Blue Gold Ltd 20-F, filed Jul 1, 2025
Blue Gold Ltd (BGL)
About this 20-F
Blue Gold Ltd filed this 20-F on July 1, 2025, covering the fiscal year ended June 25, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended __________
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report: June 25, 2025
Commission File Number: 001-42717
BLUE GOLD LIMITED
(Exact name of Registrant as specified in its charter)
| Not applicable | Cayman Islands | |
|
(Translation of Registrant’s |
(Jurisdiction of incorporation |
Mourant Governance Services (Cayman) Limited,
94 Solaris Avenue, Camana Bay
Grand Cayman, KY1-1108, Cayman Islands.
(Address of principal executive offices)
Andrew Cavaghan
Tel. No: +44 (0) 7487 799481
Email: info@bluegoldmine.com
94 Solaris Avenue, Camana Bay
Grand Cayman, KY1-1108, Cayman Islands
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Class A ordinary shares, par value $0.0001 per share | BGL | The Nasdaq Stock Market LLC | ||
| Warrants, each exercisable for one share of Class A ordinary shares at an exercise price of $11.50 per share | BGLWW | The Nasdaq Stock Market LLC |
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the shell company report:
On June 25, 2025, the issuer had 30,571,764 Class A ordinary shares, par value $0.0001 per share, outstanding.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☐
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | ☐ | Accelerated filer | ☐ | Non-accelerated filer | ☒ |
| Emerging growth company | ☒ |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
| U.S. GAAP ☒ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ | Other ☐ |
If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☐
TABLE OF CONTENTS
| Page | ||
| EXPLANATORY NOTE | iii | |
| CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | iv | |
| PART I | 1 | |
| ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | 1 |
| A. | Directors and Senior Management | 1 |
| B. | Advisers | 1 |
| C. | Auditors | 1 |
| ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE | 2 |
| ITEM 3. | KEY INFORMATION | 2 |
| A. | [Reserved.] | 2 |
| B. | Capitalization and Indebtedness | 2 |
| C. | Reasons for the Offer and Use of Proceeds | 2 |
| D. | Risk Factors | 3 |
| ITEM 4. | INFORMATION ON THE COMPANY | 6 |
| A. | History and Development of the Company | 6 |
| B. | Business Overview | 7 |
| C. | Organizational Structure | 7 |
| D. | Property, Plants and Equipment | 8 |
| ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 8 |
| ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | 18 |
| A. | Directors and Senior Management | 18 |
| B. | Compensation | 19 |
| C. | Board Practices | 21 |
| D. | Employees | 21 |
| E. | Share Ownership | 21 |
| ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | 21 |
| A. | Major Shareholders | 21 |
| B. | Related Party Transactions | 23 |
| C. | Interests of Experts and Counsel | 23 |
i
| ITEM 8. | FINANCIAL INFORMATION | 23 |
| A. | Consolidated Statements and Other Financial Information | 23 |
| B. | Significant Changes | 23 |
| ITEM 9. | THE OFFER AND LISTING | 23 |
| A. | Offer and Listing Details | 23 |
| B. | Plan of Distribution | 24 |
| C. | Markets | 24 |
| D. | Selling Shareholders | 24 |
| E. | Dilution | 24 |
| F. | Expenses of the Issue | 24 |
| ITEM 10. | ADDITIONAL INFORMATION | 24 |
| A. | Share Capital | 24 |
| B. | Memorandum and Articles of Association | 24 |
| C. | Material Contracts | 24 |
| D. | Exchange Controls and Other Limitations Affecting Security Holders | 25 |
| E. | Taxation | 25 |
| F. | Dividends and Paying Agents | 25 |
| G. | Statement by Experts | 25 |
| H. | Documents on Display | 25 |
| I. | Subsidiary Information | 26 |
| ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS | 26 |
| ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | 26 |
| PART II | 31 | |
| PART III | 33 | |
| ITEM 17. | FINANCIAL STATEMENTS | 33 |
| ITEM 18. | FINANCIAL STATEMENTS | 33 |
ii
On June 25, 2025 (the “Closing Date”), Blue Gold Limited, a Cayman Islands exempted company limited by shares (“Blue Gold Limited” or the “Company”), consummated the previously announced business combination pursuant to the Second Amended and Restated Business Combination Agreement, dated as of June 12, 2024, and further amended on November 7, 2024, January 8, 2025, March 28, 2025, April 30, 2025, May 8, 2025 and June 10, 2025, by and among the Company, Perception Capital Corp. IV, a Cayman Islands exempted company limited by shares, formerly known as RCF Acquisition Corp. (“Perception”), and Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (“BGHL”) (as amended and restated, the “BCA”).
The following transactions occurred pursuant to the terms of the BCA (collectively, the “Business Combination”):
| ● | Blue Gold Limited formed Blue Merger Sub, an exempted company incorporated under the laws of the Cayman Islands (“Blue Merger Sub”), for the purpose of effectuating the business combination; |
| ● | Perception merged with and into Blue Gold Limited, with Blue Gold Limited being the surviving entity (the “Perception Reorganization”); |
| ● | Blue Cayman 1, an exempted company incorporated under the laws of the Cayman Islands (“BC1”), acquired the entirety of the BGHL Shares; |
| ● | BC1 transferred the entire undertaking of BC1, including the entire share capital of BGHL to Blue Cayman 2, an exempted company incorporated under the laws of the Cayman Islands (“BC2”). The name of Blue Cayman 2 was changed to Blue Gold (Cayman) Limited; |
| ● | Blue Merger Sub merged with and into BC2, with BC2 being the surviving entity and becoming a wholly owned subsidiary of Blue Gold Limited; |
| ● | In connection with the Perception Reorganization, each (a) issued and outstanding Class A ordinary share, par value $0.0001 per share, of Perception (“Perception Class A Ordinary Shares”) was converted on a one-for-one basis into one newly issued Class A ordinary share, par value $0.0001, of Blue Gold Limited (the “Ordinary Shares”) and (b) outstanding and unexercised whole warrant of Perception was converted into one warrant of Blue Gold Limited (each, a “Warrant”) that entitles the holder thereof to purchase one Ordinary Share in lieu of one Perception Ordinary Share and otherwise upon substantially the same terms and conditions; and |
| ● | Blue Perception Capital LLP, a private limited partnership, delivered, on behalf of itself and the other shareholders of BC2 (collectively, the “Blue Shareholders”), all of the original certificates for BC2 common stock (the “BC2 Common Stock”) to Continental Stock Exchange, as exchange agent, and Blue Gold Limited issued and caused Continental Stock Exchange to deliver to the Blue Shareholders an aggregate of 11,450,000 Blue Gold Limited Ordinary Shares. |
Ordinary Shares and Warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “BGL” and “BGLWW”, respectively.
Except as otherwise indicated or required by context, references in this Shell Company Report on Form 20-F (the “Report”) to “we”, “us”, “our”, “Blue Gold Limited” or the “Company” refer to Blue Gold Limited.
iii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report and the documents incorporated by reference herein include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements relate to, among others, our plans, objectives and expectations for our business, operations and financial performance and condition, and can be identified by terminology such as “may”, “should”, “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue” and similar expressions that do not relate solely to historical matters. Forward-looking statements are based on management’s belief and assumptions and on information currently available to management. Although we believe that the expectations reflected in forward-looking statements are reasonable, such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Forward-looking statements in this Report and in any document incorporated by reference in this Report may include, but are not limited to, statements about:
| ● | The ability of Blue Gold Limited to realize the benefits expected from the Business Combination and to maintain the listing of the Ordinary Shares and Warrants on Nasdaq; |
| ● | Blue Gold Limited’s operations and the continued listing of Blue Gold Limited’s securities; |
| ● | Actions relating to the business, operations and financial performance of Blue Gold Limited; |
| ● | Blue Gold Limited’s ability to restart the Bogoso Prestea gold mine and to cost-effectively deliver gold to the global gold markets; |
| ● | The global market and future demand for gold; |
| ● | Blue Gold Limited’s ability to obtain regulatory approval for its operations, including the lease dispute with the Republic of Ghana, and any related restrictions or limitations of any approved operation; |
| ● | Blue Gold Limited’s ability to develop and maintain effective internal controls; and |
| ● | Assumptions regarding interest rates and inflation. |
Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements for many reasons, including:
| ● | Changes in global, regional or local business, market, economic, financial, political and legal conditions, including the development, effects and enforcement of laws and regulations and the impact of any current or new government regulations in the United States, Ghana, England and Wales and the Cayman Islands; |
| ● | An inability to retain, recruit or hire officers, key employees or directors; |
| ● | An inability to respond to general economic conditions; |
| ● | An inability to secure substantial additional capital to finance operations, and to raise capital when needed and on acceptable terms; |
| ● | An ability of Blue Gold Limited’s management to avoid delays and reductions to and/or eliminations of one or more of its development programs or future commercialization efforts; |
| ● | Competition and competitive pressures from other companies worldwide in the industries in which Blue Gold Limited operates; and |
| ● | The factors discussed in the Prospectus of Blue Gold Limited, which forms a part of the Registration Statement filed in connection with the Business Combination, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 13, 2025 (as amended and supplemented from time to time, the “Prospectus”) under the heading “Risk Factors”, and this information is incorporated herein by reference. |
Accordingly, you should not rely on these forward-looking statements, which speak only as of the date of this Report. We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this Report or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks described in the reports we will file from time to time with the SEC after the date of this Report.
Although we believe the expectations reflected in the forward-looking statements were reasonable at the time made, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assume responsibility for the accuracy or completeness of any of these forward-looking statements. You should carefully consider the cautionary statements contained or referred to in this section in connection with the forward-looking statements contained in this Report and any subsequent written or oral forward-looking statements that may be issued by the Company or persons acting on its behalf.
iv
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
A. Directors and Senior Management
The directors of the Company are Andrew Cavaghan, Daniel Owiredu, Candice Beaumont, David Edward, Phil Newall and Tao Tan. In addition, Andrew Cavaghan serves as our Chief Executive Officer and Lorenz Werndle serves as our Chief Financial Officer. See Item 6 for further information.
The business address for each of our directors and executive officers is Mourant Governance Services (Cayman) Limited, 94 Solaris Avenue, Camana Bay, Grand Cayman, KY1-1108, Cayman Islands.
Mayer Brown LLP, 1221 Avenue of the Americas New York, New York, 10020, United States, has acted as U.S. securities counsel for the Company and will continue to act as U.S. securities counsel to the Company.
Mourant Ozannes (Cayman) LLP, 94 Solaris Avenue, Camana Bay, Grand Cayman KY1-1108, Cayman Islands, has acted as counsel for the Company with respect to Cayman Island law and will continue to act as counsel for the Company with respect to Cayman Island law following the completion of the Business Combination.
Kimathi Partners, No 6. Airport Road, Airport Residential Area, Accra, Ghana, has acted as counsel for the Company with respect to Ghanaian law and will continue to act as counsel for the Company with respect to Ghanaian law following the completion of the Business Combination.
Pannell Kerr Forster of Texas P.C. (“PKF Texas”), 5847 San Felipe, Suite 2600, Houston, TX 77057, has acted as the independent registered public accounting firm for BGHL since 2023 and became the Company’s independent registered public accounting firm following the Business Combination.
1
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
B. Capitalization and Indebtedness
The following table sets forth the capitalization of the Company on an unaudited pro forma combined basis as of December 31, 2024, after giving effect to the Business Combination and the agreements as described above:
| As of December 31, 2024 | ||||
| Pro Forma | ||||
| (in thousands) | ||||
| Cash and cash equivalents | $ | 2,061 | ||
| Equity: | ||||
| Ordinary shares | 3 | |||
| Additional paid-in capital | 4,109 | |||
| Foreign currency translation | (42 | ) | ||
| Accumulated deficit | (12,157 | ) | ||
| (8,087 | ) | |||
| Non-controlling interest | 17,580 | |||
| Total equity: | 9,493 | |||
| Debt: | ||||
| Advances payable | 648 | |||
| Convertible notes | 1,903 | |||
| Warrant liability | 230 | |||
| Royalty payable | 2,700 | |||
| Contingent consideration liabilities | 17,100 | |||
| Total Debt: | 22,581 | |||
| Total capitalization | $ | 32,074 | ||
C. Reasons for the Offer and Use of Proceeds
Not applicable.
2
The risk factors related to the business and operations of the Company are described in the Prospectus under the heading “Risk Factors”, which is incorporated herein by reference.
Blue Gold Limited may not have sufficient funds to develop its projects or service its expenses and other liquidity needs and may require additional capital.
Following the business combination, Blue Gold Limited may not have sufficient funds to develop our projects or service our expenses and other liquidity needs and may require additional capital. There can be no assurance that Blue Gold Limited will be able to timely secure such additional funding on acceptable terms and conditions, or at all. If we cannot obtain sufficient capital, we will not have sufficient cash and liquidity to finance our operations, develop our projects and make required payments and may need to substantially alter, or possibly even discontinue, our operations. Blue Gold Limited plans to continue to seek opportunities for raising additional funds through potential alternatives, which may include, among other things, the issuance of equity, equity-linked securities debt securities, debt financings or other capital sources and/or strategic transactions. However, Blue Gold Limited may not be successful in securing additional financing on a timely basis, on acceptable terms and conditions, or at all. If sufficient funds are not available on a timely basis and on acceptable terms, Blue Gold Limited may have to delay, revise or reduce the scope of some of its business activities, including project development and related operating expenses, which would adversely affect its business prospects and its ability to continue its operations and would have a negative impact on its financial condition and ability to pursue its business strategies. If we are ultimately unable to continue, we may have to seek the protection of bankruptcy laws or liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements, and it is possible that its shareholders will lose all or a part of their investment.
BGHL’s financial situation creates doubt whether we will continue as a going concern.
Since inception, BGHL’s primary sources of liquidity have been cash flows from (i) a loan provided to us by an affiliated company and (ii) funds generated from the issuance of convertible loan notes payable and common stock. For the year ended December 31, 2024, BGHL reported an operating loss of $11.6 million and cash flows used in operations of $6.2 million. As of December 31, 2024, BGHL had an aggregate cash and cash equivalents balance of $170,557 and a net working capital deficit of $7.6 million.
The funding of BGHL’s future capital requirements will depend on many factors, including BGHL’s revenue growth rate, the timing and extent of spending to support the restart of the Bogoso Prestea Mine, including whether the Bogoso Prestea Mine will restart at all, and further exploration activities. To finance these activities, BGHL will need to raise additional capital, and there can be no assurances that BGHL will be able to raise such capital. Management has signed a Gold Advance Payment Purchase Agreement (“GAPPA”) with Gerald Metals SARL (“Gerald”), whereby Gerald has agreed to fund certain costs in connection with the restart of the Bogoso Prestea Mine; however, such financing is subject to satisfying several conditions precedent, including satisfactory due diligence by Gerald. Additional or alternative financing will be required from outside sources, which BGHL may not be able to raise on terms acceptable to BGHL or at all. If BGHL is unable to raise additional capital, BGHL’s business, results of operations and financial condition will be materially and adversely affected.
As a result of the above, management has determined that BGHL’s liquidity condition raises substantial doubt about BGHL’s ability to continue as a going concern.
3
We are located outside of the United States and, as such, we could be subject to a variety of additional risks that may adversely affect us.
Because we are located in and have operations outside of the United States, we are subject to additional risk factors that may negatively impact our operations. Accordingly, we are subject to special considerations or risks associated with companies operating in an international setting, including any of the following:
| ● | Costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets; |
| ● | Rules and regulations regarding currency redemption; |
| ● | Complex rules and regulations governing corporate withholding taxes on individuals across international jurisdictions; |
| ● | Laws governing the manner in which future business combinations may be effected; |
| ● | Exchange listing and/or delisting requirements; |
| ● | Tariffs and trade barriers; |
| ● | Regulations related to customs and import/export matters; |
| ● | Local or regional economic policies and market conditions; |
| ● | Unexpected changes in regulatory requirements; |
| ● | Challenges in managing and staffing international operations; |
| ● | Longer payment cycles and challenges in collecting accounts receivable; |
| ● | Tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
| ● | Currency fluctuations and exchange controls; |
| ● | Rates of inflation; |
| ● | Challenges in collecting accounts receivable; |
| ● | Cultural and language differences; |
| ● | Employment regulations; |
| ● | Underdeveloped or unpredictable legal or regulatory systems; |
| ● | Corruption; |
| ● | Protection of intellectual property; |
| ● | Social unrest, crime, strikes, riots and civil disturbances; |
| ● | Regime changes and political upheaval; |
| ● | Terrorist attacks, natural disasters and wars; and |
| ● | Deterioration of political relations with the United States. |
We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our business, financial condition and results of operations.
4
The Ordinary Shares issued in the Business Combination are subject to lock-up. If a large number of shares are sold in the public market, the sales could reduce the trading price of the Ordinary Shares and impede our ability to raise future capital.
The Amended and Restated Memorandum and Articles of Association subject certain Ordinary Shares issued in connection with the Business Combination to lock-up restrictions. Members of our board of directors (the “Board”) can allocate the release among the shareholders subject to the lock-up as they see fit and may waive the restrictions as to any shareholder at any time. Once released, any Ordinary Share will not be subject to additional lock-up.
As a result, large numbers of shares may become available for sale at one time, which may lead to a sharp decline in the market price of our Ordinary Shares. This may also hinder our ability to raise additional capital through the sale of Ordinary Shares in the capital markets. In particular, if the price of the Ordinary Shares is below $10.00 throughout the lock-up period, or to the extent it exceeds $20.00 for sixty days in any ninety-day trading period, a significant number of shares will be released from the lock-up at one time. If the holders of Ordinary Shares sell all or a significant portion of their Ordinary Shares, or if the market anticipates such releases, there may be increased volatility or downward pressure on the share price. A decreased share price may make it more difficult for us to raise additional capital through equity offerings.
BGHL’s operations in Ghana are subject to political, economic and other risks.
BGHL will operate in Ghana under an investment agreement which established a fixed fiscal and legal regime, including fixed royalty and tax rates, for its operations in Ghana. The Republic of Ghana has experienced worsening socioeconomic conditions in recent years. The Ghanaian cedi has experienced significant depreciation with inflation, and, whilst the value of the Cedi has recently increased during April and May 2025, there is no guarantee that such appreciation will be sustained or that the value will not begin to decline. Ghana’s credit rating worsened to speculative grade, at near default to default levels, as the Ghanaian Finance Ministry announced suspension of debt service payments in December 2022 on the majority of its external debt, including commercial and bilateral loans, and that Ghana was seeking to restructure its debt. Efforts in early 2023 to put in place a domestic debt exchange program have faced setbacks from pension funds and by individual bond holders leading to amended terms. Continued economic recession and/or unfavorable macroeconomic indicators have also resulted in pressures from the Government of Ghana to obtain more revenue and benefits from mining companies on the back of anti-mining sentiment and perceived inequities that the industry is not contributing its fair share. To address budgetary deficits, the Government of Ghana has in the past initiated measures to generate additional revenue from the mining industry and other sectors of the economy as it attempts to increase revenue collection through various tax audits and investigations, proposed new fees, increased revenue and tax initiatives and other vehicles. Other risks include impacts to supply chain, restrictions and local procurement requirements, increase in key commodity prices, more restrictive local banking requirements including requirements for repatriation of proceeds to banks domiciled in Ghana, limitations on capacity of banks to provide reclamation bonds, requests for further local employment requirements, requests for contract renegotiation and increases in contract rates and other costs. Additionally, the government may grant artisanal mining rights or alternative mining rights, such as sand and gravel, in locations in which BGHL has land rights, but no active operations, impacting BGHL’s non-operational land positions. Economic setbacks and anti-mining sentiment can also result in an increase in community frustration and friction with artisanal small-scale mining resulting in conflicts, which can negatively impact BGHL’s operations in Ghana
Any downturn in Ghana’s economy may impact BGHL’s growth, profitability and ability to continue BGHL’s operations.
Although Ghana’s attractiveness has significantly improved over the past few years, thanks to recent business-friendly reforms, enhanced connectivity and the availability of digital services, the current turbulent nature of the economy could pose a risk to BGHL’s operations and BGHL’s business will be adversely affected by any downturn in the money.
Any downturn in Ghana’s economy could adversely affect BGHL’s operations and profitability. In 2022, Ghana’s economic growth decreased as a result of the country’s sovereign debt crisis. In December, Ghana ceased to make payments on its external debt to official bilateral and external commercial creditors, leading to mounting arrears.
The country agreement reached with the International Monetary Fund in mid-May 2023 is the first step towards a comprehensive debt-restructuring process that will involve the G20 group, including China, and domestic debt issued to banks that have already suffered substantial haircuts.
In the third quarter of 2022, Ghana’s GDP growth slowed to +2.9% from +6.4% the previous year. Non-extractive industries led the downturn because they were hit the hardest by the widespread slowdown brought on by falling corporate and consumer confidence. However, a pick-up in growth of extractive operations is projected to have kept GDP growth at around +3.1% in 2022.
Central bank reserves dropped to a critically low level in the past quarters and the local currency (Cedi) has depreciated significantly. Exports of gold and oil helped reduce the current account deficit from 3.2% of GDP in 2021 to 2.1% in 2022, more than offsetting the impact of rising imports. However, intense balance of payment pressures resulted since Ghana was cut off from international capital markets, faced capital withdrawals and had trouble rolling over central bank foreign exchange liabilities. Gross international reserves fell to USD1.1bn (0.5 months of imports) at the end of February 2023, almost USD5bn below the level of mid-2021, largely due to foreign exchange interventions by the Bank of Ghana to reduce volatility. As a result of these factors, the value of the Cedi, the local currency, has dropped by more than -50% since the end of 2021.
In December 2022, inflation reached 54% due to a number of factors, including a rise in global energy and food costs as well as the lingering impact of fiscal and monetary stimulus during the pandemic, a decline in the value of the currency and massive monetary financing by the government. By April 2023, inflation dropped to 41% and the Cedi temporarily appreciated against the USD, but the value of the Cedi continued to decline during 2024. While the value of the Cedi has recently increased during April and May 2025, there is no guarantee that such appreciation will be sustained or that the value will not begin to decline.
5
Growth is predicted to remain muted over the coming years. Starting in 2026, growth is expected to begin rising again towards its long-term potential of about +5%. The anticipated development of oil and gas production, as well as the opening of huge new gold mines, are all contributing factors to the extractive industry’s relatively robust performance. Exposure to negative terms-of-trade shocks from Ghana’s overreliance on commodities will be partly mitigated by the variety of the export basket, which includes gold, crude oil and cocoa (80% of total exports).
Notwithstanding the current high inflationary environment in Ghana, BGHL anticipates offsetting any inflation in Cedi denominated costs locally by generating revenue in USD through the sale of gold on the global metal trading market. The value of the USD has increased from 6 Cedi at the beginning of 2022 to around 10 Cedi in June 2025.
Failure to obtain the advance payment facility or a delay in obtaining it, could have a material adverse effect on BGHL’s ability to adequately explore, develop and operationalize the mines. This may have a material adverse effect on the exploration, results of operation, financial condition, and cashflows.
On August 19 2024, BGHL entered into a Gold Advance Payment Purchase Agreement (the “Advance Payment Agreement”) with Gerald Metals Sarl, a company incorporated in Switzerland (“Gerald Metals”) for an advance payment facility of up to a maximum amount of twenty-five million USD ($25,000,000). The Advance Payment Agreement was entered into to enable BGHL to finance the exploration, development, and operation of its mine. Following the closing of the Business Combination occurs, there is a risk that the Blue Gold shareholders may experience a dilutive effect to the value of their shares if Gerald Metals exercises its conversion option under the Advance Payment Agreement. Additionally, if BGHL does not meet the conditions precedent under the Advance Payment Agreement and is not able to obtain the advance payment facility, it may lead to material adverse effects on its ability to effectively explore, develop, and operate the mine.
Failure to obtain the advance payment facility or a delay in obtaining it, could have a material adverse effect on BGHL’s ability to adequately explore, develop and operationalize the mines. This may have a material adverse effect on the exploration, results of operation, financial condition, and cashflows.
ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
See “Explanatory Note” in this Report for additional information regarding the Company and the BCA. Certain additional information about the Company is included in the Prospectus under the section titled “Information About BGHL” and is incorporated herein by reference. The material terms of the Business Combination are described in the Prospectus under the section titled “The Business Combination Proposal,” which is incorporated herein by reference.
Blue Gold Limited, a Cayman Islands exempted company limited by shares, was incorporated on December 4, 2023. The Company’s registered office is at the offices of Mourant Governance Services (Cayman) Limited, 94 Solaris Avenue, Camana Bay, Grand Cayman, KY1-1108, Cayman Islands. Mourant Governance Services (Cayman) Limited serves as its agent. Following and as a result of, the Business Combination, the business of the Company is conducted through BGHL, the Company’s indirect subsidiary, and BGHL’s subsidiaries, including BGBPL.
BGHL is a private company limited by shares formed under the laws of England and Wales. BGHL was incorporated on November 9, 2023. It operates under the laws of England and Wales. Other than in connection with the Business Combination, neither Blue Gold Limited nor BGHL have engaged in any (i) other material reclassification, merger or consolidation; (ii) acquisitions or dispositions of material assets other than in the ordinary course of business; (iii) material changes in the types of products produced or services rendered; name changes; (iv) or the nature and results of any bankruptcy, receivership or similar proceedings with respect to the company or significant subsidiaries. On May 15, 2024, following the consummation of the Purchase and Assumption agreement dated January 27, 2024, BGHL’s subsidiary acquired certain mining assets, primarily mining leases, on an exploration property in the Ashanti gold belt of Ghana, the Bogoso Prestea gold mine. At the acquisition date, mineral rights valued at approximately $30.1 million, mine assets valued at approximately $1.8 million, and building and leasehold land valued at approximately $0.8 million was acquired and was fair valued as of the acquisition date. As of the date of this Report, neither Blue Gold Limited, BGHL, nor any of their respective subsidiaries have any principal capital expenditures and divestitures in progress. Further information regarding the business of BGHL and its subsidiaries is included in the Prospectus under the sections titled “Information About BGHL” and “BGHL’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the information is incorporated herein by reference.
The Company is subject to certain of the informational filing requirements under the Exchange Act. Since the Company is a “foreign private issuer,” it is exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of the Company are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act with respect to their purchase and sale of Ordinary Shares. In addition, the Company is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies whose securities are registered under the Exchange Act. However, the Company is required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent accounting firm. The SEC also maintains a website at www.sec.gov that contains reports and other information that the Company files with or furnishes electronically to the SEC.
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The website address of the Company is www.bluegoldmine.com. The information contained on the website does not form a part of, and is not incorporated by reference into, this Report.
Following and as a result of, the Business Combination, the business of the Company is conducted through BGHL, the Company’s indirect subsidiary, and BGHL’s subsidiaries. Information regarding the business of BGHL is included in Item 5 herein.
The diagram below depicts a simplified version of the Company immediately prior to and following the consummation of the Business Combination.
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D. Property, Plants and Equipment
Information regarding the building, land, mining equipment, and vehicles of the Company is included in the Prospectus under the section titled “Information About BGHL”, which is incorporated herein by reference.
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
On June 25, 2025, BGHL consummated its business combination with Perception, a special purpose acquisition company. The transaction was accounted for as a reverse recapitalization in accordance with U.S. GAAP, with BGHL treated as the accounting acquirer. As a result, the financial information presented in this section reflects the operations of BGHL for all periods prior to and following the Business Combination.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements for the year ended December 31, 2024 and for the period from November 9, 2023 (inception) to December 31, 2023 and other information included elsewhere in this Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this report. Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented in U.S. dollars.
Unless the context otherwise requires, references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “we,” “us,” and “our” generally refer to Blue Gold Holding Limited in the present tense or Blue Gold Holding Limited from and after the Business Combination.
Business Overview
Blue Gold Holdings Limited (“BGHL”) is a company incorporated in the United Kingdom, with the intent to acquire, develop, finance, license, and operate gold mines. BGHL’s initial activities are focused on the Ashanti Gold Belt located in Ghana.
BGHL has one subsidiary, Blue Gold Bogoso Prestea Ltd (“BGBPL”), a wholly owned subsidiary company incorporated in Ghana on January 26, 2024. BGHL and BGBPL collectively are herein referred to as the Company.
Recent Developments
Recent events impacting our business are as follows:
Business Combination Agreement:
On June 25, 2025 (the “Closing Date”), Blue Gold Limited consummated the previously announced business combination pursuant to the Second Amended and Restated Business Combination Agreement, dated as of June 12, 2024 (as amended and restated, the “BCA”), and further amended on November 7, 2024, January 8, 2025, March 28, 2025, April 30, 2025, May 8, 2025, and June 10, 2025 by and among Blue Gold Limited, Perception and BGHL. The following transactions occurred pursuant to the terms of the BCA to effectuate the Business Combination:
| ● | Blue Gold Limited formed Blue Merger Sub, an exempted company incorporated under the laws of the Cayman Islands (“Blue Merger Sub”), for the purposes of effectuating the business combination; |
| ● | Perception merged with and into Blue Gold Limited, with Blue Gold Limited being the surviving entity (the “Perception Reorganization”); |
| ● | Blue Cayman 1, an exempted company incorporated under the laws of the Cayman Islands (“BC1”), acquired the entirety of the BGHL Shares; |
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| ● | BC1 transferred the entire undertaking of BC1, including the entire share capital of BGHL to Blue Cayman 2, an exempted company incorporated under the laws of the Cayman Islands (“BC2”). The name of Blue Cayman 2 was changed to Blue Gold (Cayman) Limited; |
| ● | Blue Merger Sub merged with and into BC2, with BC2 being the surviving entity and becoming a wholly owned subsidiary of BGL. |
Ordinary Shares are traded on The Nasdaq Global Market under the symbol “BGL” and Warrants are traded on The Nasdaq Capital Market under the symbol “BGLWW”.
Purchase and Assumption Agreement
On January 27, 2024, BGBPL and FGR Bogoso Prestea Ltd (“FGRBPL”) entered into a purchase and assumption agreement (the “Purchase Agreement”) for BGBPL to acquire certain mining assets, primarily mining leases, of the Bogoso Prestea Mine, subject to certain closing conditions including approval by the Ministry of Lands and Natural Resources of the Republic of Ghana. The closing conditions have been met, with a number of subsequent closing deliverables still to be concluded (including the Royal Gold Agreement novation, the Golden Star Resources Agreement novation and the Corporate Social Responsibility Agreement novation). The registration of the legal transfer was completed on May 15, 2024. In accordance with the laws of Ghana, BGBPL will ultimately be 90% owned by BGHL and 10% owned by the Government of the Republic of Ghana. BGHL accounted for the purchase as an asset acquisition in accordance with ASC 805 and allocated the total consideration transferred on the date of acquisition to the assets on a relative fair value basis.
Also on January 27, 2024, BGBPL entered into a Royalty Agreement (“Bond SPV Royalty”) with FGRBPL and Bond SPV. The Bond SPV Royalty provides for BGBPL to pay a royalty in refined gold to Bond SPV (as priority payee) and FGRBPL (as secondary payee, once Bond SPV debt service obligations are met) at a rate of the lesser of (i) 2,000 ounces per month, or 30% of gross production per month for the first 36 months following the start of commercial production, and (ii) 3,250 ounces per month, or 30% of gross production per month, after 36 months until Bond SPV Royalty payments total the 250,000 ounce cap.
In connection with the preparation of BGHL’s audited consolidated financial statements included in this Form 20-F, the Company identified required changes to the unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2024. The changes relate to the initial asset acquisition accounting performed by the Company when it acquired the assets pursuant to the Purchase Agreement. The adjustments primarily relate to the removal of the Bond SPV Royalty liability and the removal of certain fixed assets (and the related depreciation expense) that were not part of the Purchase Agreement. After further investigation, it was determined the Bond SPV Royalty agreement should be accounted for as FGRBPL’s retention of a mineral right in accordance with ASC 932 as it represents a volumetric production payment, whereas previously it was accounted for as part of the consideration payable to FGR. Under ASC 932, FGR would retain the rights to their share of the ounces of gold and no entry should be recorded on BGHL as those rights were not part of the lease transfer.
Mineral rights are measured at fair value at the acquisition date and determined by the net present value of expected future cashflows, which, under an asset acquisition, are then adjusted to match the consideration paid, in this case being the liabilities assumed. Given BGHL accounted for the purchase as an asset acquisition rather than a business combination, the total adjusted consideration transferred on the date of the acquisition was allocated to the assets and liabilities acquired on a relative fair value basis therefore the net impact of these adjustments on the consolidated balance sheet as of the acquisition date was zero.
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The following table summarizes the reporting acquisition date fair value of the assets acquired and the liabilities assumed, restatement adjustments and adjusted allocation of fair value of assets acquired:
| May 15, 2024 | ||||||||||||
| As Reported | Restatement Adjustments | As Restated | ||||||||||
| Assets Acquired | ||||||||||||
| Property, plant and equipment | $ | 44,600,000 | $ | (42,000,000 | ) | $ | 2,600,000 | |||||
| Intangible assets: Mineral rights | 323,600,000 | (293,500,000 | ) | 30,100,000 | ||||||||
| Total assets acquired | $ | 368,200,000 | $ | (335,500,000 | ) | $ | 32,700,000 | |||||
| Liabilities assumed | ||||||||||||
| Bond SPV royalty liabilities | $ | 335,500,000 | $ | (335,500,000 | ) | $ | — | |||||
| GSR royalty liability | 2,700,000 | — | 2,700,000 | |||||||||
| GSR contingent consideration liabilities | 17,100,000 | — | 17,100,000 | |||||||||
| Asset retirement obligation | 12,900,000 | — | 12,900,000 | |||||||||
| Total Liabilities assumed | $ | 368,200,000 | $ | (335,500,000 | ) | $ | 32,700,000 | |||||
Update on Status of Notice of Termination of Mining Leases
On September 20, 2024, FGRBPL, the previous leaseholders, received a notice of termination of mining leases (the “Commission Notice”) from the Minerals Commission of Ghana (the “Mineral Commission”) alleging violations of the related leases. After the Commission Notice, the Mineral Commission formed an Interim Management Committee (“IMC”), and the IMC assumed managerial control of the mine site. BGHL and the Previous Leaseholder, pursuant to the Minerals and Mining Act 2006 (Act 703) (the “Mining Act”), actively dispute the contents and legality of the Commission Notice and the appointment of an IMC. On October 14, 2024, BGHL delivered notice to the Republic of Ghana requesting settlement of BGHL’s dispute pursuant to the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Ghana for the Promotion and Protection of Investments, signed in Accra on March 22, 1989 and entered into force on October 25, 1991 (“UK-Ghana BIT”). Pending the resolution of BGHL’s dispute, BGHL has been advised by Kimathi Partners, its legal counsel in Ghana, that pursuant to Section 27(5) of the Mining Act, the leases remain valid and in full effect.
On April 2, 2025, BGHL served a notice of arbitration on the Republic of Ghana to commence international arbitration proceedings against the Republic of Ghana pursuant to Article 10 of the UK-Ghana BIT. On June 6, 2025, the Republic of Ghana submitted its response to the notice of arbitration in which it contests jurisdiction and disputes the validity and merits of BGHL’s claims and has agreed to have a three-person tribunal hear the dispute and for it to be administered by an arbitral institution (the Permanent Court of Arbitration in The Hague). Pending the resolution of the dispute, BGHL has been advised by Kimathi Partners, its legal counsel in Ghana, that pursuant to Section 27(5) of the Mining Act, the leases remain valid and in full effect.
In the event the arbitration outcome or any of these actions is favourable to the existing mining leases, successful mine development, infrastructure construction, and mineral production is dependent on obtaining all necessary consents, approvals and licenses for a successful design, construction and operation of efficient mining, processing and transportation facilities. No assurance can be given that we will be able to resolve this matter or obtain all necessary consents, approvals, and licenses in a timely manner, or at all. If the outcome of the arbitration is unfavourable, it will adversely affect the value of BGHL’s business. Delays or difficulties in obtaining a favourable arbitration outcome or in obtaining relevant approvals, may interfere with future mining operations or plans of BGHL, which will materially impact our business and financial position in the future.
Due to the uncertainty surrounding the outcome of the lease dispute with the Government of Ghana, and the possibility that the mining leases may not be returned to BGBPL, there is a material uncertainty that BGHL will not be able to undertake its business plan to restart the Bogoso Prestea mine. If the Company is not successful with its arbitration proceedings with the Republic of Ghana, the leases may be relinquished which will reduce the mineral rights value reflected in BGHL’s balance sheet to zero.
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Results of Operations
The following table summarizes our financial results for the year ended December 31, 2024 and for the period from November 9, 2023 (inception) to December 31, 2023:
| For the year ended December 31, 2024 | Period from November 9, 2023 (inception) to December 31, 2023 | |||||||
| Operating expenses | ||||||||
| General and administrative expenses | $ | 2,111,753 | $ | 333,781 | ||||
| Merger and acquisition expenses | 1,682,391 | — | ||||||
| Plant maintenance costs | 6,252,438 | — | ||||||
| Accretion of asset retirement obligation | 1,037,000 | — | ||||||
| Depreciation | 41,768 | — | ||||||
| Start-up Costs | — | 897 | ||||||
| Total operating expenses | 11,125,350 | 334,678 | ||||||
| Other income (expense) | ||||||||
| Interest expense | (442,869 | ) | — | |||||
| Related party interest expense, net | (69,418 | ) | — | |||||
| Total Other expense | (512,287 | ) | — | |||||
| Net loss | $ | (11,637,637 | ) | $ | (334,678 | ) | ||
As of December 31, 2024, BGHL has not generated any revenue since inception. For the year ended December 31, 2024, BGHL’s expenses are associated with start-up costs related to the potential Business Combination as described above and plant maintenance costs associated with the mine leases.
For the period from November 9, 2023 (inception) to December 31, 2023, BGHL’s expenses are associated with start-up and costs related to the potential Business Combination, as described above.
Liquidity and Capital Resources
Since inception, BGHL’s primary sources of liquidity have been cash flows from loans provided by affiliated companies, Blue International Holdings Limited (“BIHL”) and Future Global Resources Limited (“FGR”), the previous leaseholder, as well as funds generated from the issuance of convertible notes payable and common stock. For the year ended December 31, 2024, BGHL reported an operating loss of $11.6 million and cash flows used in operations of $6.2 million. As of December 31, 2024, BGHL had an aggregate cash and cash equivalents balance of $170,557 and a net working capital deficit of $7.6 million.
In August 2024, BGHL signed a Gold Advance Payment Purchase Agreement (“GAPPA”) with Gerald Metals SARL (“Gerald”), whereby, subject to satisfying several conditions precedent, Gerald will make advance payments of up to an aggregate of $25,000,000 to fund restart costs. All advance payment amounts, plus interest accruing and compounding daily at 7% plus three-month SOFR per annum, are required to be prepaid 24 months after the date of the first advance payment disbursement. Until such time as all such amounts are paid in full, Gerald is granted a first ranking perfected security interest over all of BGBPL’s assets, including real property, machinery and equipment, its mining license, each with regard to the Bogoso Prestea mine, and certain other assets. In consideration of the advance payment, BGBPL will sell 100% of the total material produced at the Bogoso and Prestea site to Gerald for a period of 60 months after the offtake commencement date at a discount as defined in the agreement. The total amount of material sold will be no less than 760,000 oz of gold, delivered pursuant to a prescribed delivery schedule, and such 60 month period can be extended until such amount is delivered. Pursuant to the GAPPA, Gerald was also granted a right of first refusal to participate in the development funding of certain future projects. In addition, the GAPPA includes an undertaking that the Company will become a party to the GAPPA. The GAPPA gives Gerald the option to convert the advance payment, or part thereof, into shares and warrants of Blue Gold Limited. Under Tranche A, $15.0 million of advance payment can be converted to Ordinary Shares of the Company up to 10 business days after listing. The conversion price into Ordinary Shares will be calculated on the basis of a conversion into BGHL shares at $0.43 cents, and then applying the BCA conversion price into Ordinary Shares achieved by BGHL at the time of the listing. Each share is paired with a warrant as part of Tranche A, giving the right to purchase shares at the listing price (cash exercise) for a period of 24 months following the date of issue of the warrants. Under Tranche B, $10.0 million of advance payment can be converted to Ordinary Shares of the Company for a period of 24 months after the first disbursement of the advance payment. Under Tranche B, Gerald can elect to convert on the earlier of (i) the Listing Date; or (ii) during the first calendar month of commercial production. If the conversion under Tranche B takes place prior to the Listing Date, the conversion price shall be 100 cents per share in BGHL; if the conversion is after Listing, the conversion price shall be the initial listing price. Each share is paired with a warrant as part of Tranche B, giving the right to purchase shares at the listing price (cash exercise) for a period of (i) 24 months following the date of issue of the warrants if Tranche B is exercised prior to the Listing, or on the IPO date, or within 12 months following the date of last disbursement of the Advance Payment, or (ii) 12 months if Gerald elects to convert after the 12th Month following the date of last disbursement of the Advance Payment. Furthermore, the GAPPA gives Gerald the right, for the duration of the agreement, to two seats on the Company’s board of directors.
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In September 2024, BGBPL signed a Mining Equipment Supply Framework Agreement with Attachy Construction Limited (“Attachy”), whereby Attachy has agreed to procure certain goods and equipment necessary for the restart of the Bogoso Prestea Mine, up to a total value of $8.0 million. BGBPL must repay to Attachy the equipment purchase price plus a mark-up of 30% of such price. Repayment of the purchase price and mark-up amount will commence three months after an equipment purchase and will be repaid over seven equal monthly installments. The Company paid $1,084,872 to Attachy under this Agreement as a service fee, which has been expensed as plant maintenance costs for the year ended December 31, 2024.
On November 7, 2024, BGHL received a $345,000 advance from Attachy. On each of October 2, 2024, October 28, 2024 and November 13, 2024, BGHL’s subsidiary, BGBPL, received advances in the aggregate amount of $303,000 from Attachy. These advances are non-interest bearing and do not require collateral. The advances are due on demand and, to date, Attachy has not demanded repayment of the advances.
In March 2025, BGHL received an advance of $866,691 from BC2, BGHL’s current parent company.
As at June 25, 2025, BGHL has raised an aggregate of $1,902,586 in connection with an ongoing convertible note financing. The convertible notes have a maturity date of October 31, 2025 and a redemption premium of 20%. The convertible notes will be automatically converted into Ordinary Shares of the Company thirty (30) days after June 26, 2025 (the “Listing Date”). The conversion price will be the lower of (i) the Volume Weighted Average Price (VWAP) over the 30-day period following the Listing Date lesser the Applicable Discount (as defined below) and (ii) the closing price on the day prior to the conversion lesser the Applicable Discount. The Applicable Discount is a 40% discount for investments made prior to the Listing Date and a 20% discount for investments made following the Listing Date.
The funding of BGHL’s future capital requirements depends on many factors, including BGHL’s revenue growth rate, the timing and extent of spending to support the restart of the Bogoso Prestea Mine and further exploration activities. To finance these activities, BGHL will need to raise additional or alternative capital from outside sources. While there can be no assurances, BGHL currently intends to raise such capital through issuances of additional equity, debt finance, trade finance, and/or offtake finance. BGHL may not be able to raise it on terms acceptable to BGHL or at all. If BGHL is unable to raise additional capital when at the time or in amounts necessary, BGHL’s business, results of operations and financial condition will be materially and adversely affected.
As a result of the above, in connection with BGHL’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that BGHL’s liquidity condition raises substantial doubt about BGHL’s ability to continue as a going concern for the next twelve months and thereafter. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should BGHL be unable to continue as a going concern.
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Cash flows for the year ended December 31, 2024 and for the period from November 9, 2023 (inception) to December 31, 2023
The following table summarizes BGHL’s cash flows from operating, investing and financing activities for the year ended December 31, 2024 and for the period from November 9, 2023 (inception) to December 31, 2023:
| For the year ended December 31, 2024 | For the period from November 9, 2023 (inception) to December 31, 2023 | |||||||
| Net cash used in operating activities | $ | (6,234,318 | ) | $ | — | |||
| Net cash used in investing activities | $ | (355,277 | ) | $ | — | |||
| Net cash provided by financing activities | $ | 6,749,039 | $ | — | ||||
Cash flows used in operating activities
Net cash used in operating activities for the year ended December 31, 2024 was $6.2 million, primarily due to expenses associated with start-up costs related to the potential Business Combination, as described above, and plant maintenance costs associated with the mine leases.
Cash flows used in investing activities
Net cash used in investing activities for the year ended December 31, 2024 was $0.4 million and was primarily related to purchases of vehicles.
Cash flows provided by financing activities
Net cash provided by financing activities for the year ended December 31, 2024 was $6.8 million and was primarily related to proceeds from convertible notes ($2.5 million), proceeds from the issuance of common stock ($3.6 million) and proceeds from a loan ($0.6 million) from Attachy described above.
Off-Balance Sheet Arrangements
BGHL does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies and Estimates
BGHL prepares its financial statements in accordance with US GAAP, expressed in U.S. dollars. BGHL’s financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with US GAAP. References to GAAP issued by the FASB are to the FASB Accounting Standards Codification. All significant intercompany balances and transactions have been eliminated in consolidation.
Preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires BGHL to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and the accompanying notes. Actual results could materially differ from these estimates. On an ongoing basis, BGHL evaluates its estimates, including those relating to fair values, income taxes, and contingent liabilities among others. BGHL bases its estimates on assumptions both historical and forward looking that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of its assets and liabilities.
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Critical Accounting Estimates
Use of Estimates
The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosures of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are adjusted to reflect actual experience when necessary. Significant estimates made by management include, but are not limited to, valuation of mineral rights, valuation of royalty liabilities, contingent consideration, reserve volumes and future net revenues associated with mine resources and the asset retirement obligations.
The Life of Mine model (“LoM”), which has been used as the basis for calculating the mineral rights value and the royalty liability value is prepared to a Scoping Study level. The LoM is preliminary in nature and there is a high degree of uncertainty over the assumptions made. The LoM is solely based on Measured and Indicated Resources which are considered too speculative geologically to have economic considerations applied to them that would allow them to be categorized as mineral reserves, and there is no certainty that the LoM will be realized.
Foreign currency translation and transactions
BGHL’s reporting currency is the U.S. dollar. The functional currency of each entity in the group is the currency of the primary economic environment in which it operates. Transactions in foreign currencies are initially recorded into functional currency at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured into functional currency at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are remeasured to the functional currency at exchange rates that prevailed on the date of inception of each transaction.
BGHL translates the financial statements from the local (functional) currency into U.S. Dollars using the year or reporting period end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters (“ASC 830-10”). Assets and liabilities are translated at exchange rates as of the balance sheet date. Expenses are translated at average rates in effect for the periods presented. Translation gains and losses resulting from re-measurement from functional to reporting currency are recorded in accumulated other comprehensive income or loss as a component of shareholders’ equity.
Gains and losses resulting from transactions denominated in a currency other than the functional currency of the entity are included in general and administrative expenses in the consolidated statements of operations using the average exchange rates in effect during the period.
BGBPL holds certain long-lived assets in Ghana including the mineral assets. Ghana has experienced economic instability and the Ghanian government has implemented various monetary policies. Ghana has also experienced high rates of inflation over the past several years. BGHL applies hyper-inflationary accounting to Ghana in accordance with the guidelines in ASC 830, “Foreign Currency.” A hyper-inflationary economy designation occurs when a country has experienced cumulative inflation of approximately 100 percent or more over a 3-year period. This hyper-inflationary designation requires BGHL’s subsidiary in Ghana to record all transactions as if they were denominated in U.S. dollars. The subsidiary in Ghana has not generated revenue to the date of this report and total net currency exchange losses were not significant.
Property, Plant and Equipment
The value of property, plant and equipment (“PP&E”), including land, buildings and processing equipment, that were acquired as part of the Asset Acquisition are recorded at relative fair value assessed at the time of the acquisition less depreciation. Any additional PP&E acquired, and any expenditures that extend the life of such assets are recorded at historical cost, including direct acquisition costs less depreciation and impairment losses. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Capital work in progress is recorded at cost less impairment losses but is not depreciated until it is in use and transferred into other PP&E classifications.
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Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to BGHL and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to profit or loss during the financial period in which they are incurred.
Depreciation
Depreciation for mobile equipment and other assets is computed using the straight-line method at rates calculated to depreciate the cost of the assets, less their anticipated residual values, if any, over their estimated useful lives as follows:
| Vehicles | 5 years | |
| Other Equipment | 2 years | |
| Computer and accessories | 2 years |
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.
BGHL evaluates the carrying value of PP&E and finite-lived intangible assets whenever a change in circumstances indicates that the net carrying value may not be recoverable from the entity-specific undiscounted future cash flows expected to result from our use of and eventual disposition of a long-lived asset or asset group. Events or circumstances that could trigger an impairment review of a long-lived asset or asset group include, but are not limited to: (i) a significant decrease in the market price of the asset, (ii) a significant adverse change in the extent or manner that the asset is used or in its physical condition, (iii) a significant adverse change in legal factors or in the business climate that could affect the value of the asset, (iv) an accumulation of costs significantly in excess of original expectation for the acquisition or construction of the asset, (v) a current period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast of continuing losses associated with the use of the asset and (vi) a more-likely-than-not expectation that the asset will be sold or disposed of significantly before the end of its previously estimated useful life. If an impairment exists, the net carrying values are reduced to fair values. BGHL estimates the fair values of these long-lived assets by performing a discounted future cash flow analysis for the remaining useful life of the asset, or the remaining useful life of the primary asset in the case of an asset group. An individual asset within an asset group is not impaired below its estimated fair value. There were no impairments recorded as of December 31, 2024 and 2023.
Mineral Rights and Amortization
Amortization of Mineral Rights (“Mine Properties”), buildings, leasehold land and plant and machinery (collectively the “mineral assets”) is provided for using the unit-of-production method with separate calculations made for each mineral resource.
The calculation of the units-of-production rate of amortization could be impacted to the extent that actual production in the future differs from current forecasted production resulting in possible revision to the estimate of total resources to be produced.
The carrying values of the mineral rights are assessed for impairment by management on an annual basis (while under development) or when indicators of impairment exist. BGHL compares the carrying value of the mine assets to its estimates of undiscounted future cash flows from the underlying resources. Should management determine that these carrying values cannot be recovered, the carrying value is compared to an estimate of fair value and the unrecoverable amounts are written off against earnings and cannot be subsequently reversed. As of December 31, 2024, as the lease termination and ensuing dispute represented a triggering event, in accordance with ASC 360, BGHL compared the undiscounted cash flows of the long-lived asset group to their carrying amounts which determined there was no impairment required.
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Mineral Exploration Rights and Costs, Exploration, Evaluation and Development Expenditures
Exploration costs, which include maintenance, development and exploration of mineral claims, are expensed as incurred. When it is determined that a mineral deposit can be economically developed as a result of establishing proven and probable reserves and all regulatory operating permits have been secured, the costs incurred after such determination will be capitalized until the commencement of production and amortized over their useful lives. To date, BGHL has not established the commercial feasibility and received the necessary regulatory operating permits for any of its exploration prospects; therefore, all exploration costs are being expensed as incurred.
Asset Retirement Obligation
BGHL follows Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), which established a uniform methodology for accounting for estimated reclamation and abandonment costs. FASB ASC 410 requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which the legal obligation associated with the retirement of the long-lived asset is incurred or when acquired. When the liability is initially recorded, the offset is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its future value each period and charged to accretion expense, and the initial capitalized cost is amortized over the useful life of the related asset. To settle the liability, the obligation is paid, and to the extent there is a difference between the liability and the amount of cash paid, a gain or loss upon settlement is recorded.
Convertible Notes Payable
BGHL may enter into convertible notes, some of which contain fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder into common shares at a fixed rate at the time of conversion. This results in a fair value of the convertible notes being equal to a fixed monetary amount. BGHL records the convertible notes liability at its fixed monetary amount on the issuance date and interest expense is charged over the outstanding period of the note.
Business Combination and Asset acquisition
BGHL applies a screen test to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets to determine whether a transaction should be accounted for as an asset acquisition or business combination.
When an acquisition does not meet the definition of a business combination because either: (i) substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or group of similar identified assets, or (ii) the acquired entity does not have an input and a substantive process that together significantly contribute to the ability to create outputs, BGHL accounts for the acquisition as an asset acquisition. In an asset acquisition, goodwill is not recognized, but rather, any excess purchase consideration over the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable net assets as of the acquisition date and any direct acquisition-related transaction costs are capitalized as part of the purchase consideration.
When an acquisition is accounted for as a business combination, BGHL recognizes and measures the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, while transaction and integration costs related to business combinations are expensed as incurred. Any excess of the purchase consideration in excess of the aggregate fair value of the net tangible and intangible assets acquired, if any, is recorded as goodwill. For material acquisitions, BGHL engages independent appraisers to assist with the determination of the fair value of assets acquired, liabilities assumed, noncontrolling interest, if any, and goodwill, based on recognized business valuation methodologies. An income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired, liabilities assumed, and noncontrolling interest, if any, in a business combination. The income valuation method represents the present value of future cash flows over the life of the asset using discrete financial forecasts, long-term growth rates, appropriate discount rates, and expected future capital requirements. The market valuation method uses prices paid for a similar asset by other purchasers in the market, normalized for any differences between the assets. The cost valuation method is based on the replacement cost of a comparable asset at the time of the acquisition adjusted for depreciation and economic and functional obsolescence of the asset. The fair value of property, plant and mine development is estimated to include the fair value of asset retirement costs of related long-lived tangible assets. During the measurement period, not to exceed one year from the date of acquisition, BGHL may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the period the adjustment arises.
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Fair Value Measurement
As defined in ASC 820, Fair Value Measurements and Disclosures, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (exit price). BGHL utilizes market data or assumption that market participants use in pricing an asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that participants used to measure fair value. The hierarchy gives us the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.
Level 1: Quoted prices are available in an active market for identical assets or liabilities as of the reporting data. Active markets are those in which transactions for the assets or liability occur in sufficient frequency and volume to provide information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.
Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Subsequently all these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supposed by observable level at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, option and collar.
Level 3: Pricing inputs includes significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
The fair value of cash, prepaid expenses and other assets, advances to related parties, accrued expenses and other liabilities, and due to related parties approximate their carrying values due to their short term to maturity. The royalty payable, contingent consideration payable and the asset retirement obligation were recorded at fair value as of the closing date of the Purchase and Assumption Agreement using Level 3 inputs.
Recent Accounting Pronouncements
Certain new standards, amendments and interpretations and improvements to existing standards have been published by the FASB and SEC but are not yet effective and have not been adopted early by BGHL. BGHL does not anticipate that any of these pronouncements will have a material impact on its consolidated financial statements.
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The following table sets forth certain information relating to the executive officers and directors of the Company as of the date of this Report.
| Name | Age | Position | ||
| Andrew Cavaghan | 48 | Chief Executive Officer and Director | ||
| Lorenz Werndle | 50 | Chief Financial Officer | ||
| Daniel Owiredu | 67 | Executive Chairman | ||
| David Edward | 60 | Director | ||
| Phil Newall | 63 | Director | ||
| Tao Tan | 39 | Director | ||
| Candice Beaumont | 51 | Director |
Andrew Cavaghan
Mr. Cavaghan is the CEO of the Company. He resides in Accra, Ghana, where he co-leads BGHL as Executive Chairman. Mr. Cavaghan is also co-founder and Executive Director of Blue International Holdings, formed in 2012, which has raised and invested over $150m into energy and mining projects in sub–Saharan Africa. Prior to this Mr. Cavaghan co-founded investment group, Desert Lion Partners, in 2009 which originated multiple projects in Sub Saharan Africa in the mining, transportation, real estate and infrastructure sectors. Between 2002 and 2009 Mr. Cavaghan was a venture capital and private equity executive, latterly with Octopus Investment. During his time with Octopus funds under management grew from $30m to $1bn, Mr. Cavaghan was called to the bar in 2002 and became a member of Middle Temple. Mr. Cavaghan has worked at the law firm Addleshaw Goddard (formerly Theodore Goddard), and gained his undergraduate degree in Philosophy at University College London.
Lorenz Werndle
Mr. Werndle is the CFO of the Company, as well as the CFO for BGHL. He was previously the Head of Corporate Development, leading Mergers & Acquisitions and Financial Planning and Analysis for Mwana Africa PLC and Lonrho PLC, both companies focused on Africa. At Mwana Africa, he led the corporate finance elements of the financing and successful restart of the Bindura Nickel Mine in Zimbabwe growing group revenue to over $110M/yr. At Lonrho, he was part of the team that grew group revenue by £100M/yr through business acquisitions. Mr Werndle has also worked for Ambrian Partners PLC in their Corporate Finance advisory division, advising mining clients on IPOs and sell side transactions. He started his career as a strategy consultant for Andersen Consulting in their South African office advising global clients on delivering operational improvements and on their African expansion strategies. Mr. Werndle holds a Bachelor of Commerce Degree in Accounting and an Honours Degree in Economics from Stellenbosch University, where he received the CGW Schumann medal for the top postgraduate student in the Faculty of Economics and Management Sciences in 1998 and the Cloete Medal for the top Economics student in 1997 and 1998. He also holds an MSc from the University of Oxford where he was the recipient of the Clarendon scholarship.
Daniel Owiredu
Mr. Owiredu is the chairman of the Company. He is an accomplished Mining Executive with over 35 years of experience in the mining sector in Ghana and other parts of Africa. He holds a BSc degree in Mechanical Engineering from the Kwame Nkrumah University of Science & Technology, Kumasi and an MBA degree from Strathclyde Business School in Scotland, UK. Mr. Owiredu was previously the President of the Chamber of Mines in the Ghana. He was awarded an honorary doctorate in 2018 by the University of Mines and Technology in recognition of his various critical roles. Prior to 2006, Mr. Owiredu was the Chief Operating Officer, West Africa and Deputy Chief Operating Officer, Africa for AngloGold Ashanti. He also served as the Managing Director of the then Ashanti Goldfields, Bibiani Mine in Ghana, Siguiri Mine in Guinea and Obuasi Mine in Ghana. Mr. Owiredu joined Golden Star Resources Ltd. in September 2006 as Vice President, Operations and was subsequently appointed Executive Vice President, Operations and Chief Operating Officer in January 2013. He was appointed to the Board of Directors in November 2014. He was critical in the development of the Wassa underground mine and the revamping of the Prestea underground mine. Mr Owiredu was appointed President of Golden Star Resources and retired from executive management in December 2019. Mr. Owiredu served as the Executive Chairman of FGR Bogoso Prestea local board until June 2022 when he was appointed as the CEO of Blue Gold International.
David Edward
Mr. Edward is a director of the Company. Mr. Edward spent his entire working career in the Lloyd’s insurance market where he established himself as a leading underwriter in the fine art and specie market. He has global experience of providing insurance solutions for the precious metals industry including the mining, refining, transportation and jewelry manufacture of gold where he could commit up to $500m of liability. His reputation for excellent risk assessment and financial management delivering highly profitable results led to his appointment as a director of Brockbank Syndicate Management Ltd where he also took management responsibility for other classes of business. In 2001 he was a founding partner and director of a start-up company in the Lloyd’s market, Ascot Underwriting Limited. Mr. Edward was instrumental in building an underwriting team across eight classes of businesses that quickly established itself as a market leader and underwrote more than $1bn of premium income. The success of the business led to the sale of the company in 2008 to AIG. Since that time, Mr. Edward has been active in investing in early-stage companies whilst also fulfilling non-executive director and advisory roles including Blue International Holdings since its establishment. He has also undertaken expert witness assignments.
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Phil Newall
Mr. Newall is a director of the Company. He recently retired as Managing Director of Wardell Armstrong International following a career in the mining industry spanning more than 40 years. He has a first degree in Mining Geology and a PhD in Exploration Geochemistry. During this time, Mr. Newall has provided a broad range of consultancy services to minerals companies throughout the world, with emphasis in Central Asia, sub-Saharan Africa and Europe. He has developed an extensive portfolio of exploration and mining-related contracts, from project management through to technical audits of a large variety of metalliferous and industrial mineral deposits, although particular specialisation lies in gold and base metals. Mr. Newall brings a wealth of experience from across the industry and has been involved in some important IPO’s such as Glencore, Nordgold, IRC and London Mining. In addition, he has been instrumental in managing some major Feasibility studies, is very familiar with NI 43-101, JORC/CIM resource reporting, as well as undertaking numerous due diligences, fatal flaw and scoping studies. Phil also continues to be involved in Expert Witness work.
Tao Tan
Mr. Tan is a director of the Company. He has nearly 15 years of experience across finance, strategy and business transformation. Mr. Tan was previously Senior Vice President at Fanatics, President of Perception Capital Corp. IV, and Partner at Perception Capital Partners. Until 2020, Mr. Tan was an Associate Partner at McKinsey & Company’s New York office. At McKinsey, Mr. Tan led teams across the firm’s transformation and private equity & principal investor practices, where he drove comprehensive performance transformation and turnaround programs for companies with revenues ranging from $200 million to $25 billion across multiple industries and continents. Most recently, Mr. Tan helped found, launch and lead McKinsey’s SPAC service line, and served in a leadership role in McKinsey’s COVID-19 client response team. Prior to McKinsey, Mr. Tan was a Senior Associate at Rose Tech Ventures, where he led the firm’s first-round investment in JUMP Bikes, which was subsequently sold to Uber in 2018. Prior to Rose Tech Ventures, Mr. Tan served in investment banking and capital markets roles at Bank of America Merrill Lynch and Lehman Brothers. Mr. Tan is a member of the Council on Foreign Relations, the Atlantic Council of the United States, and of the Economic Club of New York. Mr. Tan received his B.A. and his M.B.A, both with honors, from Columbia University in the City of New York, where he was an Erwin Wolfson Scholar and a Toigo Foundation Fellow.
Candice Beaumont
Ms. Beaumont is a director of the Company. She has served since 2016 as Chairman of the Salsano Group, a Panama based family office and conglomerate invested in private equity. Since 2003, Ms. Beaumont has served as Chief Investment Officer of L Investments, a single-family office invested in public and private equity. Ms. Beaumont was a member of the Board of Directors of Clean Earth Acquisitions Corp. (Nasdaq: CLINU) that completed its initial public offering in February 2022 and completed its business combination with Alternus Energy Group in December 2023, as well as Israel Acquisitions Corp that completed its IPO in January 2023. Beginning in March 2021 Candice began to serve as Advisor to Athena Technology Acquisition Corp (NYSE: ATHN.U) and as Advisor of Springwater Situations Corp. (NASDAQ: SWSSU), a special purpose acquisition company formed to effectuate a merger or similar transaction with one or more businesses, which completed its initial public offering on August 25, 2021. She speaks at numerous family office and investment conferences globally, including the Stanford University Graduate School of Business Global Investor’s Forum, is a NYU Stern Family Office Council member serving on the Steering Committee, and is an Advisory Board member of the Family Office Association. From 2012 to 2014, Ms. Beaumont was a member of the Board of Directors of I2BF Venture Fund II, a Dubai Financial Services Authority regulated clean tech venture capital firm with offices in Dubai, New York and London. She started her career in Corporate Finance at Merrill Lynch in 1996 and worked as an investment banker at Lazard Frères from 1997 to 1999, during which time she executed over $20 billion of merger and acquisition advisory assignments. Ms. Beaumont also worked in private equity at Argonaut Capital from 1999 to 2001. Ms. Beaumont obtained a Bachelor in Business Administration from the University of Miami, graduating first in her class with a major of International Finance & Marketing.
BGHL Named Executive Officer and Director Compensation
Information regarding the directors and executive officers compensation of the Company after the closing of the Business Combination is included in the Prospectus under the section titled “Management of Blue Gold Limited Following the Business Combination” and is incorporated herein by reference. Director and Employment agreements are attached as Exhibits 4.22 through 4.25.
Director Compensation
Following the closing of the Business Combination, we expect Blue Gold Limited’s executive compensation program to be consistent with BGHL’s existing compensation policies and philosophies, which are designed to:
| ● | attract, retain and motivate senior management leaders who are capable of advancing BGHL’s mission and strategy and, ultimately, creating and maintaining its long-term equity value. Such leaders must engage in a collaborative approach and possess the ability to execute its business strategy in an industry characterized by competitiveness and growth; |
| ● | reward senior management in a manner aligned with BGHL’s financial performance; and |
| ● | align senior management’s interests with BGHL shareholders’ long-term interests through equity participation and ownership. |
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Decisions with respect to the compensation of the Company’s executive officers, including its named executive officers, will be made by the compensation committee of the Company’s board of directors. The following discussion is based on the present expectations as to the compensation of the named executive officers and directors following the Business Combination. The actual compensation of the named executive officers will depend on the judgment of the members of the compensation committee and may differ from that set forth in the following discussion.
The Company currently anticipates that compensation for its executive officers will have the following components: base salary, cash bonus opportunities, long-term incentive compensation, broad-based employee benefits, supplemental executive perquisites, and severance benefits. Base salaries, broad-based employee benefits, supplemental executive perquisites and severance benefits will be designed to attract and retain senior management talent. The Company intends to also use annual cash bonuses and long-term equity awards to promote performance-based pay that aligns the interests of its named executive officers with the long-term interests of its equity owners and to enhance executive retention.
Base Salary
Blue Gold Limited expects that the base salaries of its named executive officers in effect prior to the Business Combination as described under the heading “BGHL’s Executive Officer and Director Compensation” will be subject to increases made in connection with reviews by the compensation committee.
Annual Bonuses
Blue Gold Limited expects that it will use annual cash incentive bonuses for the named executive officers to motivate their achievement of short-term performance goals and tie a portion of their cash compensation to performance. It expects that, near the beginning of each year, the compensation committee will select the performance targets, target amounts, target award opportunities and other terms and conditions of annual cash bonuses for the named executive officers, subject to the terms of their employment and service agreements. Following the end of each year, the compensation committee will determine the extent to which the performance targets were achieved and the amount of the award that is payable to the named executive officers.
Stock-Based Awards
Blue Gold Limited expects to use stock-based awards in future years to promote its interests by providing these executives with the opportunity to acquire equity interests as an incentive for their remaining in its service and aligning the executives’ interests with those of Blue Gold Limited shareholders. Stock-based awards for its directors and named executive officers may be awarded in future years under a new employee incentive plan upon or after consummation of the Business Combination, which would be adopted by the Blue Gold Limited Board following the Business Combination.
Other Compensation
Blue Gold Limited expects to continue to maintain various employee benefit plans currently maintained by BGHL and to continue to provide its named executive officers with specified perquisites and personal benefits currently provided by BGHL that are not generally available to all employees.
Director Compensation
Following the Business Combination, non-employee directors of Blue Gold Limited will receive varying levels of compensation for their services as directors and members of committees of the Blue Gold Limited Board of Directors, in accordance with a non-employee director compensation policy that will be put in place following the Business Combination. Blue Gold Limited anticipates determining director compensation in accordance with industry practice and standards.
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The Company’s Amended and Restated Memorandum and Articles of Association provides that, to the fullest extent permitted by law, each director of Blue Gold Limited shall be indemnified from and against all liability which they incur in execution of their duty as a director of the Company, except liability incurred by reason of such director’s or officer’s actual fraud, willful default, or willful neglect.
Information regarding the Board of the Company subsequent to the Business Combination is included in the Prospectus under the section titled “Management of Blue Gold Limited Following the Business Combination” and is incorporated herein by reference.
None.
Information regarding the ownership of the Ordinary Shares by our directors and executive officers is set forth in Item 7.A of this Report.
F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
None.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
The following table sets forth information relating to the beneficial ownership of the Post-Closing Ordinary Shares as of the Closing Date by:
| ● | each person, or group of affiliated persons, known by us to beneficially own more than 5% of outstanding Ordinary Shares; |
| ● | each of our directors; |
| ● | each of our executive officers; and |
| ● | all of our directors and executive officers as a group. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security. Under those rules, beneficial ownership includes securities that the individual or entity has the right to acquire, such as through the exercise of warrants within 60 days of June 25, 2025. Shares subject to warrants that are currently exercisable or exercisable within 60 days of June 25, 2025 or subject to restricted stock units that vest within 60 days of June 25, 2025 are considered outstanding and beneficially owned by the person holding such warrants. Except as noted by footnote, and subject to community property laws where applicable, based on the information provided to Perception, Perception believes that the persons and entities named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them.
There are 30,571,764 Ordinary Shares issued and outstanding immediately following the consummation of the Business Combination on June 25, 2025.
The following table does not reflect record of beneficial ownership of any Ordinary Shares issuable upon exercise of Warrants as such securities are not exercisable or convertible within 60 days of June 25, 2025.
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Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Post-Closing Ordinary Shares beneficially owned by them. To our knowledge, no Post-Closing Ordinary Shares beneficially owned by any executive officer, director or director nominee have been pledged as security.
| Post- Business Combination Beneficial Ownership | ||||||||
| Name of Beneficial Owner(1) | Number of Class A Ordinary Shares | % | ||||||
| 5% Holders | ||||||||
| Perception Capital Partners IV LLC | 1,878,062 | 6.1 | % | |||||
| RCF VII Sponsor LLC | 1,903,125 | 6.2 | % | |||||
| Andrew Cavaghan and affiliates(1) | 3,971,493 | 13.0 | % | |||||
| Mark Green and affiliates(2) | 4,519,915 | 14.8 | % | |||||
| Kevin Clark and affiliates(3) | 1,738,962 | 5.7 | % | |||||
| Directors and Executive Officers Post-Business Combination | ||||||||
| Andrew Cavaghan(1) | 3,971,493 | 13.0 | % | |||||
| Daniel Owiredu(4) | 286,247 | * | ||||||
| David Edward | 648,147 | 2.1 | % | |||||
| Phil Newall | — | — | ||||||
| Tao Tan(5) | 434,689 | 1.4 | % | |||||
| Candice Beaumont | 160,000 | * | ||||||
| Lorenz Werndle(6) | 150,000 | * | ||||||
| All Directors and Executive Officers as a Group (7 Persons) | 5,650,576 | 18.5 | % | |||||
| * | Less than 1% |
| (1) | BCMP Services Limited is the record holder of 612,500 shares, Pegasus Capital Limited is the record holder of 2,593,430 shares, Pegasus Capital Holdings Limited is the record holder of 5,170 shares, and Elizabeth Cavaghan is the record holder of 1,325 shares as reported herein. Mr. Cavaghan is a director and 50% shareholder of BCMP Services Limited and sole shareholder of Pegasus Capital Limited. Mr. Cavaghan disclaims beneficial ownership of these securities, except to the extent, if any, of his pecuniary interest therein. |
| (2) | BCMP Services Limited is the record holder of 612,500 shares as reported herein. Mr. Green is the 50% shareholder of BCMP Services Limited. Mr. Green disclaims beneficial ownership of these securities, except to the extent, if any, of his pecuniary interest therein. |
| (3) |
Green Bear Resources LP is the record holder of 236,695 shares, Kaela Ritchie is the record holder of 588,248 shares and Fountainhead Holdings LLC is the record holder of 816,976 shares. Mr. Clark disclaims beneficial ownership of these securities, except to the extent, if any, of his pecuniary interest therein. |
| (4) | Includes beneficial interest over 200,000 shares by virtue of an option to acquire Ordinary Shares owned by BGHL. Mr. Owiredu is the Chairman of Blue Gold Limited. Mr. Owiredu disclaims beneficial ownership of these securities, except to the extent, if any, of his pecuniary interest therein. |
| (5) | Includes 434,689 shares held by Cibreo Partners LLC. Mr. Tan is the 51% shareholder of Cibreo Partners LLC. Mr. Tan disclaims beneficial ownership of these securities, except to the extent, if any, of his pecuniary interest therein. |
| (6) | Includes beneficial interest over 150,000 shares by virtue of an option to acquire Ordinary Shares owned by BGHL. Mr. Werndle is the CFO of Blue Gold Limited and BGHL. Mr. Werndle disclaims beneficial ownership of these securities, except to the extent, if any, of his pecuniary interest therein. |
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Information regarding certain related party transactions is included in the Prospectus under the section titled “Certain Relationships and Related Person Transactions—BGHL” and is incorporated herein by reference.
C. Interests of Experts and Counsel
None.
A. Consolidated Financial Statements and Other Financial Information
See Item 18 of this Report for consolidated financial statements and other financial information.
A discussion of significant changes since December 31, 2024 is provided under Item 4 of this Report.
Nasdaq Listing of Ordinary Shares and Warrants
Ordinary Shares and Warrants are listed on Nasdaq under the symbol “BGL” and “BGLWW”, respectively. Holders of Ordinary Shares should obtain current market quotations for their securities.
Lock-ups
Certain Ordinary Shares issued in connection with the Business Combination are deemed restricted shares (the “Restricted Shares”). Restricted Shares shall be subject to lock-up unless and until released from lock-up pursuant to Article 39 of the Amended and Restated Memorandum and Articles of Association or unless otherwise released by the Company.
The Amended and Restated Memorandum and Articles of Association limits the transfer of the Ordinary Shares issued in the Business Combination. Initially, 5% of the Restricted Shares will be released from lock-up upon the registration of the Ordinary Shares issued in the Business Combination that results in the Ordinary Shares being able to be sold publicly on a national securities exchange without restriction under the Securities Act. Thereafter, an additional 5% of the Restricted Shares shall become freely tradeable on each monthly anniversary of their becoming registered; provided that in such month the volume weighted-average trading price of the Ordinary Shares, on the principal national securities exchange on which the Ordinary Shares are listed is greater than $10.00 per Ordinary Share for twenty out of the applicable number of trading days of that month. All Restricted Shares that have not previously become freely trading will become freely-tradeable on the earlier of (i) the volume weighted-average trading price of the Ordinary Shares on the principal national securities exchange on which the Ordinary Shares are listed is greater than $20.00 per Ordinary Share for sixty out of any ninety day period; (ii) the second anniversary of the consummation of the Business Combination and (iii) the Directors resolving to release such Restricted Shares from these restrictions.
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Warrants
Upon the completion of the Business Combination, there were 11,500,000 Blue Gold Limited Warrants outstanding. The Blue Gold Limited Warrants, which entitle the holder to purchase one Ordinary Share at an exercise price of $11.50 per share, become exercisable 30 days after the completion of the Business Combination. The Blue Gold Limited Warrants expire five years after the completion of the Business Combination or earlier upon redemption or liquidation in accordance with their terms.
In addition, each Perception warrant outstanding and unexercised immediately prior to the Effective Time was converted into one Warrant that entitles the holder thereof to purchase one Ordinary Share on the terms and conditions described above.
Not applicable.
The Ordinary Shares and Warrants are listed on Nasdaq under the symbols “BGL” and “BGLWW”, respectively. There can be no assurance that the Ordinary Shares or Warrants will remain listed on Nasdaq.
Not applicable.
Not applicable.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
Following the Business Combination, the authorized share capital of Blue Gold Limited is $50,000 consisting of 400,000,000 Class A ordinary shares of par value $0.0001 and 100,000,000 preference shares of par value $0.0001.
Information regarding our share capital is included in the Prospectus under the section titled “Description of Blue Gold Limited Securities” and is incorporated herein by reference.
B. Memorandum and Articles of Association
Information regarding certain material provisions of Blue Gold Limited’s Amended and Restated Memorandum and Articles of Association is included in the Prospectus under the section titled “Description of Blue Gold Limited Securities” and is incorporated herein by reference.
Except as described above under the heading “Explanatory Note”, information regarding certain material contracts is included in the Prospectus under the sections titled “The Business Combination Proposal—The Business Combination Agreement” and “—Related Agreements” and is incorporated herein by reference.
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Under the laws of the Cayman Islands, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our ordinary shares. There is no limitation imposed by the Company’s Amended and Restated Memorandum and Articles of Association on the right of non-residents to hold or vote shares.
Information regarding certain tax consequences of owning and disposing of Ordinary Shares and Warrants is included in the Prospectus under the section titled “Material U.S. Federal Income Tax Considerations” and is incorporated herein by reference.
F. Dividends and Paying Agents
To date, Blue Gold Limited has not paid any dividends to its shareholders. Following the completion of the Business Combination, Blue Gold Limited’s board of directors will consider whether or not to institute a dividend policy. The determination to pay dividends will depend on many factors, including, among others, Blue Gold Limited’s financial condition, current and anticipated cash requirements, contractual restrictions and financing agreement covenants, solvency tests imposed by applicable corporate law and other factors that Blue Gold Limited’s board of directors may deem relevant.
The financial statements of Perception as of and for the years ended December 31, 2024 and 2023 set forth in Exhibit 15.2 hereto have been audited by Withum Smith+Brown, PC, an independent registered public accounting firm (“Withum”), as set forth in their report thereon (which report contains an explanatory paragraph regarding the ability of Perception to continue as a going concern), appearing elsewhere therein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of BGHL as of December 31, 2024 and 2023 and for the year ended December 31, 2024 and for the period from November 9, 2023 (inception) to December 31, 2023, have been incorporated by reference herein and in Exhibit 15.3 hereto in reliance upon the report of PKF Texas, an independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing. PKF Texas’ audit report contained an explanatory paragraph related to the substantial doubt of BGHL’s ability to continue as a going concern.
We are subject to the informational requirements of the Exchange Act. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information we have filed electronically with the SEC. As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
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We also make available on our website, free of charge, our Annual Report and the text of our reports on Form 6-K, including any amendments to these reports, as well as certain other SEC filings, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Our website address is www.bluegoldmine.com. The reference to our website is an inactive textual reference only, and information contained therein or connected thereto is not incorporated into this Form 20-F.
Not applicable.
J. Annual Report to Security Holders
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Information regarding quantitative and qualitative disclosure about market risk is set forth in Item 5 of this Report.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. Debt Securities
None.
B. Warrants and Rights
Each Warrant entitles the registered holder to purchase one Ordinary Share at an exercise price of $11.50 per share, subject to adjustment as discussed below and will become exercisable 30 days after the Closing Date, as contemplated by the BCA in connection with the Business Combination, except as discussed below.
A Warrant holder may exercise its Warrants only for a whole number of Ordinary Shares. This means only a whole Warrant may be exercised at a given time by a Warrant holder and only whole Warrants will trade. The Warrants will expire five years after the completion of the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Registrant will not be obligated to deliver any Ordinary Shares pursuant to the exercise of a Warrant and will have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the Ordinary Shares underlying the Warrants is then effective and a prospectus relating thereto is current, subject to the Registrant satisfying its obligations described below with respect to registration. No Warrant will be exercisable and the Registrant will not be obligated to issue an Ordinary Share upon exercise of a Warrant unless the Ordinary Share issuable upon such Warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant will not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless. In no event will the Registrant be required to net cash settle any Warrant. In the event that a registration statement is not effective for the exercised Warrants, the purchaser of a unit containing such Warrant will have paid the full purchase price for the unit solely for the Ordinary Share underlying such unit.
The Registrant will, as soon as practicable, but in no event later than fifteen (15) business days after the closing of the Business Combination, use commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement covering the registration under the Securities Act of the Ordinary Shares issuable upon exercise of the Warrants. The Registrant will use commercially reasonable efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the above. If a registration statement covering the Ordinary Shares issuable upon exercise of the Warrants is not effective by the sixtieth (60th) business day after the closing of the Business Combination, Warrant holders may, until such time as there is an effective registration statement and during any period when the Registrant will have failed to maintain an effective registration statement, exercise Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Ordinary Shares are at the time of any exercise of a Warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Registrant may, at its option, require holders of Warrants who exercise their Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Registrant so elects, they will not be required to file or maintain in effect a registration statement, and in the event they do not so elect, they will use commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
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Each holder must pay the exercise price by surrendering the Warrants for that number of Ordinary Shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying the Warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the Warrants by (y) the fair market value and (B) 0.361. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Ordinary Shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by Continental Stock Transfer & Trust Company (the “Warrant agent”).
Redemption of Warrants When the Price Per Ordinary Share Equals or Exceeds $18.00
Once the Warrants become exercisable, the Registrant may call the Warrants for redemption:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per Warrant; |
| ● | upon a minimum of 30 days’ prior written notice of redemption (the “30-day redemption period”) to each Warrant holder; and |
| ● | if, and only if, the closing price of the Ordinary Shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a Warrant) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Registrant sends the notice of redemption to the Warrant holders. |
The Registrant will not redeem the Warrants as described above unless a registration statement under the Securities Act covering the issuance of the Ordinary Shares issuable upon exercise of the Warrants is then effective and a current prospectus relating to those Ordinary Shares is available throughout the 30-day redemption period. If and when the Warrants become redeemable by the Registrant, the Registrant may exercise its redemption right even if the Registrant is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
The Registrant has established the last of the redemption criteria discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the Warrant exercise price. If the foregoing conditions are satisfied and the Registrant issues a notice of redemption of the Warrants, each Warrant holder will be entitled to exercise his, her or its Warrant prior to the scheduled redemption date. Any such exercise would not be on a “cashless” basis and would require the exercising Warrant holder to pay the exercise price for each Warrant being exercised. However, the price of the Ordinary Shares may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a Warrant) as well as the $11.50 (for whole shares) Warrant exercise price after the redemption notice is issued.
Redemption of Warrants When the Price Per Ordinary Share Equals or Exceeds $10.00
Once the Warrants become exercisable, the Registrant may call the Warrants for redemption:
| ● | in whole and not in part; |
| ● | at $0.10 per Warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their Warrants on a cashless basis prior to redemption and receive that number of Ordinary Shares to be determined by reference to the table below, based on the redemption date and the “fair market value” of the Ordinary Shares (as defined below) except as otherwise described below; and |
| ● | if, and only if, the closing price of the Ordinary Shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a Warrant) for any 20 trading days within the 30-trading day period ending on the third trading day prior to the date on which the Registrant sends the notice of redemption to the Warrant holders. |
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Beginning on the date the notice of redemption is given until the Warrants are redeemed or exercised, holders may elect to exercise their Warrants on a cashless basis. The numbers in the table below represent the number of Ordinary Shares that a Warrant holder will receive upon such cashless exercise in connection with a redemption by the Registrant pursuant to this redemption feature, based on the “fair market value” of the Ordinary Shares on the corresponding redemption date (assuming holders elect to exercise their Warrants and such Warrants are not redeemed for $0.10 per Warrant), determined for these purposes based on the volume weighted average price of the Ordinary Shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of Warrants, and the number of months that the corresponding redemption date precedes the expiration date of the Warrants, each as set forth in the table below. The Registrant will provide its Warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends.
The share prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares issuable upon exercise of a Warrant or the exercise price of a Warrant is adjusted pursuant to the anti-dilution provisions below.
If the number of shares issuable upon exercise of a Warrant is adjusted, the adjusted share prices in the column headings will equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a Warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a Warrant as so adjusted. The number of shares in the table below shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a Warrant. If the exercise price of a Warrant is adjusted, in the case of an adjustment pursuant to the second paragraph in the section titled “Anti-Dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price less the decrease in the exercise price of a Warrant pursuant to such exercise price adjustment.
| Redemption Date | Fair Market Value of Ordinary Shares | |||||||||||||||||||||||||||||||||||
| (period to expiration of Warrants) | ≤$10.00 | $11.00 | $12.00 | $13.00 | $14.00 | $15.00 | $16.00 | $17.00 | ≥$18.00 | |||||||||||||||||||||||||||
| 60 months | 0.261 | 0.281 | 0.297 | 0.311 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
| 57 months | 0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
| 54 months | 0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||||||||||||||||||
| 51 months | 0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||||||||||||||||||
| 48 months | 0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||||||||||||||||||
| 45 months | 0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||||||||||||||||||
| 42 months | 0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||||||||||||||||||
| 39 months | 0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||||||||||||||||||
| 36 months | 0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||||||||||||||||||
| 33 months | 0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||||||||||||||||||
| 30 months | 0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||||||||||||||||||
| 27 months | 0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||||||||||||||||||
| 24 months | 0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||||||||||||||||||
| 21 months | 0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||||||||||||||||||
| 18 months | 0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||||||||||||||||||
| 15 months | 0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 | |||||||||||||||||||||||||||
| 12 months | 0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||||||||||||||||||
| 9 months | 0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||||||||||||||||||
| 6 months | 0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||||||||||||||||||
| 3 months | 0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
| 0 months | — | — | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 | |||||||||||||||||||||||||||
The exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of Ordinary Shares to be issued for each Warrant exercised will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365-or 366-day year, as applicable.
In no event will the Warrants be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 Ordinary Shares per Warrant (subject to adjustment). Finally, as reflected in the table above, if the Warrants are out of the money and about to expire, they cannot be exercised on a cashless basis in connection with a redemption by the Registrant pursuant to this redemption feature, since they will not be exercisable for any Ordinary Shares.
As stated above, the Registrant can redeem the Warrants when the Ordinary Shares are trading at a price starting at $10.00, which is below the exercise price of $11.50. No fractional Ordinary Shares will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, the Registrant will round down to the nearest whole number of Ordinary Shares to be issued to the holder.
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Redemption Procedures
A holder of a Warrant may notify the Registrant in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the Warrant agent’s actual knowledge, would beneficially own in excess of 4.9% or 9.8% (or such other amount as specified by the holder) of the Ordinary Shares outstanding immediately after giving effect to such exercise.
Anti-Dilution Adjustments
If the number of outstanding Ordinary Shares is increased by a share capitalization payable in Ordinary Shares, or by a sub-division of ordinary shares or other similar event, then, on the effective date of such share capitalization, sub-division or similar event, the number of Ordinary Shares issuable on exercise of each Warrant will be increased in proportion to such increase in the outstanding ordinary shares. A rights offering to holders of ordinary shares entitling holders to purchase Ordinary Shares at a price less than the “historical fair market value” (as defined below) will be deemed a share capitalization of a number of Ordinary Shares equal to the product of (i) the number of Ordinary Shares actually sold in such rights offering (or issuable under any other equity interests sold in such rights offering that are convertible into or exercisable for Ordinary Shares) multiplied by (ii) one minus the quotient of (x) the price per Ordinary Share paid in such rights offering and divided by (y) the historical fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for Ordinary Shares, in determining the price payable for Ordinary Shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “historical fair market value” means the volume weighted average price of Ordinary Shares as reported during the 10-trading day period ending on the trading day prior to the first date on which the Ordinary Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if the Registrant, at any time while the Warrants are outstanding and unexpired, pays a dividend or make a distribution in cash, securities or other assets to holders of Ordinary Shares on account of such Ordinary Shares (or other securities into which the Warrants are convertible), other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the Ordinary Shares during the 365-day period ending on the date of declaration of such dividend or distribution (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of Ordinary Shares issuable on exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price of the units in this offering) or (c) to satisfy the redemption rights of the holders of Ordinary Shares in connection with a proposed business combination, then the Warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each Ordinary Share in respect of such event.
If the number of outstanding Ordinary Shares is decreased by a consolidation, combination, reverse share sub-division or reclassification of Ordinary Shares or other similar event, then, on the effective date of such consolidation, combination, reclassification or similar event, the number of Ordinary Shares issuable on exercise of each Warrant will be decreased in proportion to such decrease in outstanding Ordinary Shares.
Whenever the number of Ordinary Shares purchasable upon the exercise of the Warrants is adjusted, as described above, the Warrant exercise price will be adjusted by multiplying the Warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of Ordinary Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of Ordinary Shares so purchasable immediately thereafter.
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In case of any reclassification or reorganization of the outstanding Ordinary Shares (other than those described above or that solely affects the par value of such Ordinary Shares), or in the case of any merger or consolidation of the Registrant with or into another corporation (other than a consolidation or merger in which the Registrant is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding Ordinary Shares), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Registrant as an entirety or substantially as an entirety in connection with which the Registrant are dissolved, the holders of the Warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the Ordinary Shares immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of Ordinary Shares or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the Warrants would have received if such holder had exercised their Warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each Warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the Registrant in connection with redemption rights held by shareholders as provided for in the amended and restated memorandum and articles of association or as a result of the redemption of Ordinary Shares by the Registrant if a proposed business combination is presented to the shareholders for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding Ordinary Shares, the holder of a Warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such Warrant holder had exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Ordinary Shares held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustment (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the Warrant agreement. Additionally, if less than 70% of the consideration receivable by the holders of Ordinary Shares in such a transaction is payable in the form of Ordinary Shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the Warrant properly exercises the Warrant within thirty days following public disclosure of such transaction, the Warrant exercise price will be reduced as specified in the Warrant agreement based on the Black-Scholes Warrant Value (as defined in the Warrant agreement) of the Warrant. The purpose of such exercise price reduction is to provide additional value to holders of the Warrants when an extraordinary transaction occurs during the exercise period of the Warrants pursuant to which the holders of the Warrants otherwise do not receive the full potential value of the Warrants.
The Warrants will be issued in registered form under a Warrant agreement between the Warrant agent and the Registrant. The Warrants may be exercised upon surrender of the Warrant certificate on or prior to the expiration date at the offices of the Warrant agent, with the exercise form on the reverse side of the Warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to the Registrant, for the number of Warrants being exercised. The Warrant holders do not have the rights or privileges of holders of ordinary shares and any voting rights until they exercise their Warrants and receive Ordinary Shares. After the issuance of Ordinary Shares upon exercise of the Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders.
The Warrants to be registered hereby have been approved for listing on the Nasdaq Capital Market under the symbol “BGLWW”.
C. Other Securities
None.
D. American Depositary Shares
None.
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ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS OF THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Information regarding the impact of the Business Combination on the rights of our security holders is included in the Prospectus under the section titled “Description of Blue Gold Limited Securities” and is incorporated herein by reference.
ITEM 15. CONTROLS AND PROCEDURES
ITEM 16. [RESERVED]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Not applicable.
ITEM 16B. CODE OF ETHICS
Not applicable.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not applicable.
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ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Following the consummation of the Business Combination on the Closing Date, PKF Texas, the independent registered public accounting firm of BGHL, has been engaged as the independent auditor of Blue Gold Limited. In connection with the Business Combination, on the Closing Date, Withum, which was the auditor for Perception, was informed that it would no longer be Perception’s auditor. Such cessation of audit services was effective upon consummation of the Business Combination on the Closing Date.
The reports of Withum on the financial statements of Perception as of December 31, 2024 and December 31, 2023, and for the years ended December 31, 2024 and December 31, 2023 did not contain any adverse opinion or a disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope, or accounting principles. Withum’s audit reports contained an explanatory paragraph related to the substantial doubt of Perception’s ability to continue as a going concern.
