Item 1.01 Entry into a Material Definitive Agreement.
On March 31, 2023, DecisionPoint Systems, Inc.
(the “Company”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) with the Durwood Wayne Williams
Revocable Trust and the Collins Family Living Trust, as sellers (collectively, the “Sellers”) and with Durwood W. Williams
and Bartley E. Collins, (the respective trustees of the Sellers), individually, (collectively and together with the Sellers, the “Seller
Parties”), pursuant to which the Company acquired all of the issued and outstanding equity of Macro Integration Services, Inc. (“Macro”)
from the Sellers (the “Acquisition”), effective April 1, 2023 (the “Effective Date”). Upon consummation of the
Acquisition, Macro, a project management and professional services and integrated solutions company, became a wholly-owned subsidiary
of the Company.
Pursuant to the Purchase Agreement, the aggregate
consideration paid by the Company on the Effective Date was $10.5 million in cash, subject to certain adjustments for indebtedness and
net working capital (the “Cash Purchase Price”). The Cash Purchase Price was funded by the Company using a combination of
cash on hand from the Company’s existing revolving line of credit with MUFG Union Bank and a separate term loan extended to the
Company by MUFG Union Bank on or about March 27, 2023.
In addition, under the Purchase Agreement, upon
the satisfaction of certain EBITDA thresholds attributable to Macro during each of the two years following the Effective Date (each twelve
month period following the Effective Date, an “Earn-out Period”), the Company may be required to make certain earnout payments
to Sellers in the amounts set forth on that certain earnout schedule for the first Earn-out Period and for the second Earn-out Period,
payable within 75 days after the respective Earn-out Periods. Also, customer payments on specified accounts receivable actually received
by the Company through September 30, 2024, are to be remitted to the Sellers on a quarterly basis.
The Sellers are also due certain payments from
the Company if certain inventory is utilized by the Company before March 31, 2024.
The Purchase Agreement contains customary representations,
warranties and covenants for transactions of this type. Subject to certain limitations in the Purchase Agreement, the Seller Parties are
required to indemnify and defend the Company for certain losses resulting from breaches or inaccuracies of the Seller Parties’ representations,
warranties and covenants made in the Purchase Agreement and for certain other matters, in each case, as set forth in the Purchase Agreement.
The Purchase Agreement contains representations and warranties of the
parties, which have been made for the benefit of the other party and should not be relied upon by any other person. Such representations
and warranties (i) have been qualified by schedules and exhibits, (ii) are subject to materiality standards that may differ from what
may be viewed as material by investors, (iii) are made as of specified dates, and (iv) may have been used for the purpose of allocating
risk among the parties rather than establishing matters of fact. Accordingly, the representations and warranties should not be relied
upon as characterizations of the actual state of facts.
The foregoing description of the Purchase Agreement and the transactions
contemplated thereby is not complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is
filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
As required by Item 9.01 of Form 8-K, no later than 71 days after the
date on which this Current Report on Form 8-K is required to be filed with the SEC, the Company will file with the SEC an amendment to
this Current Report that includes the financial statements and pro forma financial information as may be required by such item.