares of the Common Stock. Each holder of shares of the
Series B Preferred shall be entitled to the number of votes equal to the number
of shares of the Common Stock into which such shares of the Series B Preferred
are then convertible. For so long as any the shares of the Series B Preferred
remain outstanding, in addition to any other vote or consent required by the
Company's Certificate of Incorporation or bylaws, the vote or written consent of
the holders of at least a majority of the outstanding shares of the Series B
Preferred, voting or consenting together as a separate class, shall be necessary
for authorizing, effecting or validating certain transactions as further
described in the Certificate of Designations.
Additionally, the Series B Preferred holders may elect a Director to sit on the
Company's Board of Directors.
The above description of the Certificate of Designations does not purport to be
complete and is qualified in its entirety by the full text of the forms of the
Certificate of Designations, which is attached as an exhibit to this Current
Report on Form 8-K and incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
The information set forth in Item 3.03 of this Current Report on Form 8-K is
incorporated by reference into this Item 5.03.
Item 9.01 Financial Statements and Exhibits
Exhibit No. Description
3.1* Form of Series B Preferred Stock Certificate of Designations
* filed herewith
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