As of the Closing Date, there were no disagreements with Withum on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedure, which such disagreements, if not resolved to the satisfaction of Withum, would have caused Withum to make reference thereto in its reports on the financial statements of Perception for such periods. In its evaluation of Perception’s disclosure controls and procedures and internal control over financial reporting for the fiscal year ended December 31, 2023 and the period ended June 30, 2024, Perception’s management identified material weaknesses related to the interpretation and accounting for certain complex financial reporting transactions. Except for such material weaknesses, as described in Item 9A of Perception’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, there were no “reportable events” as that term is described in paragraphs (A) through (D) of Item 16F(a)(1)(v) of Form 20-F.
ITEM 16G. CORPORATE GOVERNANCE
Not applicable.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
Not applicable.
ITEM 16K. CYBERSECURITY
Not applicable.
32
See “Item 18. Financial Statements” in this Report.
The audited financial statements of Perception as of and for the years ended December 31, 2024 and 2023, and the audited consolidated financial statements of BGHL as of December 31, 2024 and 2023 and for the year ended December 31, 2024 and for the period from November 9, 2023 (inception) to December 31, 2023 are attached as Exhibit 15.2 and Exhibit 15.3, respectively, to this Report.
The unaudited pro forma condensed combined financial statements of Perception and BGHL are attached as Exhibit 15.1 to this Report.
ITEM 19. EXHIBITS
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| * | Filed herewith. |
34
SIGNATURE
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this report on its behalf.
| BLUE GOLD LIMITED | ||
| July 1, 2025 | By: | /s/ Andrew Cavaghan |
| Name: | Andrew Cavaghan | |
| Title: | Chief Executive Officer | |
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Exhibit 1.1
COMPANIES ACT (AS AMENDED)
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
BLUE GOLD LIMITED
(adopted pursuant to special resolutions of the Company passed on 10 June 2025 and effective on 24 June 2025)
COMPANIES ACT (AS AMENDED)
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
BLUE GOLD LIMITED
(adopted pursuant to a special resolution of the Company passed on 10 June 2025 and effective on 24 June 2025)
| 1. | The name of the Company is Blue Gold Limited. |
| 2. | The registered office of the Company is at the offices of Mourant Governance Services (Cayman) Limited, 94 Solaris Avenue, Camana Bay, PO Box 1348, Grand Cayman KY1-1108, Cayman Islands or at such other place as the Directors may from time to time decide. |
| 3. | The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by law as provided by Section 7(4) of the Companies Act. |
| 4. | The Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit as provided by Section 27(2) of the Companies Act. |
| 5. | Nothing in the preceding paragraphs shall be deemed to permit the Company to carry on the business of a bank or trust company without being licensed in that behalf under the provisions of the Banks and Trust Companies Act (as amended), or to carry on insurance business from within the Cayman Islands or the business of an insurance manager, agent, sub-agent or broker without being licensed in that behalf under the provisions of the Insurance Act (as amended) or to carry on the business of company management without being licensed in that behalf under the provisions of the Companies Management Act (as amended). |
| 6. | The Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands, provided that nothing in this Memorandum of Association shall be construed as to prevent the Company from effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of business outside the Cayman Islands. |
| 7. | The liability of each member is limited to the amount from time to time unpaid on such member’s shares. |
| 8. | The authorised share capital of the Company is US$50,000 divided into 400,000,000 Class A ordinary shares of par value US$0.0001 per share and 100,000,000 preferred shares of par value US$0.0001 per share, with the power for the Company, insofar as is permitted by law and the Articles, to redeem, purchase or redesignate any of its shares and to increase or reduce the said share capital subject to the Companies Act and the Articles and to issue any part of its capital, whether original, redeemed or increased with or without any preference, priority or special privilege or subject to any postponement of rights or to any conditions or restrictions and so that unless the conditions of issue shall otherwise expressly declare every issue of shares whether declared to be preference or otherwise shall be subject to the powers hereinbefore contained. |
| 9. | The Company may exercise the power contained in Section 206 of the Companies Act to deregister in the Cayman Islands and be registered by way of continuation in another jurisdiction. |
| 10. | Capitalised terms that are not defined in this Memorandum bear the meanings given to those terms in the Articles. |
COMPANIES ACT (AS AMENDED)
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
BLUE GOLD LIMITED
(adopted pursuant to a special resolution of the Company passed on 10 June 2025 and effective on 24 June 2025)
TABLE OF CONTENTS
| ARTICLE | PAGE |
| TABLE A | 1 |
| DEFINITIONS AND INTERPRETATION | 1 |
| COMMENCEMENT OF BUSINESS | 6 |
| SITUATION OF REGISTERED OFFICE | 6 |
| SHARES | 6 |
| ISSUE OF SHARES | 7 |
| REDEMPTION, PURCHASE AND SURRENDER OF SHARES | 8 |
| TREASURY SHARES | 9 |
| MODIFICATION OF RIGHTS | 9 |
| COMMISSION ON SALES OF SHARES | 10 |
| SHARE CERTIFICATES | 10 |
| TRANSFER AND TRANSMISSION OF SHARES | 11 |
| LIEN | 13 |
| CALL ON SHARES | 13 |
| FORFEITURE OF SHARES | 14 |
| ALTERATION OF SHARE CAPITAL | 15 |
| GENERAL MEETINGS | 16 |
| NOTICE OF GENERAL MEETINGS | 17 |
| PROCEEDINGS AT GENERAL MEETINGS | 18 |
| VOTES OF SHAREHOLDERS | 20 |
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| CLEARING HOUSES | 21 |
| WRITTEN RESOLUTIONS OF SHAREHOLDERS | 22 |
| DIRECTORS | 22 |
| TRANSACTIONS WITH DIRECTORS | 24 |
| POWERS OF DIRECTORS | 25 |
| PROCEEDINGS OF DIRECTORS | 25 |
| WRITTEN RESOLUTIONS OF DIRECTORS | 26 |
| PRESUMPTION OF ASSENT | 27 |
| BORROWING POWERS | 27 |
| SECRETARY | 27 |
| THE SEAL | 27 |
| DIVIDENDS, DISTRIBUTIONS AND RESERVES | 28 |
| SHARE PREMIUM ACCOUNT | 29 |
| ACCOUNTS | 29 |
| AUDIT | 29 |
| NOTICES | 30 |
| WINDING UP AND FINAL DISTRIBUTION OF ASSETS | 31 |
| INDEMNITY | 31 |
| DISCLOSURE | 32 |
| CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE | 32 |
| REGISTRATION BY WAY OF CONTINUATION | 33 |
| FINANCIAL YEAR | 33 |
| AMENDMENTS TO MEMORANDUM AND ARTICLES OF ASSOCIATION | 33 |
| CAYMAN ISLANDS DATA PROTECTION | 33 |
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COMPANIES ACT (AS AMENDED)
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
BLUE GOLD LIMITED
(adopted pursuant to a special resolution of the Company passed on 10 June 2025 and effective on 24 June 2025)
TABLE A
| 1. | In these Articles, the regulations contained in Table A in the First Schedule to the Companies Act (as defined below) do not apply except insofar as they are repeated or contained in these Articles. |
DEFINITIONS AND INTERPRETATION
| 2. | In these Articles, the following words and expressions shall have the meanings set out below save where the context otherwise requires: |
| Applicable Law | with respect to any person, all applicable provisions of all constitutions, treaties, statutes, laws (including the common law), codes, rules, regulations, ordinances or orders of any Governmental Authority, and any orders, decisions, injunctions, awards and decrees of or agreements with any Governmental Authority; |
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| Articles | these articles of association of the Company, as amended or amended and restated from time to time by Special Resolution; | |
| Audit Committee | the audit committee of the board of directors of the Company established pursuant to Article 155, or any successor audit committee; | |
| Auditors | the auditor or auditors for the time being of the Company; | |
| Board of Directors | the Directors assembled as a board or assembled as a committee appointed by that board; | |
| BGHL | Blue Gold Holdings Limited, a private company limited by shares, formed under the laws of England and Wales; | |
| Business Combination | the business combination among the Company, Perception and BGHL pursuant to the Business Combination Agreement; | |
| Business Combination Agreement | the second amended and restated business combination agreement dated 12 June 2024 by and among Perception, the Company and BGHL, as amended, supplemented or otherwise modified from time to time; | |
| Chairperson | has the meaning given in Article 130; | |
| Class or Classes | any class or classes of Shares as may from time to time be issued by the Company; | |
| Class A Ordinary Share | a Class A ordinary share of a par value of US$0.0001 in the share capital of the Company; | |
| Companies Act | the Companies Act (as amended); | |
| Company | the above-named company; | |
| Company’s Website | the main corporate/investor relations website of the Company, the address or domain name of which has been disclosed in any registration statement filed by the Company in connection with its initial public offering, or which has otherwise been notified to Shareholders; | |
| Deputy Chairperson | has the meaning given in Article 130; |
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| Designated Stock Exchange | any national securities exchange or automated system on which the Company’s securities are traded, including, but not limited to, NASDAQ Global Market, The New York Stock Exchange or any over-the-counter (OTC) market; | |
| Directors | the directors of the Company for the time being; | |
| Dividend | any dividend (whether interim or final) resolved to be paid on Shares pursuant to these Articles; | |
| DPA | has the meaning given in Article 177; | |
| Electronic Record | has the same meaning as in the Electronic Transactions Act; | |
| Electronic Transactions Act | the Electronic Transactions Act (as amended); | |
| Governmental Authority | any nation or government or any province or state or any other political subdivision thereof, or any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any court, tribunal, government authority, agency, department, board, commission or instrumentality or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organisation; | |
| Memorandum | the memorandum of association of the Company, as amended or amended and restated from time to time by Special Resolution; | |
| Ordinary Resolution | a resolution passed by a simple majority of the votes of such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy, at a general meeting and where a poll is taken regard shall be had in computing a majority to the number of votes to which each Shareholder is entitled; | |
| paid up | paid up as to the par value and any premium payable in respect of the issue of any Shares and includes credited as paid up; | |
| Perception | Perception Capital Corp. IV, an exempted company incorporated under the laws of the Cayman Islands; | |
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| person | any natural person, firm, company, joint venture, partnership, corporation, association or other entity (whether or not having separate legal personality) or any of them as the context so requires; | |
| Personal Data | has the meaning given in Article 177; | |
| Preferred Share | a preferred share of a par value of US$0.0001 in the share capital of the Company; | |
| Register of Members | the register of Shareholders to be kept pursuant to these Articles; | |
| Registered Office | the registered office of the Company for the time being; | |
| Registration | the registration of the Class A Ordinary Shares issued in the Business Combination that results in the Class A Ordinary Shares being able to be sold publicly on the Designated Stock Exchange without restriction under the United States Securities Act of 1933, as amended; | |
| Restricted Shares | the Class A Ordinary Shares issued in the Business Combination, other than the Unrestricted Shares; | |
| Seal | the common seal of the Company including any duplicate seal; | |
| SEC | the United States Securities and Exchange Commission; | |
| Secretary | any person appointed by the Directors to perform any of the duties of the secretary of the Company, including a joint, assistant or deputy secretary; | |
| Series | a series of a Class as may from time to time be issued by the Company; | |
| Share | a share in the capital of the Company and includes a fraction of any such share; | |
| Shareholder | any person registered in the Register of Members as the holder of Shares of the Company and, where two or more persons are so registered as the joint holders of such Shares, the person whose name stands first in the Register of Members as one of such joint holders; | |
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| Share Premium Account | the share premium account established in accordance with these Articles and the Companies Act; | |
| signed | includes an electronic signature and a signature or representation of a signature affixed by mechanical means; | |
| Special Resolution | a resolution passed by a majority of at least three-quarters of the votes of such Shareholders as, being entitled to do so, vote in person, where proxies are allowed, by proxy, at a general meeting and where a poll is taken regard shall be had in computing a majority to the number of votes to which each Shareholder is entitled; | |
| Treasury Shares | Shares that were previously issued but were purchased, redeemed, surrendered or otherwise acquired by the Company and not cancelled; | |
| Unrestricted Shares | Class A Ordinary Shares that are: (i) issued to holders of shares in Perception that are not redeemed in the Business Combination; and (ii) previously Restricted Shares that have been released from lock-up pursuant to Article 39; and | |
| US Exchange Act | the United States Securities Exchange Act of 1934, as amended, or any similar U.S. federal statute and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time. | |
| 3. | In these Articles, unless there be something in the subject or context inconsistent with such construction: |
| (a) | words importing the singular number shall include the plural number and vice versa; | |
| (b) | words importing a gender shall include other genders; |
| (c) | words importing persons only shall include companies, partnerships, trusts or associations or bodies of persons, whether corporate or not; |
| (d) | the word “may” shall be construed as permissive and the word “shall” shall be construed as imperative; |
| (e) | the word “year” shall mean calendar year, the word “quarter” shall mean calendar quarter and the word “month” shall mean calendar month; |
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| (f) | a reference to a “dollar” or “$” is a reference to the legal currency of the United States of America; |
| (g) | a reference to any enactment includes a reference to any modification or re-enactment thereof for the time being in force; |
| (h) | a reference to any meeting (whether of the Directors, a committee appointed by the Board of Directors or the Shareholders or any class of Shareholders) includes any adjournment of that meeting; |
| (i) | Sections 8 and 19 of the Electronic Transactions Act shall not apply; and |
| (j) | a reference to “written” or “in writing” includes a reference to all modes of representing or reproducing words in visible form, including in the form of an Electronic Record. |
| 4. | Subject to the two preceding Articles, any words defined in the Companies Act shall, if not inconsistent with the subject or context, bear the same meaning in these Articles. |
| 5. | The table of contents to, and the headings in, these Articles are for convenience of reference only and are to be ignored in construing these Articles. |
COMMENCEMENT OF BUSINESS
| 6. | The business of the Company may be commenced as soon after incorporation as the Board of Directors shall see fit. |
SITUATION OF REGISTERED OFFICE
| 7. | The Registered Office shall be at such address in the Cayman Islands as the Directors shall from time to time determine. The Company, in addition to the Registered Office, may establish and maintain such other offices and places of business and agencies in such places as the Directors may from time to time determine. |
SHARES
| 8. | The Directors may impose such restrictions as they think necessary on the offer and sale of any Shares. |
| 9. | The Directors may in their absolute discretion refuse to accept any application for Shares and may accept any application in whole or in part. |
| 10. | The Company may on any issue of Shares deduct any sales charge or subscription fee from the amount subscribed for the Shares. |
| 11. | No person shall be recognised by the Company as holding any Share upon any trust, and the Company shall not be bound by or recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any Share, or (except as otherwise provided by these Articles or as required by law) any other right in respect of any Share except an absolute right thereto in the registered holder. |
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| 12. | The Directors shall keep or cause to be kept a Register of Members as required by the Companies Act at such place or places as the Directors may from time to time determine. In the absence of any such determination, the Register of Members shall be kept at the Registered Office. |
| 13. | The Directors in each year shall prepare or cause to be prepared an annual return and declaration setting forth the particulars required by the Companies Act in respect of exempted companies and deliver a copy thereof to the Registrar of Companies in the Cayman Islands. |
| 14. | The Company shall not issue Shares to bearer. |
ISSUE OF SHARES
| 15. | Subject to the provisions of the Memorandum and to any direction that may be given by the Company in general meeting and, where applicable, the rules and regulations of the Designated Stock Exchange, the SEC and/or any other competent regulatory authority or otherwise under Applicable Law, without prejudice to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they think proper, and may also (subject to the Companies Act and these Articles) vary such rights, and for such purposes the Directors may reserve an appropriate number of Shares for the time being unissued. |
| 16. | The Company may issue rights, options, warrants or convertible securities or securities of a similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any Class of Shares or other securities in the Company, upon such terms as the Directors may from time to time determine, and for such purposes the Directors may reserve an appropriate number of Shares for the time being unissued. |
| 17. | The Company may issue units of securities in the Company, which may be comprised of whole or fractional Shares, rights, options, warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any Class of Shares or other securities in the Company, upon such terms as the Directors may from time to time determine. |
| 18. | Subject to Article 30, the Directors, or the Shareholders by Ordinary Resolution, may authorise the division of Shares into any number of Classes and sub-classes and Series and sub-series and the different Classes and sub-classes and Series and sub-series shall be authorised, established and designated (or re-designated as the case may be) and the variations in the relative rights (including, without limitation, voting, dividend and redemption rights), restrictions, preferences, privileges and payment obligations as between the different Classes and Series (if any) may be fixed and determined by the Directors or the Shareholders by Ordinary Resolution. |
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| 19. | The Directors may issue fractions of a Share and, if so issued, a fraction of a Share shall be subject to and carry the corresponding fraction of liabilities (whether with respect to nominal or par value, premium, calls or otherwise howsoever), limitations, preferences, privileges, qualifications, restrictions, rights (including without prejudice to the foregoing generality, voting and participation rights) and other attributes of a Share. If more than one fraction of a Share is issued to or acquired by the same Shareholder, such fractions shall be accumulated. |
| 20. | The premium arising on all issues of Shares shall be held in the Share Premium Account established in accordance with these Articles. |
| 21. | Payment for Shares shall be made at such time and place and to such person on behalf of the Company as the Directors may from time to time determine. Payment for any Shares shall be made in such currency as the Directors may determine from time to time, provided that the Directors shall have the discretion to accept payment in any other currency or in kind or a combination of cash and in kind. |
REDEMPTION, PURCHASE AND SURRENDER OF SHARES
| 22. | Subject to the Companies Act and the rules of the Designated Stock Exchange, the Company may: |
| (a) | issue Shares on terms that they are to be redeemed or are liable to be redeemed at the option of the Company and/or the Shareholder on such terms and in such manner as the Directors may, before the issue of such Shares, determine; |
| (b) | purchase its own Shares (including any redeemable Shares) on such terms and in such manner as the Directors may determine and agree with the relevant Shareholder(s); |
| (c) | make a payment in respect of the redemption or purchase of its own Shares in any manner authorised by the Companies Act, including out of its capital, profits or the proceeds of a fresh issue of Shares; and |
| (d) | accept the surrender for no consideration of any paid up Share (including any redeemable Share) on such terms and in such manner as the Directors may determine. |
| 23. | Unless the Directors determine otherwise, any Share in respect of which notice of redemption has been given shall not be entitled to participate in the profits of the Company in respect of the period after the date specified as the date of redemption in the notice of redemption. |
| 24. | The redemption, purchase or surrender of any Share shall not be deemed to give rise to the redemption, purchase or surrender of any other Share. |
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| 25. | The Directors may when making payments in respect of a redemption or purchase of Shares, if authorised by the terms of issue of the Shares being redeemed or purchased or with the agreement of the holder of such Shares, make such payment either in cash or in specie including, without limitation, interests in a special purpose vehicle holding assets of the Company or holding entitlement to the proceeds of assets held by the Company or in a liquidating structure. |
TREASURY SHARES
| 26. | Shares that the Company purchases, redeems or acquires (by way of surrender or otherwise) may, at the option of the Company, be cancelled immediately or held as Treasury Shares in accordance with the Companies Act. In the event that the Directors do not specify that the relevant Shares are to be held as Treasury Shares, such Shares shall be cancelled. |
| 27. | No dividend may be declared or paid, and no other distribution (whether in cash or otherwise) of the Company’s assets (including any distribution of assets to Shareholders on a winding up) may be declared or paid in respect of a Treasury Share. |
| 28. | The Company shall be entered in the Register of Members as the holder of the Treasury Shares provided that: |
| (a) | the Company shall not be treated as a Shareholder for any purpose and shall not exercise any right in respect of the Treasury Shares, and any purported exercise of such a right shall be void; and |
| (b) | a Treasury Share shall not be voted, directly or indirectly, at any meeting of the Company and shall not be counted in determining the total number of issued shares at any given time, whether for the purposes of these Articles or the Companies Act, save that an allotment of Shares as fully paid bonus shares in respect of Treasury Shares is permitted and Shares allotted as fully paid bonus shares in respect of Treasury Shares shall be treated as Treasury Shares. |
| 29. | Treasury Shares may be disposed of by the Company on any terms and conditions determined by the Directors. |
MODIFICATION OF RIGHTS
| 30. | If at any time the share capital of the Company is divided into different Classes of Shares, the rights attached to any Class (unless otherwise provided by the terms of issue of the Shares of that Class) may, whether or not the Company is being wound up, be varied without the consent of the holders of the issued Shares of that Class where such variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise, any such variation shall be made only with the consent in writing of the holders of not less than a majority of the issued Shares of that Class, or with the approval of a resolution passed by a majority of the votes cast at a separate meeting of the holders of the Shares of that Class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant Class. To any such meeting, all the provisions of these Articles relating to general meetings shall apply mutatis mutandis, except that the necessary quorum shall be any one or more persons holding or representing by proxy not less than a majority of the issued Shares of that Class (provided that, if at any adjourned meeting of such holders a quorum as above defined is not present, those Shareholders who are present shall form a quorum). |
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| 31. | For the purposes of a separate Class meeting, the Directors may treat two or more or all of the Classes of Shares as forming one Class of Shares if the Directors consider that such Classes of Shares would be affected in the same way by the proposals under consideration, but in any other case shall treat them as separate Classes of Shares. |
| 32. | The rights conferred upon the holders of the Shares of any Class shall not, unless otherwise expressly provided by the terms of issue of the Shares of that Class, be deemed to be varied by: (i) the creation or issue of further shares ranking pari passu therewith; (ii) the redemption or purchase of any Shares of any Class by the Company; (iii) the cancellation of authorised but unissued Shares of that Class; or (iv) the creation or issue of Shares with preferred or other rights including, without limitation, the creation of any Class or issue of Shares. |
COMMISSION ON SALES OF SHARES
| 33. | The Company may, in so far as the Companies Act permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on any issue of Shares pay such brokerage as may be lawful. |
SHARE CERTIFICATES
| 34. | The Shares will be issued in fully registered, book-entry form. A Shareholder shall only be entitled to a share certificate if the Directors resolve that share certificates shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company for transfer shall be cancelled and, subject to these Articles, no new certificate shall be issued until the former certificate representing a like number of relevant Shares shall have been surrendered and cancelled. |
| 35. | If a share certificate is defaced, worn out, lost or destroyed it may be renewed on such terms (if any) as to evidence and indemnity and on payment of such fee, if any, and on such terms if any, as to evidence and obligations to indemnify the Company as the Board of Directors may determine and (in the case of defacement or wearing out) upon delivery of the old certificate. |
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| 36. | Every share certificate sent in accordance with these Articles will be sent at the risk of the Shareholder or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the course of delivery. |
| 37. | Every share certificate of the Company shall bear legends required under Applicable Law, including the US Exchange Act. |
TRANSFER AND TRANSMISSION OF SHARES
| 38. | Subject to these Articles and the rules or regulations of the Designated Stock Exchange or any relevant rules of the SEC or securities laws (including, but not limited to the US Exchange Act), a Shareholder may transfer all or any of his, her or its Shares. |
| 39. | Restricted Shares shall be subject to lock-up unless and until released from lock-up in accordance with this Article 39. Restricted Shares shall be released from lock-up as follows: |
| (a) | five percent (5%) of the Restricted Shares shall be released from lock-up immediately upon the Registration; |
| (b) | an additional five percent (5%) of the Restricted Shares shall be released from lock-up on each month following the Registration; provided that, in each such month, the volume weighted-average trading price of the Class A Ordinary Shares on the Designated Stock Exchange is greater than ten dollars ($10.00) per Share for at least twenty (20) out of the applicable number of trading days of that month; |
| (c) | all remaining Restricted Shares shall be released from lock-up on the earlier to occur of: |
| (i) | the Directors, in their sole and absolute discretion, resolving to release such Restricted Shares from lock-up; |
| (ii) | the volume weighted-average trading price of the Class A Ordinary Shares on the Designated Stock Exchange exceeding twenty dollars ($20.00) for at least sixty (60) out of any ninety (90) day period; or |
| (iii) | the second anniversary of the consummation of the Business Combination. |
Each release of Restricted Shares from lock-up pursuant to the foregoing clauses (a) through (c) shall:
| (d) | apply to each holder of Restricted Shares for the time being on a pro rata basis (to be determined by reference to the number of Restricted Shares held by each such holder relative to the total number of Restricted Shares held by all such holders); and |
| (e) | occur automatically without the need for any further action by the Directors upon the occurrence of the relevant circumstances, and (if applicable) the satisfaction of the relevant conditions, specified above. |
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Additionally, and without limiting the foregoing provisions of this Article 39, the Directors shall have the power, at any time and from to time, to release from lock-up Restricted Shares held by one or more Shareholders in their sole and absolute discretion. As used in this Article 39, “lock-up” means that the Restricted Shares shall not be capable of, and shall be restricted from, being transferred unless and until such Restricted Shares are released from lock-up in accordance with this Article 39.
| 40. | The instrument of transfer of any Share shall be in: (a) any usual or common form; (b) such form as is prescribed by the Designated Stock Exchange; or (c) any other form as the Directors may determine, and shall be executed by or on behalf of the transferor and if in respect of a nil or partly paid up Share, or if so required by the Directors, shall also be executed on behalf of the transferee and shall be accompanied by the certificate (if any) of the Shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. The transferor shall be deemed to remain the holder of a Share until the name of the transferee is entered in the Register of Members in respect of the relevant Shares. |
| 41. | Subject to the terms of issue thereof and the rules or regulations of the Designated Stock Exchange or any relevant rules of the SEC or securities laws (including, but not limited to, the US Exchange Act), the Directors may determine to decline to register any transfer of Shares without assigning any reason therefor. |
| 42. | Subject to these Articles and the rules or regulations of the Designated Stock Exchange, the registration and transfer of Shares may be suspended at such times and for such periods as the Directors may from time to time determine. |
| 43. | All instruments of transfer which are registered shall be retained by the Company, but any instrument of transfer which the Directors may decline to register shall (except in any case of fraud) be returned to the person depositing the same. |
| 44. | In case of the death of a Shareholder, the survivors or survivor (where the deceased was a joint holder) and the executors or administrators of the deceased where the deceased was the sole or only surviving holder, shall be the only persons recognised by the Company as having title to the deceased’s interest in the Shares, but nothing in this Article shall release the estate of the deceased holder whether sole or joint from any liability in respect of any Share solely or jointly held by the deceased. |
| 45. | Any guardian of an infant Shareholder and any curator or other legal representative of a Shareholder under legal disability and any person entitled to a share in consequence of the death or bankruptcy of a Shareholder shall, upon producing such evidence of title as the Directors may require, have the right either to be registered as the holder of the Share or to make such transfer thereof as the deceased or bankrupt Shareholder could have made, but the Directors shall in either case have the same right to refuse or suspend registration as they would have had in the case of a transfer of the Shares by the infant or by the deceased or bankrupt Shareholder before the death or bankruptcy or by the Shareholder under legal disability before such disability. |
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| 46. | A person so becoming entitled to a Share in consequence of the death or bankruptcy of a Shareholder shall have the right to receive and may give a discharge for all dividends and other money payable or other advantages due on or in respect of the Share, but such person shall not be entitled to receive notice of or to attend or vote at meetings of the Company, or save as aforesaid, to any of the rights or privileges of a Shareholder unless and until such person shall be registered as a Shareholder in respect of the Share provided always that the Directors may at any time give notice requiring any such person to elect either to be registered or to transfer the Share and if the notice is not complied with within ninety (90) days the Directors may thereafter withhold all dividends or other monies payable or other advantages due in respect of the Share until the requirements of the notice have been complied with. |
LIEN
| 47. | The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not) registered in the name of a Shareholder (whether solely or jointly with others) for all debts, liabilities or engagements to or with the Company (whether presently payable or not) by such Shareholder or the Shareholder’s estate, either alone or jointly with any other person, whether a Shareholder or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this Article. The registration of a transfer of any such Share shall operate as a waiver of the Company’s lien thereon. The Company’s lien on a Share shall also extend to any amount payable in respect of that Share. |
| 48. | The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen (14) clear days after notice has been given to the holder of the Shares, or to the person entitled to it in consequence of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may be sold. |
| 49. | To give effect to any such sale the Directors may authorise any person to execute an instrument of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or the purchaser’s nominee shall be registered as the holder of the Shares comprised in any such transfer, and the purchaser shall not be bound to see to the application of the purchase money, nor shall the purchaser’s title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of the Company’s power of sale under these Articles. |
| 50. | The net proceeds of such sale, after payment of costs, shall be applied in payment of such part of the amount in respect of which the lien exists as is presently payable and any residue shall (subject to a like lien for sums not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the sale. |
CALL ON SHARES
| 51. | Subject to the terms of the allotment the Directors may from time to time make calls upon the Shareholders in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Shareholder shall (subject to receiving at least fourteen (14) days’ notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on the Shares. A call may be revoked or postponed as the Directors may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls made upon them notwithstanding the subsequent transfer of the Shares in respect of which the call was made. |
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| 52. | A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed. |
| 53. | The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof. |
| 54. | If a call remains unpaid after it has become due and payable, the person from whom it is due shall pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine, but the Directors may waive payment of the interest wholly or in part. |
| 55. | An amount payable in respect of a Share on allotment or at any fixed date, whether on account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions of these Articles shall apply as if that amount had become due and payable by virtue of a call. |
| 56. | The Directors may issue Shares with different terms as to the amount and times of payment of calls, or the interest to be paid. |
| 57. | The Directors may, if they think fit, receive an amount from any Shareholder willing to advance all or any part of the monies uncalled and unpaid upon any Shares held by such Shareholder, and may (until the amount would otherwise become payable) pay interest at such rate as may be agreed upon between the Directors and the Shareholder paying such amount in advance. |
| 58. | No such amount paid in advance of calls shall entitle the Shareholder paying such amount to any portion of a dividend declared in respect of any period prior to the date upon which such amount would, but for such payment, become payable. |
FORFEITURE OF SHARES
| 59. | If a call remains unpaid after it has become due and payable the Directors may give to the person from whom it is due not less than fourteen (14) clear days’ notice requiring payment of the amount unpaid together with any interest which may have accrued. The notice shall specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the call was made will be liable to be forfeited. |
| 60. | If the notice is not complied with any Share in respect of which it was given may, before the payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all dividends or other monies declared payable in respect of the forfeited Share and not paid before the forfeiture. |
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| 61. | A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors may authorise some person to execute an instrument of transfer of the Share in favour of that person. |
| 62. | A person any of whose Shares have been forfeited shall cease to be a Shareholder in respect of them and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to the Company all monies which at the date of forfeiture were payable by such person to the Company in respect of those Shares together with interest, but such person’s liability shall cease if and when the Company shall have received payment in full of all monies due and payable by such person in respect of those Shares. |
| 63. | A certificate in writing under the hand of one Director or officer of the Company that a Share has been forfeited on a specified date shall be conclusive evidence of the fact as against all persons claiming to be entitled to the Share. The certificate shall (subject to the execution of any instrument of transfer) constitute a good title to the Share and the person to whom the Share is disposed of shall not be bound to see to the application of the purchase money, if any, nor shall such person’s title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share. |
| 64. | The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by way of premium as if it had been payable by virtue of a call duly made and notified. |
ALTERATION OF SHARE CAPITAL
| 65. | The Company may from time to time by Ordinary Resolution increase its share capital by such sum to be divided into Shares of such Classes and amounts as the resolution shall prescribe. |
| 66. | All new Shares shall be subject to the provisions of these Articles with reference to transfer, transmission and otherwise. |
| 67. | Subject to the Companies Act, the Company may by Special Resolution from time to time reduce its share capital in any way, and in particular, without prejudice to the generality of the foregoing power, may: |
| (a) | cancel any paid-up share capital which is lost, or which is not represented by available assets; or |
| (b) | pay off any paid-up share capital which is in excess of the requirements of the Company, |
and may, if and so far as is necessary, alter the Memorandum by reducing the amounts of its share capital and of its Shares accordingly.
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| 68. | The Company may from time to time by Ordinary Resolution alter (without reducing) its share capital by: |
| (a) | consolidating and dividing all or any of its share capital into Shares of larger amount than its existing Shares; |
| (b) | sub dividing its Shares, or any of them, into Shares of smaller amount than that fixed by the Memorandum so, however, that in the sub division the proportion between the amount paid and the amount, if any, unpaid on each reduced Share shall be the same as it was in the case of the Share from which the reduced Share is derived; or |
| (c) | cancelling any Shares which, at the date of the passing of the Ordinary Resolution, have not been taken, or agreed to be taken by any person, and diminishing the amount of its authorised share capital by the amount of the Shares so cancelled. |
GENERAL MEETINGS
| 69. | For so long as any Shares are traded on a Designated Stock Exchange, the Company shall in each year hold a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it, unless such Designated Stock Exchange does not require the holding of an annual general meeting. Any annual general meeting shall be held at such time and place as the Directors shall appoint in accordance with the rules of the Designated Stock Exchange provided that Shareholders shall be given at least 120 days’ prior notice of the annual general meeting. At these meetings the report of the Directors (if any) shall be presented. |
| 70. | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
| 71. | The Directors may proceed to convene a general meeting whenever they think fit, including, without limitation, for the purposes of considering a liquidation of the Company, and they shall convene a general meeting on the requisition of the Shareholders holding at the date of the deposit of the requisition not less than one-third of the votes that may be cast by all of the issued share capital of the Company as at the date of the deposit carries the right of voting at general meetings. |
| 72. | The requisition: |
| (a) | must be in writing and state the objects of the meeting; |
| (b) | must be signed by each requisitionist and deposited at the Registered Office; and |
| (c) | may consist of several documents in like form each signed by one or more requisitionists. |
| 73. | If the Directors do not within twenty-one (21) days from the date of the deposit of the requisition duly proceed to convene a general meeting, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held no later than the day which falls three months after the expiration of the said twenty-one (21) days. |
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| 74. | A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are convened by the Directors. A general meeting may be convened in the Cayman Islands or at such other location, as the Directors think fit. |
| 75. | Shareholders seeking to bring business before the annual general meeting or to nominate candidates for election as Directors at an annual general meeting must deliver notice to the principal executive offices of the Company: |
| (a) | where no annual general meeting of the Company was held in the preceding year or where the annual general meeting is held more than 30 days before or 70 days after the one-year anniversary of a preceding year’s annual general meeting, notice of a Shareholder proposal must be received no later than the close of business on the later of the 90th day prior to such annual general meeting and the 10th day following the day on which the public announcement of the date of such meeting is first made; and |
| (b) | for all other annual general meetings, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the scheduled date of the annual general meeting. |
| 76. | The only business that may be conducted at an annual general meeting is business that: |
| (a) | is specified in the notice of such meeting (including any supplement thereto); |
| (b) | is brought by or at the direction of the Directors and/or the chairperson of the meeting; or |
| (c) | is otherwise properly brought before such meeting in accordance with these Articles by a Shareholder who is a Shareholder of record at the time of giving of the notice and, at the time of the annual general meeting, is a Shareholder of record who is entitled to vote at such meeting and has complied with the notice procedures specified in these Articles. |
NOTICE OF GENERAL MEETINGS
| 77. | At least five (5) calendar days’ notice specifying the place, the day and the hour of any general meeting and in case of special business the general nature of such business (and, in the case of an annual general, meeting specifying the meeting as such), shall be given in the manner hereinafter mentioned to such persons as are under these Articles or the conditions of issue of the Shares held by them entitled to receive notices from the Company. If the Directors determine that prompt Shareholder action is advisable, they may shorten the notice period for any general meeting to such period as the Directors consider reasonable. |
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| 78. | A general meeting shall, notwithstanding that it is called by shorter notice than that specified in the preceding Article, be deemed to have been duly called with regard to the length of notice if it is so agreed: |
| (a) | in the case of a meeting called as the annual general meeting by all the Shareholders entitled to attend and vote thereat; and |
| (b) | in the case of any other meeting by a majority in number of the Shareholders having a right to attend and vote at the meeting, being a majority together holding not less than ninety-five (95) per cent, by par value, of the Shares giving that right. |
| 79. | In every notice calling a general meeting, there shall appear with reasonable prominence a statement that a Shareholder entitled to attend and vote either (i) is entitled to appoint one or more proxies to attend such meeting and vote instead of such Shareholder and that a proxy need not also be a Shareholder or (ii) has appointed a proxy who, unless such appointment is revoked, will attend such meeting and vote on behalf of such Shareholder. |
| 80. | The accidental omission to give notice to, or the non-receipt of notice by, any person entitled to receive notice shall not invalidate the proceedings at any general meeting. |
PROCEEDINGS AT GENERAL MEETINGS
| 81. | All business that is transacted at an extraordinary general meeting shall be deemed special, and also all business that is transacted at an annual general meeting, with the exception of the consideration of the accounts and balance sheet and the reports of the Directors and Auditors, the election of Directors in the place of those retiring, the appointment of additional Directors and the fixing of the remuneration of the Directors, shall be deemed special. |
| 82. | No business shall be transacted at any general meeting unless a quorum is present. Save as otherwise provided in these Articles a quorum shall be the presence, in person or by proxy, of one or more persons holding at least a majority in par value of the issued Shares which confer the right to attend and vote thereat. |
| 83. | Save as otherwise provided for in these Articles, if within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened on the requisition of or by Shareholders, shall be dissolved. In any other case it shall stand adjourned to the same day in the next week, at the same time and place or to such other day and at such other time and place as the Directors may determine and if at such adjourned meeting a quorum is not present within fifteen (15) minutes from the time appointed for holding the meeting, the Shareholders present shall be a quorum. |
| 84. | A person may, with the consent of the Directors, participate at a general meeting by means of telephone, video or similar communication equipment by way of which all persons participating in such meeting can hear each other and such participation shall be deemed to constitute presence in person at such meeting. |
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| 85. | The Chairperson (if any) or, if the Chairperson is not present within fifteen (15) minutes after the time appointed for holding the meeting or is unwilling to act as chairperson of the meeting, some other Director nominated by the Directors shall preside as chairperson at every general meeting, but if at any meeting neither the Chairperson nor such other Director be present within fifteen (15) minutes after the time appointed for holding the meeting, or if neither of them be willing to act as chairperson of the meeting, the Shareholders present shall choose some Shareholder present to be chairperson of the meeting. |
| 86. | The chairperson of the meeting may with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place. The chairperson of the meeting may adjourn any meeting without the consent of such meeting if, in his sole opinion, he considers it necessary to do so to: secure the orderly conduct or proceedings of the meeting; or give all persons present in person or by proxy and having the right to speak and/or vote at such meeting, the ability to do so, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for ten (10) days or more, seven (7) days’ notice at the least specifying the place, the day and the hour of the adjourned meeting, shall be given as in the case of the original meeting but it shall not be necessary to specify in such notice the nature of the business to be transacted at the adjourned meeting. Save as aforesaid, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. |
| 87. | The Directors may cancel or postpone any duly convened general meeting at any time prior to such meeting, except for general meetings requisitioned by the Shareholders in accordance with these Articles, for any reason or for no reason at any time prior to the time for holding such meeting or, if the meeting is adjourned, the time for holding such adjourned meeting. The Directors shall give the Shareholders notice in writing of any cancellation or postponement. A postponement may be for a stated period of any length or indefinitely as the Directors may determine. |
| 88. | At any general meeting, a resolution put to the vote of the meeting shall be decided by a poll and not on a show of hands. |
| 89. | A poll shall be taken in such manner as the chairperson of the meeting directs, and the result of the poll shall be deemed to be the resolution of the meeting. |
| 90. | All questions submitted to a meeting shall be decided by an Ordinary Resolution except where a greater majority is required by these Articles or by the Companies Act. In the case of an equality of votes, the chairperson of the meeting shall not be entitled to a second or casting vote and the resolution in question shall not be passed. |
| 91. | A poll shall be taken forthwith or at such time as the chairperson of the meeting directs. |
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VOTES OF SHAREHOLDERS
| 92. | Subject to any rights or restrictions attached to any Shares, on a poll, every holder of Shares, present in person or by proxy and entitled to vote thereon, shall be entitled to one vote in respect of each Share held by them. |
| 93. | In the case of joint holders of a Share, the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members in respect of the Shares. |
| 94. | A Shareholder who has appointed special or general attorneys or a Shareholder who is subject to a disability may vote on a poll, by such Shareholder’s attorney, committee, receiver, curator bonis or other person in the nature of a committee, receiver, or curator bonis appointed by a court and such attorney, committee, receiver, curator bonis or other person may on a poll vote by proxy; provided that such evidence as the Directors may require of the authority of the person claiming to vote shall, unless otherwise waived by the Directors, have been deposited at the Registered Office not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting at which such person claims to vote. |
| 95. | No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the chairperson of the meeting, whose decision shall be final and conclusive. |
| 96. | On a poll votes may be given either personally or by proxy and a Shareholder entitled to more than one vote need not, if the Shareholder votes, use all their votes or cast all the votes the Shareholder uses in the same way. |
| 97. | The instrument appointing a proxy shall be in writing under the hand of the appointor or of the appointor’s attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or under the hand of an officer or attorney so authorised. |
| 98. | Any person (whether a Shareholder or not) may be appointed to act as a proxy. A Shareholder may appoint more than one proxy to attend on the same occasion. |
| 99. | The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, must be deposited at the Registered Office, or at such other place as is specified for that purpose in the notice of meeting or in the instrument of proxy issued by the Company, no later than the time appointed for holding the meeting or adjourned meeting; provided that the chairperson of the meeting may in the chairperson’s discretion accept an instrument of proxy sent by fax, email or other electronic means. |
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| 100. | An instrument of proxy shall: |
| (a) | be in any common form or in such other form as the Directors may approve; |
| (b) | be deemed to confer authority to vote on any amendment of a resolution put to the general meeting for which it is given as the proxy thinks fit; and |
| (c) | subject to its terms, be valid for any adjournment of the general meeting for which it is given. |
| 101. | The Directors may at the expense of the Company send to the Shareholders instruments of proxy (with or without prepaid postage for their return) for use at any general meeting, either in blank or nominating in the alternative any one or more of the Directors or any other persons. If for the purpose of any meeting invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the expense of the Company, such invitations shall be issued to all (and not to some only) of the Shareholders entitled to be sent a notice of the meeting and to vote thereat by proxy. |
| 102. | A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the death or insanity of the principal or the revocation of the instrument of proxy, or of the authority under which the instrument of proxy was executed; provided that no intimation in writing of such death, insanity, revocation or transfer shall have been received by the Company at the Registered Office before commencement of the meeting or adjourned meeting at which the instrument of proxy is used. |
| 103. | Anything which under these Articles a Shareholder may do by proxy that Shareholder may also do by a duly appointed attorney. The provisions of these Articles relating to proxies and instruments appointing proxies apply, mutatis mutandis, to any such attorney and the instrument appointing that attorney. |
| 104. | Any Shareholder which is a corporation or partnership may, by a resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting or meetings of the Company. The person so authorised shall be entitled to exercise the same powers on behalf of such corporation or partnership as the corporation or partnership could exercise if it were a Shareholder who was an individual and such corporation or partnership shall for the purposes of these Articles be deemed to be present in person at any such meeting if a person so authorised is present. |
CLEARING HOUSES
| 105. | If a clearing house (or its nominee(s)), being a corporation, is a Shareholder it may, by resolution of its directors or other governing body or by power of attorney, authorise such person or persons as it thinks fit to act as its representative or representatives at any general meeting or at any meeting of any class of Shareholders provided that, if more than one person is so authorised, the authorisation shall specify the number and Class of Shares in respect of which each such person is so authorised. A person so authorised pursuant to this Article shall be entitled to exercise the same powers on behalf of the clearing house (or its nominee) which that person represents as that clearing house (or its nominee) could exercise if it were an individual Shareholder holding the number and Class of Shares specified in such authorisation, notwithstanding any contrary provision contained in these Articles. |
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WRITTEN RESOLUTIONS OF SHAREHOLDERS
| 106. | No resolution of the Shareholders shall be valid or effective unless passed at a duly convened general meeting of the Shareholders and, for the avoidance of doubt, the Shareholders shall not have the power to pass resolutions in writing in lieu of a meeting. |
DIRECTORS
| 107. | There shall be a Board of Directors consisting of not less than three (3) persons, provided, however, that the Directors may from time to time increase or reduce the limits in the number of Directors. |
| 108. | A Director need not be a Shareholder but shall be entitled to receive notice of and attend all general meetings. |
| 109. | The Directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. Each class shall consist of as nearly equal numbers of Directors as possible and Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the Board of Directors. Upon adoption of these Articles, the existing Directors shall by resolution classify themselves as Class I, Class II or Class III Directors. The Class I Directors shall stand appointed for a term expiring at the Company’s first annual general meeting after the adoption of these Articles, the Class II Directors shall stand appointed for a term expiring at the Company’s second annual general meeting after the adoption of these Articles and the Class III Directors shall stand appointed for a term expiring at the Company’s third annual general meeting after the adoption of these Articles. Commencing at the Company’s first annual general meeting after the adoption of these Articles, and at each annual general meeting thereafter, Directors appointed to succeed those Directors whose terms expire (including Directors re-appointed at the expiry of such terms) shall be appointed by Ordinary Resolution for a term of office to expire at the third succeeding annual general meeting after their appointment. Except as the Companies Act or other applicable law may otherwise require, in the interim between annual general meetings or extraordinary general meetings called for the appointment of Directors and/or the removal of one or more Directors and the filling of any vacancy in that connection, additional Directors and any vacancies in the board of Directors, including unfilled vacancies resulting from the removal of Directors pursuant to these Articles, may be filled by the vote of a majority of the remaining Directors then in office (notwithstanding that such remaining Directors may be insufficient to form a quorum for a meeting of Directors in accordance with these Articles). Notwithstanding the foregoing provisions of this Article, each Director shall hold office until the expiration of his or her term, until his or her successor shall have been duly elected and qualified or until his or her earlier death, resignation or removal in accordance with these Articles. A Director appointed to fill a vacancy resulting from the death, resignation or removal of a Director shall serve for the remainder of the full term of the Director whose death, resignation or removal shall have created such vacancy. |
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| 110. | The Directors, by majority vote, may appoint any person to be a Director, either to fill a vacancy or as an additional Director; provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with these Articles as the maximum number of Directors. Any Director appointed in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of Directors in which the new directorship was created or the vacancy occurred and until such Director’s successor shall have been duly elected and qualified or until his or her earlier resignation, death or removal. When the number of Directors is increased or decreased, the Board of Directors shall, subject to Article 109, determine the class or classes to which the increased or decreased number of Directors shall be apportioned; provided, however, that no decrease in the number of Directors shall shorten the term of any incumbent Director. |
| 111. | Each Director shall be entitled to such remuneration as approved by the Board of Directors and this may be in addition to such remuneration as may be payable under any other provision of these Articles. Such remuneration shall be deemed to accrue from day to day. The Directors and the Secretary may also be paid all travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Directors or any committee of the Directors or general meetings or in connection with the business of the Company. The Directors may, in addition to such remuneration as aforesaid, grant special remuneration to any Director who, being called upon, shall perform any special or extra services to or at the request of the Company. |
| 112. | The office of a Director shall be vacated on the occurrence of any of the following events: |
| (a) | if the Director resigns their office by notice in writing signed by that Director and left at the Registered Office; |
| (b) | if the Director is absent from three consecutive meetings of the Board of Directors without special leave of absence from the Directors, and the Directors pass a resolution determining that the relevant Director has by reason of such absence vacated office; |
| (c) | if the Director becomes bankrupt or makes any arrangement or composition with such Director’s creditors generally; |
| (d) | if the Director dies or is found to be or becomes of unsound mind; |
| (e) | if the Director ceases to be a Director by virtue of, or becomes prohibited from being a Director by reason of, an order made under any provisions of any law or enactment; |
| (f) | if the Director is removed from office by notice addressed to such Director at their last known address and signed by a majority of the co-Directors (not being less than two in number); or |
| (g) | if the Director is removed from office by Ordinary Resolution. |
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TRANSACTIONS WITH DIRECTORS
| 113. | A Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with their office of Director on such terms as to tenure of office and otherwise as the Directors may determine. |
| 114. | No Director or intending Director shall be disqualified by their office from contracting with the Company either as vendor, purchaser or otherwise, nor shall any such contract or any contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relationship thereby established, but the nature of the Director’s interest must be declared by such Director at the meeting of the Directors at which the question of entering into the contract or arrangement is first taken into consideration, or if the Director was not at the date of that meeting interested in the proposed contract or arrangement, then at the next meeting of the Directors held after such Director becomes so interested, and in a case where the Director becomes interested in a contract or arrangement after it is made, then at the first meeting of the Directors held after such Director becomes so interested. |
| 115. | In the absence of some other material interest than is indicated below, provided a Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company declares (whether by specific or general notice) the nature of their interest at a meeting of the Directors that Director may vote in respect of any contract or proposed contract or arrangement notwithstanding that such Director may be interested therein and if such Director does so their vote shall be counted and such Director may be counted in the quorum at any meeting of the Directors at which any such contract or proposed contract or arrangement shall come before the meeting for consideration. |
| 116. | Where proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two or more Directors to offices or employments with the Company or any company in which the Company is interested, such proposals may be divided and considered in relation to each Director separately and in such cases each of the Directors concerned shall be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning the Director’s own appointment. |
| 117. | Any Director may act independently or through the Director’s firm in a professional capacity for the Company, and the Director or the firm shall be entitled to remuneration for professional services as if the Director were not a Director, provided that nothing herein contained shall authorise a Director or the Director’s firm to act as Auditor to the Company. |
| 118. | Any Director may continue to be or become a director, managing director, manager or other officer or shareholder of any company promoted by the Company or in which the Company may be interested, and no such Director shall be accountable for any remuneration or other benefits received by the Director as a director, managing director, manager or other officer or shareholder of any such other company. The Directors may exercise the voting power conferred by the shares in any other company held or owned by the Company or exercisable by them as directors of such other company, in such manner in all respects as they think fit (including the exercise thereof in favour of any resolution appointing themselves or any of them directors, managing directors or other officers of such company, or voting or providing for the payment of remuneration to the directors, managing directors or other officers of such company). |
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| 119. | A general notice that a Director is a shareholder, director, officer or employee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure for the purposes of voting on a resolution in respect of a contract or transaction between such firm or company and the Company (and after such general notice it shall not be necessary to give special notice relating to any particular transaction between such firm or company and the Company). |
POWERS OF DIRECTORS
| 120. | The business of the Company shall be managed by the Directors, who may exercise all such powers of the Company as are not by the Companies Act or by these Articles required to be exercised by the Company in general meeting, subject nevertheless to any regulations of these Articles, to the Companies Act, and to such regulations being not inconsistent with the aforesaid regulations or provisions as may be prescribed by the Company in general meeting, but no regulations made by the Company in general meeting shall invalidate any prior act of the Directors which would have been valid if such regulations had not been made. The general powers given by this Article shall not be limited or restricted by any special authority or power given to the Directors by any other Article. |
| 121. | The Directors may from time to time and at any time by power of attorney appoint any company, firm or person or any fluctuating body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys as the Directors may think fit, and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in such attorney. The Directors may also appoint any person to be the agent of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and on such conditions as they determine, including authority for the agent to delegate all or any of their powers. |
| 122. | The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any Director who has held any other salaried office or place of profit with the Company or to the Director’s widow or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance. |
| 123. | The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the Company or of any third party. |
| 124. | The Directors shall have the authority to present a winding up petition on behalf of the Company without the sanction of a resolution passed by the Company in general meeting. |
| 125. | All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments drawn by the Company, and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as the Directors shall from time to time by resolution determine. |
PROCEEDINGS OF DIRECTORS
| 126. | The Directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings, as they think fit. Questions and matters arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes on any matter, the Chairperson shall not have a second or casting vote. A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors. |
| 127. | A Director or Directors may participate in any meeting of the Directors, or of any committee appointed by the Board of Directors of which such Director or Directors are members, by means of telephone, video or similar communication equipment by way of which all persons participating in such meeting can hear each other and such participation shall be deemed to constitute presence in person at the meeting. |
| 128. | The quorum necessary for the transaction of the business of the Directors shall be a majority in number of the Directors then in office. |
| 129. | The continuing Directors or a sole continuing Director may act notwithstanding any vacancies in their number, but if and so long as the number of Directors is reduced below the minimum number fixed by or in accordance with these Articles the continuing Directors or Director may act for the purpose of filling up vacancies in their number, or of summoning general meetings, but not for any other purpose. If there be no Directors or Director able or willing to act, then any two Shareholders may summon a general meeting for the purpose of appointing Directors. |
| 130. | The Directors may from time to time elect and remove a chairperson of the Board of Directors (the Chairperson) and, if they think fit, a deputy chairperson of the Board of Directors (the Deputy Chairperson) and determine the period for which they respectively are to hold office. The Chairperson or, failing them, the Deputy Chairperson shall preside at all meetings of the Directors, but if there be no Chairperson or Deputy Chairperson, or if at any meeting the Chairperson or Deputy Chairperson be not present within five (5) minutes after the time appointed for holding the same, the Directors present may choose one of their number to serve as the chairperson of the meeting. |
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| 131. | A meeting of the Directors for the time being at which a quorum is present shall be competent to exercise all powers and discretions for the time being exercisable by the Directors. |
| 132. | Without prejudice to the powers conferred by these Articles, the Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit. Any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on them by the Directors. The Directors may, by power of attorney or otherwise, appoint any person to be an agent of the Company on such condition as the Directors may determine, provided that the delegation is not to the exclusion of their own powers. |
| 133. | The meetings and proceedings of any such committee consisting of two or more Directors shall be governed by the provisions of these Articles regulating the meetings and proceedings of the Directors so far as the same are applicable and are not superseded by any regulations made by the Directors under the preceding Article. |
| 134. | The Directors may appoint such officers as they consider necessary on such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit. Unless otherwise specified in the terms of the officer’s appointment an officer may be removed by resolution of the Directors or Shareholders. |
| 135. | All acts done by any meeting of Directors, or of a committee of Directors or by any person acting as a Director, shall, notwithstanding it be afterwards discovered that there was some defect in the appointment of any such Director or person acting as aforesaid, or that they or any of them were disqualified, or had vacated office, or were not entitled to vote, be as valid as if every such person had been duly appointed, and was qualified and had continued to be a Director and had been entitled to vote. |
| 136. | The Directors shall cause minutes to be made of: |
| (a) | all appointments of officers made by the Directors; |
| (b) | the names of the Directors present at each meeting of the Directors and of any committee of Directors; and |
| (c) | all resolutions and proceedings of all meetings of the Company and of the Directors and of any committee of Directors. |
Any such minutes, if purporting to be signed by the chairperson of the meeting at which the proceedings took place, or by the chairperson of the next succeeding meeting, shall, until the contrary be proved, be conclusive evidence of the proceedings.
