Exhibit 10.5


 


HELIX
TCS, INC.


SERIES
B PREFERRED STOCK PURCHASE AGREEMENT


 


This
Series B Preferred Stock Purchase Agreement (this
“Agreement”) is made and entered into as of October 31, 2017, by and among (i) Helix
TCS, Inc., a Delaware corporation (the “Company”), and (ii) RSF4, LLC, a Delaware limited liability
company (the “Purchaser”).


 


Witnesseth


 


Whereas,
the Company has authorized a series of preferred stock in its Series B Certificate of Designation (as defined below) designated
as the “Series B Preferred Stock”, and on May 17, 2017, the Company, the Purchaser and Helix Opportunities, LLC entered
into a series of transactions contemplated by that certain Series B Preferred Stock Purchase Agreement (the “May 2017
SPA”);


 


Whereas,
the Company has authorized the sale and issuance of the value of the Company’s Series B Preferred Stock (the “Series
B Preferred Shares”) which are to be sold at the Closing (as defined in Section 2.1);


 


Whereas,
the Purchaser desires to purchase the Series B Preferred Shares on the terms and conditions set forth herein; and


 


Whereas,
the Company desires to issue and sell the Series B Preferred Shares to the Purchaser on the terms and conditions set forth herein.


 


Agreement


 


Now,
Therefore, in consideration of the foregoing
recitals and the mutual promises, representations, warranties, and covenants hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


 


1. AGREEMENT
TO SELL AND PURCHASE


 


1.1 Authorization
of Series B Preferred Shares. The Company
has authorized the sale and issuance to the Purchaser of the Series B Preferred Shares. The Series B Preferred Shares have the
rights, preferences, privileges and restrictions set forth in the Charter, including that certain Certificate of Designations,
Preferences and Rights of Series B Preferred Stock in the form attached to the May 2017 SPA (the “Series B Certificate
of Designation”).


 


1.2 Sale
and Purchase. The Company hereby agrees to issue and sell to the Purchaser and, subject to and in reliance upon the
representations, warranties, covenants, terms and conditions hereof, at the Closing, the Purchaser agrees to purchase, from the
Company, 795,833 Series B Preferred Shares (the “Purchased Series B Shares”) in exchange for an aggregate
cash payment equal to $477,500 (i.e., a per share price equal to $0.60 (the “Per Share Purchase Price”)).


 






     


     


    

 


1.3 Conversion
Clarification and Sample Calculation. For clarity and the avoidance of doubt, each of the parties hereto agrees that,
for all purposes under the Series B Certificate of Designation, (i) the Preferred Stock Original Issue Price (as defined therein)
and (ii) the Preferred Stock Conversion Price (as defined therein), shall each equal $0.3253815 per Series B Preferred Share.
The parties further agree that, unless an event occurs which gives rise to an adjustment to the Preferred Stock Conversion Price
in accordance with the Series B Certificate of Designation (for example, a dividend paid in additional shares of Common Stock
which would result in an adjustment of the Preferred Stock Conversion Price per Article VI, Section F of the Series B Certificate
of Designation), the Purchased Series B Shares shall be convertible into 795,833 shares of the Company’s Common Stock.


 


2. CLOSING,
DELIVERY AND PAYMENT


 


2.1 Closing.


 


(a) Closing.
The sale and purchase of the Series B Preferred Shares shall occur on the date hereof (the “Closing”).


 


2.2 Use
of Proceeds. The Company covenants and agrees
to use the proceeds from the sale of the Series B Preferred Shares for working capital purposes and to fund the $50,000 deposit
to BTC Investment LLC pursuant to the October 6, 2017 Letter of Interest between the Company and BTC Investment LLC.


 


2.3 Payment.
The Purchaser shall pay for the Series B Preferred Shares by wire transfer in accordance with instructions provided by the Company
in an amount equal to the Per Share Purchase Price multiplied by the number of the Series B Preferred Shares purchased.


 


2.4 Delivery.
At the Closing, subject to the terms and conditions
hereof and upon payment of the purchase price therefor, the Company will deliver to the Purchaser a certificate, duly signed by
an authorized agent of the Company, representing the Purchased Series B Shares.


