Item
1.01 Entry into a Material Definitive Agreement
On
September 4, 2018 (the “
Closing Date
”), Visium Technologies, Inc., a Florida corporation (“
Purchaser
”)
entered into a Membership Interest Purchase Agreement (the “
Purchase Agreement
”), by and among Purchaser, each
member (each, a “
Seller
” and collectively, the “
Sellers
”) of Threat Surface Solutions Group,
LLC, a Virginia limited liability company (“
TSSG
”), the Sellers being Ramparts, LLC, a Maryland limited liability
company (“
Ramparts
”), Acquired Data Solutions, Inc., a Maryland corporation (“ADS”), and Kevin
Anderson, an individual. Pursuant to the Purchase Agreement, each Seller agrees to assign, transfer and sell to Purchaser, and
Purchaser purchased from such Sellers, all of the issued and outstanding membership and/or economic interests of TSSG (collectively,
the “
Transaction
”). Capitalized terms used herein and not otherwise defined have the meaning set forth in the
Purchase Agreement.
The
transaction will close as soon as is practical and is pending the completion of the audit of TSSG. The total consideration for
the transaction is approximately $5 million, with up to $3.5 million of that amount payable as earnout consideration based on
mutually agreed-to revenue milestones. At the closing of the Transaction, Purchaser will pay (i) $500,000 in common stock, valued
at the lower of the closing price of Purchaser’s common stock on the day before the closing of the transaction, or the trailing
30-day volume weighted average price of the Purchasers common stock, and (ii) a Seller’s note in the amount of $1 million
dollars. The note is interest-only, has a 5-year term and is subject to the earnout provisions in the Agreement. Subject to funding,
cash consideration of $1,000,000 will be payable post-Closing (the “
Closing Consideration
”).
The
Purchase Agreement includes customary terms and conditions, including provisions that require the Sellers to indemnify Purchaser
for certain losses that it incurs, including as a result of a breach by any Seller of his respective representations, warranties
or covenants under the Purchase Agreement. The foregoing description of the terms and conditions of the Purchase Agreement does
not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement.
The
representations, warranties and covenants of the parties contained in the Purchase Agreement have been made solely for the benefit
of the parties thereto. In addition, such representations, warranties and covenants (i) have been made only for purposes of the
Purchase Agreement, (ii) have been qualified by confidential disclosures made by the Sellers to Purchaser in connection with the
Purchase Agreement, (iii) are subject to materiality qualifications contained in the Purchase Agreement which may differ from
what may be viewed as material by investors, (iv) were made only as of the date of the Purchase Agreement or such other date as
is specified in the Purchase Agreement and (v) have been included in the Purchase Agreement for the purpose of allocating risk
between the contracting parties rather than establishing matters as facts. Investors should not rely on the representations, warranties
or covenants, or any descriptions thereof, as characterizations of the actual state of facts or condition of the parties or any
of their respective subsidiaries or affiliates.