WRITTEN RESOLUTIONS OF DIRECTORS
| 137. | A resolution in writing signed by all of the Directors for the time being entitled to attend and vote at a meeting of the Directors shall be as valid and effective as a resolution passed at a meeting of the Directors duly convened and held and may consist of several documents in the like form each signed by one or more of the Directors. |
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PRESUMPTION OF ASSENT
| 138. | A Director who is present at a meeting of the Directors at which action on any Company matter is taken shall be presumed to have assented to the action taken unless the Director’s dissent shall be entered in the minutes of the meeting or unless the Director shall file their written dissent from such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour of such action. |
BORROWING POWERS
| 139. | The Directors may exercise all the powers of the Company to borrow money and hypothecate, mortgage, charge or pledge its undertaking, property, and assets or any part thereof, and to issue debentures, debenture stock or other securities, whether outright or as collateral security for any debt liability or obligation of the Company or of any third party. |
SECRETARY
| 140. | The Directors may appoint any person to be a Secretary who shall hold office for such term, at such remuneration and upon such conditions and with such powers as they think fit. Any Secretary so appointed by the Directors may be removed by the Directors or by the Company by Ordinary Resolution. Anything required or authorised to be done by or to the Secretary may, if the office is vacant or there is for any other reason no Secretary capable of acting, be done by or to any assistant or deputy Secretary or if there is no assistant or deputy Secretary capable of acting, by or to any officer of the Company authorised generally or specially in that behalf by the Directors, provided that any provisions of these Articles requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in the place of, the Secretary. |
| 141. | No person shall be appointed or hold office as Secretary who is: |
| (a) | the sole Director; or |
| (b) | a corporation the sole director of which is the sole Director; or |
| (c) | the sole director of a corporation which is the sole Director. |
THE SEAL
| 142. | The Directors shall provide for the safe custody of the Seal and the Seal shall never be used except by the authority of a resolution of the Directors or of a committee of the Directors authorised by the Directors in that behalf. The Directors may keep for use outside the Cayman Islands a duplicate Seal. The Directors may from time to time as they see fit (subject to the provisions of these Articles relating to share certificates) determine the persons and the number of such persons in whose presence the Seal or the facsimile thereof shall be used, and until otherwise so determined the Seal or the duplicate thereof shall be affixed in the presence of any one Director or the Secretary, or of some other person duly authorised by the Directors. |
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DIVIDENDS, DISTRIBUTIONS AND RESERVES
| 143. | Subject to the Companies Act, these Articles, and the special rights attaching to Shares of any Class, the Directors may, in their absolute discretion, declare dividends and distributions on Shares in issue and authorise payment of the dividends or distributions out of the funds of the Company lawfully available therefor. No dividend or distribution shall be paid except out of the realised or unrealised profits of the Company, or out of the Share Premium Account, or as otherwise permitted by the Companies Act. |
| 144. | Except as otherwise provided by the rights attached to Shares, or as otherwise determined by the Directors, all dividends and distributions in respect of Shares shall be declared and paid according to the par value of the Shares that a Shareholder holds. If any Share is issued on terms providing that it shall rank for dividend or distribution as from a particular date, that Share shall rank for dividend or distribution accordingly. |
| 145. | The Directors may deduct and withhold from any dividend or distribution otherwise payable to any Shareholder all sums of money (if any) then payable by the Shareholder to the Company on account of calls or otherwise or any monies which the Company is obliged by law to pay to any taxing or other authority. |
| 146. | The Directors may declare that any dividend or distribution be paid wholly or partly by the distribution of specific assets and in particular of shares, debentures or securities of any other company or in any one or more of such ways and, where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional Shares and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Shareholder upon the basis of the value so fixed in order to adjust the rights of all Shareholders and may vest any such specific assets in trustees as may seem expedient to the Directors. |
| 147. | Any dividend, distribution, interest or other monies payable in cash in respect of Shares may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall (unless the Directors in their sole discretion otherwise determine) be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any dividends, bonuses, or other monies payable in respect of the Share held by them as joint holders. |
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| 148. | Any dividend or distribution which cannot be paid to a Shareholder and/or which remains unclaimed after six (6) months from the date of declaration of such dividend or distribution may, in the discretion of the Directors, be paid into a separate account in the Company’s name, provided that the Company shall not be constituted as a trustee in respect of that account and the dividend or distribution shall remain as a debt due to the Shareholder. Any dividend or distribution which remains unclaimed after a period of six years from the date of declaration of such dividend or distribution shall be forfeited and shall revert to the Company. |
| 149. | No dividend or distribution shall bear interest against the Company. |
SHARE PREMIUM ACCOUNT
| 150. | The Directors shall establish an account on the books and records of the Company to be called the Share Premium Account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any Share. |
ACCOUNTS
| 151. | The Directors shall cause proper books of account to be kept with respect to all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions. |
| 152. | The books of account shall be kept at the Registered Office or at such other place as the Directors think fit, and shall always be open to inspection by the Directors. |
| 153. | The Board of Directors shall from time to time determine whether and to what extent and at what time and places and under what conditions or articles the accounts and books of the Company or any of them shall be open to the inspection of Shareholders not being Directors, and no Shareholder (not being a Director) shall have any right of inspection of any account or book or document of the Company except as conferred by law or authorised by the Board of Directors or by resolution of the Shareholders. |
AUDIT
| 154. | The accounts relating to the Company’s affairs shall be audited in such manner as may be determined from time to time by resolution of the Shareholders or failing any such determination, by the Board of Directors, or failing any determination as aforesaid, shall not be audited. |
| 155. | Without prejudice to the freedom of the Directors to establish any other committee, if any of the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, and if required by the Designated Stock Exchange, the Directors shall establish and maintain an audit committee (the Audit Committee) as a committee of the Board of Directors and shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis. The composition and responsibilities of the Audit Committee shall comply with the rules and regulations of the SEC and the Designated Stock Exchange. The Audit Committee shall meet at least once every financial quarter, or more frequently as circumstances dictate. |
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| 156. | If any of the Shares (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilise the Audit Committee for the review and approval of potential conflicts of interest. |
| 157. | The remuneration of the Auditor shall be fixed by the Audit Committee, if one exists, and otherwise by the Board of Directors. |
NOTICES
| 158. | Except as otherwise provided in these Articles and subject to the Designated Stock Exchange Rules, at the discretion of the Board, any notice or document may be served by the Company to any Shareholder either personally, or by posting it by airmail or by courier service in a prepaid letter addressed to such Shareholder at his or her address as appearing in the Register of Members, or by electronic mail to any electronic mail address such Shareholder may have specified in writing for the purpose of such service of notices, or by facsimile to any facsimile number such Shareholder may have specified in writing for the purpose of such service of notices, or by placing it on the Company’s Website should the Board deem it appropriate. |
| 159. | Any notice or document, if served by: |
| (a) | post, shall be deemed to have been served five (5) days after the time when the letter containing the same is posted; |
| (b) | facsimile, shall be deemed to have been served upon production by the transmitting facsimile machine of a report confirming transmission of the facsimile in full to the facsimile number of the recipient; |
| (c) | courier service, shall be deemed to have been served three (3) days after the time when the letter containing the same is delivered to the courier service; |
| (d) | electronic mail, shall be deemed to have been served immediately upon the time of the transmission by electronic mail; or |
| (e) | placing it on the Company’s Website, shall be deemed to have been served immediately upon the time when the same is placed on the Company’s Website. |
| 160. | In proving service by post or courier service it shall be sufficient to prove that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier service. |
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| 161. | In the case of joint holders of a Share, all notices shall be given to that one of the joint holders whose name stands first in the Register of Members in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders. |
| 162. | Any Shareholder present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened. |
| 163. | Any summons, notice, order or other document required to be sent to or served upon the Company, or upon any officer of the Company may be sent or served by leaving the same or sending it through the post in a prepaid letter envelope or wrapper, addressed to the Company or to such officer at the Registered Office. |
| 164. | Any notice or document delivered or sent by post to or left at the registered address of any Shareholder in pursuance of these Articles shall notwithstanding that such Shareholder be then dead, insane, bankrupt or dissolved, and whether or not the Company has notice of such death, insanity, bankruptcy or dissolution, be deemed to have been duly served in respect of any Share registered in the name of such Shareholder as sole or joint holder, unless the Shareholder’s name shall at the time of the service of the notice or document, have been removed from the Register of Members as the holder of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all persons interested (whether jointly with or as claiming through or under such Shareholder) in the Share. |
WINDING UP AND FINAL DISTRIBUTION OF ASSETS
| 165. | If the Company shall be wound up the liquidator shall apply the assets of the Company in satisfaction of creditors’ claims in such manner and order as such liquidator thinks fit. |
| 166. | If the Company shall be wound up, and the assets available for distribution amongst the Shareholders shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Shareholders in proportion to the par value of the Shares held by them. If in a winding up the assets available for distribution amongst the Shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the Shareholders in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction from those Shares in respect of which there are monies due of all monies payable to the Company for unpaid calls or otherwise. This Article is without prejudice to the rights of the holders of Shares issued upon special terms and conditions. |
| 167. | If the Company shall be wound up (whether the liquidation is voluntary, under supervision or by the Court) the liquidator may, with the authority of a Special Resolution, divide among the Shareholders in specie the whole or any part of the assets of the Company, and whether or not the assets shall consist of property of a single kind, and may for such purposes set such value as the liquidator deems fair upon any one or more class or classes of property, and may determine how such division shall be carried out as between the Shareholders. The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of Shareholders as the liquidator, with the like authority, shall think fit, and the liquidation of the Company may be closed and the Company dissolved, but so that no Shareholder shall be compelled to accept any Shares in respect of which there is liability. |
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INDEMNITY
| 168. | Every Director or officer of the Company shall be indemnified out of the assets of the Company against any liability incurred by that Director or officer as a result of any act or failure to act in carrying out their functions other than such liability (if any) that the Director or officer may incur by their own actual fraud, wilful default or wilful neglect. No such Director or officer shall be liable to the Company for any loss or damage in carrying out their functions unless that liability arises through the actual fraud, wilful default or wilful neglect of such Director or officer. References in this Article to actual fraud, wilful default or wilful neglect mean a finding to such effect by a competent court in relation to the conduct of the relevant party. |
| 169. | The Directors shall have the power to purchase and maintain insurance for the benefit of any person who is or was a Director or officer of the Company indemnifying them against any liability which may lawfully be insured against by the Company. |
DISCLOSURE
| 170. | Any Director, officer or authorised agent of the Company shall, if lawfully required to do so under the laws of any jurisdiction to which the Company is subject or in compliance with the rules of any stock exchange upon which the Company’s shares are listed or in accordance with any contract entered into by the Company, be entitled to release or disclose any information in their possession regarding the affairs of the Company including, without limitation, any information contained in the Register of Members. |
CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE
| 171. | For the purpose of determining Shareholders entitled to notice of, or to vote at any meeting of Shareholders or any adjournment thereof, or Shareholders entitled to receive payment of any dividend or other distribution, or in order to make a determination of Shareholders for any other purpose, the Directors may, by any means in accordance with the requirements of any Designated Stock Exchange, provide that the Register of Members shall be closed for transfers for a stated period which shall not in any case exceed thirty days. |
| 172. | In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or arrears a date as the record date for any such determination of Shareholders entitled to notice of, or to vote at any meeting of the Shareholders or any adjournment thereof, or for the purpose of determining the Shareholders entitled to receive payment of any dividend or other distribution, or in order to make a determination of Shareholders for any other purpose. |
| 173. | If no record date is fixed for the determination of Shareholders entitled to notice of or to vote at a meeting of Shareholders or Shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Shareholders. When a determination of Shareholders entitled to vote at any meeting has been made in the manner provided in the preceding Article, such determination shall apply to any adjournment thereof. |
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REGISTRATION BY WAY OF CONTINUATION
| 174. | The Company may by Special Resolution resolve to be registered by way of continuation in a jurisdiction outside the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing. The Directors may cause an application to be made to the Registrar of Companies to deregister the Company in the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing and may cause all such further steps as they consider appropriate to be taken to effect the transfer by way of continuation of the Company. |
FINANCIAL YEAR
| 175. | The Directors shall determine the financial year of the Company and may change the same from time to time. Unless they determine otherwise, the financial year shall end on 31 December in each year. |
AMENDMENTS TO MEMORANDUM AND ARTICLES OF ASSOCIATION
| 176. | The Company may from time to time alter or add to these Articles or alter or add to the Memorandum with respect to any objects, powers or other matters specified therein by passing a Special Resolution. |
CAYMAN ISLANDS DATA PROTECTION
| 177. | The Company is a “data controller” for the purposes of the Data Protection Act (as amended) (the DPA). By virtue of subscribing for and holding Shares in the Company, Shareholders provide the Company with certain information (Personal Data) that constitutes “personal data” under the DPA. Personal Data includes, without limitation, the following information relating to a Shareholder and/or any natural person(s) connected with a Shareholder (such as a Shareholder’s individual directors, members and/or beneficial owner(s)): name, residential address, email address, corporate contact information, other contact information, date of birth, place of birth, passport or other national identifier details, national insurance or social security number, tax identification, bank account details and information regarding assets, income, employment and source of funds. |
| 178. | The Company processes such Personal Data for the purposes of: |
| (a) | performing contractual rights and obligations (including under the Memorandum and these Articles); |
| (b) | complying with legal or regulatory obligations (including those relating to anti-money laundering and counter-terrorist financing, preventing and detecting fraud, sanctions, automatic exchange of tax information, requests from governmental, regulatory, tax and law enforcement authorities, beneficial ownership and the maintenance of statutory registers); and |
| (c) | the legitimate interests pursued by the Company or third parties to whom Personal Data may be transferred, including to manage and administer the Company, to send updates, information and notices to Shareholders or otherwise correspond with Shareholders regarding the Company, to seek professional advice (including legal advice), to meet accounting, tax reporting and audit obligations, to manage risk and operations and to maintain internal records. |
| 179. | The Company transfers Personal Data to certain third parties who process the Personal Data on the Company’s behalf, including third party service providers that it appoints or engages to assist with its management, operation, administration and legal, governance and regulatory compliance. In certain circumstances, the Company may be required by law or regulation to transfer Personal Data and other information with respect to one or more Shareholders to a governmental, regulatory, tax or law enforcement authority. That authority may, in turn, exchange this information with another governmental, regulatory, tax or law enforcement authority established in or outside the Cayman Islands. |
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Exhibit 4.4
AMENDMENT NUMBER 3 TO SECOND AMENDED AND RESTATED
BUSINESS COMBINATION AGREEMENT
This Amendment Number 3 to Second Amended and Restated Business Combination Agreement (this “Amendment”) between Perception Capital Corp. IV (formerly known as RCF Acquisition Corp.), a Cayman Islands exempted company limited by shares (“Perception”) and Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (“BGHL”) is dated March 28, 2025 (the “Signing Date”). Capitalized terms used but not defined have the meaning ascribed to such term in the Original Agreement.
BACKGROUND
A. Perception, Blue Gold Limited, a Cayman Islands exempted company limited by shares, and BGHL previously entered into that certain Second Amended and Restated Business Combination Agreement dated June 12, 2024, as amended by that Amendment Number 1 to Second Amended and Restated Business Combination Agreement dated November 7, 2024, as further amended by that certain Second Amended and Restated Business Combination Agreement dated January 8, 2025 (the “Original Agreement”).
B. In connection with Section 11.8 of the Original Agreement, the Original Agreement may be amended by a written instrument signed by Perception and BGHL.
C. Perception and BGHL desire to enter into this amendment (the “Amendment”) to, among other things, change the surviving entity under the Blue Merger.
D. By executing this Amendment, the parties agree as follows:
AGREEMENT
| 1. | Amendments. |
a. Section 9.1(b) of the Original Agreement is amended by deleting Section 9.1(b) and replacing it with the following new Section 9.1(b):
“(b) by written notice by either Perception or BGHL to the other Parties, if any of the conditions to the Closing set forth in Article IX have not been satisfied or waived by April 30, 2025 (the “Outside Date”); provided, however, the right to terminate this Agreement under this Section 9.1(b) shall not be available to a Party if the breach or violation by such Party or its Affiliates of any representation, warranty, covenant or obligation under this Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date;”
| 2. | Miscellaneous. |
a. Full Force and Effect; References to Original Agreement. Except as expressly modified by this Amendment, the Original Agreement remains unmodified and is in full force and effect and binding upon the Parties. All of the representations, warranties, covenants, terms and conditions of the Original Agreement are unaffected by this Amendment and shall continue to be, and remain, in full force and effect in accordance with their respective terms as if fully restated in this Amendment. This Amendment shall inure to the benefit of and be binding upon the undersigned Parties and their respective legal representatives, successors and assigns. All references to “this Agreement” in the Original Agreement shall be deemed to refer to the Original Agreement, as amended by this Amendment.
b. Counterparts. This Amendment may be executed in counterparts, each of which shall be an original for all purposes and all of which counterparts taken together shall constitute one agreement. Signatures to this Amendment executed and/or transmitted by electronic means shall be valid and effective to bind the parties.
c. Governing Law. This Amendment and the rights and obligations of the parties shall be interpreted and enforced in accordance with the laws of the State of New York.
d. Definitions. All capitalized terms not otherwise defined are used with the respective definitions given them in the Original Agreement.
e. Entire Agreement. The Original Agreement, as amended by this Amendment, contain the entire agreement of the parties with respect of the subject and supersedes all prior conversations, discussions and agreements relating to the subject matter of this Amendment.
[Signatures follow.]
Each party has executed this Amendment as of the Signing Date.
| BGHL: | ||
| BLUE GOLD HOLDINGS LIMITED | ||
| By: | ||
| Name: | Andrew Cavaghan | |
| Title: | Executive Chairman | |
| Perception: | ||
| PERCEPTION CAPITAL CORP. IV | ||
| By: | ||
| Name: | Rick Gaenzle | |
| Title: | Chief Executive Officer | |
Exhibit 4.5
AMENDMENT NUMBER 4 TO SECOND AMENDED AND RESTATED
BUSINESS COMBINATION AGREEMENT
This Amendment Number 4 to Second Amended and Restated Business Combination Agreement (this “Amendment”) between Perception Capital Corp. IV (formerly known as RCF Acquisition Corp.), a Cayman Islands exempted company limited by shares (“Perception”) and Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (“BGHL”) is effective as of April 30, 2025 (the “Effective Date”). Capitalized terms used but not defined have the meaning ascribed to such term in the Original Agreement.
BACKGROUND
A. Perception, Blue Gold Limited, a Cayman Islands exempted company limited by shares, and BGHL previously entered into that certain Second Amended and Restated Business Combination Agreement dated June 12, 2024, as amended by that Amendment Number 1 to Second Amended and Restated Business Combination Agreement dated November 7, 2024, as further amended by that certain Amendment Number 2 to Second Amended and Restated Business Combination Agreement dated January 8, 2025, and as further amended by that certain Amendment Number 3 to Second Amended and Restated Business Combination Agreement dated March 28, 2025 (the “Original Agreement”).
B. In connection with Section 11.8 of the Original Agreement, the Original Agreement may be amended by a written instrument signed by Perception and BGHL.
C. Perception and BGHL desire to enter into this amendment (the “Amendment”) to, among other things, change the surviving entity under the Blue Merger.
D. By executing this Amendment, the parties agree as follows:
AGREEMENT
| 1. | Amendments. |
a. Section 9.1(b) of the Original Agreement is amended by deleting Section 9.1(b) and replacing it with the following new Section 9.1(b):
“(b) by written notice by either Perception or BGHL to the other Parties, if any of the conditions to the Closing set forth in Article IX have not been satisfied or waived by May 9, 2025 (the “Outside Date”); provided, however, the right to terminate this Agreement under this Section 9.1(b) shall not be available to a Party if the breach or violation by such Party or its Affiliates of any representation, warranty, covenant or obligation under this Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date;”
| 2. | Miscellaneous. |
a. Full Force and Effect; References to Original Agreement. Except as expressly modified by this Amendment, the Original Agreement remains unmodified and is in full force and effect and binding upon the Parties. All of the representations, warranties, covenants, terms and conditions of the Original Agreement are unaffected by this Amendment and shall continue to be, and remain, in full force and effect in accordance with their respective terms as if fully restated in this Amendment. This Amendment shall inure to the benefit of and be binding upon the undersigned Parties and their respective legal representatives, successors and assigns. All references to “this Agreement” in the Original Agreement shall be deemed to refer to the Original Agreement, as amended by this Amendment.
b. Counterparts. This Amendment may be executed in counterparts, each of which shall be an original for all purposes and all of which counterparts taken together shall constitute one agreement. Signatures to this Amendment executed and/or transmitted by electronic means shall be valid and effective to bind the parties.
c. Governing Law. This Amendment and the rights and obligations of the parties shall be interpreted and enforced in accordance with the laws of the State of New York.
d. Definitions. All capitalized terms not otherwise defined are used with the respective definitions given them in the Original Agreement.
e. Entire Agreement. The Original Agreement, as amended by this Amendment, contain the entire agreement of the parties with respect of the subject and supersedes all prior conversations, discussions and agreements relating to the subject matter of this Amendment.
[Signatures follow.]
Each party has executed this Amendment to be effective as of the Effective Date.
| BGHL: | ||
| BLUE GOLD HOLDINGS LIMITED | ||
| By: | ||
| Name: | Andrew Cavaghan | |
| Title: | Executive Chairman | |
| Perception: | ||
| PERCEPTION CAPITAL CORP. IV | ||
| By: | ||
| Name: | Rick Gaenzle | |
| Title: | Chief Executive Officer | |
Exhibit 4.6
AMENDMENT NUMBER 5 TO SECOND AMENDED AND RESTATED
BUSINESS COMBINATION AGREEMENT
This Amendment Number 5 to Second Amended and Restated Business Combination Agreement (this “Amendment”) between Perception Capital Corp. IV (formerly known as RCF Acquisition Corp.), a Cayman Islands exempted company limited by shares (“Perception”) and Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (“BGHL”) is effective as of May 8, 2025 (the “Effective Date”). Capitalized terms used but not defined have the meaning ascribed to such term in the Original Agreement.
BACKGROUND
A. Perception, Blue Gold Limited, a Cayman Islands exempted company limited by shares, and BGHL previously entered into that certain Second Amended and Restated Business Combination Agreement dated June 12, 2024, as amended by that Amendment Number 1 to Second Amended and Restated Business Combination Agreement dated November 7, 2024, as further amended by that certain Amendment Number 2 to Second Amended and Restated Business Combination Agreement dated January 8, 2025, and as further amended by that certain Amendment Number 3 to Second Amended and Restated Business Combination Agreement dated March 28, 2025, and as further amended by that certain Amendment Number 4 to Second Amended and Restated Business Combination Agreement dated April 30, 2025 (the “Original Agreement”).
B. In connection with Section 11.8 of the Original Agreement, the Original Agreement may be amended by a written instrument signed by Perception and BGHL.
C. Perception and BGHL desire to enter into this amendment (the “Amendment”) to, among other things, change the surviving entity under the Blue Merger.
D. By executing this Amendment, the parties agree as follows:
AGREEMENT
| 1. | Amendments. |
a. Section 9.1(b) of the Original Agreement is amended by deleting Section 9.1(b) and replacing it with the following new Section 9.1(b):
“(b) by written notice by either Perception or BGHL to the other Parties, if any of the conditions to the Closing set forth in Article IX have not been satisfied or waived by June 15, 2025 (the “Outside Date”); provided, however, the right to terminate this Agreement under this Section 9.1(b) shall not be available to a Party if the breach or violation by such Party or its Affiliates of any representation, warranty, covenant or obligation under this Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date;”
| 2. | Miscellaneous. |
a. Full Force and Effect; References to Original Agreement. Except as expressly modified by this Amendment, the Original Agreement remains unmodified and is in full force and effect and binding upon the Parties. All of the representations, warranties, covenants, terms and conditions of the Original Agreement are unaffected by this Amendment and shall continue to be, and remain, in full force and effect in accordance with their respective terms as if fully restated in this Amendment. This Amendment shall inure to the benefit of and be binding upon the undersigned Parties and their respective legal representatives, successors and assigns. All references to “this Agreement” in the Original Agreement shall be deemed to refer to the Original Agreement, as amended by this Amendment.
b. Counterparts. This Amendment may be executed in counterparts, each of which shall be an original for all purposes and all of which counterparts taken together shall constitute one agreement. Signatures to this Amendment executed and/or transmitted by electronic means shall be valid and effective to bind the parties.
c. Governing Law. This Amendment and the rights and obligations of the parties shall be interpreted and enforced in accordance with the laws of the State of New York.
d. Definitions. All capitalized terms not otherwise defined are used with the respective definitions given them in the Original Agreement.
e. Entire Agreement. The Original Agreement, as amended by this Amendment, contain the entire agreement of the parties with respect of the subject and supersedes all prior conversations, discussions and agreements relating to the subject matter of this Amendment.
[Signatures follow.]
Each party has executed this Amendment to be effective as of the Effective Date.
| BGHL: | ||
| BLUE GOLD HOLDINGS LIMITED | ||
| By: | ||
| Name: | Andrew Cavaghan | |
| Title: | Executive Chairman | |
| Perception: | ||
| PERCEPTION CAPITAL CORP. IV | ||
| By: | ||
| Name: | Rick Gaenzle | |
| Title: | Chief Executive Officer | |
Exhibit 4.7
AMENDMENT NUMBER 6 TO SECOND AMENDED AND RESTATED
BUSINESS COMBINATION AGREEMENT
This Amendment Number 6 to Second Amended and Restated Business Combination Agreement (this “Amendment”) between Perception Capital Corp. IV (formerly known as RCF Acquisition Corp.), a Cayman Islands exempted company limited by shares (“Perception”) and Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (“BGHL”) is effective as of June 10, 2025 (the “Effective Date”). Capitalized terms used but not defined have the meaning ascribed to such term in the Original Agreement.
BACKGROUND
A. Perception, Blue Gold Limited, a Cayman Islands exempted company limited by shares, and BGHL previously entered into that certain Second Amended and Restated Business Combination Agreement dated June 12, 2024, as amended by that Amendment Number 1 to Second Amended and Restated Business Combination Agreement dated November 7, 2024, as further amended by that certain Amendment Number 2 to Second Amended and Restated Business Combination Agreement dated January 8, 2025, and as further amended by that certain Amendment Number 3 to Second Amended and Restated Business Combination Agreement dated March 28, 2025, and as further amended by that certain Amendment Number 4 to Second Amended and Restated Business Combination Agreement dated April 30, 2025, and as further amended by that certain Amendment Number 5 to Second Amended and Restated Business Combination Agreement dated May 8, 2025 (the “Original Agreement”).
B. In connection with Section 11.8 of the Original Agreement, the Original Agreement may be amended by a written instrument signed by Perception and BGHL.
C. Perception and BGHL desire to enter into this amendment (the “Amendment”) to, among other things, change the surviving entity under the Blue Merger.
D. By executing this Amendment, the parties agree as follows:
AGREEMENT
| 1. | Amendments. |
a. Section 9.1(b) of the Original Agreement is amended by deleting Section 9.1(b) and replacing it with the following new Section 9.1(b):
“(b) by written notice by either Perception or BGHL to the other Parties, if any of the conditions to the Closing set forth in Article IX have not been satisfied or waived by June 30, 2025 (the “Outside Date”); provided, however, the right to terminate this Agreement under this Section 9.1(b) shall not be available to a Party if the breach or violation by such Party or its Affiliates of any representation, warranty, covenant or obligation under this Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date;”
| 2. | Miscellaneous. |
a. Full Force and Effect; References to Original Agreement. Except as expressly modified by this Amendment, the Original Agreement remains unmodified and is in full force and effect and binding upon the Parties. All of the representations, warranties, covenants, terms and conditions of the Original Agreement are unaffected by this Amendment and shall continue to be, and remain, in full force and effect in accordance with their respective terms as if fully restated in this Amendment. This Amendment shall inure to the benefit of and be binding upon the undersigned Parties and their respective legal representatives, successors and assigns. All references to “this Agreement” in the Original Agreement shall be deemed to refer to the Original Agreement, as amended by this Amendment.
b. Counterparts. This Amendment may be executed in counterparts, each of which shall be an original for all purposes and all of which counterparts taken together shall constitute one agreement. Signatures to this Amendment executed and/or transmitted by electronic means shall be valid and effective to bind the parties.
c. Governing Law. This Amendment and the rights and obligations of the parties shall be interpreted and enforced in accordance with the laws of the State of New York.
d. Definitions. All capitalized terms not otherwise defined are used with the respective definitions given them in the Original Agreement.
e. Entire Agreement. The Original Agreement, as amended by this Amendment, contain the entire agreement of the parties with respect of the subject and supersedes all prior conversations, discussions and agreements relating to the subject matter of this Amendment.
[Signatures follow.]
Each party has executed this Amendment to be effective as of the Effective Date.
| BGHL: | ||
| BLUE GOLD HOLDINGS LIMITED | ||
| By: | ||
| Name: | Andrew Cavaghan | |
| Title: | Executive Chairman | |
| Perception: | ||
| PERCEPTION CAPITAL CORP. IV | ||
| By: | ||
| Name: | Rick Gaenzle | |
| Title: | Chief Executive Officer | |
Exhibit 4.10
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), among (i) Blue Gold Holdings Limited, a private company limited by shares incorporated under the laws of England and Wales (“BGHL”), (ii) Blue Gold Limited, a Cayman Islands exempted company limited by shares (“Blue Gold Limited”), (iii) Perception Capital Corp. IV, a Cayman Islands exempted company limited by shares, formerly known as RCF Acquisition Corp. (“Perception”), (iv) Perception Capital Partners IV LLC, a Delaware limited liability company (“Sponsor”), and (v) undersigned parties listed on the signature page (each a “Holder” and collectively the “Holders”) is dated June 18, 2025. Any capitalized term used but not defined in this Agreement will have the meaning ascribed to such term in the Business Combination Agreement.
BACKGROUND:
| A. | On June 12, 2024, BGHL, Perception, and Blue Gold Limited entered into that certain Second Amended and Restated Business Combination Agreement, which was further amended on November 7, 2024, January 8, 2025, and March 28, 2025 (the “Business Combination Agreement”). |
| B. | In connection with the Closing, the parties desire to enter into this Agreement in order to provide the Holders with registration rights. |
| C. | In consideration of the foregoing and of the mutual covenants and agreements contained in this Agreement, the parties agree as follows: |
Article I
DEFINITIONS
1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the chief executive officer or principal financial officer of Blue Gold Limited, after consultation with counsel to Blue Gold Limited, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed, and (iii) Blue Gold Limited has a bona fide business purpose for not making such information public.
“Agreement” shall have the meaning given in the preamble.
“BGHL” shall have the meaning given in the Preamble, and includes the BGHL’s successors by recapitalization, merger, consolidation, spin-off, reorganization or similar transaction.
“Business Combination Agreement” shall have the meaning given in the recitals.
“Closing Date” shall have the meaning given in the recitals.1
“Commission” shall mean the Securities and Exchange Commission.
“Directors” shall mean the Directors of Blue Gold Limited.
“Effectiveness Deadline” shall have the meaning given in Section 2.1.1.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Filing Deadline” shall have the meaning given in Section 2.1.1.
“Form F-1” shall have the meaning given in Section 2.1.1.
“Form F-3 Shelf” shall have the meaning given in Section 2.1.1.
“Holder Information” shall have the meaning given in Section 4.1.2.
“Holders” shall have the meaning given in the Preamble.
“Maximum Number of Securities” the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering.
“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the light of the circumstances under which they were made) not misleading.
“Piggyback Registration” shall have the meaning given in Section 2.2.1.
“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
| 1 | Mourant note: This term is not defined in the recitals. |
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“Registrable Securities” shall mean (a) any outstanding Blue Gold Limited Securities or any other equity security (including warrants to purchase Blue Gold Limited Securities and Blue Gold Limited Securities issued or issuable upon the exercise of any other equity security) of Blue Gold Limited held by a Holder immediately following the Closing (including any securities distributable under the Business Combination Agreement), (b) any outstanding Blue Gold Limited Securities or any other equity security (including warrants to purchase Blue Gold Limited Securities and Blue Gold Limited Securities issued or issuable upon the exercise of any other equity security) of BGHL acquired by a Holder following the date of this Agreement to the extent that such securities are “restricted securities” (as defined in Rule 144) or are otherwise held by an “affiliate” (as defined in Rule 144) of BGHL, and (c) any other equity security of BGHL or any of its subsidiaries issued or issuable with respect to any securities referenced in clause (a) or (b) above by way of a stock dividend or stock split or in connection with a recapitalization, merger, consolidation, spin-off, reorganization or similar transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of: (A) a Registration Statement with respect to the sale of such securities shall BGHL have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement by the applicable Holder; (B) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by a Holder and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; (D) such securities (i) may be sold without registration under Rule 144 or any successor rule promulgated under the Securities Act (but with no volume or other restrictions or limitations including as to manner or timing of sale) and (ii) the holder of such securities has beneficial ownership of less than 5% of the outstanding Blue Gold Limited Securities; and (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction. For the purposes of the immediately preceding sentence, “beneficial ownership” shall be determined in accordance with Section 13(d) of the Exchange Act and Rule 13d-3.
“Registration” shall mean a registration, effected by preparing and filing a registration statement, prospectus or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations, and such registration statement becoming effective.
“Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Blue Gold Limited Securities are then listed;
(B) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);
(C) printing, messenger, telephone and delivery expenses;
(D) reasonable fees and disbursements of counsel for BGHL;
(E) reasonable fees and disbursements of all independent registered public accountants of BGHL incurred specifically in connection with such Registration; and
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(F) reasonable fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders initiating a Demand Registration to be registered for offer and sale in the applicable Registration.
“Registration Statement” shall mean any registration statement under the Securities Act that covers the Registrable Securities under the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Rule 144” shall mean Rule 144 promulgated under the Securities Act (or any successor rule then in effect).
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.
“Shelf Registration” shall mean a registration of securities under a registration statement filed with the Commission in accordance with and under Rule 415 promulgated under the Securities Act (or any successor rule then in effect).
“Subsequent Shelf Registration” shall have the meaning given in Section 2.1.2.
“Transfer” shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).
“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.
“Underwritten Registration” or “Underwritten Offering” shall mean a Registration in which securities of Blue Gold Limited are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
Article
II
REGISTRATIONS
2.1 Shelf Registration.
2.1.1 Filing. Blue Gold Limited shall use commercially reasonable efforts to file within thirty (30) days after the Closing Date, (the “Filing Deadline”), a Registration Statement on Form F-1 (the “Shelf Registration) or, if Blue Gold Limited is eligible to use a Form F-3 Shelf, a Registration Statement for a Shelf Registration on Form F-3 (the “Form F-3 Shelf” with the applicable registration statement on either Form F-1 or Form F-3 Shelf being the “Shelf Registration”), in each case, covering the resale of all the Registrable Securities (determined as of two business days before such filing). Blue Gold Limited shall use commercially reasonable efforts to cause such Shelf Registration to be declared effective as soon as possible after filing, but in no event later than the earlier of (i) sixty (60) days following the Filing Deadline and (ii) three (3) business days after the Commission notifies Blue Gold Limited that it will not review such Shelf Registration, if applicable (the “Effectiveness Deadline”); provided, that, if such Shelf Registration filed under this Section 2.1.1 is reviewed by, and Blue Gold Limited receives comments from, the Commission with respect to such Shelf Registration, the Effectiveness Deadline shall be extended to ninety (90) days following the Filing Deadline. Such Shelf Registration shall provide for the resale of the Registrable Securities under to any method or combination of methods legally available to, and requested by, any Holder named. Blue Gold Limited shall maintain a Shelf Registration, and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be necessary to keep a Shelf Registration continuously effective, available for use and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. If Blue Gold Limited files a Form F-1, Blue Gold Limited shall use its commercially reasonable efforts to convert the Form F-1 (and any Subsequent Shelf Registration) to a Form F-3 Shelf as soon as practicable after Blue Gold Limited is eligible to use Form F-3.