 


3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY


 


Except
as set forth on a Schedule of Exceptions attached hereto (the “Schedule of Exceptions”), the Company,
on behalf of itself and each member of the Company Group, hereby represents and warrants to the Purchaser as of the date of this
Agreement as set forth below. For purposes of this Section 3, the phrase “to the Company’s knowledge” means
the actual knowledge of the executive officers of the Company.


 






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3.1 Organization,
Good Standing and Qualification. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and
authority and any government consents and approvals to (i) own and operate its properties and assets, (ii) execute and deliver
this Agreement, (iii) issue and sell the Series B Preferred Shares, (iv) carry out the provisions of this Agreement, the Series
B Financing Agreements (as such term is defined in the May 2017 SPA) and the Charter and (v) carry on its business as presently
conducted. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in
all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification
necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the assets, liabilities,
financial condition, prospects or operations of the Company. For the purposes of this Agreement, the Company’s original
Certificate of Incorporation filed with the Secretary of the State of Delaware on March 13, 2014 (the “Original Certificate”),
as (i) amended on May 6, 2014 (in order to correct a misspelling), (ii) further amended on May 6, 2014, (iii) amended on October
14, 2015, (iv) amended on December 28, 2015 pursuant to an amendment which included the Certificate of Designation of Rights and
Privileges of Class A Preferred Convertible Super Majority Voting Stock (the “Original Series A Certificate of Designation”),
and (v) further amended on May 15, 2017 pursuant to an amendment which included the Series B Certificate of Designation (the amendments
described in the foregoing clauses (i)-(v), collectively, the “Charter Amendments”, and the Original
Certificate and the Amendments are together, collectively referred to herein as the “Charter”.


 


3.2 Capitalization;
Voting Rights.


 


(a) The
authorized capital stock of the Company, immediately prior to the Closing consists of (i) 200,000,000 shares of common stock,
par value $0.001 per share, 28,644,522 shares of which are issued and outstanding (the “Common Stock”),
and (ii) 20,000,000 shares of Preferred Stock, par value $0.001 per share, (A) 1,000,000 of which are designated “Series A
Preferred Stock” in the Charter, as may be amended from time to time in accordance with this Agreement (the “Series
A Preferred Stock”), all of which are issued and outstanding immediately prior to the Closing; and (B) 13,000,000
of which are designated “Series B Preferred Stock”, 10,292,230 of which are issued and outstanding immediately prior
to the Closing. Attached as Schedule 3.2(a) sets forth the capitalization of the Company immediately prior to the
Closing.


 


(b) Other
than (i) rights to purchase additional shares of the Common Stock vested in those persons and entities and determined as described
in Schedule 3.2(b) attached hereto, and (iii) except as may otherwise be granted pursuant to this Agreement, the
May 2017 SPA and any agreement related thereto (collectively the “Series B Financing Agreements”) , there are no outstanding
options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements,
or agreements of any kind, including agreements contingent on the occurrence of possible future events, for the purchase or acquisition
from the Company of any of its securities.


 


(c) The
rights, preferences, privileges and restrictions applicable to the Series B Preferred Shares are as stated in the Series B Certificate
of Designation. When issued in compliance with the provisions of this Agreement and the Charter, the Series B Preferred Shares
will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances other than liens and encumbrances
created by Purchaser; provided, however, that the Series B Preferred Shares may be subject to restrictions on transfer under the
Series B Financing Agreements, and state and/or federal securities laws as set forth herein or as otherwise required by such laws
at the time a transfer is proposed.


 


(d) Except
as set forth in Schedule 3.2(d) attached hereto, no stock plan, stock purchase, stock option or other agreement
or understanding between the Company and any holder of any equity securities or rights to purchase equity securities provides
for mandatory acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the
result of (i) termination of employment (whether actual or constructive); (ii) any merger, consolidated sale of stock or assets,
change in control or any other transaction(s) by the Company; (iii) the transactions contemplated hereby or (iv) the occurrence
of any other event or combination of events.


 






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3.3 Authorization;
Binding Obligations.


 


(a) All
corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization of this
Agreement, the performance of all obligations of the Company hereunder at the Closing, the authorization, sale, issuance and delivery
of the Series B Preferred Shares pursuant hereto.


 


(b) This
Agreement, when executed and delivered by the Company, will (assuming the due authorization, execution and delivery hereof by
the Purchaser and other parties thereto) be legal, valid and binding obligations of the Company enforceable in accordance with
their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors’ rights, (b) general principles of equity that restrict the
availability of equitable remedies, and (c) to the extent that the enforceability of the indemnification provisions in the
Series B Financing Agreements may be limited by applicable laws.


