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.