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2.1.2 Subsequent Shelf Registration. If any Shelf Registration ceases to be effective under the Securities Act for any reason at any time while Registrable Securities are still outstanding, Blue Gold Limited shall, subject to Section 3.4, use its commercially reasonable efforts to promptly cause such Shelf Registration to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such Shelf Registration), and shall use its commercially reasonable efforts to promptly amend such Shelf Registration in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf Registration or file an additional registration statement as a Shelf Registration (a “Subsequent Shelf Registration”) registering the resale of all Registrable Securities (determined as of two business days before such filing), and under any method or combination of methods legally available to, and requested by, any Holder named. If a Subsequent Shelf Registration is filed, Blue Gold Limited shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective under the Securities Act as promptly as is reasonably practicable after the filing (it being agreed that the Subsequent Shelf Registration shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities Act) if Blue Gold Limited is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent applicable eligibility determination date) and (ii) keep such Subsequent Shelf Registration continuously effective, available for use and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. Any such Subsequent Shelf Registration shall be on Form F-3 to the extent that Blue Gold Limited is eligible to use such form. Otherwise, such Subsequent Shelf Registration shall be on another appropriate form.
2.1.3 Reserved.
2.1.4 Reserved.
2.1.5 Reserved.
2.2 Piggyback Registration.
2.2.1 Piggyback Rights. Subject to Section 2.4.3, if Blue Gold Limited or any Holder proposes to conduct a registered offering of, or if Blue Gold Limited proposes to file a Registration Statement under the Securities Act with respect to the Registration of, equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of shareholders of Blue Gold Limited (or by Blue Gold Limited and by the shareholders of Blue Gold Limited), other than a Registration Statement (or any registered offering) (i) filed in connection with any employee stock option or other benefit plan, (ii) under a Registration Statement on Form F-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule), (iii) for an offering of debt that is convertible into equity securities of Blue Gold Limited or (iv) for a dividend reinvestment plan, then Blue Gold Limited shall give written notice of such proposed offering to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering under a Shelf Registration, the applicable “red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to include in such registered offering such number of Registrable Securities as such Holders may request in writing within five (5) days after receipt of such written notice (such registered offering, a “Piggyback Registration”). Subject to Section 2.2.2, Blue Gold Limited shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and, if applicable, shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of such Piggyback Registration to permit the Registrable Securities requested by the Holders under this Section 2.2.1 to be included on the same terms and conditions as any similar securities of Blue Gold Limited included in such registered offering and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution. The inclusion of any Holder’s Registrable Securities in a Piggyback Registration shall be subject to such Holder agreement to enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering.
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2.2.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises Blue Gold Limited and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of Blue Gold Limited Securities or other equity securities that Blue Gold Limited desires to sell, taken together with (i) the Blue Gold Limited Securities or other equity securities, if any, as to which Registration or a registered offering has been demanded under separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities, (ii) the Registrable Securities as to which registration has been requested under Section 2.2, and (iii) the Blue Gold Limited Securities or other equity securities, if any, as to which Registration or a registered offering has been requested under separate written contractual piggy-back registration rights of other shareholders of Blue Gold Limited, exceeds the Maximum Number of Securities, then:
(a) If the Registration or registered offering is undertaken for Blue Gold Limited’s account, Blue Gold Limited shall include in any such Registration or registered offering: (A) first, the Blue Gold Limited Securities or other equity securities that Blue Gold Limited desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities under Section 2.2.1, pro rata, based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Blue Gold Limited Securities or other equity securities, if any, as to which Registration or a registered offering has been requested under written contractual piggy-back registration rights of other shareholders of Blue Gold Limited, which can be sold without exceeding the Maximum Number of Securities;
(b) If the Registration or registered offering is under a request by persons or entities other than the Holders of Registrable Securities, then Blue Gold Limited shall include in any such Registration or registered offering (A) first, the Blue Gold Limited Securities or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities under Section 2.2.1, pro rata, based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the Blue Gold Limited Securities or other equity securities that Blue Gold Limited desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Blue Gold Limited Securities or other equity securities for the account of other persons or entities that Blue Gold Limited is obligated to register under separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities; and
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(c) If the Registration or registered offering is under a request by Holder(s) of Registrable Securities under Section 2.1, then Blue Gold Limited shall include in any such Registration or registered offering securities under Section 2.1.5.
2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to Blue Gold Limited and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration before the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration or, in the case of a Piggyback Registration under a Shelf Registration, the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. Blue Gold Limited (whether on its own good faith determination or as the result of a request for withdrawal by persons under separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration (which, in no circumstance, shall include the Shelf Registration) at any time before the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement (other than Section 2.1.5), Blue Gold Limited shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration before its withdrawal under this Section 2.2.3.
2.2.4 Reserved.
2.3 Market Stand-off. In connection with any Underwritten Offering of equity securities of Blue Gold Limited, each Holder of Registrable Securities agrees that it shall not Transfer any Blue Gold Limited Securities or other equity securities of Blue Gold Limited (other than those included in such offering under this Agreement), without the prior written consent of Blue Gold Limited, during the thirty (30)-day period (or such shorter time agreed to by the managing Underwriter(s)) beginning on the date of pricing of such offering, except if the Underwriters managing the offering otherwise agree by written consent. Each Holder of Registrable Securities agrees to execute a customary lock-up agreement in favor of the Underwriters to such effect (in each case on substantially the same terms and conditions as all such Holders). For the sake of clarity, no Holder shall be obligated under the provisions of this Section 2.3 to the extent such Holder no longer owns Registrable Securities.
2.4 Reserved.
Article
III
COMPANY PROCEDURES
3.1 General Procedures. If Blue Gold Limited is required to effect the Registration of Registrable Securities, Blue Gold Limited shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution, and Blue Gold Limited shall, as expeditiously as possible:
3.1.1 prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold;
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3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be requested by any Holder or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by Blue Gold Limited or by the Securities Act or rules and regulations to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus or are no longer outstanding;
3.1.3 before filing a Registration Statement or Prospectus, or any amendment or supplement, furnish without charge to the Underwriters, if any, and each Holder of Registrable Securities included in such Registration, and each such Holder’s legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits and documents incorporated by reference), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and each Holder of Registrable Securities included in such Registration or the legal counsel for any such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;
3.1.4 before any public offering of Registrable Securities, use its commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as any Holder of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of Blue Gold Limited and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that Blue Gold Limited shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued by Blue Gold Limited are then listed;
3.1.6 provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
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3.1.8 at least five (5) days before the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus or any document that is to be incorporated by reference into such Registration Statement or Prospectus, furnish a copy to each seller of such Registrable Securities and its counsel, including, without limitation, providing copies promptly upon receipt of any comment letters received with respect to any such Registration Statement or Prospectus;
3.1.9 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 ;
3.1.10 permit a representative of the Holders, the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause Blue Gold Limited’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters agree to confidentiality arrangements reasonably satisfactory to Blue Gold Limited, before the release or disclosure of any such information;
3.1.11 obtain a “cold comfort” letter from Blue Gold Limited’s independent registered public accountants if of an Underwritten Registration which the participating Holders may rely on, in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders;
3.1.12 on the date the Registrable Securities are delivered for sale under such Registration, obtain an opinion, dated such date, of counsel representing Blue Gold Limited for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to a majority in interest of the participating Holders;
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3.1.13 if of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of such offering;
3.1.14 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of Blue Gold Limited’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 (or any successor rule promulgated by the Commission);
3.1.15 with respect to an Underwritten Offering under Section 2.1.4, use its commercially reasonable efforts to make available senior executives of Blue Gold Limited to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in such Underwritten Offering; and
3.1.16 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with such Registration.
Notwithstanding the foregoing, Blue Gold Limited shall not be required to provide any documents or information to an Underwriter if such Underwriter has not then been named with respect to the applicable Underwritten Offering.
3.2 Registration Expenses. The Registration Expenses of all Registrations shall be borne by Blue Gold Limited. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements for Participation in Underwritten Offerings. Notwithstanding anything in this Agreement to the contrary, if any Holder does not provide Blue Gold Limited with its requested Holder Information (as defined below), Blue Gold Limited may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if Blue Gold Limited determines, based on the advice of counsel, that such information is necessary to effect the registration and such Holder continues to withhold such information. No person may participate in any Underwritten Offering for equity securities of Blue Gold Limited under a Registration initiated by Blue Gold Limited unless such person (i) agrees to sell such person’s securities on the basis provided in any underwriting arrangements approved by Blue Gold Limited and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements. The exclusion of a Holder’s Registrable Securities as a result of this Section 3.3 shall not affect the registration of the other Registrable Securities to be included in such Registration.
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3.4 Suspension of Sales; Adverse Disclosure.
3.4.1 Upon receipt of written notice from Blue Gold Limited that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that Blue Gold Limited covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing by Blue Gold Limited that the use of the Prospectus may be resumed but in no event longer than 30 days after advising of such Misstat53m3n5.
3.4.2 Subject to Section 3.4.4, if the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would (a) require Blue Gold Limited to make an Adverse Disclosure, (b) require the inclusion in such Registration Statement of financial statements that are unavailable to Blue Gold Limited for reasons beyond Blue Gold Limited’s control, or (c) in the good faith judgment of the majority of the Directors, be detrimental to Blue Gold Limited and the majority of the Directors concludes as a result that it is advisable to defer such filing, initial effectiveness or continued use at such time, Blue Gold Limited may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time determined in good faith by Blue Gold Limited to be necessary for such purpose. If Blue Gold Limited exercises its rights under this Section 3.4.2, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities.
3.4.3 Reserved.
3.4.4 The right to delay or suspend any filing, initial effectiveness or continued use of a Registration Statement under Section 3.4.2 or a registered offering under Section 3.4.3 shall be exercised by Blue Gold Limited, in the aggregate, not more than three (3) times in any twelve-month period, and any such delay or suspension shall last for no more than sixty (60) days.
3.4.5 Blue Gold Limited shall as promptly as commercially practicable notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.
3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, Blue Gold Limited, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions and file within the applicable grace period) all reports required to be filed by Blue Gold Limited after the date of this Agreement under Sections 13(a) or 15(d) of the Exchange Act. Blue Gold Limited further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Blue Gold Limited securities held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 (or any successor rule promulgated by the Commission), including providing any legal opinions. Upon the request of any Holder, Blue Gold Limited shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
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Article
IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 Blue Gold Limited agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, members, and managers, and directors (if applicable) and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment or supplement or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, except insofar as the same are caused by or contained in any information furnished in writing to Blue Gold Limited by such Holder expressly for use. Blue Gold Limited shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
4.1.2 In connection with any Registration Statement for a Registration in which a Holder of Registrable Securities is participating, such Holder shall furnish to Blue Gold Limited in writing such customary information and affidavits as Blue Gold Limited reasonably requests for use in connection with any such Registration Statement or Prospectus (the “Holder Information”) and, to the extent permitted by law, shall indemnify Blue Gold Limited, its directors and officers and agents and each person who controls Blue Gold Limited (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment or supplement or any omission of a material fact required to be stated or necessary to make the statements not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities under such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of Blue Gold Limited.
4.1.3 Any person entitled to indemnification shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (plus local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party under the terms of such settlement) or which settlement does not include as an unconditional term the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
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4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. Blue Gold Limited and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party if Blue Gold Limited’s or such Holder’s indemnification is unavailable for any reason.
4.1.5 If the indemnification provided under Section 4.1 from the indemnifying party is held by a court of competent jurisdiction to be unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to, then the indemnifying party, in lieu of indemnifying the indemnified party, shall to the extent permitted by law contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by a court of law by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this Section 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties agree that it would not be just and equitable if contribution under this Section 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution under this Section 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
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Article
V
MISCELLANEOUS
5.1 Notices. All notices, consents, waivers and other communications shall be in writing and shall be deemed to have been duly given when delivered (i) in person, (ii) by facsimile or other electronic means, with affirmative confirmation of receipt, (iii) two (2) business days after being sent, if sent by reputable, internationally recognized overnight courier service or (iv) four (4) business days after being mailed, if sent by registered or certified mail, pre-paid and return receipt requested, in each case to the applicable party at the following addresses (or at such other address for a party as shall be specified by like notice). Any notice or communication under this Agreement must be addressed, if to Blue Gold Limited, to: 109 W. 50th Street, #207 Minneapolis, MN 55410 Attn: Richard W. Gaenzle, Jr. and, if to any Holder, at such Holder’s address or contact information as set forth in Blue Gold Limited’s books and records. Any party may change its address for notice at any time and from time to time by written notice to the other parties, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this Section 5.1.
5.2 Assignment; No Third Party Beneficiaries.
5.2.1 This Agreement and the rights, duties and obligations of Blue Gold Limited may not be assigned or delegated by Blue Gold Limited in whole or in part.
5.2.2 This Agreement and the provisions shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders.
5.2.3 This Agreement shall not confer any rights or benefits on any persons that are not parties, other than as expressly set forth in this Agreement and Section 5.2.
5.2.4 No assignment by any party of such party’s rights, duties and obligations shall be binding upon or obligate Blue Gold Limited unless and until Blue Gold Limited shall have received (i) written notice of such assignment as provided in Section 5.1 and (ii) the written agreement of the assignee, in a form reasonably satisfactory to Blue Gold Limited, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.
5.3 Counterparts. This Agreement may be executed in multiple counterparts and delivered electronically (including counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
5.4 Governing Law; Jurisdiction; Venue. This Agreement shall be governed by, construed and enforced in accordance with the Laws of the State of New York, without regard to its conflict of laws principles. All actions, suits or proceedings (each an “Action”, and, collectively, “Actions”), arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York County, State of New York (or in any appellate court) (the “Specified Courts”). Each party (a) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any party and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the contemplated transactions may not be enforced in or by any Specified Court. Each party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each party irrevocably consents to the service of the summons and complaint and any other process in any other Action relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such party at the applicable address. Nothing in this Section shall affect the right of any party to serve legal process in any other manner permitted by Law.
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5.5 Jury Trial. EACH OF THE PARTIES WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE CONTEMPLATED TRANSACTIONS. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
5.6 Amendments and Modifications. Upon the written consent of Blue Gold Limited and the Holders of at least a majority in interest of the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment or waiver that adversely affects one Holder, solely in its capacity as a holder of the shares of capital stock of Blue Gold Limited, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or Blue Gold Limited and any other party or any failure or delay on the part of a Holder or Blue Gold Limited in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or Blue Gold Limited. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies by such party.
5.7 Term. This Agreement shall terminate with respect to any Holder upon the earlier of (i) the tenth anniversary of the date of this Agreement and (ii) the date that such Holder no longer holds any Registrable Securities. The provisions of Section 3.5 and Article IV shall survive any termination.
5.8 Holder Information. Each Holder agrees, if requested in writing, to represent to Blue Gold Limited the total number of Registrable Securities held by such Holder in order for Blue Gold Limited to make determinations.
[Signature Page Follows]
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The parties have executed this Agreement as of the date first written above.
| BGHL: | ||
| By: | ||
| Name: | Andrew Cavaghan | |
| Title: | Executive Chairman | |
[Signature Page to Registration Rights Agreement]
The parties have executed this Agreement as of the date first written above.
| Perception: | ||
| By: | ||
| Name: | Richard W. Gaenzle, Jr. | |
| Title: | Chief Executive Officer | |
[Signature Page to Registration Rights Agreement]
The parties have executed this Agreement as of the date first written above.
| Blue Gold Limited: | ||
| By: | ||
| Name: | Richard W. Gaenzle, Jr. | |
| Title: | Chief Executive Officer | |
[Signature Page to Registration Rights Agreement]
The parties have executed this Agreement as of the date first written above.
| HOLDER: | ||
[Signature Page to Registration Rights Agreement]
The parties have executed this Agreement as of the date first written above.
| SPONSOR: | ||
[Signature Page to Registration Rights Agreement]
Exhibit 4.16
ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT (this “Agreement”), dated June 25, 2025, is made by and among Perception Capital Corp. IV, a Cayman Islands exempted company limited by shares formerly known as RCF Acquisition Corp. (“Perception” or the “Company”), Blue Gold Limited, a Cayman Islands exempted company (“Blue Gold Limited” or “PubCo”), and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (in such capacity, the “Warrant Agent”) and amends the Warrant Agreement (the “Existing Warrant Agreement”), dated November 9, 2021, by and between the Company and the Warrant Agent. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Existing Warrant Agreement.
WHEREAS, pursuant to the Existing Warrant Agreement, the Company has issued the following (collectively, the “Warrants”) (i) 11,500,000 Public Warrants; (ii) 11,700,000 Private Placement Warrants and (iii) 1,500,000 Working Capital Warrants;
WHEREAS, all of the Warrants are governed by the Existing Warrant Agreement;
WHEREAS, on December 5, 2023, Perception, Blue Gold Limited, a wholly owned subsidiary of Perception, and Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (“BGHL”), entered into a Business Combination Agreement (the “Original Business Combination Agreement”).
WHEREAS, on June 12, 2024, Perception and BGHL, entered into that certain Second Amended and Restated Business Combination Agreement, which was amended on November 7, 2024, January 8, 2025, March 28, 2025, and April 30, 2025 (as the same may be further amended from time to time, the “Business Combination Agreement”) pursuant to which: (i) Blue Gold Limited formed a wholly owned subsidiary (the “Blue Merger Sub”) for the purposes of effecting the Blue Merger, (ii) Perception shall merge with and into Blue Gold Limited, a wholly owned subsidiary of Perception with Blue Gold Limited being the surviving entity (the “Perception Reorganization”), (ii) BGHL formed a new Cayman Islands entity (“NewCo”) and will contribute all of the issued and outstanding shares of BGHL to NewCo, (iii) Blue Merger Sub will merge with and into NewCo, following which the separate corporate existence of Blue Merger Sub will cease and (iv) at the Merger Effective Time (a defined in the Business Combination Agreement), NewCo shall continue as the surviving entity and wholly owned subsidiary of Blue Gold Limited (“New Blue”);
WHEREAS, as of the Merger Effective Time, Blue Perception Capital LLP, as trustee of NewCo and Blue Shareholders shall cease to have any other rights in and to BGHL or NewCo, and Blue Perception Capital LLP, as trustee of NewCo and the Blue Shareholders shall be shareholders of Blue Gold Limited and New Blue shall continue as a wholly owned subsidiary of Blue Gold Limited;
WHEREAS, effective with the Perception Reorganization, each issued and outstanding Class A Ordinary Share shall be converted on a one-for-one basis into Blue Gold Limited Class A Ordinary Shares and each whole Warrant shall be converted into a warrant to purchase one Blue Gold Limited Class A Ordinary Share;
WHEREAS, upon consummation of the transactions contemplated by the Business Combination Agreement (the “Business Combination”), as provided in Section 4.4 of the Existing Warrant Agreement, the Warrants will no longer be exercisable for shares of Ordinary Shares of the Company but instead will be exercisable (subject to the terms of the Existing Warrant Agreement as amended hereby) for PubCo Ordinary Shares;
WHEREAS, in connection with the Business Combination, the Company desires to assign all of its right, title and interest in the Existing Warrant Agreement to PubCo and PubCo wishes to accept such assignment; and
WHEREAS, Section 9.8 of the Existing Warrant Agreement provides that the Company and the Warrant Agent may amend the Existing Warrant Agreement without the consent of any Registered Holders (i) to provide for replacement of securities upon reorganization pursuant to Section 4.5 of the Existing Warrant Agreement in connection with the Business Combination and the transactions contemplated by the Business Combination Agreement or (ii) as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the rights of the Registered Holders under the Existing Warrant Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
| 1. | Assignment and Assumption; Consent. |
| 1.1 | Assignment and Assumption. As of and with effect on and from the Merger Effective Time (as defined in the Business Combination Agreement), the Company hereby assigns to PubCo all of the Company’s right, title and interest in and to the Existing Warrant Agreement (as amended hereby) and PubCo hereby assumes, and agrees to pay, perform, satisfy and discharge in full, as the same become due, all of the Company’s liabilities and obligations under the Existing Warrant Agreement (as amended hereby) arising on, from and after the Merger Effective Time. |
| 1.2 | Consent. The Warrant Agent hereby consents to (i) the assignment of the Existing Warrant Agreement by the Company to PubCo and the assumption of the Existing Warrant Agreement by PubCo from the Company pursuant to Section 1.1, in each case effective as of the Merger Effective Time, and (ii) the continuation of the Existing Warrant Agreement (as amended hereby) in full force and effect from and after the Merger Effective Time. |
| 2. | Amendment of Existing Warrant Agreement. |
Effective as of the Merger Effective Time, the Company and the Warrant Agent hereby amend the Existing Warrant Agreement as provided in this Section 2, and acknowledge and agree that the amendments to the Existing Warrant Agreement set forth in this Section 2 are to provide for the replacement of securities upon reorganization pursuant to Section 4.5 of the Existing Warrant Agreement (in connection with the Business Combination and the transactions contemplated by the Business Combination Agreement).
| 2.1 | References to the Company. All references to the “Company” in the Existing Warrant Agreement (including all Exhibits thereto) shall be references to PubCo. |
| 2.2 | References to Ordinary Shares. All references to “Ordinary Shares” in the Existing Warrant Agreement (including all Exhibits thereto) shall be references to PubCo Ordinary Shares. |
| 2.3 | References to Business Combination. All references to “Business Combination” in the Existing Warrant Agreement (including all Exhibits thereto) shall be references to the transactions contemplated by the Business Combination Agreement, and references to “the completion of the Business Combination” and all variations thereof in the Existing Warrant Agreement (including all Exhibits thereto) shall be references to the Merger Effective Time. |
| 2.4 | References to stockholder. All references to a “stockholder’ of the Company in the Existing Warrant Agreement (including all Exhibits thereto) shall be construed as a reference to a “shareholder” of PubCo. |
| 2.5 | Detachability of Warrants. Section 2.5 of the Existing Warrant Agreement is hereby deleted and replaced with the following: |
“[INTENTIONALLY OMITTED]”
Except that the defined term “Business Day” set forth therein shall be retained for all purposes of the Existing Warrant Agreement.
| 2.6 | Post IPO Warrants. |
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| 2.6.1 | Section 2.7 of the Existing Warrant Agreement is hereby deleted in its entirety. |
| 2.6.2 | All references to “Post-IPO Warrant” in the Existing Warrant Agreement shall be deleted. |
| 2.7 | Duration of Warrants. The first sentence of Section 3.2 of the Existing Warrant Agreement is hereby deleted and replaced with the following: |
“A Warrant may be exercised only during the period (the “Exercise Period”) commencing on the date that is thirty (30) days after the consummation of the transactions contemplated by the Business Combination Agreement (a “Business Combination”), and terminating at 5:00 p.m., New York City time on the earlier to occur of: (x) the date that is five (5) years after the date on which the Business Combination is completed, (y) the liquidation of the Company, or (z) the Redemption Date (as defined below) as provided in Section 6.2 hereof (the Expiration Date”); provided, however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in Section 7.4 below with respect to an effective registration statement. “Business Combination Agreement” is defined herein as that certain Business Combination Agreement dated on December 5, 2023 (as amended, modified or supplemented from time to time), by and among Perception Capital Corp. IV, a Cayman Islands exempted company limited by shares formerly known as RCF Acquisition Corp. (“Perception”), Blue Gold Limited, a Cayman Islands company limited by shares, and Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales, as amended on June 12, 2024, by that certain Second Amended and Restated Business Combination Agreement.”
| 2.8 | Notice Clause. Section 9.2 of the Existing Warrant Agreement is hereby deleted and replaced with the following: |
“Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on PubCo shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by PubCo with the Warrant Agent), as follows:
Blue Gold Limited
3109 W. 50th Street, #207
Minneapolis, MN 55410
Attention: Rick Gaenzle
Email:
with a copy (which shall not constitute notice) to:
Loeb & Loeb LLP
901 New York Ave.
Washington, D.C. 20001
Attention: Joan Guilfoyle and Giovanni Caruso
Email: jguilfoyle@loeb.com
and
Perception Capital Corp. IV
3109 W. 50th Street, #207
Minneapolis, MN 55410
Attention: Scott Honour
Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Continental Stock Transfer &
Trust Company
One State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
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| 3. | Miscellaneous Provisions. |
| 3.1 | Effectiveness of the Amendment. Each of the parties hereto acknowledges and agrees that the effectiveness of this Agreement shall be expressly subject to the occurrence of the Business Combination and substantially contemporaneous occurrence of the Merger Effective Time and shall automatically be terminated and shall be null and void if the Business Combination Agreement shall be terminated for any reason. |
| 3.2 | Successors. All the covenants and provisions of this Agreement by or for the benefit of PubCo, the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns. |
| 3.3 | Applicable Law and Exclusive Forum. The validity, interpretation, and performance of this Agreement shall be governed in all respects by the laws of the State of New York. Subject to applicable law, each of PubCo and the Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive forum for any such action, proceeding or claim. Each of PubCo and the Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. |
Any person or entity purchasing or otherwise acquiring any interest in the Warrants shall be deemed to have notice of and to have consented to the forum provisions in this Section 3.3. If any action, the subject matter of which is within the scope the forum provisions above, is filed in a court other than a court located within the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any warrant holder, such warrant holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of New York or the United States District Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
| 3.4 | Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. |
| 3.5 | Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof. |
| 3.6 | Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable. |
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IN WITNESS WHEREOF, the parties hereto have caused this Assignment, Assumption and Amendment Agreement to be duly executed as of the date first above written.
| Perception Capital Corp. IV (formerly known as RF ACQUISITION CORP.) | |||
| By: | |||
| Name: | |||
| Title: | |||
| BLUE GOLD LIMITED | |||
| By: | |||
| Name: | |||
| Title: | |||
| CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent | |||
| By: | |||
| Name: | |||
| Title: | |||
[Signature Page to Assignment, Assumption and Amendment Agreement]
Exhibit 4.17
THIS CONVERTIBLE PROMISSORY NOTE AND THE SECURITIES THAT MAY BE ACQUIRED PURSUANT TO THIS CONVERTIBLE PROMISSORY NOTE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF (COLLECTIVELY, A “TRANSFER”), UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO SAID ACT AND SUCH LAWS; OR (II) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SAID ACT AND SUCH LAWS AND THE RECIPIENT OF SUCH TRANSFER EXECUTES AN AGREEMENT WITH THE COMPANY (IN A FORM REASONABLY SATISFACTORY TO THE COMPANY) OBLIGATING IT TO ABIDE BY COMPARABLE RESTRICTIONS ON TRANSFER.
BLUE GOLD LIMITED
convertible PROMISSORY NOTE
As of June 25, 2025 (the “Issuance Date”)
FOR VALUE RECEIVED, Blue Gold Limited (“Maker” or the “Company”), promises to pay to Loeb & Loeb LLP (“Holder”), or its registered assigns, in lawful money of the United States of America (i) the sum of eight hundred five thousand dollars ($805,000) (the “Principal Amount”); and (ii) interest accrued on the unpaid Principal Amount in accordance with Section 2. All Obligations (as defined below) under this convertible promissory note (the “Note”) shall be due and payable on (a) the Maturity Date (as defined below) of this Note; or (b) when, upon or after the occurrence and during the continuance of an Event of Default (as defined below), such amounts are declared due and payable by Holder or made automatically due and payable in accordance with the terms hereof. Maker and Holder may be individually referred to herein as a “Party” or collectively as the “Parties”. Capitalized terms not defined herein have the meanings ascribed to them in the Settlement Agreement dated of even date herewith.
| 1. | Definitions. |
| (a) | Preamble and Recitals: The terms defined above are incorporated herein. |
| (b) | For purposes of this Note, the following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa): |
| i) | “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act. |
| ii) | “Business Day” means any day other than Saturday, Sunday or a day on which banking institutions in the State of New York are permitted or obligated by applicable law to remain closed. |
| iii) | “Conversion Price” means, as of the date of conversion, eighty percent (80%) of the average VWAP (as defined herein) of the Ordinary Shares during the thirty (30) consecutive Trading Day period ending on the Trading Day prior to delivery of the notice of conversion. “VWAP” shall mean the daily dollar volume-weighted average sale price for the Ordinary Shares on the Principal Market on any particular Trading Day during the period beginning at 9:30 a.m., New York City Time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00 p.m., New York City Time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” functions or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York City Time (or such other time as the Principal Market publicly announces is the official open of trading), and ending at 4:00 p.m., New York City Time (or such other time as the Principal Market publicly announces is the official close of trading), as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the OTCBB or the “pink sheets” by the National Quotation Bureau, Inc. If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations of VWAP shall to be appropriately and equitably adjusted in accordance with the provisions set forth herein for any stock dividend, stock split, stock combination or other similar transaction occurring during any period used to determine the Market Price (or other period utilizing VWAPs). |
| iv) | “Event of Default” shall have the meaning set forth in Section 5. |
| v) | “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. |
| vi) | “Fair Market Value” means, as of any date, the value of the Ordinary Shares of Maker as determined below. If the shares are listed on any established stock exchange or a national market system, including, without limitation, the New York Stock Exchange or the Nasdaq Stock Market, the Fair Market Value shall be the closing price of a share (or if no sales were reported, the closing price on the date immediately preceding such date) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal. In the absence of an established market for the shares, the Fair Market Value shall be mutually determined between Maker and Holder in good faith. |
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| vii) | “Financing Transaction” shall mean any financing transaction completed by the Maker or any of its Affiliates resulting in gross proceeds of at least $10,000,000. |
| viii) | “Holder Optional Conversion Amount” shall have the meaning set forth in Section 7(a). |
| ix) | “Late Payment Penalty” shall have the meaning set forth in Section 3. |
| x) | “Maturity Date” means December 15, 2025. |
| xi) | “Maximum Rate” shall have the meaning set forth in Section 2. |
| xii) | “Note Obligations” means, as of the date of measurement, the Company’s obligation to pay the aggregate sum of (i) the outstanding unpaid Principal Amount of this Note; (ii) all accrued and unpaid interest thereon calculated in accordance with Section 2; and (iii) any other amounts payable hereunder with respect to this Note. |
| xiii) | “Ordinary Shares” means the Company’s ordinary shares. |
| xiv) | “Ordinary Share Equivalents” means any securities of the Company or its subsidiaries which would entitle the holder thereof to acquire at any time Ordinary Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or convertible or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares. |
| xv) | “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. |
| xvi) | “Principal Market” means the Nasdaq Global Market. |
| xvii) | “Securities” means this Note and, as applicable, the Ordinary Shares issuable upon conversion of the Note. |
| xviii) | “Securities Act” means the U.S. Securities Act of 1933, as amended. |
| xix) | “Trading Day” means a day on which the Principal Market is open for trading. |
| 2. | Interest. Interest on the outstanding portion of the Principal Amount shall accrue at a rate equal to the lesser of twelve percent (12%) per annum and the maximum non-usurious interest rate permitted by applicable law (the “Maximum Rate”). Any overdue unpaid Principal Amount shall bear interest, before and after judgment, for each day that such amounts are overdue at a rate equal to the lesser of eighteen percent (18%) per annum and the Maximum Rate. All computations of interest shall be made on the basis of a 365 day year for the actual number of days occurring in the period for which such interest is payable. |
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| 3. | Payment. Unless otherwise earlier converted pursuant to Section 7, monthly payments of $100,000 plus accrued interest shall be due and payable to the Holder on the last day of each month beginning on July 31, 2025 or the next succeeding Business Day with any remaining unpaid Principal Amount plus all accrued but unpaid interest due and payable to Holder on the Maturity Date. All payments shall be by wire transfer of immediately available funds. There shall be no grace period for the payments due hereunder and any failure to timely make any such payment, the provisions of Section 7(b) shall apply (the “Late Payment Penalty”). |
| 4. | Prepayment. |
| (a) | Mandatory Prepayment. Upon completion of any Financing Transaction, the unpaid Principal Amount plus all accrued but unpaid interest hereunder shall be repaid in full. |
| (b) | Voluntary Prepayment. Maker may prepay this Note in whole or in part, provided that any such prepayment will be applied first to the payment of costs and expenses due under this Note, second to interest accrued on this Note and third, if the amount of prepayment exceeds the amount of all such costs, expenses and accrued interest, to the payment of the Principal Amount of this Note. |
| 5. | Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note: |
| (a) | Failure to Pay. Maker shall fail to pay when due any principal or interest payment on the due date hereunder or any other amount payable hereunder when due, whether at maturity, upon a mandatory prepayment event or otherwise; or |
| (b) | Voluntary Bankruptcy or Insolvency Proceedings. Maker shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property; (ii) admit in writing its inability, to pay its debts generally as they mature; (iii) make a general assignment for the benefit of its or any of its creditors; (iv) be dissolved or liquidated; or (v) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; or |
| (c) | Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of Maker or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to Maker or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty (60) days of commencement; or |
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| (d) | Agreements. Maker shall fail to perform or observe in all material respects any of its covenants or agreements in this Note and the Registration Rights Agreement entered into between Maker and Holder and such failure shall continue for five (5) days after Maker obtaining knowledge of such failure or receipt by Maker from Holder of a written notice of such failure; provided that the failure of Maker to reach agreement with Holder as to the VWAP or Fair Market Value of the Ordinary Shares, if required pursuant to the respective definitions thereof, shall constitute an Event of Default hereunder and may only continue for three (3) Business Day after Maker obtains knowledge of such failure or receives written notice of such failure from Holder. |
| 6. | Rights of Holder upon Default. Upon the occurrence or existence of any Event of Default (other than an Event of Default described in Sections 5(b) or 5(c)) and at any time thereafter during the continuance of such Event of Default, all outstanding Note Obligations payable by Maker hereunder shall become immediately due and payable upon election of the Holder without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. Upon the occurrence or existence of any Event of Default described in Sections 5(b) and 5(c), immediately and without notice, all outstanding Note Obligations payable by Maker hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other right power or remedy granted to it by this Note or otherwise permitted to it by applicable law, either by suit in equity or by action at law, or both. |
| 7. | Conversion. |
| (a) | Holder’s Optional Conversion Right if no Late Payment. Once a registration statement registering the Ordinary Shares underlying the Note under the Securities Act has been declared effective by the Securities and Exchange Commission, but not prior to thirty (30) days following the closing of the business combination, as contemplated by the Second Amended and Restated Business Combination Agreement, dated June 12, 2024, as amended, Holder, in its sole discretion and upon no less than five (5) business days written notice to Maker, may elect to have all or any portion of the outstanding Principal Amount and all interest accrued with respect to such outstanding portion of the Principal Amount through the date that the Holder notifies in writing Maker of its intent to convert pursuant to this Section 7(a) (such Principal Amount and accrued interest, the “Holder Optional Conversion Amount”) converted into that number of Ordinary Shares equal to the quotient of (a) the Holder Optional Conversion Amount divided by (b) the Conversion Price. Notwithstanding the foregoing, upon written notice by Holder of the intent to convert, Maker may instead elect to pay all of the Note Obligations in full provided such payment is made within the five Business Day period. |
| (b) | Holder’s Optional Conversion if Late Payment Penalty Applies. In the event there have been one or more late payments pursuant to Section 3 and the Holder seeks to convert all or any portion of the Note in accordance with Section 7(a), the number of Ordinary Shares to be received upon conversion shall be equal to the quotient of (a) 120% of the Holder Optional Conversion Amount divided by (b) the Conversion Price. |
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| (c) | Surrender of Note. Promptly after a conversion of all amounts due under this Note pursuant to this Section 7, but in no event more than three (3) Business Days thereafter, Holder shall deliver the original of this Note (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement acceptable to Maker whereby the holder agrees to indemnify Maker from any loss incurred by it in connection with this Note arising out of any claims that the Original Note was not lost, stolen or destroyed); provided, however, that upon Maker’s issuance of all amounts and/or Ordinary Shares required under Sections 7(a), 7(b), and Section 7(e), as applicable, upon full conversion of the Note, this Note shall be deemed converted and of no further force and effect, whether or not it is delivered for cancellation as set forth in this Section 7(c). |
| (d) | Reservation of Equity Securities. Maker covenants that it shall reserve 2,000,000 Ordinary Shares, subject to adjustment, that shall be duly authorized, validly issued, fully paid, and non-assessable by Maker, not subject to any preemptive rights, and free from any taxes, liens, and charges with respect to the issue thereof. Maker has reserved for issuance from its duly authorized capital stock the maximum number of Ordinary Shares issuable upon conversion of this Note. Maker shall take all such action as may be necessary to ensure that all such Ordinary Shares may be so issued without violation of any applicable law or regulation. |
| (e) | Fractional Securities. No fractional Ordinary Shares shall be issued upon conversion of this Note. In lieu of Maker issuing any fractional Ordinary Shares to Holder upon the conversion of this Note, Maker shall round up to the nearest whole share. |
| (f) | Issuance Taxes. The issuance of Ordinary Shares upon conversion of all or any portion of the outstanding Note Obligations in accordance with this Section 7 shall be made without charge to Holder for any issuance tax in respect thereof. |
| 8. | Registration Rights. All Ordinary Shares issuable upon a conversion pursuant to Section 7 shall have the benefit of registration rights on the terms set forth in the Registration Rights Agreement entered into between Maker and Holder concurrently herewith. |
| 9. | Assignment. Neither this Note nor any of the rights, interests or obligations hereunder may be assigned by either Party, whether by operation of law or otherwise, without the other Party’s prior written consent (other than by merger), unless such transfer complies with applicable securities laws. Any purported attempt by a Party to assign this Note or any of the rights, interests or obligations hereunder in violation of this Section 9 shall be null and void. |
| 10. | Unsecured Obligation. This Note is an unsecured obligation of the Company. |
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| 11. | Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing and emailed, mailed or delivered to each party as follows: (i) if to Maker, at Maker’s address or email address set forth on the signature page to this Note (or at such other address or email address as Maker shall have furnished to Holder in writing), or (ii) if to Holder, at the following address or email address (or at such other address or email address as Holder shall have furnished to Maker in writing): |
Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Attention: Mitchell Nussbaum
Email: mnussbaum@loeb.com
All such notices and communications will be deemed effectively given the earlier of (i) when received; (ii) when delivered personally; (iii) when emailed; (iv) one Business Day after being deposited with an overnight courier service of recognized standing; or (v) four days after being deposited in the U.S. mail, first class with postage prepaid.
| 12. | Miscellaneous. |
| (a) | Survival. The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Note. |
| (b) | Severability. If any provision of this Note shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. |
| (c) | Usury. In the event any interest is paid on this Note which is deemed to be in excess of the then Maximum Rate, then that portion of the interest payment representing an amount in excess of the then Maximum Rate shall be deemed a payment of principal and, notwithstanding Section 4, be applied against the principal of this Note. |
| (d) | Waivers. Maker hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this instrument. |
| (e) | Costs. The Maker shall pay its own fees, costs and expenses (including the fees of any attorneys, accountants or others) in connection with this Note and the transactions contemplated hereby whether or not the transactions contemplated hereby are consummated. If Maker shall default on the payment of any of the Note Obligations, Maker shall reimburse Holder for its reasonable, documented out-of-pocket costs of collection, including reasonable attorney’s fees and disbursements. |
| (f) | No Drafting Presumption. The language used in this Note shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party. |
| (g) | Reservation of Rights. No failure on the part of Holder to exercise, and no delay in exercising, any right, power, privilege or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof by Holder preclude any other or further exercise thereof or the exercise of any other right, power, privilege or remedy of Holder. |
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| (h) | CHOICE OF LAW. THIS NOTE AND ALL ACTIONS, CAUSES OF ACTION OR CLAIMS OF ANY KIND (WHETHER AT LAW, IN EQUITY, IN CONTRACT, IN TORT OR OTHERWISE) THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE TO THIS NOTE, OR THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION NEW YORK LAWS RELATING TO APPLICABLE STATUTES OF LIMITATION AND BURDENS OF PROOF, AVAILABLE REMEDIES AND APPLICABLE EVIDENTIARY PRIVILEGES. |
| (i) | Exclusive Jurisdiction. The courts of the State of New York, in the County of New York (the “Specified Courts”) shall have exclusive jurisdiction in relation to all matters which may arise out of or in connection with this Note (each, an “Action”). Each of Maker and Holder (a) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Note may not be enforced in or by any Specified Court. Each of Maker and Holder agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each such party irrevocably consents to the service of the summons and complaint and any other process in any other Action relating to the transactions contemplated by this Note, on behalf of itself, or its property, by personal delivery of copies of such process to such party at the applicable address set forth in Section 11. Nothing in this Section 12(i) shall affect the right of any party to serve legal process in any other manner permitted by law. |
| (j) | WAIVER OF JURY TRIAL. EACH OF MAKER AND HOLDER WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE. EACH SUCH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS TRANSACTIONS CONTEMPLATED BY THIS NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12(J). |
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| (k) | Amendments and Waivers. Any term of this Note may be amended, modified or waived upon the written consent of Maker and the Holder. No such waiver or consent in any one instance shall be construed to be a continuing waiver or a waiver in any other instance unless it expressly so provides. |
| (l) | Counterparts. This Note be manually or electronically executed in one or more counterparts (delivery of which may occur via facsimile or electronic transmission, including as an attachment to an electronic mail message in “pdf” or similar format), each of which shall be deemed an original, but all of which shall together constitute one and the same instrument. The words “execution,” “signed,” “signature,” and words of like import in this Note shall be deemed to include electronic signatures or electronic records, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act or any other similar state laws based on the Uniform Electronic Transactions Act. |
[Signature Page Follows.]
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IN WITNESS WHEREOF, the undersigned have executed this Note as of the Issuance Date.
| BLUE GOLD LIMITED | ||
| By: | ||
| Name: | ||
| Title: | Chief Executive Officer | |
| LOEB & LOEB LLP | ||
| By: | ||
| Name: | ||
| Title: | ||
Signature Page to Convertible Promissory Note
Exhibit 4.18
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is made and entered into as of June 25, 2025, between Blue Gold Limited, a Cayman Islands exempted company (the “Company”), and the Holder signatory hereto (the “Holder”).
This Agreement is made pursuant to the Convertible Promissory Note, dated as of the date hereof, between the Company and the Holder (the “Note”).
The Company and Holder hereby agrees as follows:
1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the Note shall have the meanings given such terms in the Note. As used in this Agreement, the following terms shall have the following meanings:
“Advice” shall have the meaning set forth in Section 6(c).
“Effectiveness Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 90th calendar day following the date hereof (or, in the event of a “full review” by the Commission, the 120th calendar day following the date hereof) and with respect to any additional Registration Statements which may be required pursuant to Section 3(c), the 30th calendar day following the date on which an additional Registration Statement is required to be filed hereunder (or, in the event of a “full review” by the Commission, the 60th calendar day following the date such additional Registration Statement is required to be filed hereunder); provided, however, that (i) in the event the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day and (ii) not withstanding such deadline in subsection (i), such deadline shall be extended until five (5) calendar days after the applicable Commission filing deadline for such updated financial information if the Company is required to update the financial information in the Registration Statement prior to it being able to be declared effective.
“Effectiveness Period” shall have the meaning set forth in Section 2(a).
“Event” shall have the meaning set forth in Section 2(c).
“Event Date” shall have the meaning set forth in Section 2(c).
“Filing Date” means, with respect to the Initial Registration Statement no later than the 30th day after the date hereof, and, with respect to any additional Registration Statements which may be required pursuant to Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.
“Indemnified Party” shall have the meaning set forth in Section 5(c).
“Indemnifying Party” shall have the meaning set forth in Section 5(c).
“Initial Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
“Losses” shall have the meaning set forth in Section 5(a).
“Plan of Distribution” shall have the meaning set forth in Section 2(a).
“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
“Registrable Securities” means, 2,000,000 Ordinary Shares and any additional Ordinary Shares issued and issuable in connection with any anti-dilution provisions in the Note and (any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holder (assuming that such securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the advice of counsel to the Company.
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“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration statements contemplated by Section 3(c), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Selling Shareholder Questionnaire” shall have the meaning set forth in Section 3(a).
“SEC Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements or requests of the Commission staff and (ii) the Securities Act.
2. Shelf Registration.
(a) The Company shall use commercially reasonable efforts to prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 on or prior to each Filing Date, but in any event within thirty (30) days after the date hereof. The Holder acknowledges that the Company is not, as of the date hereof, nor will be as of the Filing Date, eligible to use Form F-3. Each post-effective amendment to the Initial Registration Statement or subsequent Registration Statement filed hereunder shall be on Form F-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form F-3, in which case such registration shall be on another appropriate form in accordance herewith, subject to the provisions of Section 2(d)); provided, however, that no Holder shall be required to be named as an “underwriter” without such Holder’s express prior written consent. Subject to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement filed under this Agreement (including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously effective under the Securities Act until the date that all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the Holder (the “Effectiveness Period”). The Company shall request effectiveness of a Registration Statement as of 5:00 p.m. (New York City time) on a Trading Day. The Company shall immediately notify the Holder via e-mail of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission. The Company shall, by 9:30 a.m. (New York City time) on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424.