 


3.4 No
Insolvency. No insolvency proceeding of any character, including, without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary, affecting the Company or any of its assets or properties,
is pending or, to the Company's knowledge, threatened. Neither the Company, nor any of its subsidiaries (collectively, with the
Company, the “Company Group”), has taken any action in contemplation of, or that would constitute the
basis for, the institution of any such insolvency proceedings.


 


3.5 Litigation.
Other than the two lawsuits by three former employees previously disclosed by the Company, there is no (a) action, suit,
proceeding or investigation pending or, to the Company’s knowledge, currently threatened against any member of the Company
Group before or by any Federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, (b) arbitration proceeding relating to any member of the Company Group pending or (c) governmental inquiry
pending or, to the Company’s knowledge, currently threatened against any member of the Company Group (including without
limitation any inquiry as to the qualification of the Company to hold or receive any license or permit), nor is the Company aware
that there is any basis for any of the foregoing.


 






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3.6 Tax
Returns and Payments. The Company has timely filed all tax returns and
reports as required by federal, state and local law. These returns and reports are true and correct in all material respects.
The Company has paid all taxes and other assessments due, except those contested by it in good faith. The provision for taxes
of the Company as shown in the Financial Statements is adequate for taxes due or accrued as of the date thereof. The Company has
elected pursuant to the Internal Revenue Code of 1986, as amended (the “Code”), to be treated as a corporation.
During the past three (3) years, the Company has not had any tax deficiency proposed or assessed against it and has not executed
any waiver of any statute of limitations on the assessment or collection of any tax or governmental charge. During the past three
(3) years, none of the Company’s federal income tax returns and none of its state income or franchise tax or sales or use
tax returns has ever been audited by governmental authorities. The Company has withheld or collected from each payment made to
each of its employees the amount of all taxes, including, but not limited to, federal income taxes, Federal Insurance Contribution
Act taxes and Federal Unemployment Tax Act taxes required to be withheld or collected therefrom, and has paid the same to the
proper tax receiving officers or authorized depositaries.


 


3.7 Disclosure.
The Company has made available to the Purchaser all the information reasonably available to the Company and its subsidiaries
that the Purchaser have requested for deciding whether to acquire the Purchased Series B Shares. No representation or warranty
of the Company contained in this Agreement, as qualified by the Schedule of Exceptions, and no certificate or other information
furnished or to be furnished to Purchaser at the Closing contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances
under which they were made.


 


4. REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER.


 


Purchaser
hereby represents and warrants to the Company as follows (such representations and warranties do not lessen or obviate the representations
and warranties of the Company set forth in this Agreement):


 


4.1 Requisite
Power and Authority. Such Purchaser has all necessary power and authority
under all applicable provisions of law to execute and deliver this Agreement and to carry out its provisions. All action on such
Purchaser’s part required for the lawful execution and delivery of this Agreement have been or will be effectively taken
prior to the Closing. Upon its execution and delivery, this Agreement will be valid and binding obligations of such Purchaser,
enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors’ rights, and (b) as limited by general principles
of equity that restrict the availability of equitable remedies.


 


4.2 Investment
Representations. Such Purchaser understands that none of the Purchased
Series B Shares have been registered under the Securities Act. Such Purchaser also understands that the Series B Preferred Shares
are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon such
Purchaser’s representations contained in the Agreement. Such Purchaser hereby represents and warrants as follows:


 


(a) Purchaser
Bears Economic Risk. Such Purchaser has substantial experience in evaluating and investing in private placement transactions
of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in
the Company and has the capacity to protect its own interests. Such Purchaser must bear the economic risk of this investment indefinitely
unless the Purchased Series B Shares are registered pursuant to the Securities Act, or an exemption from registration is available.
Such Purchaser understands that the Company has no present intention of registering the Purchased Series B Shares or any shares
of the Common Stock. Such Purchaser also understands that there is no assurance that any exemption from registration under the
Securities Act will be available and that, even if available, such exemption may not allow such Purchaser to transfer all or any
portion of the Purchased Series B Shares under the circumstances, in the amounts or at the times that such Purchaser might propose
or desire.