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(b) Notwithstanding the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly inform the Holder thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form F-3 or such other form available to register for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(d); with respect to filing on Form F-3 or other appropriate form, and subject to the provisions of Section 2(c) with respect to the payment of liquidated damages.
(c) If: (i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration Statement without affording the Holder the opportunity to review and comment on the same as required by Section 3(a) herein or the Company subsequently withdraws the filing of the Registration Statement, the Company shall be deemed to have not satisfied this clause (i) as of the Filing Date), or (ii) the Company fails to file with the Commission a request for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities Act, within five Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review unless, in all cases, the financial data included in the Registration Statement will be required to be updated in order for the Registration Statement to be declared effective, in which case the five Trading Day period shall run from the required filing date of the periodic report with the updated financial data, or (iii) prior to the effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within fifteen (15) calendar days after the receipt of comments by or notice from the Commission that such amendment is required in order for such Registration Statement to be declared effective unless, in all cases, the financial data included in the Registration Statement will be required to be updated in order for the Registration Statement to be declared effective, in which case the fifteen calendar day period shall run from the required Filing Date of the periodic report with the updated financial data, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared effective by the Commission by the Effectiveness Date (provided that, if the Registration Statement does not allow for the resale of Registrable Securities at prevailing market prices (i.e., only allows for fixed price sales), the Company shall have been deemed to have not satisfied this clause) (any such failure or breach being referred to as an “Event”, and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such fifteen (15) calendar day period is exceeded as applicable, is exceeded being referred to as the “Event Date”), then, in addition to any other rights the Holder may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 1.0% multiplied by the principal balance of the Note then outstanding. The parties agree that the maximum aggregate liquidated damages payable to a Holder under this Agreement shall be 6.0% of the aggregate principal balance of the Note then outstanding. If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event.
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(d) If Form F-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form F-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form F-3 covering the Registrable Securities has been declared effective by the Commission.
3. Registration Procedures.
In connection with the Company’s registration obligations hereunder, the Company shall:
(a) Not less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holder, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holder shall reasonably object in good faith, provided that, the Company is notified of such objection in writing no later than five (5) Trading Days after the Holder has been so furnished copies of a Registration Statement or one (1) Trading Day after the Holder has been so furnished copies of any related Prospectus or amendments or supplements thereto. Holder agrees to furnish to the Company a completed questionnaire (a “Selling Shareholder Questionnaire”) on a date that is not less than three (3) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date on which the Holder receives draft materials in accordance with this Section. The Holder hereby acknowledges that any delay in their providing the required information will delay the Company’s ability to file. If, as a result of any such delay, the Company is not able to file on or prior to the Filing Date, then no liquidated damages under Section 2(c) shall be due unless the Registration Statement is not filed as soon as reasonably practicable after all of such information has been provided in writing to the Company.
(b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to the Holder true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided that, the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance with the intended methods of disposition, and subject to the terms of this Agreement, by the Holder thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.
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(c) If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of Ordinary Shares then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holder of not less than the number of such Registrable Securities.
(d) Notify the Holder of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to Holder to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, however, that in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company or any of its Subsidiaries, and the Company agrees that the Holder shall not have any duty of confidentiality to the Company or any of its Subsidiaries and shall not have any duty to the Company or any of its Subsidiaries not to trade on the basis of such information.
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(e) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.
(f) Furnish to Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission, provided that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.
(g) Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by the Holder in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).
(h) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the Holder in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement, provided that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.
(i) If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Note, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request.
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(j) Upon the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its shareholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holder in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holder shall suspend use of such Prospectus. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus subject to the payment of partial liquidated damages otherwise required pursuant to Section 2(c) for a period not to exceed sixty (60) calendar days (which need not be consecutive days) in any 12-month period.
(k) Otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holder in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Holder is required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.
(l) The Company shall use its commercially reasonable efforts to obtain and then maintain eligibility for use of Form F-3 (or any successor form thereto) for the registration of the resale of Registrable Securities at the earliest practicable time.
(m) The Company may require Holder to furnish to the Company a certified statement as to the number of Ordinary Shares beneficially owned by the Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the shares, pursuant to Rule 13d-3 of the Exchange Act. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities solely because any Holder fails to furnish such information within three (3) Trading Days of the Company’s request, any liquidated damages that are accruing at such time shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended, until such information is delivered to the Company.
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4. Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Ordinary Shares are then listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holder.
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5. Indemnification.
(a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless Holder, the partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Ordinary Shares), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of the Holder and each Person who controls the Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding the Holder furnished in writing to the Company by the Holder expressly for use therein, or to the extent that such information relates to the Holder or the Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by the Holder for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by the Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified the Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by the Holder of the Advice contemplated in Section 6(c). The Company shall notify the Holder promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by the Holder in accordance with Section 6(f).
(b) Indemnification by Holder. Holder shall, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that such information relates to such Holder’s information provided in the Selling Shareholder Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto. In no event shall the liability of a selling Holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.
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(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof, provided that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.
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Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party, provided that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.
(d) Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.
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6. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by the Holder of any of their respective obligations under this Agreement, Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.
(b) No Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Except as set forth on Schedule 6(b) attached hereto, neither the Company nor any of its security holders (other than the Holder in such capacity pursuant hereto) may include securities of the Company in any Registration Statements other than the Registrable Securities.
(c) Discontinued Disposition. By its acquisition of Registrable Securities, Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 2(c).
(d) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holder
(e) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Note.
(f) Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by either Party, whether by operation of law or otherwise, without the other Party’s prior written consent (other than by merger), unless such transfer complies with applicable securities laws. If such written consent is obtained, this Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of Holder.
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(g) No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holder in this Agreement or otherwise conflicts with the provisions hereof. Except as set forth on Schedule 6(i), neither the Company nor any of its Subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.
(h) Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf” format data file or any electronic signature complying with the U.S. federal ESIGN Act of 2000 (e.g., www.docusign.com), such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
(i) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Note.
(j) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(k) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
(l) Headings. The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or affect any of the provisions hereof.
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(m) Consent to Jurisdiction. All claims, demands, actions, suits, litigation, hearings or proceedings (collectively, “Actions”) arising out of or relating to this Agreement shall be heard and determined exclusively in any state or federal court located in New York County, State of New York (or in any appellate court) (the “Specified Courts”). Each party hereto (a) submits to the exclusive jurisdiction of any Specified Court for the purpose of any Action arising out of or relating to this Agreement brought by any such party and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the Note may not be enforced in or by any Specified Court. Each party hereto agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereto irrevocably consents to the service of the summons and complaint and any other process in any other Action relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such party at the applicable address set forth on the signature pages hereof . Nothing in this Section 6(m) shall affect the right of any party hereto serve legal process in any other manner permitted by law.
********************
(Signature Pages Follow)
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
| BLUE GOLD LIMITED | |||
| By: | |||
| Name: | |||
| Title: | |||
Address for Notices:
Rick Gaenzle
3109 W. 50th Street, #207
Minneapolis, MN 55410
[SIGNATURE PAGE OF HOLDER FOLLOWS]
| LOEB & LOEB LLP | |||
| By: | |||
| Name: | |||
| Title: | |||
Address for Notices:
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Attention: Mitchell S. Nussbaum
Exhibit 4.19
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Subscription Agreement”) by and among Perception Capital Corp. IV, a Cayman Islands exempted company limited by shares (“SPAC”), Blue Gold Limited, a Cayman Islands exempted company limited by shares (the “Issuer”), and Cibreo Partners LLC, a New York limited liability company (the “Investor”) is dated March 17, 2025.
BACKGROUND
A. The SPAC, Issuer, and other signatories previously entered into that certain Second Amended and Restated Business Combination Agreement dated June 12, 2024, as amended by that certain First Amendment to the Second Amended and Restated Business Combination Agreement dated November 7, 2024 (as may be further amended, supplemented, or otherwise modified from time to time, the “Transaction Agreement”) under which, among other things, the SPAC will merge into the Issuer with the Issuer being the surviving company on the terms and subject to the conditions of the Transaction Agreement (the “Transaction”).
B. Issuer, Investor, SPAC, and other signatories previously entered into that certain letter agreement dated November 8, 2024 (the “Letter Agreement”) under which, among other things, the Issuer agreed to provide the Investor with a Subscription Agreement to purchase up to 432,891 ordinary shares in the capital of the Issuer in accordance with the terms of the Letter Agreement.
C. In connection with the Transaction and the Letter Agreement, the Issuer is providing to Investor the opportunity to purchase, contingent upon, and substantially concurrently with the closing of the Transaction, 432,891 ordinary shares in the capital of the Issuer (the “Shares”) in a private placement for a purchase price of $0.0001 per share (the “Per Share Purchase Price”). The aggregate purchase price to be paid by the Investor for the subscribed Shares as set forth on the signature page (the “Subscribed Shares”) is referred to as the “Subscription Amount.”
D. In consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, set forth in this Subscription Agreement, and intending to be legally bound, each of the Investor, the Issuer, and SPAC agrees as follows:
AGREEMENT
1. Subscription. The Investor irrevocably subscribes for and agrees to purchase from the Issuer the number of Shares set forth on the signature page of this Subscription Agreement. The Investor acknowledges that the Issuer reserves the right to accept or reject the Investor’s subscription for the Shares for any reason or for no reason, in whole or in part, at any time before its acceptance, and the same shall be deemed to be accepted by the Issuer only when this Subscription Agreement is signed by a duly authorized person by or on behalf of the Issuer; the Issuer may do so in counterpart form.
2. Closing. The closing of the sale of the Shares (the “Closing”) is contingent upon the substantially concurrent consummation of the Transaction. The Closing shall occur on the date of, and substantially concurrently with and conditioned upon the consummation of, the Transaction. Upon (a) satisfaction or waiver of the conditions set forth in Section 3 below and (b) delivery of written notice from (or on behalf of) the Issuer to the Investor (the “Closing Notice”), that the Issuer reasonably expects all conditions to the closing of the Transaction to be satisfied or waived on a date that is not less than five (5) business days from the date on which the Closing Notice is delivered to the Investor, the Investor shall deliver to the Issuer, three (3) business days before the closing date specified in the Closing Notice (the “Closing Date”), the Subscription Amount by wire transfer of United States dollars in immediately available funds to the account(s) specified by the Issuer in the Closing Notice, to be held in escrow until the Closing with a reputable law firm or financial institution. The Subscription Amount shall only be released to the Issuer upon Closing. If for any reason the Closing or the Transaction does not happen, or Investor’s Shares are not issued, the Subscription Amount shall be returned to the Investor without any deductions.
The Investor shall also deliver to the Issuer any other information that is reasonably requested in the Closing Notice in order for the Issuer to issue the Investor’s Shares, including, without limitation, the legal name of the person in whose name such Shares are to be issued and a duly executed Internal Revenue Service Form W-9 or W-8, as applicable. As soon as practicable following, but not later than one (1) business day after the Closing Date, the Issuer shall (1) issue a number of Shares to the Investor set forth on the signature page to this Subscription Agreement and subsequently cause such Shares to be registered in book entry form in the name of the Investor on the Issuer’s register of members and (2) deliver to the Investor a copy of the records of the Issuer’s transfer agent or other evidence showing the Investor as the owner of the Shares on and as of the Closing Date; provided, however, that the Issuer’s obligation to issue the Shares to the Investor is contingent upon the Issuer having received the Subscription Amount in full accordance with this Section 2. If the Closing does not occur within ten (10) business days following the Closing Date specified in the Closing Notice, unless otherwise agreed to in writing by SPAC, the Issuer and Investor, the Issuer shall promptly (but not later than one subsequent (1) business day) return the Subscription Amount in full to the Investor. For purposes of this Subscription Agreement, “business day” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York, London, or the Cayman Islands are authorized or required by law to close.
3. Closing Conditions.
a. The obligation of the parties to consummate the purchase and sale of the Shares under this Subscription Agreement is subject to the satisfaction or valid waiver by SPAC and the Issuer, on the one hand, and the Investor on the other hand, of the condition that all conditions precedent to the closing of the Transaction under the Transaction Agreement shall have been satisfied (as determined by the parties to the Transaction Agreement and other than those conditions under the Transaction Agreement which, by their nature, are to be fulfilled at the closing of the Transaction, including to the extent that any such condition is dependent upon the consummation of the purchase and sale of the Shares under this Subscription Agreement) or waived and the closing of the Transaction shall be scheduled to occur concurrently with or on the same date as the Closing Date.
b. The obligation of the Issuer to consummate the issuance and sale of the Shares under this Subscription Agreement shall be subject to the satisfaction or valid waiver by the Issuer of the additional conditions that (i) all representations and warranties of the Investor contained in this Subscription Agreement are true and correct in all material respects at and as of the Closing Date, and consummation of the Closing shall constitute a reaffirmation by the Investor of each of the representations and warranties of the Investor contained in this Subscription Agreement as of the Closing Date and (ii) all obligations, covenants and agreements of the Investor required to be performed by it at or before the Closing Date shall have been performed in all material respects.
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c. The obligation of the Investor to consummate the purchase of the Shares under this Subscription Agreement shall be subject to the satisfaction or valid waiver by the Investor of the additional conditions that (i) all representations and warranties of the Issuer and SPAC contained in this Subscription Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, Issuer Material Adverse Effect or SPAC Material Adverse Effect, which representations and warranties shall be true in all respects) at and as of the Closing Date, and consummation of the Closing shall constitute a reaffirmation by each of the Issuer and SPAC of each of their respective representations and warranties contained in this Subscription Agreement as of the Closing Date, (ii) all obligations, covenants and agreements of the Issuer required by the Subscription Agreement to be performed by it at or before the Closing Date shall have been performed in all material respects and (iii) the Investor shall have delivered the Subscription Amount to Issuer in compliance with the terms of this Subscription Agreement.
4. Further Assurances. At or before the Closing Date, the parties shall execute and deliver or cause to be executed and delivered such additional documents and take such additional actions as the parties reasonably may deem to be practical and necessary in order to consummate the subscription as contemplated by this Subscription Agreement.
5. Issuer Representations and Warranties. The Issuer represents and warrants to the Investor that:
a. The Issuer is an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands. The Issuer has all power (corporate or otherwise) and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver, and perform its obligations under this Subscription Agreement.
b. As of the Closing Date, subject to the receipt of the Subscription Amount in accordance with the terms of this Subscription Agreement and registration on the Issuer’s register of members, the Shares will be duly authorized and, when issued and delivered to the Investor against full payment in accordance with the terms of this Subscription Agreement and registered on the Issuer’s register of members, the Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive or similar rights created under the Issuer’s memorandum and articles of association (as may be amended and/or restated from time to time) in effect on the Closing Date or under the Cayman Islands Companies Law.
c. This Subscription Agreement has been duly authorized, executed and delivered by the Issuer and, assuming that this Subscription Agreement constitutes the valid and binding agreement of the Investor, this Subscription Agreement is enforceable against the Issuer in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or other laws relating to or affecting the rights of creditors generally, or (ii) principles of equity, whether considered at law or equity.
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d. The issuance and sale of the Shares and the compliance by the Issuer with all of the provisions of this Subscription Agreement and the consummation of the contemplated transactions will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer under the terms of any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject that would reasonably be expected to have a material adverse effect on the ability of the Issuer to timely comply in all material respects with the terms of this Subscription Agreement (an “Issuer Material Adverse Effect”); (ii) result in any violation of the provisions of the organizational documents of the Issuer; or (iii) result in any violation of any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that would reasonably be expected to have an Issuer Material Adverse Effect.
e. Assuming the accuracy of the Investor’s representations and warranties set forth in Section 6, no registration under the Securities Act of 1933, as amended (the “Securities Act”) is required for the offer and sale of the Shares by the Issuer to the Investor. The Shares (i) were not offered by any form of general solicitation or general advertising and (ii) to the Issuer’s knowledge are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
6. Investor Representations and Warranties. The Investor represents and warrants to SPAC and the Issuer that:
a. The Investor, or each of the funds managed by or affiliated with the Investor for which the Investor is acting as nominee, as applicable, (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a) under the Securities Act), in each case, satisfying the applicable requirements set forth on Schedule A, and accordingly, understands that the offering meets the exemptions from filing under FINRA Rule 5123(b)(1)(C) or (J), (ii) is acquiring the Shares only for his, her or its own account and not for the account of others, or if the Investor is subscribing for the Shares as a fiduciary or agent for one or more investor accounts, the Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements in this Subscription Agreement on behalf of each owner of each such account, and (iii) is not acquiring the Shares with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act (and shall provide the requested information set forth on Schedule A). The Investor (i) is an “institutional account” as defined by FINRA Rule 4512(c), (ii) is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities and (iii) exercised independent judgment in evaluating the Investor’s participation in the purchase of the Shares, and (z) understands that the offering meets (i) the exemptions from filing under FINRA Rule 5123(b)(1)(A) and (ii) the institutional customer exemption under FINRA Rule 2111(b). The information provided by the Investor on Schedule A is true and correct in all respects.
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b. The Investor acknowledges that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Shares have not been registered under the Securities Act and that the Shares have not been registered under the Securities Act. The Investor acknowledges that the Shares may not be offered, resold, transferred, pledged or otherwise disposed of by the Investor absent an effective registration statement under the Securities Act except (i) to the Issuer or a subsidiary, (ii) to non-U.S. persons under offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) under another applicable exemption from the registration requirements of the Securities Act, and in each of clauses (i) and (iii) in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates representing the Shares shall contain a restrictive legend to such effect. The Investor acknowledges that it has been advised to consult legal counsel and tax and accounting advisors before making any offer, resale, transfer, pledge or disposition of any of the Shares.
c. The Investor acknowledges that the Investor is purchasing the Shares directly from the Issuer. The Investor further acknowledges that there have been no representations, warranties, covenants and agreements made to the Investor by or on behalf of SPAC, the Issuer, any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and agreements of the Issuer expressly set forth in Section 5 and those representations, warranties, covenants and agreements of SPAC expressly set forth in Section 7.
d. The Investor’s acquisition and holding of the Shares will not constitute or result in a non-exempt prohibited transaction under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, Section 4975 of the Internal Revenue Code of 1986, as amended, or any applicable similar law.
e. The Investor acknowledges that the Investor has received such information as the Investor deems necessary in order to make an investment decision with respect to the Shares, including, with respect to SPAC, the Issuer, the Transaction and the business of the Issuer, and its subsidiaries. Without limiting the generality of the foregoing, the Investor acknowledges that he, she or it has reviewed the respective filings of SPAC and the Issuer with the U.S. Securities and Exchange Commission (the “SEC”). The Investor acknowledges that the Investor and the Investor’s professional advisor(s), if any, have had the full access to and opportunity to ask such questions, receive such answers and obtain such financial and other information and an opportunity to review such information as the Investor and such Investor’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Shares.
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f. The Investor became aware of this offering of the Shares solely by means of direct contact between the Investor and SPAC, the Issuer, or a representative of SPAC, the Issuer, and the Shares were offered to the Investor solely by direct contact between the Investor and SPAC, the Issuer, or a representative of SPAC, the Issuer. The Investor did not become aware of this offering of the Shares, nor were the Shares offered to the Investor, by any other means. The Investor acknowledges that the Shares (i) were not offered by any form of general solicitation or general advertising or, to its knowledge, general solicitation and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws. The Investor acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation (including, without limitation, SPAC, the Issuer, any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), other than the representations and warranties of the Issuer contained in Section 5 and of SPAC contained in Section 7, in making its investment or decision to invest in the Issuer.
g. The Investor acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Shares, including those set forth in the Issuer’s and SPAC’s respective filings with the SEC. The Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Shares, and the Investor has sought such accounting, legal and tax advice as the Investor has considered necessary to make an informed investment decision and the Investor has made its own assessment and has satisfied itself concerning relevant tax and other economic considerations relative to its purchase of the Shares. The Investor is able to sustain a complete loss on its investment in the Shares, has no need for liquidity with respect to its investment in the Shares and has no reason to anticipate any change in circumstances, financial or otherwise, which may cause or require any sale or distribution of all or any part of the Shares.
h. Alone, or together with any professional advisor(s), the Investor has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for the Investor and that the Investor is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Investor’s investment in the Issuer. The Investor acknowledges specifically that a possibility of total loss exists.
i. In making its decision to purchase the Shares, the Investor has relied solely upon independent investigation made by the Investor. Without limiting the generality of the foregoing, the Investor has not relied on any statements or other information provided by or on behalf of SPAC, the Issuer, or any of its respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing concerning the Issuer, the Transaction, the Transaction Agreement, this Subscription Agreement or the contemplated transactions, the Shares or the offer and sale of the Shares.
j. The Investor acknowledges that (i) the SPAC and the Issuer currently may have, and later may come into possession of, information regarding the SPAC and the Issuer that is not known to the Investor and that may be material to a decision to enter into this transaction to purchase the Shares (“Excluded Information”), (ii) the Investor has determined to enter into the this transaction to purchase the Shares notwithstanding its lack of knowledge of the Excluded Information, and (iii) neither the SPAC nor the Issuer shall have liability to the Investor, and the Investor to the extent permitted by law waive and releases any claims it may have against the SPAC or the Issuer, with respect to the nondisclosure of the Excluded Information.
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k. The Investor acknowledges that certain information provided to the Investor was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections.
l. The Investor acknowledges that no federal or state agency has passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of this investment.
m. The Investor, if not an individual, has been duly formed or incorporated and is validly existing and is in good standing under the laws of its jurisdiction of formation or incorporation, with power and authority to enter into, deliver and perform its obligations under this Subscription Agreement.
n. The execution, delivery and performance by the Investor of this Subscription Agreement are within the powers of the Investor, have been duly authorized and will not constitute or result in a breach or default under or conflict with any order, ruling or regulation of any court or other tribunal or of any governmental commission or agency, or any agreement or other undertaking, to which the Investor is a party or by which the Investor is bound, and, if the Investor is not an individual, will not violate any provisions of the Investor’s organizational documents, including, without limitation, its incorporation or formation papers, bylaws, indenture of trust or partnership or operating agreement, as may be applicable. The signature on this Subscription Agreement is genuine, and the signatory, if the Investor is an individual, has legal competence and capacity to execute the same or, if the Investor is not an individual, the signatory has been duly authorized to execute the same, and, assuming that this Subscription Agreement constitutes the valid and binding obligation of SPAC and the Issuer, this Subscription Agreement constitutes a legal, valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
o. The Investor is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) or in any Executive Order issued by the President of the United States and administered by OFAC (“OFAC List”), or a person or entity prohibited by any OFAC sanctions program, (ii) owned, directly or indirectly, or controlled by, or acting on behalf of, one or more persons that are named on the OFAC List; (iii) organized, incorporated, established, located, resident or born in, or a citizen, national or the government, including any political subdivision, agency or instrumentality, of, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine or any other country or territory embargoed or subject to substantial trade restrictions by the United States, (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (each, a “Prohibited Investor”). The Investor agrees to provide law enforcement agencies, if requested, such records as required by applicable law, provided that the Investor is permitted to do so under applicable law. If the Investor is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.) (the “BSA”), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”), and its implementing regulations (collectively, the “BSA/PATRIOT Act”), the Investor maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. To the extent required, it maintains policies and procedures reasonably designed to ensure compliance with OFAC-administered sanctions programs, including for the screening of its investors against the OFAC sanctions programs, including the OFAC List. To the extent required by applicable law, the Investor maintains policies and procedures reasonably designed to ensure that the funds held by the Investor and used to purchase the Shares were legally derived and were not obtained, directly or indirectly, from a Prohibited Investor.
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p. The Investor is not currently (and at all times through Closing will refrain from being or becoming) a member of a “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) acting for the purpose of acquiring, holding or disposing of equity securities of SPAC (within the meaning of Rule 13d-5(b)(1) under the Exchange Act).
q. No foreign person (as defined in Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. §4565), and all issued and effective rules and regulations (together, the “DPA”)) in which the national or subnational governments of a single foreign state have a “substantial interest” (as defined in the DPA) will acquire a “substantial interest” (as defined in the DPA) in the Issuer as a result of the purchase of Shares by the Investor such that a filing before the Committee on Foreign Investment in the United States would be required under the DPA, and no such foreign person will have “control” (as defined in the DPA) over the Issuer from and after the Closing as a result of the purchase of Shares by the Investor.
r. The Investor has or has commitments to have and, when required to deliver payment to the Issuer under Section 2 above, will have, sufficient funds to pay the Subscription Amount and consummate the purchase and sale of the Shares under this Subscription Agreement.
s. The Investor does not have, as of the date of this Subscription Agreement, and during the 30-day period immediately before the date of this Subscription Agreement, the Investor has not entered into, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act or end of day short sale positions with respect to the securities of SPAC.
t. If the Investor is an employee benefit plan that is subject to Title I of ERISA, a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code, the Investor represents and warrants that (i) neither SPAC, the Issuer nor, to the Investor’s knowledge, any of SPAC’s or the Issuer’s respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Subscribed Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Subscribed Shares and (ii) the acquisition and holding of the Subscribed Shares will not result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code.
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u. No broker, finder or other financial consultant is acting on the Investor’s behalf in connection with this Subscription Agreement or the contemplated transactions in such a way as to create any liability of the Issuer or SPAC for the payment of any fees, costs, expenses, or commissions.
7. Intentionally Omitted.
8. Registration Rights.
a. If the Shares are not registered in connection with the consummation of the Transaction, the Issuer agrees that, within thirty (30) calendar days after the Closing Date (or within ninety (90) calendar days following the Closing Date if the Issuer is required to include additional financial information that is not included in the registration statement on Form F-4 at the time of the closing of the Transaction), it will file or cause to be filed, with the SEC (at the its sole cost and expense) a registration statement registering the resale of the Shares (the “Registration Statement”), and it shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing but no later than the earlier of (a) sixty (60) calendar days (or one hundred and twenty (120) calendar days if the SEC notifies the Issuer that it will “review” such Registration Statement) following the initial filing date and (b) ten (10) business days after the Issuer is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be “reviewed” or will not be subject to further review (the “Effective Date”); provided, however, that if the SEC is closed for operations due to a government shutdown, the Effectiveness Date shall be extended by the same amount of days that the Commission remains closed for operations, provided, further, that the Issuer’s obligations to include the Shares in the Registration Statement are contingent upon the Investor furnishing in writing to the Issuer such information regarding the Investor, the securities of the Issuer held by the Investor, the intended method of disposition of the Shares (which shall be limited to non-underwritten public offerings) and such other information as shall be reasonably requested by the Issuer to effect the registration of the Shares, and the Investor shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement (i) as permitted and (ii) as may be necessary in connection with the preparation and filing of a post-effective amendment to the Registration Statement following the filing of the Issuer’s Annual Report on Form 20-F or 10-K for its first completed fiscal year. With respect to the information to be provided by Subscriber under this Section , the Issuer shall request such information from the Investor at least five (5) Business Days before the anticipated filing date of the Registration Statement, and the Issuer shall provide a draft of the Registration Statement to the Investor for review at least three (3) Business Days in advance of filing the Registration Statement. In connection with the foregoing, Investor shall not be required to execute any lock-up or similar agreement or otherwise be subject to any contractual restriction on the ability to transfer the Shares. The Issuer agrees to, except for such times as the Issuer is permitted to suspend the use of the prospectus forming part of a Registration Statement, use its commercially reasonable efforts to cause such Registration Statement, or another shelf registration statement that includes the Shares to be sold under this Subscription Agreement, to remain effective until the earliest of (i) the fifth anniversary of the Closing, (ii) the date on which the Investor ceases to hold any Shares issued under this Subscription Agreement, or (iii) on the first date on which the Investor is able to sell all of its Shares issued under this Subscription Agreement (or shares received in exchange) under Rule 144 promulgated under the Securities Act (“Rule 144”) without the public information, volume or manner of sale limitations of such rule (such date, the “End Date”).
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b. Before the End Date, the Issuer will use commercially reasonable efforts to qualify the Shares for listing on the applicable stock exchange. The Investor agrees to disclose its ownership to the Issuer upon request to assist it in making the determination with respect to Rule 144 described in clause (iii) above. The Issuer may amend the Registration Statement so as to convert the Registration Statement to a Registration Statement on Form F-3 at such time after the Issuer becomes eligible to use such Form F-3. The Investor acknowledges that the Issuer may suspend the use of any such registration statement if it determines that in order for such registration statement not to contain a material misstatement or omission, an amendment would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act. The Issuer’s obligations to include the Shares issued under this Subscription Agreement (or shares issued in exchange) for resale in the Registration Statement are contingent upon the Investor furnishing in writing to the Issuer such information regarding the Investor, the securities of the Issuer held by the Investor and the intended method of disposition of such Shares, which shall be limited to non-underwritten public offerings, as shall be reasonably requested by the Issuer to effect the registration of such Shares, and shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling stockholder in similar situations.
c. Notwithstanding anything to the contrary in this Subscription Agreement, the Issuer shall be entitled to delay or postpone the effectiveness of the Registration Statement, and from time to time to require the Investor not to sell under the Registration Statement or to suspend the effectiveness, if (x) the use of the Registration Statement would require the inclusion of financial statements that are unavailable for reasons beyond the Issuer’s control, (y) the Issuer determines that in order for the Registration Statement to not contain a material misstatement or omission, an amendment would be needed to include information that would at that time not otherwise be required in a current, quarterly, or annual report under the Exchange Act, or if (z) such filing or use could materially affect a bona fide business or financing transaction of the Issuer or its subsidiaries or would require additional disclosure by the Issuer in the Registration Statement of material information that the Issuer has a bona fide business purpose for keeping confidential (each such circumstance, a “Suspension Event”). Upon receipt of any written notice from the Issuer of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated or necessary to make the statements, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the Investor agrees that it will immediately discontinue offers and sales of the Shares under the Registration Statement until the Investor receives copies of a supplemental or amended prospectus that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales; provided, for the avoidance of doubt, that the Issuer shall not include any material non-public information in any such written notice. If so directed by the Issuer, the Investor will deliver to the Issuer or destroy all copies of the prospectus covering the Shares in the Investor’s possession.
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d. Indemnification
(i) The Issuer agrees to indemnify and hold harmless, to the extent permitted by law, the Investor, its directors, and officers, employees, and agents, and each person who controls the Investor (within the meaning of the Securities Act or the Exchange Act) from and against any and all out-of-pocket losses, claims, damages, liabilities and expenses (including, without limitation, any reasonable and documented attorneys’ fees and expenses incurred in connection with defending or investigating any such action or claim) caused by any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus included in any Registration Statement or preliminary prospectus or any amendment or supplement or any omission or alleged omission of a material fact required to be stated or necessary to make the statements not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Issuer by or on behalf of the Investor expressly for use in the Registration Statement.
(ii) The Investor agrees to indemnify and hold harmless the Issuer, its directors and officers and agents and each person who controls the Issuer (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including, without limitation, reasonable and documented attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, prospectus or preliminary prospectus or any amendment or supplement or any omission of a material fact required to be stated or necessary to make the statements not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by or on behalf of the Investor expressly for use. The liability of the Investor shall not be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Shares purchased under this Subscription Agreement giving rise to such indemnification obligation.
(iii) Any person entitled to indemnification shall (1) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification to the extent such failure has not prejudiced the indemnifying party) and (2) permit such indemnifying party to assume the defense of such claim with counsel it elects in its sole discretion. If such defense is assumed, the indemnifying party will not be liable to the indemnified party for any legal or other expenses incurred by the indemnified party and shall not be subject to any liability for any settlement made by the indemnified party without its consent. An indemnifying party who elects not to assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of legal counsel to any indemnified party a conflict of interest exists between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party under the terms of such settlement) or which settlement does not include as an unconditional term the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
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(iv) The indemnification provided for under this Subscription Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, employee, agent, affiliate or controlling person of such indemnified party and shall survive the transfer of the Shares purchased under this Subscription Agreement.
(v) If the indemnification provided under this Section from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to in this Subscription Agreement, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by or on behalf of, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution under this Section from any person who was not guilty of such fraudulent misrepresentation. Any contribution under this Section by any seller of Shares shall be limited in amount to the amount of net proceeds received by such seller from the sale of such Shares under the Registration Statement. Notwithstanding anything to the contrary, in no event will any party be liable for consequential, special, exemplary or punitive damages in connection with this Subscription Agreement.
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9. Additional Investor Agreement. The Investor agrees that, from the date of this Subscription Agreement, none of the Investor or any person or entity acting on behalf of the Investor or under any understanding with the Investor will engage in any hedging or other transactions or arrangements (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination, forward, swap or any other derivative transaction or similar instrument, including without limitation equity repurchase agreements and securities lending arrangements, however, described or defined) designed or intended, or which could reasonably be expected to lead to or result in, a sale, loan, pledge or other disposition or transfer (whether by the Investor or any other person) of any economic consequences of ownership, in whole or in part, directly or indirectly, physically or synthetically, of any securities of SPAC before the Closing, whether any such transaction or arrangement would be settled by delivery of securities of SPAC, in cash or otherwise, or to publicly disclose the intention to undertake any of the foregoing; provided that the provisions of this Section 9 shall not apply to long sales (including sales of securities held by the Investor before the date of this Subscription Agreement and securities purchased by the Investor in the open market after the date of this Subscription Agreement) other than those effectuated through derivatives transactions and similar instruments.
10. Termination. This Subscription Agreement shall terminate and be void and of no further force, and all rights and obligations of the parties shall terminate without any further liability on the part of any party, upon the earliest to occur of (a) such date and time as the Transaction Agreement is terminated in accordance with its terms without being consummated, (b) upon the mutual written agreement of each of the parties and the Issuer to terminate this Subscription Agreement, and (c) 30 days after the Outside Date (as defined in the Transaction Agreement as in effect on the date of this Subscription Agreement), if the Closing has not occurred by such date other than as a result of a breach of the Investor’s obligations (the termination events described in clauses (a)–(c) above, collectively, the “Termination Events”); provided that nothing will relieve any party from liability for any willful breach before the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from any such willful breach. The Issuer shall notify the Investor in writing of the termination of the Transaction Agreement promptly after the termination of such agreement. Upon the occurrence of any Termination Event, this Subscription Agreement shall be void and of no further effect and any monies paid by the Investor to the Issuer shall promptly (and in any event within two (2) business days) following the Termination Event be returned to the Investor.
11. Trust Account Waiver. The Investor acknowledges that SPAC is a blank check company with the powers and privileges to effect a merger, asset acquisition, reorganization or similar business combination involving SPAC and one or more businesses or assets. The Investor further acknowledges that, as described in SPAC’s prospectus relating to its initial public offering dated November 9, 2021 (the “Prospectus”) available at www.sec.gov, substantially all of SPAC’s assets consist of the cash proceeds of SPAC’s initial public offering and private placement of its securities, and substantially all of those proceeds have been deposited in a trust account (the “Trust Account”) for the benefit of SPAC, its public shareholders and the underwriters of SPAC’s initial public offering. Except with respect to interest earned on the funds held in the Trust Account that may be released to SPAC to pay its tax obligations and to fund certain of its working capital requirements, the cash in the Trust Account may be disbursed only for the purposes set forth in the Prospectus. For and in consideration of SPAC entering into this Subscription Agreement, the receipt and sufficiency of which are acknowledged, the Investor irrevocably waives any and all right, title and interest, or any claim of any kind it has or may have in the future, in or to any monies held in the Trust Account, and agrees not to seek recourse against the Trust Account as a result of, or arising out of, this Subscription Agreement; provided, however, that nothing in this Section 11 shall be deemed to limit the Investor’s right, title, interest or claim to any monies held in the Trust Account by virtue of its record or beneficial ownership of shares of SPAC currently outstanding on the date of this Subscription Agreement, under a validly exercised redemption right with respect to any such shares of SPAC, except to the extent that the Investor has otherwise agreed with SPAC to not exercise such redemption right.
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12. Miscellaneous.
a. Neither this Subscription Agreement nor any rights that may accrue to the parties (other than the Shares acquired, if any) may be transferred or assigned without the prior written consent of each of the other parties; provided that (i) this Subscription Agreement and any of the Investor’s rights and obligations may be assigned to any fund or account managed by the same investment manager as the Investor or by a controlled affiliate (as defined in Rule 12b-2 of the Exchange Act) of such investment manager without the prior consent of SPAC and the Issuer and (ii) the Investor’s rights under Section 8 may be assigned to an assignee or transferee of the Shares; provided further that before such assignment any such assignee shall agree in writing to be bound by the terms; provided, that no assignment under clause (i) of this Section 12 shall relieve the Investor of its obligations.
b. The Issuer may request from the Investor such additional information as the Issuer may deem necessary to register the resale of the Shares and evaluate the eligibility of the Investor to acquire the Shares, and the Investor shall promptly provide such information as may reasonably be requested to the extent readily available; provided, that, the Issuer agrees to keep any such information provided by Investor confidential except (i) as necessary to include in any registration statement the Issuer is required to file, (ii) as required by the federal securities law or under other routine proceedings of regulatory authorities or (iii) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which SPAC’s securities are listed or the Issuer’s securities will be listed for trading. The Investor acknowledges that if it does not provide the Issuer with such requested information, the Issuer may not be able to register the Investor’s Shares for resale under Section 8. The Investor acknowledges that SPAC and/or the Issuer may file a copy of this Subscription Agreement (or a form of this Subscription Agreement) with the SEC as an exhibit to a periodic report or a registration statement of SPAC and/or the Issuer.
c. The Investor acknowledges that SPAC, the Issuer, and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement, including Schedule A. Before the Closing, the Investor agrees to promptly notify SPAC and the Issuer if any of the acknowledgments, understandings, agreements, representations and warranties set forth in Section 6 above are no longer accurate in any material respect (other than those acknowledgments, understandings, agreements, representations and warranties qualified by materiality, in which case the Investor shall notify SPAC and the Issuer if they are no longer accurate in any respect). The Investor acknowledges that each purchase by the Investor of Shares from the Issuer will constitute a reaffirmation of the acknowledgments, understandings, agreements, representations and warranties in this Subscription Agreement (as modified by any such notice) by the Investor as of the time of such purchase.
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d. Each of the SPAC and the Investor acknowledges that each representation, warranty, covenant, and agreement of the SPAC and the Investor is being made also for the benefit of the Issuer after the Closing.
e. SPAC and the Issuer are each entitled to rely upon this Subscription Agreement and each is irrevocably authorized to produce this Subscription Agreement or a copy to any interested party in any administrative or legal proceeding or official inquiry with respect to the covered matters.
f. All of the agreements, representations and warranties made by each party in this Subscription Agreement shall survive the Closing.
g. This Subscription Agreement may not be modified, waived or terminated (other than under the terms of Section 10) except by an instrument in writing, signed by each of the parties, provided, however, that no modification or waiver by the Issuer of the provisions of this Subscription Agreement shall be effective without the prior written consent of the Issuer (other than modifications or waivers that are solely ministerial in nature or otherwise immaterial and do not affect any economic or any other material term of this Subscription Agreement). No failure or delay of either party in exercising any right or remedy shall operate as a waiver, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise or the exercise of any other right or power. The rights and remedies of the parties are cumulative and are not exclusive of any rights or remedies that they would otherwise have.
h. This Subscription Agreement (including the schedule) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter. Except as set forth in Section 8(d), Section 10, Section 12(c), Section 12(d), Section 12(e), Section 12(g), this Section 12(h), Section 13 and the last sentence of Section 12(l), with respect to the persons specifically referenced, this Subscription Agreement shall not confer any rights or remedies upon any person other than the parties, and their respective successors and assigns, and the parties acknowledge that such persons so referenced are third party beneficiaries of this Subscription Agreement with right of enforcement for the purposes of, and to the extent of, the rights granted to them, if any, under the applicable provisions.
i. Except as otherwise provided, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.
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j. If any provision of this Subscription Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired and shall continue in full force.
k. This Subscription Agreement may be executed in one or more counterparts (including by electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
l. The parties acknowledge and agree that irreparable damage would occur if any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Subscription Agreement, without posting a bond or undertaking and without proof of damages, to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise.
m. If any change in the number, type or classes of authorized shares of the Issuer (including the Shares), other than as contemplated by the Transaction Agreement or any agreement contemplated by the Transaction Agreement, shall occur between the date of this Subscription Agreement and immediately before the Closing by reason of reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend, the number of Shares issued to the Investor shall be appropriately adjusted to reflect such change.
n. This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New York (regardless of the laws that might otherwise govern under applicable principles of conflicts of laws) as to all matters (including any action, suit, litigation, arbitration, mediation, claim, charge, complaint, inquiry, proceeding, hearing, audit, investigation or reviews by or before any governmental entity), including matters of validity, construction, effect, performance and remedies.
o. Each party, and any person asserting rights as a third party beneficiary may do so only if he, she or it, irrevocably agrees that any action, suit or proceeding between or among the parties, whether arising in contract, tort or otherwise, arising in connection with any disagreement, dispute, controversy or claim arising out of or relating to this Subscription Agreement.
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13. Non-Reliance and Exculpation. The Investor acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, firm or corporation, other than the statements, representations and warranties of the Issuer expressly contained in Section 5 and those statements, representations and warranties of SPAC expressly contained in Section 7, in making its investment or decision to invest in the Issuer. The Investor acknowledges that none of (i) any other investor under this Subscription Agreement or any other subscription agreement related to the private placement of the Shares (including the investor’s respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing), or (ii) any other party to the Transaction Agreement or any Non-Party Affiliate (other than the Issuer and SPAC with respect to the previous sentence), shall have any liability (including in contract, tort, under federal or state securities laws or otherwise) to the Investor, or to any other investor, under, arising out of or relating to this Subscription Agreement or any other subscription agreement related to the private placement of the Shares, the negotiations, or its subject matter, or the contemplated transactions, including, without limitation, with respect to any action taken or omitted to be taken by any of them in connection with the purchase of the Shares or with respect to any claim (whether in tort, contract or otherwise) for breach of this Subscription Agreement or in respect of any written or oral representations made or alleged to be made, as expressly provided in this Subscription Agreement, or for any actual or alleged inaccuracies, misstatements or omissions with respect to any information or materials of any kind furnished by SPAC, the Issuer, or any Non-Party Affiliate concerning SPAC, the Issuer any of their respective controlled affiliates, this Subscription Agreement or the contemplated transactions. For purposes of this Subscription Agreement, “Non-Party Affiliates” means each former, current or future officer, director, employee, partner, member, manager, direct or indirect equityholder or affiliate of SPAC, the Issuer, any of SPAC’s, the Issuer’s, or any family member of the foregoing.
14. Disclosure. SPAC shall, by 9:00 a.m., New York City time, on the third (3rd) business day immediately following the date of this Subscription Agreement, issue one or more press releases or file with the SEC a Current Report on Form 8-K (collectively, the “Disclosure Document”) disclosing all material terms of the contemplated transactions and any other material, nonpublic information that SPAC and/or the Issuer has provided to the Investor at any time before the filing of the Disclosure Document. Upon the issuance of the Disclosure Document, to the knowledge of SPAC, the Investor shall not be in possession of any material, non-public information received from SPAC or any of its officers, directors, or employees or agents, and the Investor shall no longer be subject to any confidentiality or similar obligations under any current agreement, whether written or oral, with SPAC, the Issuer or any of their respective affiliates, relating to the transactions contemplated by this Subscription Agreement. Notwithstanding anything in this Subscription Agreement to the contrary, SPAC shall not publicly disclose the name of the Investor or any of its affiliates or advisers, or include the name of the Investor or any of its affiliates or advisers in any press release or in any filing with the SEC or any regulatory agency or trading market, without the prior written consent of the Investor, except (i) as required by the federal securities law or under other routine proceedings of regulatory authorities, (ii) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of any national securities exchange on which SPAC’s securities are listed for trading or (iii) to the extent such announcements or other communications contain only information previously disclosed in a public statement, press release or other communication previously approved in accordance with this Section 14.
SIGNATURE PAGES FOLLOW
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The Investor has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first written above.
| Name of Investor: |
State/Country of Formation or Domicile: | |
| Cibreo Partners LLC |
New York |
| /s/ Tao Tan | ||
| Name: | Tao Tan | |
| Title: | Authorized Signatory | |
| Name in which Shares are to be registered (if different): | ||
| 93-244766 | ||
| Investor’s EIN: | ||
|
266 Scribner Hollow Road, PO Box 232 Business Address-Street: |
Mailing Address-Street (if different): | |
|
Hunter, NY 12442 |
||
| City, State, Zip: | City, State, Zip: | |
| Attn: | Attn: |
| Telephone No.: (212) 461-1021 | Telephone No.: | |
| Facsimile No.: | Facsimile No.: | |
| Number of Shares subscribed for: 432,891 | ||
| Aggregate Subscription Amount: $43.29 | Price Per Share: $0.0001 |
You must pay the Subscription Amount by wire transfer of United States dollars in immediately available funds to the account specified by the Issuer in the Closing Notice.
[Signature Page to Subscription Agreement]
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The Issuer has accepted this Subscription Agreement as of the date first written above.
| Blue Gold Limited | ||
| By: | /s/ Rick Gaenzle | |
| Name: | Richard W. Gaenzle, Jr. | |
| Title: | Director | |
Acknowledged by:
| Perception Capital Corp. IV | ||
| Blue Gold Limited | ||
| By: | /s/ Rick Gaenzle | |
| Name: | Richard W. Gaenzle, Jr. | |
| Title: | Chief Executive Officer | |
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SCHEDULE A
ELIGIBILITY REPRESENTATIONS OF THE INVESTOR
| A. | QUALIFIED INSTITUTIONAL BUYER STATUS |
| (Please check the applicable subparagraphs): |
| ¨ We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act (a “QIB”)). |
| B. | INSTITUTIONAL ACCREDITED INVESTOR STATUS |
| (Please check the applicable subparagraphs): |
| x We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act or an entity in which all of the equity holders are accredited investors within the meaning of Rule 501(a) under the Securities Act), and have marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an “accredited investor.” |
Rule 501(a), in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. The Investor has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to the Investor and under which the Investor accordingly qualifies as an “accredited investor.”
| ¨ | Any bank, registered broker or dealer, insurance company, registered investment company, business development company, or small business investment company; |
| ¨ | Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; |
| ¨ | Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5,000,000; |
| ¨ | Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; |
| ¨ | Any trust with assets in excess of $5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person; |
| ¨ | Any entity, of a type not listed above, not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000; or |
| x | Any entity in which all of the equity owners are “accredited investors” under Rule 501(a) under the Securities Act meeting one or more of the above tests. |
This page should be completed by the Investor and constitutes a part of the Subscription Agreement.
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Exhibit 4.20
Execution Version
WAIVER AGREEMENT
THIS WAIVER AGREEMENT (this “Waiver”), between Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (“BGHL”) and Perception Capital Corp. IV, a Cayman Islands exempted company limited by shares (“Perception”) is dated June 10, 2025 (the “Effective Date”). BGHL and Perception are individually referred to as a “Party” collectively referred to as the “Parties.” Capitalized terms used but not defined shall have the meaning set forth in the Business Combination Agreement.
BACKGROUND
A. The Parties and the other signatories thereto entered into the Second Amended and Restated Business Combination Agreement dated June 12, 2024 (as further amended from time to time, the “Business Combination Agreement”).
B. Under Sections 8.2(e)(v), 8.3(a), and 8.3(v) of the Business Combination Agreement, the Parties had a duty to deliver a Lock-Up Agreement in connection with the Closing.
C. Under Section 11.9 of the Business Combination Agreement, no waiver by any party shall be effective unless explicitly set forth in writing and signed by the party waiving.
D. The Parties have agreed to waive Perception and BGHL’s obligations concerning the delivery of the Lock-Up Agreements set forth in the Business Combination Agreement (the “Waived Obligation”).
E. In consideration of the foregoing and the mutual covenants and agreements contained in this Waiver, the receipt and sufficiency of which is acknowledged, the Parties agree as follows:
AGREEMENT
1. Capitalized terms used and not defined in this Waiver shall have the meanings ascribed to them in the Business Combination Agreement.
2. The Parties mutually and irrevocably waive the following conditions to Closing:
| a. | Section 8.3(e)(v); |
| b. | Section 8.3(a) solely with respect to the Lock-Up Agreement; and |
| c. | Section 8.2(e)(v). |
3. Each of the terms and provisions of this Waiver is deemed incorporated by this reference into the Business Combination Agreement. When a conflict exists between this Waiver and the Business Combination Agreement this Waiver will control. Unless expressly waived, amended, or modified by this Waiver, all other provisions in the Business Combination Agreement remain in full force and effect without waiver, amendment, or modification. This Waiver shall be effective only in this specific instance and for the specific purpose for which it is given, and the waivers and consent in this Waiver shall not entitle BGHL or Perception, as applicable, to any other or further waiver or consent in any similar or other circumstances. The waiver and consent set forth above shall be limited precisely as written and shall not be deemed to (i) be a waiver or modification of any other term or condition of the Business Combination Agreement, or (ii) prejudice any right or remedy that Perception or BGHL, as applicable, may now have or may have in the future (except to the extent such right or remedy is based upon the Waiver) under or in connection with the Business Combination Agreement.
4. This Waiver shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction).
5. This Waiver may be executed in several counterparts, and all so executed shall constitute one and the same agreement, binding on all of the Parties. The Parties agree that this Waiver may be transmitted between them via PDF, e-mail or DocuSign (or similar electronic means) and that signatures transmitted as such shall be original signatures and the agreement containing such signatures (original or otherwise) of all the Parties is binding upon the Parties.
[Signature page follows]
2
The parties have executed this Amendment as of the Effective Date.
| Perception Capital Corp. IV | ||
| By: | /s/ Richard W. Gaenzle, Jr. | |
| Name: | Rick Gaenzle | |
| Title: | Chief Executive Officer | |
| Blue Gold Holdings Limited | ||
| By: | /s/ Andrew Cavaghan | |
| Name: | Andrew Cavaghan | |
| Title: | Executive Chairman | |
3
Exhibit 4.21
Execution Version
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this “Agreement”) is entered into as of June 24, 2025 (the “Effective Date”) by and between Blue Gold Limited, an exempted company incorporated under the laws of the Cayman Islands (the “Company”), and Andrew Cavaghan, an individual (the “Executive”).
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive as its Chief Executive Officer (“CEO”) of the Company; and
WHEREAS, the Company and the Executive desire to enter into this Agreement to set forth the terms of the Executive’s employment with the Company.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Employment and Duties.
1.1 Employment. The Company hereby employs the Executive on an at-will basis, subject to the terms and conditions expressly set forth in this Agreement, including, but not limited to, Section 5 of this Agreement. The Executive’s first day of employment pursuant to the terms of this Agreement with the Company will be on or about Effective Date. The Executive hereby agrees to such employment on the terms and conditions expressly set forth in this Agreement.
1.2 Position and Duties. The Executive shall serve the Company as its CEO and shall perform and have the responsibilities, duties, status and authority customary for a position in an organization of the size and nature of the Company, subject to the directives of the Company’s Board of Directors (the “Board”), and the policies of the Company as in effect from time to time (including, without limitation, the Company’s business conduct and ethics policies, as they may be amended from time to time). As part of the Executive’s duties, the Executive shall perform services on behalf of the Company and/or subsidiaries in various jurisdictions where the Company and/or its subsidiaries conduct business.
1.3 No Other Employment; Time Commitment. Unless otherwise disclosed in Exhibit A, or approved by the Board in writing, for so long as the Executive is employed with the Company, the Executive shall both (i) devote the Executive’s full business time, energy and skill to the performance of the Executive’s duties for the Company and (ii) hold no other employment. Further, the Executive’s service on the boards of directors (or similar body) of other businesses or charitable entities is subject to the prior approval of the Board. The Company shall have the right to require the Executive to resign from any board or similar body on which the Executive may then serve if the Board determines that such activity (i) interferes with the effective discharge of the Executive’s duties and responsibilities to the Company or that any business related to such service is then in competition with any business of the Company or any of its affiliates, successors or assigns or (ii) could adversely affect the reputation of the Company or any of its affiliates, successors or assigns.
1.4 No Breach of Contract. The Executive hereby represents to the Company: (a) that the execution and delivery of this Agreement by the Executive and the Company and the performance by the Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise bound; (b) that the Executive has no information (including, without limitation, confidential information and trade secrets) relating to any other person or entity which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his or her duties hereunder; and (c) that the Executive is not bound by any confidentiality, trade secret or similar agreement with any other person or entity which would prevent, or be violated by, the Executive (i) entering into this Agreement or (ii) carrying out his or her duties hereunder.
2. Term. The Executive’s employment under this Agreement shall commence on May 1, 2025, which, for purposes of this Agreement, will be hereinafter referred to as the “Effective Date.” Unless earlier terminated under the terms of this Agreement, this Agreement and the status and obligations of the Executive thereunder as an employee of the Company shall be effective for a period ending three (3) years after the Effective Date (the “Initial Term”) and, after the expiration of the Initial Term, this Agreement shall automatically renew for successive twelve (12) month terms (each a “Renewal Term” and, collectively with all Renewal Terms and the Initial Term, the “Term”)) unless, either party gives sixty (60) days’ advance written notice of its intention not to renew this Agreement at the conclusion of the Initial Term or the then-current Renewal Term, as applicable (a “Non-Renewal Notice”).
3. Compensation.
3.1 Base Salary. Commencing on the Effective Date, the Company agrees to pay the Executive a base salary at an annual rate of four hundred and fifty thousand United States dollars ($450,000), (the “Base Salary”). The Base Salary shall be subject to all applicable tax and other withholding requirements and shall be payable in substantially equal installments according to the regular payroll practices of the Company. The Executive’s Base Salary thereafter may be subject to annual review by the Company’s Board (or a committee thereof delegated such authority by the Board, including, but not limited to, the Compensation Committee of the Board) and may be increased from time to time as determined by the Board.
3.2 Incentive Compensation. The Executive shall be eligible to participate in all compensation plans or programs for which any salaried executives of the Company with similar titles or levels of responsibilities are eligible under any existing or future plan or program established by the Company for salaried executives. Without limiting the generality of the foregoing, during the Term, the Executive shall be eligible to participate in the Short-Term Incentive Plan (“STIP”) and Long-Term Incentive Plan the (“LTIP”) offered by the Company to its senior management.
(a) Short-Term Incentive Plan. The Executive may be eligible to receive cash incentive compensation annually pursuant to the STIP as determined in the sole discretion of the Board as determined in accordance with the applicable plan. The amount of the cash incentive compensation the Executive shall be eligible to receive pursuant to the STIP or a successor plan at target level of performance shall be established annually by the Board and such target amount shall not be less than two hundred percent (200%) of the Executive’s Base Salary paid to the Executive during the applicable performance period (for the avoidance of doubt, the actual amount of the payout of such STIP will depend on whether applicable performance goals are satisfied). The actual payment under this Section 3.2(a) earned for the year (if any) shall be paid in a single cash lump sum payment less applicable federal, state, and local tax and other withholding requirements no later than March 15th of the year following the year in which the bonus is earned, subject to the Executive’s continued employment by the Company through the payment date.
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(b) Long-Term Incentive Plan. The amount of the annual equity grants the Executive shall be eligible to receive pursuant to the LTIP or a successor plan at target level of performance shall be established annually by the Board and and such target amount shall not be less than two hundred percent (200%) of the Executive’s Base Salary paid to the Executive during the applicable performance period (for the avoidance of doubt, the actual amount of the grant of such LTIP award will depend on whether applicable performance goals are satisfied and will depend on whether there are sufficient shares approved in the LTIP to make the applicable grants). Any award under the LTIP shall be subject to prior approval of the Board (or a committee thereof), shall be subject to the terms and conditions of the LTIP plan document and the Executive’s individual award agreements, and shall contain such vesting, forfeiture, and other provisions as the Board (or committee) deems appropriate. For the avoidance of doubt, if there are insufficient shares available to grant pursuant to the applicable LTIP as approved by the shareholders of the Company, the Company shall not be in breach of this provision for a failure to make such grants as a result of such insufficient shares.
(i) LTIP 2. Subject to approval by the Board and subject to the approval of the LTIP by the shareholders of the Company, as soon as reasonably practicable after the approval of the LTIP by the shareholders, the Company shall grant to the Executive a restricted stock unit (“RSU”) award for 270,000 of the Company’s Class A ordinary shares (the “LTIP 2 Award”) that shall vest in thirty six (36) substantially equal monthly installments subject to the Executive’s continued employment by the Company and/or its affiliates through each applicable vesting date.
(ii) LTIP 3 and LTIP 4 Awards. Subject to approval by the Board and subject to the approval of the LTIP by the shareholders of the Company, as soon as reasonably practicable after approval of the LTIP by the shareholders, the Company shall grant to the Executive performance share unit (“PSU”) awards for 1,400,000 shares (the “LTIP 3 and 4 Awards”) that shall vest upon the achievement of the volume weighted average price (“VWAP”) and other metrics set forth in the Executive’s LTIP 3 and LTIP 4 Award agreements subject to the Executive’s employment on such vesting date. Each PSU represents the unsecured right to receive a number of ordinary shares the Company, in accordance with the terms and conditions of the LTIP and the Executive’s award agreements. Subject to the payment of the aggregate par value thereof, the Executive shall not be required to pay any additional consideration for the issuance of the Class A ordinary shares, if any, upon settlement of the PSUs.
3.3 Termination of Agreements. Nothing in this Agreement shall preclude the Company from amending or terminating any of the plans or programs applicable to salaried executives as long as such amendment or termination is applicable to all salaried executives.
4. Executive Benefits.
4.1 Retirement, Welfare and Fringe Benefits. During the Term, the Executive shall be eligible to participate in all employee retirement and welfare benefit plans and programs, and fringe benefit plans and programs, made available by the Company to the Company’s similarly situated employees generally, in accordance with the terms of such plans and as such plans or programs may be in effect from time to time. The Executive’s participation in such plans will be subject to the terms of the applicable plan documents and generally applicable Company policies. Notwithstanding the foregoing, the Company may modify or terminate any benefit plan at any time.
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4.2 Reimbursement of Business Expenses. During the Term, the Executive shall be authorized to incur reasonable expenses in carrying out the Executive’s duties for the Company under this Agreement and shall be eligible for reimbursement of all reasonable business expenses that the Executive incurs during the Term in connection with carrying out the Executive’s duties for the Company, subject to the Company’s expense reimbursement policies as in effect from time to time. But in any case, includes all costs incurred while temporarily relocated for business purposes, (for the Executive and his family, if they relocate with the Executive), including any relocation costs, intermittent return flights, school fees (if applicable), accommodation costs, use of a vehicle, medical expenses, (including evacuation if necessary), and subsistence costs.
4.3 Vacation and Other Leave. During the Term, the Executive may be eligible for vacation, sick, or other paid time off subject to the Company’s policies as in effect from time to time. Any paid time off taken pursuant to this Section 4.3 must be approved in advance by the Company. The Executive shall also be eligible for all other holiday and leave pay generally available to other employees of the Company of the same seniority, which in any case will not be less than 30 business days paid leave per annum, beyond public holidays.
4.4 Indemnification. The Executive will be insured under the Company’s Director’s and Officer’s Liability Insurance to the extent the Company maintains such a policy and will be entitled to indemnification by the Company pursuant to the terms and conditions of the Company’s memorandum and articles of incorporation to the same extent as the Company’s officers and directors.
| 5. | Termination of Employment. |
5.1 Generally. The Executive’s employment by the Company, and the Term may be terminated at any time (i) by the Company with or without Cause, (ii) by the Company in the event that the Executive has incurred a Disability, (iii) by the Executive with Good Reason, (iv) by the Executive without Good Reason, or (v) due to the Executive’s death.
5.2 Notice of Termination. Any termination of the Executive’s employment under this Agreement (other than because of the Executive’s death) shall be communicated by written notice of termination from the terminating party to the other party, which termination shall be effective (i) no less than thirty (30) days following delivery of such notice in the event of a termination by the Executive for Good Reason (subject to the provisions of Section 5.5(c)) or by the Company without Cause or due to Disability (provided that the Company shall be entitled to pay the Executive Base Salary in lieu of such notice) or (ii) immediately (subject to Section 5.5 of this Agreement) in the event of a termination by the Company with Cause or resignation by the Executive without Good Reason. The notice of termination shall indicate the specific provision(s) of this Agreement relied upon in effecting the termination and shall state the specific reason(s) why the termination is being initiated.
5.3 Benefits Upon Termination.
(a) If the Executive’s employment by the Company is terminated during the Term hereof by the Company for Cause or due to Disability, by the Executive without Good Reason or due to the Executive’s death (in any case, the date that the Executive’s employment by the Company terminates is referred to as the “Severance Date”), the Company shall have no further obligation to make or provide to the Executive (or the Executive’s estate in the case of his death), and the Executive (or his estate, as applicable) shall have no further right to receive or obtain from the Company, any payments or benefits other than payment, within thirty (30) days after the Severance Date, of (i) any Base Salary that had accrued but had not been paid (including accrued and unpaid vacation time) on or before the Severance Date; and (ii) (iii) any reimbursement due to the Executive pursuant to Section 4.2 for expenses incurred by the Executive on or before the Severance Date (the “Accrued Obligations”).
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(b) If, during the Term, the Executive’s employment is involuntarily terminated by the Company without Cause or by the Executive with Good Reason, the Company shall pay the Executive (in addition to the Accrued Obligations payable in accordance with Section 5.3(a)) (i) an amount equal to twelve (12) months of his Base Salary at the rate in effect on the Severance Date (the “Severance Benefit”), and (ii) accelerate the vesting of a pro rata amount of the Executive’s STIP and LTIP awards and the NQSO Award that otherwise would vest at the end of the calendar year in which the Severance Date occurs, such amount to be based on the number of full (not partial) calendar months elapsed during such calendar year (for example, if the Executive’s Severance Date is June 30, 2025, fifty percent (50%) of the STIP and LTIP awards and the NQSO Award that otherwise would vest at the end of the 2025 calendar year shall immediately vest, and the Executive shall forfeit the remaining fifty percent (50%) of the such awards scheduled to vest in the 2025 calendar year as well as the remainder of the award that otherwise would vest in subsequent calendar years). The Company shall pay the Severance Benefit, subject to Section 5.4 of this Agreement, to the Executive in substantially equal installments over a period of twelve (12) months in accordance with the Company’s payroll cycle, commencing with the first payroll cycle following the expiration of the full Release Period (as described in Section 5.4(a)) and subject to any applicable delay of payment rules pursuant to Section 17 of this Agreement. Notwithstanding anything to the contrary in this Section 5.3(b), if the Executive’s termination of employment is not a “Separation from Service” within the meaning of Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other published guidance thereunder (including Treasury Regulation §1.409A-1(h)), then, if required in order to comply with the provisions of Section 409A of the Code, payment of the Severance Benefit and related bonus amounts shall be delayed until such a Separation from Service occurs.
(c) Notwithstanding the foregoing provisions of this Section 5.3, if the Executive breaches the Executive’s obligations under Section 6 of this Agreement, the Executive shall no longer be entitled to receive, and the Company shall no longer be obligated to pay, any remaining unpaid portion of the Severance Benefit as of the date of such breach. Any disputes with respect to the application of this Section 5.3(c) will be subject to Section 13 hereof; provided that during the pendency of any such dispute, the Company will be entitled to withhold any payments pursuant to this Section 5.3(c).
(d) The foregoing provisions of this Section 5.3 shall not affect: (i) the Executive’s receipt of benefits otherwise due terminated employees under group insurance coverage consistent with the terms of the applicable Company welfare benefit plan; (ii) the Executive’s rights under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to continue participation in medical, dental, hospitalization and such other benefit plans covered by COBRA; or (iii) the Executive’s receipt of benefits otherwise due in accordance with the terms of the Company’s 401(k) plan (if any).
(e) Payments made to the Executive pursuant to the provisions of this Section 5.3 shall be in lieu of any severance benefits otherwise due to Executive under any severance pay plan or program maintained by the Company that covers its employees or executives generally.
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5.4 Release; Exclusive Remedy.
(a) As a condition precedent to any Company obligation to the Executive pursuant to Section 5.3(b) or (c), the Executive shall, within sixty (60) days following his/her last day of employment with the Company (the full sixty (60) day period being the “Release Period”), execute, and not revoke within the applicable revocation period which ends prior to the end of the Release Period, and provide the Company with, a valid, executed general release substantially in the form presented by the Company at the time of his termination. Any payments that would otherwise be due during such period shall be accumulated and paid on the sixty-day anniversary of the last day of employment.
(b) The Executive agrees that the payments and benefits contemplated by Section 5.3 shall constitute the exclusive and sole remedy for any termination of his employment during the term of this Agreement and the Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect to any termination of employment.
5.5 Certain Defined Terms. For purposes of this Agreement, the following terms shall have the meanings set forth below:
(a) “Cause” shall mean that one or more of the following has occurred:
(i) the Executive has been convicted of, plead guilty or no contest to, or entered into a plea agreement with respect to (x) any felony (under the laws of the United States or any relevant state or jurisdiction, in the circumstances, thereof) or (y) another crime involving dishonesty or moral turpitude;
(ii) the Executive has engaged in any willful misconduct (including any violation of federal securities laws), Gross Negligence, act of dishonesty, violence or threat of violence, in each case, that would reasonably be expected to result in a material injury to the reputation, business or business relationships of the Company or any of its subsidiaries or affiliates;
(iii) the Executive has breached a written policy of the Company or the rules of any governmental or regulatory body applicable to the Company;
(iv) the Executive has willfully failed to perform or uphold his/her duties under this Agreement and/or willfully fails to comply with lawful directives of the Board or Chairman of the Board, which failure does not cease within ten (10) days after written notice specifying such failure in reasonable detail is given to the Executive by the Company;
(v) the Executive has breached any fiduciary duty owed by Executive to the Company or any of its subsidiaries or affiliates; or
(vi) the Executive has materially breached this Agreement or any other contract to which he is a party with the Company.
(b) “Disability” shall mean a physical or mental impairment which, as reasonably determined by the Board in good faith, renders the Executive unable to perform the essential functions of his/her employment with the Company, even with reasonable accommodation that does not impose an undue hardship on the Company, for more than one hundred and eighty (180) days in any three hundred and sixty-five (365) day period, unless a longer period is required by federal or state law, in which case that longer period would apply.
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(c) “Good Reason” shall mean that one or more of the following has occurred without the Executive’s written consent (which consent shall not be unreasonably withheld):
(i) a material negative change in the nature or scope of the Executive’s responsibilities, duties or authority;
(ii) a material reduction in the Executive’s Base Salary, excluding any reduction up to ten percent (10%) that is applied across the Company’s senior management group;
(iii) the Executive’s required re-location to a worksite location which is more than fifty (50) miles from the Executive’s then current principal worksite without the Executive’s consent (such consent not to be unreasonably withheld), or
(iv) the Company’s material breach of this Agreement (excluding any delay of payment required or permitted under Code Section 409A).
provided that, in any such case, the Executive provides written notice to the Company that the event giving rise to such claim of Good Reason has occurred within thirty (30) days after the occurrence of such event, and such Good Reason remains uncured thirty (30) days after the Executive has provided such written notice; provided further that any resignation of the Executive’s employment for “Good Reason” occurs no later than thirty (30) days following the expiration of such cure period.
(d) “Gross Negligence” shall mean a standard of conduct beyond negligence whereby that person acts with reckless disregard for the consequences of a breach of duty of care owed to another.
5.6 Resignation from Directorships and Officerships. The termination of the Executive’s employment with the Company for any reason shall constitute the Executive’s resignation from (i) any director, officer or employee position the Executive has with the Company or any of its affiliates and (ii) all fiduciary positions (including as a trustee) the Executive holds with respect to any employee benefit plans or trusts established by the Company or any of its affiliates. The Executive agrees that this Agreement shall serve as written notice of resignation in this circumstance.
5.7 Post-Employment Activities. Beginning on the day following the Severance Date, Executive (i) shall remove any reference to the Company as Executive’s current employer from any social media or other web- or cloud-based source the Executive either directly or indirectly controls, including, but not limited to, LinkedIn, Facebook and Google+, and (ii) will not represent that Executive is currently employed by the Company to any person or entity, including, but not limited to, on any social media or other web- or cloud-based source the Executive either directly or indirectly controls.
6. Protective Covenants. The Executive acknowledges and agrees that the Company has developed intellectual property, Trade Secrets and Confidential Information to assist it in its business. The Executive further acknowledges and agrees that the Company has substantial relationships with prospective or existing customers, as well as customer good will associated with its ongoing business. The Company employs or will employ the Executive in a position of trust and confidence, and may provide the Executive with extraordinary or specialized training in furtherance of the Executive’s duties for the Company. The Executive therefore acknowledges and agrees that the Company has a right to protect these legitimate business interests. Therefore, in consideration for the Company’s decision to employ or continue to employ the Executive; for the compensation and benefits provided to the Executive by the Company under this Agreement; in consideration of the time, investment and cost the Company has incurred and will continue to incur to train the Executive and enhance his/her skills, including, without limitation, extraordinary or specialized training; access to Trade Secrets or Confidential Information; and the Company permitting the Executive to come into contact with its customers and prospects, the Executive hereby agrees to the protective covenants in this Agreement. The Executive expressly agrees that the covenants in this Section 6 shall continue in effect through the entire Restricted Period (as defined in Section 6.3) regardless of whether the Executive is then entitled to receive any further payments or benefits from the Company. For purposes of this Section 6, the Company shall mean the Company together with its parents, subsidiaries and affiliates.
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6.1 Confidential Information.
(a) The Executive agrees at all times to hold in strictest confidence, and not to use, except for the benefit of the Company, any of the Company’s Trade Secrets or Confidential Information or to disclose to any person, firm or entity any of the Company’s Trade Secrets or Confidential Information except (i) as authorized in writing by the Company’s Board, (ii) as authorized by the Company’s management, pursuant to a written non-disclosure agreement, or (iii) as required by law.
(b) The Executive agrees that he/she will not, during the Term, knowingly improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity and that he will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity.
(c) The U.S. Defend Trade Secrets Act (18 U.S.C. § 1833(b)) states: “An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” Accordingly, to the extent applicable and to the extent subject to U.S. law, the Executive shall have the right to disclose in confidence Trade Secrets to U.S. federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The Executive shall also have the right to disclose Trade Secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b).
6.2 No Competing Employment. The Executive acknowledges that the nature of the Company’s business and the Executive’s position with the Company is such that if the Executive were to become employed by, or become substantially involved in, the business of a competitor of the Company during the Term or during the one (1) year following the termination of the Executive’s employment with the Company, it would be very difficult for the Executive not to rely on or use the Company’s Trade Secrets and Confidential Information. Thus, to avoid the inevitable disclosure of the Company’s Trade Secrets and Confidential Information, and to protect such Trade Secrets and Confidential Information and the Company’s relationships and goodwill with customers, during the Executive’s employment with the Company and for a period of one (1) year after the date the Executive’s employment with the Company terminates for any reason (the “Restricted Period”), the Executive shall not directly, or by assisting others, engage in the business of exploration or mining on any property (concession, exploration license, or otherwise), that was owned by the Company or its affiliates at the point of departure or during the Restricted Period (the “Business”) in any capacity identical with or corresponding to the capacity or capacities in which employed by the Company, anywhere within the areas(s) where the Executive is working and/or for which the Executive is responsible at the time of termination of employment; provided, that the Executive may purchase and hold only for investment purposes less than two percent (2%) of the shares of any Company in competition with the Company whose shares are regularly traded on a national securities exchange or inter-dealer quotation system, and provided further that the Executive may provide services to any business or entity that has a line of business, division, subsidiary or other affiliate that is a competitive business if, during the Restricted Period, the Executive is not employed directly in such line of business or division or by such subsidiary or other affiliate that is a competitive business and is not involved directly in the management, supervision or operations of such line of business, division, subsidiary or other affiliate that is a competitive business. The parties acknowledge and agree that, if necessary to determine the reasonable geographic scope of this restraint, the Company may rely on appropriate documentation and evidence outside the provisions of this Agreement.
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6.3 Non-Solicitation of Employees. During the Restricted Period, the Executive shall not directly or indirectly solicit, induce, recruit, encourage, take away, or hire (or attempt any of the foregoing actions) or otherwise cause (or attempt to cause) any officer, representative, agent, director, employee or independent contractor of the Company to leave his or her employment or engagement with the Company either for employment with the Executive or with any other entity or person, or otherwise interfere with or disrupt (or attempt to disrupt) the employment or service relationship between any such individual and the Company. The Executive will not be deemed to have violated this Section 6.3 if employees respond to general advertisements for employment or if the Board provides unanimous prior written consent to the activities of the Executive (all such requests for consent will be given good faith consideration by the Board).
6.4 Non-Solicitation of Customers. During the Restricted Period, the Executive shall not, directly or by assisting others, take any action to solicit, divert, take away, contact, call upon, communicate with, or attempt to solicit, divert, take away, contact, call upon, communicate with any customers of the Company, including actively seeking prospective customers, with whom Executive had Material Contact during Executive’s employment, for the purposes of inducing or attempting to induce or divert their Business away from the Company.
6.5 Non-Disparagement. The Executive agrees that at no time during his employment with the Company or thereafter shall he make, or cause or assist any other person to make, any statement or other communication to any third party which impugns or attacks, or is otherwise critical of, the reputation, business or character of the Company, or any of its respective directors, officers, representatives, agents or employees. The Company agrees, in turn, that it will not make, in any authorized corporate communications to third parties, and it will direct the members of the Board and the Chief Executive Officer, in each case, of the Company, not to make, cause or assist any other person to make, any statement or other communication to any third party which impugns or attacks, or is otherwise critical of, the reputation, business or character of the Executive.
6.6 Returning Company Documents. The Executive agrees that at the time of leaving the employ of the Company, he/she will deliver to the Company (and will not keep in his possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence (including emails), specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any items developed by the Executive pursuant to his employment with the Company or otherwise belonging to the Company, its successors or assigns, including, but not limited to, those records maintained pursuant to Section 6.2. The Executive is not required to return any personal items; documents, files, or materials containing personal information (except to the extent such materials also contain Trade Secrets or Confidential Information); or documents or agreements of which he is a party.
6.7 Understanding of Covenants. The Executive represents that he/she (i) is familiar with the foregoing confidentiality, non-solicitation, non-competition and non-disparagement covenants, (ii) is fully aware of his/her obligations hereunder, (iii) agrees to the reasonableness of the length of time, scope and geographic coverage of the foregoing covenants, and (iv) agrees that such covenants are necessary to protect the Company’s confidential and proprietary information, good will, stable workforce, and customer relations. The Executive acknowledges and agrees that the covenants contained in this Agreement are reasonable in time, scope and in all other respects; that such covenants shall be construed as agreements independent of each other and of any provision of this or any other contract between the parties hereto; that should any part or provision of any covenant be held invalid, void or unenforceable in any court of competent jurisdiction, such invalidity, voidness or unenforceability shall not render invalid, void or unenforceable any other part or provision of this Agreement. If any portion of the foregoing provisions is found to be invalid or unenforceable by a court of competent jurisdiction because its duration, the territory, the definition of activities or the definition of information covered is considered to be invalid or unreasonable in scope, the invalid or unreasonable term shall be redefined, or a new enforceable term provided, such that the intent of the Company and the Executive in agreeing to the provisions of this Agreement will not be impaired and the provision in question shall be enforceable to the fullest extent of the applicable laws; and that the existence of any claim or cause of action by the Executive against the Company, whether predicated upon this or any other contract, shall not constitute a defense to the enforcement by the Company of said covenants.
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6.8 Remedy for Breach. The Executive agrees that a breach of any of the covenants of this Section 6 would cause material and irreparable harm to the Company that would be difficult or impossible to measure, and that damages or other legal remedies available to the Company for any such injury would, therefore, be an inadequate remedy for any such breach. Accordingly, the Executive agrees that if he/she breaches any term of this Section 6, the Company shall be entitled, in addition to and without limitation upon all other remedies the Company may have under this Agreement, at law or otherwise, to obtain injunctive or other appropriate equitable relief, without bond or other security, to restrain any such breach. Claims for damages and equitable relief in any court shall be available to the Company in lieu of, or prior to or pending determination in any arbitration proceeding. In the event the enforceability of any of the terms of this Agreement shall be challenged in court and the Executive is not enjoined from breaching any of the protective covenants, then if a court of competent jurisdiction finds that the challenged protective covenant is enforceable, the time periods shall be deemed tolled upon the filing of the lawsuit challenging the enforceability of this Agreement until the dispute is finally resolved and all periods of appeal have expired.
6.9 Defined Terms. For purposes of this Section 6, the following terms shall have the meanings set forth below:
(a) “Confidential Information” shall mean any data and information (A) relating to the business of the Company, regardless of whether the data or information constitutes a Trade Secret; (B) disclosed to the Executive or of which he/she became aware of as a consequence of the Executive’s relationship with the Company; (C) having value to the Company; (D) not generally known to competitors of the Company; and (E) which includes Trade Secrets, methods of operation, names of customers, price lists, financial information and projections, route books, personnel data, and similar information; provided, however, that Confidential Information shall not mean data or information which has been voluntarily disclosed to the public by the Company, except where such public disclosure has been made by the Executive without authorization from the Company, which has been independently developed and disclosed by others, or which has otherwise entered the public domain through lawful means.
(b) “Material Contact” means the contact between the Executive and each customer (a) with whom or which the Executive dealt on behalf of the Company, (b) whose dealings with the Company were coordinated or supervised by the Executive; (c) about whom the Executive obtained Confidential Information in the ordinary course of business as a result of the Executive’s association with the Company; or (d) who receives products or services authorized by the Company, the sale or provision of which results or resulted in compensation, commissions, or earnings for Executive within two years prior to the end of the Executive’s employment with the Company.
(c) “Trade Secrets” shall mean any of the Company’s information, without regard to for, including, but not limited to, technical or non-technical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers, which is not commonly known by or available to the public and which information (A) derives economic value, actual or potential, form not being generally known to and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
7. Defense of Claims. The Executive agrees that, during the Term, and for a period of five (5) years after termination of the Executive’s employment, upon request from the Company, the Executive will cooperate with the Company in the defense of any claims or actions that may be made by or against the Company that affect the Executive’s prior areas of responsibility, except if the Executive’s reasonable interests are adverse to the Company in such claim or action. The Company agrees that it shall reimburse the reasonable out of pocket costs and attorney fees the Executive actually incurs in connection with him providing such assistance or cooperation to the Company, in accordance with the Company’s standard policies and procedures as in effect from time to time, provided that the Executive shall have obtained prior written approval from the Company for any travel or legal fees and expenses incurred by him in connection with his obligations under this Section 7.
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8. Source of Payments. All payments provided under this Agreement, other than payments made pursuant to a plan which provides otherwise, shall be paid in cash from the general assets of the Company, and no special or separate fund shall be established, and no other segregation of assets shall be made, to assure payment. The Executive shall have no right, title or interest whatsoever in or to any investments which the Company may make to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.
9. Withholding. Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such foreign, federal, state and local income, employment, or other taxes or other amounts as may be required to be withheld pursuant to any applicable law, regulation or contract.
10. Assignment; Binding Effect.
10.1 By the Executive. This Agreement and any and all rights, duties, obligations or interests hereunder shall not be assignable or delegable by the Executive.
10.2 By the Company. This Agreement and all of the Company’s rights and obligations hereunder shall not be assignable by the Company except as incident to a reorganization, merger or consolidation, or transfer of all or substantially all of the Company’s assets.
10.3 Binding Effect. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto, any successors to or assigns of the Company and the Executive’s heirs and the personal representatives of the Executive’s estate.
11. Number and Gender. Where the context requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all other genders.
12. Section Headings. The section headings of, and titles of paragraphs and subparagraphs contained in, this Agreement are for the purpose of convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation thereof.
13. Choice of Law, Forum, Conditions Precedent, and Binding Arbitration. This Agreement shall be deemed to have been executed and delivered within the Cayman Islands. The rights and obligations of the Parties shall be construed and enforced in accordance with, and governed by, the laws of the Cayman Islands, without regard to its conflicts of laws. If any of the provisions hereof are found to be unenforceable, the remainder shall be enforced as fully as possible and the unenforceable provision(s) shall be deemed modified to the limited extent required to permit enforcement of the Agreement.
Any dispute, claim or controversy arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this Agreement to arbitrate, shall be determined by confidential binding arbitration in London, England, before one mutually selected arbitrator. The arbitrator must be a retired judge from the United States federal judiciary. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those Rules. Notwithstanding the arbitrator’s ability to deviate from any of the Expedited Procedures, the Parties specifically agree that each side will be limited to one fact-witness deposition and one expert witness deposition. E-discovery and document production is limited in strict adherence to the Expedited Procedures except that, upon election by Company and in Company’s sole discretion, each Party shall be permitted to serve on the other Party no more than ten (10) interrogatories and ten (10) requests for admissions which are narrowly tailored to dispositive issues. Judgment on the Award may be entered in the state or federal courts located in London, England. The Arbitrator shall designate prevailing and non-prevailing party(s) to the arbitration and order the non-prevailing party(s) to pay all of the costs and attorney’s fees incurred by the prevailing party(s) in connection with the Arbitration.
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Prior to submitting any claims to JAMS for resolution, the parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation between executives who have authority to settle the controversy and who are at a higher level of management than the persons with direct responsibility for administration of this Agreement. Any party may give the other party written notice of any dispute not resolved in the normal course of business. Within fifteen (15) days after delivery of the notice, the receiving party shall submit to the other a written response. The notice and response shall include with reasonable particularity (a) a statement of each party’s position and a summary of arguments supporting that position, and (b) the name and title of the executive who will represent that party and of any other person who will accompany the Executive. Within thirty (30) days after delivery of the notice, the executives of both parties shall meet at a mutually acceptable time and place. Unless otherwise agreed in writing by the negotiating parties, the above-described negotiation shall end at the close of the first meeting of executives described above (“First Meeting”). Such closure shall not preclude continuing or later negotiations, if desired. All offers, promises, conduct and statements, whether oral or written, made in the course of the negotiation by any of the parties, their agents, executives, experts and attorneys are confidential, privileged and inadmissible for any purpose, including impeachment, in arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the negotiation. At no time prior to the First Meeting shall either side initiate an arbitration or litigation related to this Agreement except to pursue a provisional remedy that is authorized by law or by JAMS Rules or by agreement of the parties. However, this limitation is inapplicable to a party if the other party refuses to comply with the requirements contained herein. All applicable statutes of limitation and defenses based upon the passage of time shall be tolled while the procedures specified in this paragraph are pending and for fifteen (15) calendar days thereafter. The parties will take such action, if any, required to effectuate such tolling. If the matter is not resolved by negotiation pursuant to this paragraph of Section 13 then the matter will proceed to mediation as set forth in the following paragraph.
The parties agree that any and all disputes, claims or controversies arising out of or relating to this Agreement shall be submitted to JAMS, or its successor, for mediation (if the claims have not been resolved in accordance with the preceding paragraph), and if the matter is not resolved through mediation, then it shall be submitted to JAMS, or its successor, for final and binding arbitration. Either party may commence mediation by providing to JAMS and the other party a written request for mediation, setting forth the subject of the dispute and the relief requested. The parties will cooperate with JAMS and with one another in selecting a mediator from the JAMS panel of neutrals and in scheduling the mediation proceedings. The parties agree that they will participate in the mediation in good faith and that they will share equally in its costs. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the parties, their agents, executives, experts and attorneys, and by the mediator or any JAMS executives, are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation. Either party may initiate arbitration with respect to the matters submitted to mediation by filing a written demand for arbitration at any time following the initial mediation session or at any time following forty-five (45) days from the date of filing the written request for mediation, whichever occurs first (“Earliest Initiation Date”). The mediation may continue after the commencement of arbitration if the parties so desire. At no time prior to the Earliest Initiation Date shall either side initiate an arbitration or litigation related to this Agreement except to pursue a provisional remedy that is authorized by law or by JAMS Rules or by agreement of the parties. However, this limitation is inapplicable to a party if the other party refuses to comply with the requirements contained herein. All applicable statutes of limitation and defenses based upon the passage of time shall be tolled until fifteen (15) days after the Earliest Initiation Date. The parties will take such action, if any, required to effectuate such tolling.
The parties shall maintain the confidential nature of the arbitration proceeding and the Award, including the Hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection with a court application for a preliminary remedy, a judicial challenge to an Award or its enforcement, or unless otherwise required by law or judicial decision.
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By initialing below, the Parties confirm they have read and understand this good-faith negotiation, mediation, and arbitration provision, and voluntarily agree to the procedures set forth above, including binding arbitration of all claims other than those relating to Company’s Confidential Information pursuant to the Confidentiality Agreement. In doing so, the parties voluntarily give up important constitutional rights to trial by judge or jury, as well as rights to appeal. The Executive has the right to, and has advised Company he will, have an independent lawyer of the Executive’s choice review these arbitration provisions, and this entire agreement, prior to initialing this provision below or signing this Agreement.
| (Executive): | (Company Representative): |
14. Entire Agreement. This Agreement embodies the entire agreement of the parties hereto respecting the matters within its scope. Any prior negotiations, correspondence, agreements, proposals or understandings relating to the subject matter hereof shall be deemed to be of no force or effect, and the parties to any such other negotiations, commitments, agreements or writings shall have no further rights or obligations thereunder. There are no representations, warranties, or agreements, whether express or implied, or oral or written, with respect to the subject matter hereof, except as expressly set forth herein.
15. Modifications, Waivers. This Agreement may not be amended, modified or changed (in whole or in part), except by an instrument in writing signed by both parties hereto; provided that this Agreement and the Term may be terminated by the Company on thirty (30) days’ advance written notice to the Executive. The waiver by either party of compliance with any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.
16. Notices. All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (i) delivered by hand, (ii) otherwise delivered against receipt therefore, or (iii) sent by overnight courier, signature required. Any notice shall be duly addressed to the parties as follows:
if to the Company:
Carla Parsons, Company Secretary
Blue Gold Limited
Mourant Corporate Governance Services (Cayman) Limited
94 Solaris Avenue
Camana Bay
PO Box 1348
Grand Cayman KY1-1108
Cayman Islands
if to the Executive, to the address most recently on file in the payroll records of the Company.
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17. Code Section 409A. To the extent applicable and to the extent the Executive if subject to U.S. taxation, all payments that may be made and benefits that may be provided pursuant to this Agreement are intended to qualify for an exclusion from Section 409A of the Code and any related regulations or other pronouncements thereunder and, to the extent not excluded, to meet the requirements of Section 409A of the Code. Any payments made under Section 5 of this Agreement which are paid on or before the last day of the applicable period for the short-term deferral exclusion under Treas. Reg. Section 1.409A-1(b)(4) are intended to be excluded under such short-term deferral exclusion. Any remaining payments under Section 5 are intended to qualify for the exclusion for separation pay plans under Treas. Reg. Section 1.409A-1(b)(9). Each payment made under Section 5 shall be treated as a “separate payment”, as defined in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Code Section 409A. Further, notwithstanding anything to the contrary, all severance payments payable under the provisions of Section 5 shall be paid to the Executive no later than the last day of the second calendar year following the calendar year in which occurs the date of Executive’s termination of employment. None of the payments under this Agreement are intended to result in the inclusion in the Executive’s federal gross income on account of a failure under Section 409A(a)(1) of the Code. The parties intend to administer and interpret this Agreement to carry out such intentions. However, Company does not represent, warrant or guarantee that any payments that may be made pursuant to this Agreement will not result in inclusion in the Executive’s gross income, or any penalty, pursuant to Section 409A(a)(1) of the Code or any similar state statute or regulation. Notwithstanding any other provision of this Agreement, to the extent that the right to any payment (including the provision of benefits) hereunder provides for the “deferral of compensation” within the meaning of Section 409A(d)(1) of the Code, the payment shall be paid (or provided) in accordance with the following:
17.1 If the Executive is a “Specified Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date of the Executive’s separation from service (within the meaning of Code Section 409A) (the “Separation Date”), and if an exemption from the six (6) month delay requirement of Code Section 409A(a)(2)(B)(i) is not available, then no such payment shall be made or commence during the period beginning on the Separation Date and ending on the date that is six (6) months following the Separation Date or, if earlier, on the date of the Executive’s death. The amount of any payment that would otherwise be paid to the Executive during this period shall instead be paid to the Executive on the first day of the first calendar month following the end of the period. Each payment hereunder is intended to constitute a separate payment from each other payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).
17.2 Payments with respect to reimbursements of expenses or benefits or provision of fringe or other in-kind benefits shall be made on or before the last day of the calendar year following the calendar year in which the relevant expense or benefit is incurred. The amount of expenses or benefits eligible for reimbursement, payment or provision during a calendar year shall not affect the expenses or benefits eligible for reimbursement, payment or provision in any other calendar year.
18. Severability. If this Agreement shall for any reason be or become unenforceable in any material respect by any party, this Agreement shall thereupon terminate and become unenforceable by the other party as well. In all other respects, if any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect, and if any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances, to the fullest extent permitted by law.
19. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.
20. Legal Counsel; Mutual Drafting.Each party recognizes that this is a legally binding contract and acknowledges and agrees that they have had the opportunity to consult with legal counsel of their choice. Each party has cooperated in the drafting, negotiation and preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such language. The Executive agrees and acknowledges that he has read and understands this Agreement, is entering into it freely and voluntarily, and has been advised to seek counsel prior to entering into this Agreement and has had ample opportunity to do so.
[The remainder of this page has intentionally been left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| COMPANY | EXECUTIVE | |||
| By: | Richard W. Gaenzle, Jr. | |||
| Its: | Chief Executive Officer | Print Name: | Andrew Cavaghan | |
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EXHIBIT A
Executive’s Current Affiliations
Additional companies or partnerships set up within any of the above groups/categories undertaking similar activities to those already listed above taking no additional time from the Executive, will also count as approved under this Exhibit A.