 






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(b) Acquisition
for Own Account. Such Purchaser is acquiring the Purchased Series B Shares for such Purchaser’s own account for investment
only, and not with a view to distribution, assignment or resale of the Purchased Series B Shares to others or to fractionalization
of the Purchased Series B Shares in whole or in part, in each case, in violation of the Securities Act.


 


(c) Purchaser
Can Protect Its Interest. Such Purchaser represents that by reason of its, or of its management’s, business or financial
experience, such Purchaser has the capacity to protect its own interests in connection with the transactions contemplated in this
Agreement. Further, such Purchaser is aware of no publication of any advertisement in connection with the transactions contemplated
in the Agreement.


 


(d) Accredited
Investor. Such Purchaser represents and warrants that it is an “accredited investor” within the meaning of Rule
501 of Regulation D, as promulgated under the Securities Act. Purchaser represents and warrants that, to the best of such Purchaser’s
knowledge (after due inquiry), each equity owner of such Purchaser is also an “accredited investor” within the meaning
of Regulation D, as promulgated under the Securities Act.


 


(e) Rule
144. Such Purchaser acknowledges and agrees that in addition to any requirements under state securities laws, the Series B
Preferred Shares are “restricted securities” as defined in Rule 144 promulgated under the Securities Act as in effect
from time to time (“Rule 144”) and must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available. Such Purchaser has been advised or is aware of the
provisions of Rule 144, which permits limited resale of shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things, the availability of certain current public information about the Company, the
resale occurring following the required holding period under Rule 144, and the number of shares being sold during any three-month
period not exceeding specified limitations. Such Purchaser has been further advised that the Company has no present intention
of satisfying the current public information requirements of Rule 144, and as a result such Purchaser will be able to rely on
Rule 144 only under the limited circumstances described in that rule.


 


(f) Residence.
Purchaser is a resident of the state of New York.


 






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(g) Foreign
Investors. If such Purchaser is not a United States person (as defined by Section 7701(a)(30) of the Code), such Purchaser
hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Purchased Series B Shares or any use of this Agreement, including (i) the legal requirements within
its jurisdiction for the purchase of the Purchased Series B Shares, (ii) any foreign exchange restrictions applicable to such
purchase, (iii) any government or other consents that may need to be obtained, and (iv) the income tax and other tax consequences,
if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Purchased Series B Shares. Such Purchaser’s
subscription and payment for and continued beneficial ownership of the Purchased Series B Shares will not violate any applicable
securities or other laws of such Purchaser’s jurisdiction.


 


(h) No
General Solicitation. To the knowledge of such Purchaser, the Series B Preferred Shares have not been offered to such Purchaser
by any form of general solicitation or general advertising, including, without limitation, (A) any advertisement, article, notice
or other communication published in any newspaper, magazine or similar media, or broadcast over television or radio, or (B) any
seminar or meeting whose attendees (including the Purchaser) have been invited by any general solicitation or general advertising.


 


4.3 Transfer
Restrictions. Such Purchaser acknowledges and agrees that the Purchased
Series B Shares are subject to restrictions on transfer as set forth in the Series B Financing Agreements.


 


4.4 Not
a Bad Actor. Neither Purchaser nor any of its affiliates that could stand as beneficial owner of the Securities purchased
hereunder, is subject to any of the “Bad Actor” disqualifications described in Securities Act Rule 506(d)(1) subsections
(i) through (viii).


 


5. MISCELLANEOUS.


 


5.1 Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance
with the General Corporation Law of the State of Delaware, without regard to its principles of conflicts of laws. Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of Delaware located in Wilmington,
Delaware and the United States District Court for the District of Delaware for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the transactions contemplated hereby.  Service of process in connection
with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified
for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents to the jurisdiction of any
such court in any such suit, action or proceeding and to the laying of venue in such court.  Each party hereto irrevocably
waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. 
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS
THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.


 


5.2 Successors
and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of the Series B Preferred
Shares from time to time.


 






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5.3 Entire
Agreement. This Agreement together with the Series Financing Agreements,
subject to the waivers provided herein, the exhibits and schedules hereto and thereto, and the other documents delivered pursuant
hereto and thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects
hereof and thereof and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants
and agreements except as specifically set forth herein and therein.


 


5.4 Severability.
In case any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby.


 


5.5 Amendment
and Waiver.


 


(a) This
Agreement may be amended or modified only upon the written consent of the Company and holders of at least a majority of the Series
B Preferred Shares then outstanding (treated as if converted into which the Series B Preferred Shares have been converted that
have not been sold to the public). Any such amendment or modification effected in accordance with this Section 5.5(a) shall be
binding on all parties hereto, even if they do not execute such consent.


 


(b) Subject
to Section 5.5(c) below, any party hereto may waive compliance with any agreements, covenants or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any such waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party.


 


(c) The
obligations of the Company and the rights of the holders of the Series B Preferred Shares under the Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively) only with the written consent of the holders
of at least a majority of the Series B Preferred Shares then outstanding (treated as if converted into which the Series B Preferred
Shares have been converted that have not been sold to the public). Any such waiver effected in accordance with this Section 5.5(c)
shall be binding on all parties hereto, even if they do not execute such consent.


 


(d) The
Purchaser expressly waives and acknowledges the satisfaction of any and all terms and conditions contained in the Series B Financing
Agreements as it relates to the Closing under this Agreement, including the terms and conditions set forth in Section 2.1 of the
May 2017 SPA; provided that, for the avoidance of doubt, such waiver does not limit or impair Purchaser’s rights under Section
2.1(b) in a subsequently closing following the Closing.


 


5.6 Delays
or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default
or noncompliance by another party under this Agreement, or the Charter, shall impair any such right, power or remedy, nor shall
it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any
kind or character on Purchaser’s part of any breach, default or noncompliance under this Agreement, or under the Charter
or any waiver on such party’s part of any provisions or conditions of the Agreement or the Charter must be in writing and
shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, the Charter,
by law, or otherwise afforded to any party, shall be cumulative and not alternative.


 






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5.7 Notices.
All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours
of the recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt.


 


5.8 Expenses.
The Company and the Purchaser shall each pay their own expenses in connection with the transactions contemplated by this
Agreement; provided, however that the Company shall pay the reasonably documented fees and expenses of Purchaser
in an amount of $7,500.


 


5.9 Attorneys’
Fees. In the event that any suit or action is instituted to enforce any
provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees,
costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without
limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.


 


5.10 Titles
and Subtitles. The titles of the sections and subsections of the Agreement
are for convenience of reference only and are not to be considered in construing this Agreement.


 


5.11 Pronouns.
All pronouns contained herein, and any variations thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.


 


5.12 Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall
constitute one instrument. This Agreement may be executed by facsimile signatures or via .pdf signature.


 


Signatures
on the Following Page


 






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This
Series B Preferred Stock Purchase Agreement is hereby executed as of the
date first above written.


 





	The
    Company:	 
	 	 
	Helix
    TCS, Inc.	 
	 	 	 
	By:	 	 
	Name:	Zachary
    L. Venegas	 
	Title:	Chief
    Executive Officer	 
	 	 	 
	The
    Purchaser:	 
	 	 	 
	RSF4,
    LLC	 
	 	 	 
	By:
    Rose Capital Fund I GP, LLC, its Manager	 
	 	 	 
	By:	 	 
		Name: Andrew
    Schweibold	 
		Title: Principal	 
	 	 	 
	By:	 	 
		Name: Jonathan
    Rosenthal	 
		Title: Principal	 


 


Helix
TCS, Inc. Series B Preferred Stock Purchase Agreement


Signature
Page



 



     


     


    

 


Schedule
3.2(a)


Capitalization


 


See
attached Capitalization Table


 


Schedule
3.2(b)


Purchase
Rights


 





	Paul Hodges 	 	1,920,000 warrants @ $0.16 per share
	Red Diamond, LLC 	 	25,000 cashless warrants @ $1.00 per share
	Red Diamond, LLC 	 	150,000 cashless warrants @ $1.00 per share
	Andrew Feldschreiber	 	231,098 warrants @ $0.3245 per share
	Evan Schwartzberg	 	134,036 warrants @ $0.3245 per share
	Mathew Van Alstyne	 	97,061 warrants @ $0.3245 per share
	Former Security Grade Shareholders	 	414,854 warrants @ $0.001 per share







 


The
convertible notes described in Schedule 3.2(a) above are incorporated herein by reference


 


Schedule
3.2(d)


Acceleration
of Rights


 


Red
Diamond Warrants


Former
Security Grade Shareholders Warrants