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Exhibit 4.22
Dated: June 25, 2025
BLUE GOLD HOLDINGS LIMITED (1)
- and -
LORENZ WERNDLE (2)
EMPLOYMENT AGREEMENT
TABLE OF CONTENTS
| Page | ||
| Contents | ||
| 1 | JOB TITLE AND DUTIES | 3 |
| 2 | COMMENCEMENT OF EMPLOYMENT | 4 |
| 3 | PROBATIONARY PERIOD AND TERM OF CONTRACT | 4 |
| 5 | COLLECTIVE AGREEMENTS | 5 |
| 6 | REMUNERATION | 5 |
| 7 | HOURS OF WORK | 5 |
| 8 | ABSENCE FROM WORK | 6 |
| 9 | SICK PAY | 6 |
| 10 | HOLIDAYS | 7 |
| 11 | OTHER PAID LEAVE | 7 |
| 12 | PENSION | 7 |
| 13 | PRIVATE HEALTH INSURANCE, LIFE ASSURANCE AND DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE | 8 |
| 14 | TRAINING | 8 |
| 15 | TERMINATION OF EMPLOYMENT | 9 |
| 16 | CONFIDENTIALITY | 10 |
| 17 | INTELLECTUAL PROPERTY RIGHTS | 11 |
| 18 | DISCIPLINARY PROCEDURES | 13 |
| 19 | GRIEVANCES | 13 |
| 20 | TERMINATION OBLIGATIONS | 13 |
| 21 | RESTRICTIVE COVENANTS | 13 |
| 22 | DATA PROTECTION | 15 |
| 23 | PREVIOUS AGREEMENTS AND WARRANTIES | 16 |
| 24 | ANTI-BRIBERY & CORRUPTION | 16 |
| 25 | GOVERNING LAW AND JURISDICTION | 17 |
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THIS AGREEMENT is made on June 25, 2025
BETWEEN:
| (1) | BLUE GOLD HOLDINGS LIMITED, a limited liability company incorporated under the laws of England under company number 15271309 whose registered office is at 124 City Road, London, EC1V 2NX (the “Company”); and |
| (2) | LORENZ WERNDLE of 27 Upper Cranbrook Road, Bristol, BS6 7UR (“you”). |
BACKGROUND
This Agreement is referred to as your Employment Agreement and sets out the terms and conditions of your employment with the Company, including those required in accordance with Section 1 of the Employment Rights Act 1996.
IT IS HEREBY AGREED as follows:
| 1 | JOB TITLE AND DUTIES |
| 1.1 | You are employed as CHIEF FINANCIAL OFFICER of Blue Gold Limited. You will be responsible to the Chief Executive Officer of Blue Gold Limited, or such other person as the Company designates from time to time. The Company reserves the right to require you to carry out other duties on behalf of the Company and/or any subsidiary or holding company of the Company (as such terms are defined in section 1159 of the Companies Act 2006 (as amended) (“Associated Person”), related to your function which are within your capabilities. For the purposes of this Employment Agreement, “Group” means the Company and any Associated Person. |
| 1.2 | During your employment you agree that you will not, without the prior written consent of the Company (such consent not to be unreasonably withheld) be engaged or interested, either directly or indirectly and whether alone or in conjunction with any other person, firm or company, in any other business or employment which is similar to or in any way connected with the business of the Company, its holding company or any subsidiary of its holding company or any Associated Person. |
| 1.3 | During your employment, you will: |
| (a) | loyally and diligently perform such duties and exercise such powers for the Group as the Board and the CEO may from time to time reasonably require; |
| (b) | keep the Board and the CEO properly and regularly informed about the business of the Group and your activities in that business; |
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| (c) | comply with the reasonable and lawful directions given from time to time by the Board and the CEO; |
| (d) | comply with any internal codes of conduct for employees of the Group and all relevant policies and procedures; |
| (e) | cooperate with the Group in complying with its obligations on health and safety; |
| (f) | promptly give the Company such information as the Group may require to enable it to comply with its legal obligations; |
| (g) | promote and protect the interests of the Group, always giving it the full benefit of your knowledge, expertise and skill, and you will not knowingly or deliberately do anything which is to its detriment, including having any direct or indirect involvement in any situation whereby work or business opportunities are or may be diverted away from the Group; and |
| (h) | immediately notify the Company Secretary or a director of the Company if you become aware of or involved in anything which adversely affects or may adversely affect the business, interests or reputation of any member of the Group. |
| 2 | COMMENCEMENT OF EMPLOYMENT |
| 2.1 | Your new employment contract with the Company will commence on 25 June 2025 (notwithstanding the date of this agreement). |
| 2.2 | Your period of continuous employment for statutory purposes commences on 3 September 2024 and does not include any period of service with a previous company. |
| 2.3 | In accepting your appointment it shall be deemed that you have accepted all the terms and conditions set out in this Employment Agreement. |
| 2.4 | This Employment Agreement annuls any previous agreement with the Company whether verbal or written, given to you at any time. |
| 3 | PROBATIONARY PERIOD AND TERM OF CONTRACT |
| 3.1 | [intentionally left blank] |
| 3.2 | Your appointment will be permanent, until terminated by either party giving not less than three month’s written notice to the other. |
| 4 | PLACE OF WORK |
Your place of work will be at your home address, but may be changed to a London office, if one is established in the future, but this would be on a hybrid basis, arrangement to be confirmed. For the proper performance of your duties you may be required to travel as required by the Company on reasonable notice.
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| 5 | COLLECTIVE AGREEMENTS |
There are no collective agreements relevant to your employment.
| 6 | REMUNERATION |
| 6.1 | Your salary is £250,000 per annum on a full-time basis, payable monthly by electronic transfer to your bank account on or before the last day of each month. |
| 6.2 | You will be entitled to participate in the group STIP and LTIP schemes once they have been approved by the board. The STIP for 2025 will be paid in cash if funds permit, but will otherwise be paid in unlocked shares, at the discretion of the board, subject always to the rules of the respective plans, and you being in employment and not under notice of termination of employment at the date any awards are due to be made. |
| 6.3 | The Company reserves the right to deduct from your salary one day’s pay for each day of unauthorised absence. Unauthorised absence shall include any absence from work unless due to: |
| (a) | Sickness absence which has been notified to the Company in accordance with Clause 8.1 below. |
| (b) | Absence for which the Company has given permission; or |
| (c) | Absence reasons outside your control, which are acceptable to the Company. |
| 6.4 | The Company shall be entitled to deduct from any sums payable to you by the Company any sum from time to time owed by you to the Company or any Associated Person howsoever arising, and / or require you to repay any such sum whether immediately or on terms otherwise acceptable by the Company. |
| 6.5 | The Company shall reimburse you all travelling, hotel, mobile telephone, entertainment and other expenses properly and reasonably incurred by you in the performance of your duties provided that you comply with any guidelines or regulations issued by the Company and the production of any vouchers or other evidence of actual payment of the expenses that the Company may require. |
| 7 | HOURS OF WORK |
| 7.1 | You are contracted to work 40 hours per week from Monday to Friday. |
| 7.2 | In certain circumstances it may be necessary to exceed your contracted hours in order to ensure that your duties in accordance with your terms of employment are properly performed. You acknowledge that you shall not receive further renumeration in respect of additional hours worked. |
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| 7.3 | You agree that the limits on average weekly working time set out in Regulation 4(1) of the Working Time Regulations will not apply to you but you may withdraw your consent on giving the Company three months’ notice in writing. |
| 8 | ABSENCE FROM WORK |
| 8.1 | In the event of your absence for whatever reason you or someone on your behalf should contact your supervisor or manager within one hour of your normal starting time on the first day of the absence and inform them of the reason for your absence. You should then keep the Company informed on a regular basis of your progress and when you expect to return to work. |
| 8.2 | If the absence is due to sickness a self-certification form should be completed on your return to work in respect of any absence of seven calendar days or less. |
| 8.3 | A medical certificate signed by your doctor as to the reason for the absence must be handed or sent to your manager if you are absent for any period of eight (8) calendar days or more. A new medical certificate should be sent to the Company to cover each week of absence thereafter. |
| 8.4 | At any stage during a period of absence, the Company may require you to undergo a medical examination by the Company’s medical adviser or to provide evidence of your physical condition. |
| 8.5 | Abuse or non-compliance with these rules is a serious disciplinary offence and can in appropriate cases lead to dismissal (whether with or without notice or payment in lieu), and irrespective of the fact that no warnings have been given. Any unauthorised absence from work or conduct incompatible with the alleged sickness, injury or other incapacity will be regarded by the Company as gross misconduct. |
| 8.6 | It is necessary for the efficient operation of the Company that all employees attend regularly. If you are unable to achieve this for reasons of poor health, the Company may not be able to continue your employment. An employee’s situation is regularly reviewed by the Company during any period of absence from work due to sickness, injury or other incapacity and the Company reserves the right to terminate an employee’s employment, regardless of whether you remain entitled to statutory sick pay (“SSP”). |
| 9 | SICK PAY |
If you are absent from work due to sickness, injury or other incapacity and provided you fully comply with the Company’s rules on absence as set out in Clause 8 above, the Company will pay any SSP to which you may be entitled in accordance with its obligations. Any further payment by the Company is entirely at its discretion. Any discretionary payment which is made will include any SSP to which you may be entitled and will take account of any social security benefit for which you may be eligible (whether or not you are claiming it).
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| 10 | HOLIDAYS |
| 10.1 | The holiday year runs from 1 January to 31 December. Your entitlement for the full year is 25 days per annum plus public holidays. |
| 10.2 | Holidays must be agreed in writing in advance giving not less than one month’s notice, or one week’s notice if the proposed leave is less than 5 days. |
| 10.3 | No more than 10 consecutive working days’ holiday may be taken at any one time unless prior written permission is given. |
| 10.4 | If you leave the Company’s employment with an outstanding holiday entitlement for the holiday year in which your employment terminates, you will, in addition to any other sums to which you may be entitled, be paid a sum representing salary for the number of days holiday entitlement outstanding. If you leave the Company’s employment having taken more than the accumulated holiday entitlement for the current holiday year then a sum equivalent to wages for the additional holiday taken will be deducted from any final payment to you and the balance will be paid to you. A day’s holiday pay for these purposes will be 1/260th of your annual basic pay. |
| 10.5 | If you are absent from work through illness for a continuous period of one month or more, you will only accrue holiday to which you are entitled pursuant to the Working Time Regulations 1998 during such period, rather than the enhanced amount referred to in Clause 10.1. |
| 11 | OTHER PAID LEAVE |
You may be eligible to take the following types of paid leave, subject to any statutory eligibility requirements or conditions and the Company’s rules applicable to each type of leave in force from time to time:
| (a) | statutory maternity leave |
| (b) | statutory paternity leave |
| (c) | statutory adoption leave |
| (d) | shared parental leave |
| (e) | parental bereavement leave |
Please refer to the Employee Handbook for further information on other paid leave.
| 12 | PENSION |
| 12.1 | There is no contracting-out certificate in force in respect of your employment. If you’re eligible, you will automatically be enrolled into the Company’s pension scheme. Once you have been enrolled you will receive further information and details of your rights under the scheme. |
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| 13 | PRIVATE HEALTH INSURANCE, LIFE ASSURANCE AND DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE |
| 13.1 | During your employment, the Company will, at its expense, provide the following insured benefits: |
| (a) | private medical insurance cover for you, your spouse and dependent children. This is a taxable benefit and you can choose to opt out of this; |
| (b) | death-in-service insurance for you of four times your basic salary; and |
| (c) | directors’ and officers’ liability insurance, provided that no undertaking is given regarding the continuation of the directors’ and officers’ liability insurance either during or after the Appointment, other than that you will be covered for as long as it remains in place for the other directors of the Company. |
| 13.2 | The provision of these insured benefits will be subject to the provisions governing such insurance and on such terms as the Company may from time to time decide, including, but not limited to, deductibles, caps, exclusions and aggregate limits, and the obtaining of insurance at reasonable rates of premium. The Company reserves the right to amend, replace or withdraw such benefits from time to time. |
| 13.3 | You agree that, if the Company provides you with any insured benefits, the Company will have no responsibility for the decisions taken by the insurers about any claim by the Company or you, and that there are no circumstances in which the Group can be liable to you for any such insured benefits, or loss of such insured benefits, which the insurers have declined to pay for whatever reason. |
| 14 | TRAINING |
| 14.1 | During the Appointment, you are entitled to take part in various training courses which we may provide from time to time in-house. |
| 14.2 | If your employment with the Company is dependent upon the possession of particular qualifications or registration with a statutory body or other authority; evidence of this must be produced on request. Any additional training or costs required to maintain such qualifications will be at your expense unless specifically agreed otherwise by the Company. Should the Company fund or part-fund such a course or qualification and you leave within 2 years of completing the course, you agree to repay the Company contribution back to the Company. |
| 14.3 | The Company will provide you with any necessary on-the-job specific training required. Failure to undertake or satisfactorily complete training when provided may lead to the Company taking action against you including the possible termination your employment. |
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| 15 | TERMINATION OF EMPLOYMENT |
| 15.1 | The Company reserves the right to pay you salary in lieu of notice instead of requiring you to work out any period of notice. The Company may at its discretion make any payment under this clause as a lump sum or in equal instalments on the nominated day of the month when you would normally have received your basic salary if you had worked through your notice period. If the Company decides to make such payments in instalments such payments will be reduced by any remuneration earned by you from alternative employment during what would have been the notice period. You agree to notify the Company without delay if you accept an offer of employment or any directorship, and if so requested by the Company to provide supporting documentary evidence regarding your remuneration from subsequent employment. |
| 15.2 | The Company may, notwithstanding any other provision of this Agreement, and irrespective of whether the grounds for termination arose before or after your employment began, at any time, by notice in writing to you, terminate your employment with immediate effect: |
| (a) | if a petition is presented or any order is made or any notice is issued convening a meeting for the purpose of passing a resolution for your bankruptcy or you becomes bankrupt or makes any composition or enters into any deed of arrangement with your creditors generally; |
| (b) | if you are prohibited by law or by any decision of a regulatory body from being a director or taking part in the management of the Group; |
| (c) | if you are convicted of a criminal offence other than one which, in the opinion of the Board, does not affect your position as an employee of the Company, bearing in mind the nature of your duties and the capacity in which you are employed; |
| (d) | if you are guilty of any serious default or misconduct in connection with, or affecting the business of, the Group; |
| (e) | if you commit any serious or repeated breach of your obligations under this Agreement, or are guilty of serious neglect or negligence in the performance of your duties; or |
| (f) | if you behave in a manner (whether on or off duty) which is likely to bring the Group into disrepute or prejudice its interests or which seriously impairs your ability to perform your duties. |
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| 15.3 | After notice of termination has been given by either party, provided that you continue to be paid and enjoy your full contractual benefits until your employment terminates in accordance with the terms of this Agreement, the Company shall be entitled, without being in breach of this Agreement and so as not to give rise to any claim against the Company, for all or part of the notice period to:- |
| (a) | exclude you from the premises of the Company; |
| (b) | require you to carry out specified duties for the Company other than your usual duties or to carry out no duties at all; |
| (c) | announce to employees, suppliers and customers that you have been given notice of termination or have resigned (as the case may be); |
| (d) | instruct you not to communicate orally or in writing with suppliers, customers, employees, agents or representatives of the Company until your employment hereunder has terminated. |
| 15.4 | On commencement of any period of exclusion pursuant to Clause 15.3 you will deliver up to the Company in accordance with Clause 20.1 all property belonging to the Company. |
| 15.5 | During any period of exclusion pursuant to Clause 15.3: |
| (a) | any untaken holiday entitlement accrued up to and including the period of exclusion should be taken. You agree to notify the Company of any day or days during the exclusion period when you will be unavailable due to holiday and will endeavour to agree convenient holiday dates in advance with the Company; and |
| (b) | you agree that you will continue to owe to the Company the implied duties of good faith, loyalty and fidelity and that you will not, without the prior written consent of the Company, directly or indirectly, whether alone or in conjunction with or on behalf of any other person and whether as a principal, shareholder, director, employee, agent, consultant or otherwise, perform any duties for or provide any services to any other person, firm or company, whether paid or unpaid. |
| 15.6 | Upon the Termination of employment, you will have no rights as a result of this Agreement, or any alleged breach of this Agreement, to any compensation under or in respect of any incentive plans in which you may participate, or have received grants or allocations at or before the date your employment terminates. Any rights which you may have under such schemes will be exclusively governed by the rules of such schemes. |
| 16 | CONFIDENTIALITY |
| 16.1 | You shall not, other than in the proper performance of your duties at any time, whether before or after the termination of your employment with the Company, use, disclose or communicate and you shall use your best endeavours to prevent the improper use, disclosure or communication, of any trade secrets or other information of a secret or confidential nature (whether regarding the business, dealings, affairs, practice, accounts, finances, trading, technical data, software or know-how), concerning the Company, any Associated Person, customer or prospective customer of the Company or any Associated Person, in so far as they come to your knowledge during your employment. The information covered by this clause shall include, without limitation, information relating to research, projects, investors, staff, principals or clients, contents of client contracts, financial information of any kind, commission agreements with principals, databases and any information which is stamped or otherwise marked as confidential. |
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| 16.2 | The restrictions contained in this Clause 16 shall cease to apply with respect to any information, confidential report or research which comes into the public domain otherwise than through an unauthorised disclosure by you or a third party. |
| 16.3 | Nothing in this Employment Agreement precludes you or seeks to hinder you from: |
| (a) | making a protected disclosure in accordance with the provisions of Employment Rights Act 1996; |
| (b) | making any report or disclosure to any law enforcement authority (including the police) or any regulatory authority; |
| (c) | assisting in any criminal investigation; |
| (d) | making any disclosure where required by law or regulatory obligation; |
| (e) | making a disclosure for the purpose of representing himself/herself in any investigation/proceedings brought by your regulatory/professional body relating to matters arising from your employment; |
| (f) | making a disclosure in compliance with an order of, or to give evidence to, a court or tribunal of competent jurisdiction; and |
| (g) | making any report or disclosure for the purpose of seeking tax, medical or other professional advice provided such individuals agree to keep the matters disclosed confidential. |
| 17 | INTELLECTUAL PROPERTY RIGHTS |
| 17.1 | If during your employment you (alone or with others) make or discover any invention, discovery or improvement including without prejudice to the generality of the above any know-how, design process, drawing, formula, computer programme or specification which relates or may relate to any research, product, service, process, equipment, system or activity of the Company whether or not now or at any future time capable of being the subject of a UK or any other patent (“Invention”) you shall promptly disclose it to the Directors giving full particulars of it including all necessary drawings, models and specifications. |
| 17.2 | You agree and acknowledge that because of the nature of your duties and the responsibilities arising from them you have a special obligation to further the interests of the Company such that all Inventions made by you in the performance of your duties or as a result of any special project for the Company outside the scope of your normal duties and, without prejudice to the generality of Clause 17.3 below, all rights, including Intellectual Property Rights, in such Inventions shall belong to the Company. |
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| 17.3 | You hereby acknowledge and agree that the Intellectual Property Rights in any work or material originated, conceived, written or made by you during your employment (“Work”) shall vest automatically and forthwith in the Company as soon as such rights come into existence. You hereby waive all and any moral rights that may attach to such Work and the Company may in its absolute discretion make all such additions and alterations to and deletions from and adaptations of such Work as it shall think fit. |
| 17.4 | You shall at the cost of the Company on demand execute all such documents and do all such other acts as the Company shall require to enable the Company or its nominee to obtain the full title to and benefit of any Invention or Work to which the Company is entitled and all rights (including Intellectual Property Rights) therein and to secure such patent, utility model, copyright or design registration or similar protection in any part of the world as the Company may consider appropriate. |
| 17.5 | You hereby irrevocably appoint the Company to be your attorney in your name and on your behalf to execute all such documents and do all such acts as may be necessary or desirable to give effect to this Clause. |
| 17.6 | If you shall, during your employment, make or discover any Invention or make originate, conceive or write any Work in which, for whatever reason, any Intellectual Property Rights vest in or belong to you and not the Company, then you shall, on demand by the Company and at the Company’s expense assign to the Company with full title guarantee all such Intellectual Property Rights for the whole term thereof and, pending such assignment, you shall hold such rights on trust for the Company. |
| 17.7 | During your employment and at all times thereafter you shall not do anything to affect the validity of the protection afforded to the Company by Clause 17.4 above and at the request and expense of the Company you shall give all assistance within your power as may be necessary to maintain such protection. |
| 17.8 | The Company shall not be under any obligation to take any steps to register any patent or other right in respect of or to develop or exploit any Invention or Copyright or Design Right Work made, discovered, originated, conceived or written by you. |
| 17.9 | For the purpose of this Clause 17, “Intellectual Property Rights” shall mean patents, utility models, copyrights, trade marks, service marks, design rights, database rights, semi-conductor topography rights, rights of confidence and all applications and rights of application for the same whether registered or unregistered and all similar rights that may exist at any time anywhere in the world. |
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| 18 | DISCIPLINARY PROCEDURES |
| 18.1 | Employees are expected to behave in a responsible manner at all times and are also expected to comply with the standards, practices and reasonable instructions that are essential for the efficient operation of the business and for the well-being, health and safety of those employed in it. Failure to meet these standards renders an employee liable to disciplinary action. Further details are available in the Company’s Disciplinary Policy, which does not form part of your contract of employment. |
| 19 | GRIEVANCES |
| 19.1 | If you have a grievance in relation to your employment, you should put it in writing and follow the procedure outlined in the Company Grievance policy, which does not form part of your contract of employment. You are encouraged to initially discuss any grievance with your immediate superior or the Office Manager. |
| 20 | TERMINATION OBLIGATIONS |
| 20.1 | On the termination of your employment with the Company, you shall immediately return to the Company all property belonging to the Company or any Associated Person or customers and all documents and records containing or referring to any confidential information or giving details of customers of the Company or any Associated Person giving details of any matter concerning the Company, any Associated Person or customer. You shall not, without the written consent of the Company, retain any copies of any of these items. |
| 20.2 | To the extent that you hold any directorships in the Company or any member of the Group, on the termination of your employment with the Company, or (if earlier) upon either party giving notice under Clause 3.2 and the Company exercising its rights under Clause 15.3, you will resign at the request of the Company, without claim for compensation, from all offices held by you in the Group and from all trusteeships held by you of any pension scheme or other trusts established by the Company or any other member of the Group. Should you fail to do so, the Board is irrevocably authorised to appoint a person in your name and on your behalf to sign any documents and take such other steps as are necessary to give effect to such resignations. |
| 21 | RESTRICTIVE COVENANTS |
| 21.1 | In this Agreement the following expressions have the following meanings: |
“Critical Person” means any person who was an employee, agent, director, partner, consultant, independent contractor or investor employed, appointed, engaged or investing by or in the Company or any Relevant Associated Person at any time within the Relevant Period who by reason of such employment, appointment, engagement or investment and in particular his/her seniority and expertise or knowledge of trade secrets or confidential information of the Company or any Relevant Associated Person or knowledge of or influence over the clients, customers or suppliers of the Company or any Relevant Associated Person is likely to be able to assist or benefit a business in or proposing to be in competition with the Company or any Relevant Associated Person;
“Relevant Associated Person” means any Associated Person (other than the Company) for which you have performed services under this Agreement at any time during the Relevant Period;
“Relevant Customer” means any person, firm, partnership or organisation who or which at any time during the Relevant Period is or was:
| (a) | negotiating with the Company or a Relevant Associated Person for the sale or supply of Relevant Products or Services; or |
| (b) | a client or customer of the Company or any Relevant Associated Person for the sale or supply of Relevant Products or Services; or |
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| (c) | in the habit of dealing with the Company or any Relevant Associated Person for the sale or supply of Relevant Products or Services |
| (d) | and in each case with whom or which you were directly concerned or connected or of whom or which you had personal knowledge during the Relevant Period in the course of your employment hereunder; |
“Relevant Period” means the period of 12 months immediately before the Termination Date;
“Relevant Products or Services” means products or services which are of the same kind as or of a materially similar kind to or competitive with any products or services made, sold or supplied by the Company or any Relevant Associated Person within the Relevant Period and with which the development, construction, manufacture, operation, sale or supply you were directly concerned or connected or of which you had personal knowledge during the Relevant Period in the course of your employment hereunder;
“Restricted Asset” means any mining asset leased, owned or operated by the Company or any Relevant Associated Person or in relation to which the Company or any Relevant Associated Person provided goods or services, in any case during the Relevant Period, in relation to which you were directly concerned or connected or of which you had personal knowledge during the Relevant Period in the course of your employment hereunder;
“Termination Date” means the date on which your employment under this Agreement terminates and references to “from the Termination Date” mean from and including the date of termination.
| 21.2 | You will not without the prior written consent of the Company directly or indirectly and whether alone or in conjunction with or on behalf of any other person and whether as a principal, shareholder, director, employee, agent, consultant, partner or otherwise: |
| 21.2.1 | within the Restricted Asset for a period of 12 months from the Termination Date be engaged, concerned or interested in, or provide technical, commercial or professional advice to, any other business which: |
| (a) | supplies Relevant Products or Services in competition with the Company or any Relevant Associated Person; or |
| (b) | is or was at any time during the Relevant Period a Relevant Customer of the Company or any Relevant Associated Person if such engagement, concern or interest causes or would cause the Relevant Customer to cease or materially to reduce its orders or contracts with the Company or any Relevant Associated Person; or |
| 21.2.2 | for a period of 12 months from the Termination Date so as to compete with the Company or any Relevant Associated Person canvass, solicit or approach or cause to be canvassed, solicited or approached any Relevant Customer for the sale or supply of Relevant Products or Services or endeavour to do so; or |
| 21.2.3 | for a period of 12 months from the Termination Date so as to compete with the Company or any Relevant Associated Person deal or contract with any Relevant Customer in relation to the sale or supply of any Relevant Products or Services, or endeavour or undertake to do so; or |
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| 21.2.4 | for a period of 12 months from the Termination Date solicit, induce or entice away from the Company or any Relevant Associated Person or, in connection with any business in or proposing to be in competition with the Company or any Relevant Associated Person, employ, engage or appoint or in any way cause to be employed, engaged or appointed a Critical Person whether or not such person would commit any breach of his or her contract or employment or engagement by leaving the service of the Company or any Relevant Associated Person; or |
| 21.2.5 | use in connection with any business any name which includes the name of the Company or any Associated Person or any colourable imitation of it. |
| 21.3 | Whilst the restrictions in this Clause 21 (on which you have had an opportunity to take independent advice as you hereby acknowledge) are regarded by the parties as fair and reasonable, it is hereby declared that each of the restrictions in this Clause 21 is intended to be separate and severable. If any restriction is held to be unreasonably wide but would be valid if part of the wording (including in particular but without limitation the defined expressions referred to in Clause 21.1) were deleted, such restriction will apply with so much of the wording deleted as may be necessary to make it valid. |
| 21.4 | The parties agree that the periods referred to in sub-clauses 21.2.1, 21.2.2, 21.2.3 and 21.2.4 above will be reduced by one day for every day during which at the Company’s direction and pursuant to Clause 15.13 above you have been excluded from the Company’s premises and/or have not carried out any duties or have carried out duties other than your normal duties. |
| 21.5 | If you apply for or are offered a new employment, appointment or engagement, before entering into any related contract, you will bring the terms of this Clause 22 to the attention of a third party proposing directly or indirectly to employ, appoint or engage you. |
| 21.6 | Nothing in this Agreement will prevent you, after the termination of your employment, from holding bona fide investments representing not more than five per cent of any class of shares or securities in any company listed or dealt in on any recognised investment exchange, which would otherwise constitute a breach of clause of clause 21.2.1. |
| 22 | DATA PROTECTION |
| 22.1 | We will collect and process information relating to you in accordance with the privacy notice which is on the intranet OR attached to this agreement. You are required to sign and date the privacy notice and return to the Office Manager. |
| 22.2 | You shall comply with the Company’s data protection policy when handling personal data in the course of employment including personal data relating to any employee, worker, contractor, customer, client, supplier or agent of ours. You will also comply with our IT and communications systems policy and social media policy. |
| 22.3 | Failure to comply with the data protection policy or any of the policies listed above in clause 22.2 may be dealt with under our disciplinary procedure and, in serious cases, may be treated as gross misconduct leading to summary dismissal. |
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| 23 | PREVIOUS AGREEMENTS AND WARRANTIES |
| 23.1 | This Agreement contains the entire and only agreement and will govern the relationship between the Company and you in substitution for all previous agreements and arrangements whether written, oral or implied between the Company and you relating to your employment all of which will be deemed to have terminated by mutual consent with effect from the date of this Agreement. You acknowledge that in entering into this Agreement you have not relied on any representation or undertaking by the Company whether oral or in writing except as expressly incorporated in this Agreement. |
| 23.2 | You warrant and represent to the Company that you will not be in breach of any existing or any former terms of employment applicable to you whether express or implied or of any other obligation binding on you by reason of you entering into this Agreement or performing all or any of your duties and obligations under it. |
| 23.3 | You warrant that at the time of entering into this Agreement you have the right to work in the United Kingdom and you agree to provide to the Company copies of all relevant documents in this respect at the request of the Company. If at any time during the course of this Agreement you cease to have the right to work in the United Kingdom the Company may terminate your employment without payment of compensation. |
| 24 | ANTI-BRIBERY & CORRUPTION |
| 24.1 | You warrant that you are familiar with the U.S. Foreign Corrupt Practices Act of 1977, as amended, (“FCPA”), and the U.K. Bribery Act of 2010 (“UKBA”), and their purposes, including (as applicable) their prohibition against taking corrupt actions in furtherance of an offer, payment, promise to pay or authorisation of the payment of anything of value, including but not limited to cash, cheques, wire transfers, tangible and intangible gifts, favours, services, and those entertainment and travel expenses that go beyond what is reasonable and customary and of modest value, to: (i) an executive, official, employee or agent of a governmental department, agency or instrumentality, (ii) a director, officer, employee or agent of a wholly or partially government-owned or - controlled company or business, (iii) a political party or official thereof, or candidate for political office, or (iv) an executive, official, employee or agent of a public international organisation (e.g., the International Monetary Fund or the World Bank) (“Government Official”); while knowing or having a reasonable belief that all or some portion will be used for the purpose of: (a) influencing any act, decision or failure to act by a Government Official in his or her official capacity, (b) inducing a Government Official to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity, or (c) securing an improper advantage; in order to obtain, retain, or direct business. |
| 24.2 | You warrant that you are now in compliance with the laws of those countries where you operate, including all anti-bribery or anti-corruption laws, and will remain in compliance with such laws; that you are now in compliance with the FCPA and with the UKBA; that you will not authorise, offer or make payments directly or indirectly to any Government Official that would result in a violation of the FCPA or UKBA; and that no part of the payments received by you from the Company will be used for any purpose that could constitute a violation of the laws of the territories in which the Company operates, the FCPA, or the UKBA. |
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| 25 | GOVERNING LAW AND JURISDICTION |
This Statement shall be governed by and construed in accordance with the Laws of England and Wales whose Courts shall be the courts of competent jurisdiction.
Having read this Statement please sign the second copy and return it to your Line Manager as your acceptance of the terms and conditions of your employment. You should then retain the top copy of this Statement for future reference.
IN WITNESS whereof duly executed as a deed and delivered on the date first above written.
| SIGNED as a deed by ANDREW CAVAGHAN, Director, duly authorised for and on behalf of BLUE GOLD HOLDINGS LIMITED in the presence of: |
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Witness’s signature: |
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Witness’s name |
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| Witness’s address: |
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SIGNED as a deed by LORENZ WERNDLE in the presence of: |
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Witness’s signature: |
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Witness’s name |
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| Witness’s address: |
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Exhibit 4.23
DIRECTOR AGREEMENT
This Director Agreement (this “Agreement”) is made and entered into as of June, 2025 (the “Effective Date”) by and between Blue Gold Limited, an exempted company incorporated under the laws of the Cayman Islands (the “Company”), and [__________], of [Address], an individual (the “Director”).
WHEREAS, the Company appointed the Director on June , 2025, and desires to enter into an agreement with the Director with respect to such appointment; and
WHEREAS, the Director is willing to accept such appointment and to serve the Company on the terms set forth herein and in accordance with the provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:
1. Services.
1.1 Board of Directors. The Director has been appointed as an Independent Director of the Company to serve on the Company’s Board of Directors (the “Board”), effective upon approval by the Board, until the earlier of the date on which Director ceases to be a member of the Board for any reason or the date of termination or expiration of this Agreement in accordance with Sections 1.3, 5.1, and 5.2 hereof (such earlier date being the “Expiration Date”). The Board shall consist of the Director and such other members as nominated and elected pursuant to the then-current Memorandum and Articles of Association of the Company (the “Memorandum and Articles”).
1.2 Director Services. The Director’s services to the Company hereunder shall include service on the Board to manage the business of the Company in accordance with applicable law and the Memorandum and Articles, and such other services mutually agreed to by Director and the Company (the “Director Services”).
1.3 Director Class. In accordance with the Company’s Amended and Restated Memorandum of Articles of Association (the “Articles”), the directors of the Board shall be divided into three classes designated as Class I, Class II and Class III, respectively. Each class shall consist of as nearly equal numbers of directors as possible and directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the Board of Directors. Upon adoption of the Articles, the existing directors shall by resolution classify themselves as Class I, Class II or Class III Directors. The Director shall be designated as Class II pursuant to the Articles and shall stand for a term expiring at the Company’s second annual general meeting of the shareholders (the “Term”).
2. Compensation.
2.1 Cash Compensation. During the Term, the Company agrees to pay the Director an annual fee of twenty-five thousand dollars ($25,000) for the Director Services. In addition, the Company agrees to pay Director an annual fee of fifty thousand dollars ($50,000) for serving as the chairperson of a Board committee (Audit and Risk Committee). In the event the Director ceases to serve on the Board for any reason, the Director shall be entitled to the pro rata portion of the annual fee for the number of months he has served on the Board in a given year. The annual fee shall be paid in four (4) substantially equal quarterly installments, payable in advance on the first business day of each calendar quarter commencing on June , 2025. The Director shall be paid a pro rata annual fee for any partial calendar quarter.
2.2 Equity Compensation. The Company may also grant Director a certain amount of share-based compensation according to the Company’s effective share-based compensation plans and approved by the compensation committee of the Board. With respect to the first annual grant, such grant to be made as soon as reasonably practicable after the Effective Date (but no later than the first regularly scheduled Board meeting after the Effective Date), the Company shall grant to the Director a restricted stock unit (an “RSU”) award for 10,000 of the Company’s class A ordinary shares of par value $0.0001 per share (“Class A Ordinary Shares”). All subsequent annual grants shall be made at or shortly following the anniversary and determined by dividing [One Hundred Thousand Dollars ($100,000)] by the Fair Market Value (as defined under the Company’s equity incentive plan) of a Class A Ordinary Share. All share grants, including the initial RSU award, shall vest in twelve (12) substantially equal monthly installments, subject to the Director’s continued provision of Director Services through each applicable vesting date.
2.3 Expense Reimbursement. The Company shall reimburse the Director for all reasonable travel and other out-of-pocket expenses incurred in connection with the Director Services rendered by Director.
2.4 Indemnification. The Director will be insured under the Company’s Director’s and Officer’s Liability Insurance to the extent the Company maintains such a policy and will be entitled to indemnification by the Company pursuant to the terms and conditions of the Memorandum and Articles to the same extent as the Company’s executive officers and other directors.
3. Duties of Director.
3.1 Fiduciary Duties. In fulfilling his managerial responsibilities, the Director shall be charged with a fiduciary duty to the Company and all of its shareholders. The Director shall be attentive and inform himself of all material facts regarding a decision before taking action. In addition, the Director’s actions shall be motivated solely by the best interests of the Company and its shareholders as a whole.
3.2 Confidentiality. During the term of this Agreement, and for a period of one (1) year after the Expiration Date, the Director shall maintain in strict confidence all information he has obtained or shall obtain from the Company, which the Company has designated as “confidential” or which is by its nature confidential, relating to the Company’s business, operations, properties, assets, services, condition (financial or otherwise), liabilities, employee relations, customers (including customer usage statistics), suppliers, prospects, technology, or trade secrets, except to the extent such information (i) is in the public domain through no act or omission of the Company, (ii) is required to be disclosed by law or a valid order by a court or other governmental body, or (iii) is independently learned by the Director outside of this relationship (the “Confidential Information”).
3.3 Nondisclosure and Nonuse Obligations. The Director will use the Confidential Information solely to perform the Director Services for the benefit of the Company. The Director will treat all Confidential Information of the Company with the same degree of care as the Director treats his own Confidential Information, and the Director will use its best efforts to protect the Confidential Information. The Director will not use the Confidential Information for his own benefit or the benefit of any other person or entity, except as may be specifically permitted in this Agreement. The Director will immediately give notice to the Company of any unauthorized use or disclosure by or through him, or of which he becomes aware, of the Confidential Information. The Director agrees to assist the Company in remedying any such unauthorized use or disclosure of the Confidential Information.
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3.4 Return of The Company Property. All materials furnished to the Director by the Company, whether delivered to the Director by the Company or made by the Director in the performance of Director Services under this Agreement (the “Company Property”), are the sole and exclusive property of the Company. The Director agrees to promptly deliver the original and any copies of the Company Property to the Company at any time upon the Company’s request. Upon termination of this Agreement by either party for any reason, the Director agrees to promptly deliver to the Company or destroy, at the Company’s option, the original and any copies of the Company Property. The Director agrees to certify in writing that the Director has so returned or destroyed all such Company Property.
4. Covenants of the Director.
4.1 No Conflict of Interest. During the term of this Agreement, and for a period of one (1) year after the Expiration Date, the Director shall not be employed by, own, manage, control or participate in the ownership, management, operation or control of any business entity that is competitive with the Company or otherwise undertake any obligation inconsistent with the terms hereof, provided that the Director may continue the Director’s current affiliation or other current relationships with the entity or entities described on Exhibit A (all of which entities are referred to collectively as “Current Affiliations”). This Agreement is subject to the current terms and agreements governing the Director’s relationship with Current Affiliations, and nothing in this Agreement is intended to be or will be construed to inhibit or limit any of the Director’s obligations to Current Affiliations. The Director represents that nothing in this Agreement conflicts with the Director’s obligations to Current Affiliations. A business entity shall be deemed to be “competitive with the Company” for purpose of this Section 4 only if and to the extent it engages in the business of owning and operating a gold mine over the Bogoso and Prestea concessions in Ghana, or any other concessions owned or operated by the Company while the Director is still engaged.
4.2 Noninterference with Business. During the term of this Agreement, and for a period of one (1) year after the Expiration Date, the Director agrees not to interfere with the business of the Company in any manner. By way of example and not of limitation, the Director agrees not to solicit or induce any employee, independent contractor, customer or supplier of the Company to terminate or breach his, her or its employment, contractual or other relationship with the Company.
4.3 Director Indemnification Agreement. As a condition precedent to the Company’s obligations under this Agreement, the Director shall deliver an executed copy of the Company’s Director Indemnification Agreement in substantially the form attached hereto as Exhibit B.
5. Termination.
5.2 Termination. Either party may terminate this Agreement at any time upon thirty (30) days prior written notice to the other party, or such shorter period as the parties may agree upon.
5.3 Survival. The rights and obligations contained in Sections 3 and 4 will survive any termination or expiration of this Agreement.
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6. Miscellaneous.
6.1 Assignment. Except as expressly permitted by this Agreement, neither party shall assign, delegate, or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other party. Subject to the foregoing, this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.
6.2 No Waiver. The failure of any party to insist upon the strict observance and performance of the terms of this Agreement shall not be deemed a waiver of other obligations hereunder, nor shall it be considered a future or continuing waiver of the same terms.
6.3 Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by facsimile transmission upon acknowledgment of receipt of electronic transmission; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt. Notice shall be sent to the addresses set forth on the signature page of this Agreement or such other address as either party may specify in writing.
6.4 Governing Law. This Agreement shall be governed in all respects by the laws of the Cayman Islands, without regard to conflicts of law principles thereof.
6.5 Severability. Should any provisions of this Agreement be held by a court of law to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.
6.6 Entire Agreement. This Agreement constitutes the entire agreement between the parties relating to this subject matter and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter. The terms of this Agreement will govern all Director Services undertaken by the Director for the Company.
6.7 Amendments. This Agreement may only be amended, modified or changed by an agreement signed by the Company and the Director. The terms contained herein may not be altered, supplemented or interpreted by any course of dealing or practices.
6.8 Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
6.9 Currency. All references to “$” or “dollars” in this Agreement are references to the lawful currency of the United States of America.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| BLUE GOLD LIMITED | DIRECTOR | |||
| By: | Andrew Cavaghan | Print Name: | ||
| Its: | Chief Executive Officer | |||
EXHIBIT A
Director’s Current Affiliations
EXHIBIT B
Director Indemnification Agreement
Exhibit 4.24
INDEMNITY AGREEMENT
This Indemnity Agreement (the “Agreement”), between Blue Gold Limited, a Cayman Islands exempted company (the “Company”), and [________] a director and/or officer of the Company or one of the Company’s subsidiaries or key employee or other service provider who satisfies the definition of Indemnifiable Person set forth below (“Indemnitee”) is dated [_________] (the “Effective Date”).
BACKGROUND
| A. | The Company is aware that competent and experienced persons are increasingly reluctant to serve as representatives of companies unless they are protected by comprehensive liability insurance and indemnification, due to increased exposure to litigation costs and risks resulting from their service to such companies, and due to the fact that the exposure frequently bears no reasonable relationship to the compensation of such representatives; |
| B. | The members of the board of directors of the Company (the “Board”) have concluded that to retain and attract talented and experienced individuals to serve as representatives of the Company and its Subsidiaries and Affiliates and to encourage such individuals to take the business risks necessary for the success of the Company and its Subsidiaries and Affiliates, it is necessary for the Company to contractually indemnify certain of its representatives and the representatives of its Subsidiaries and Affiliates, and to assume for itself maximum liability for Expenses and Other Liabilities in connection with claims against such representatives in connection with their service to the Company and its Subsidiaries and Affiliates; and |
| C. | The Company desires and has requested Indemnitee to serve or continue to serve as a representative of the Company and/or the Subsidiaries or Affiliates of the Company free from undue concern about unreasonable claims for damages arising out of or related to such services to the Company and/or the Subsidiaries or Affiliates of the Company. |
| D. | For the mutual promises contained in this Agreement, the parties agree as follows: |
AGREEMENT
1. Definitions.
(a) Affiliate. For purposes of this Agreement, “Affiliate” of the Company means any corporation, company, partnership, limited liability company, joint venture, trust or other enterprise in respect of which Indemnitee is or was or will be serving as a director, officer, trustee, manager, member, partner, employee, agent, attorney, consultant, member of the entity’s governing body (whether constituted as a board of directors, board of managers, general partner or otherwise), fiduciary, or in any other similar capacity at the request, election or direction of the Company, and including, but not limited to, any employee benefit plan of the Company or a Subsidiary or Affiliate of the Company.
(b) Change in Control. For purposes of this Agreement, “Change in Control” means (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a Subsidiary or a trustee or other fiduciary holding securities under an employee benefit plan of the Company or Subsidiary, is or becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding shares, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority, or (iii) the shareholders of the Company approve a merger or consolidation of the Company with any other company, other than a merger or consolidation that would result in the shares of the Company outstanding immediately before continuing to represent (either by remaining outstanding or by being converted into shares or capital stock of the surviving entity) at least 80% of the total voting power represented by the shares of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the shareholders of the Company approve a plan of voluntary liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all of the Company’s assets.
(c) Expenses. For purposes of this Agreement, “Expenses” means all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements, bonds and other out-of-pocket costs), paid or incurred by Indemnitee in connection with either the investigation, defense or appeal of, or being a witness in a Proceeding (as defined below), or establishing or enforcing a right to indemnification under this Agreement or otherwise; provided, however, that Expenses shall not include any judgments, fines, ERISA excise taxes or penalties or amounts paid in settlement of a Proceeding.
(d) Indemnifiable Event. For purposes of this Agreement, “Indemnifiable Event” means any event or occurrence related to Indemnitee’s service for the Company or any Subsidiary or Affiliate as an Indemnifiable Person (as defined below), or by reason of anything done or not done, or any act or omission, by Indemnitee in any such capacity.
(e) Indemnifiable Person. For the purposes of this Agreement, “Indemnifiable Person” means any person who is or was a director, officer, employee, attorney, trustee, manager, member, partner, consultant, member of an entity’s governing body (whether constituted as a board of directors, board of managers, general partner or otherwise) or other agent or fiduciary of the Company or a Subsidiary or Affiliate of the Company.
(f) Independent Counsel. For purposes of this Agreement, “Independent Counsel” means legal counsel that has not performed services for the Company or Indemnitee in the five years preceding the time in question and that would not, under applicable standards of professional conduct, have a conflict of interest in representing either the Company or Indemnitee.
(g) Other Liabilities. For purposes of this Agreement, “Other Liabilities” means any and all liabilities of any type whatsoever (including, but not limited to, judgments, fines, penalties, ERISA (or other benefit plan related) excise taxes or penalties, and amounts paid in settlement and all interest, taxes, assessments and other charges paid or payable in connection with or in respect of any such judgments, fines, ERISA (or other benefit plan related) excise taxes or penalties, or amounts paid in settlement).
(h) Proceeding. For the purposes of this Agreement, “Proceeding” means any threatened, pending, or completed action, suit, inquiry or other proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative, investigative, legislative or any other type whatsoever, preliminary, informal or formal, including any arbitration or other alternative dispute resolution and including any appeal of any of the foregoing.
(i) Subsidiary. For purposes of this Agreement, “Subsidiary” means any entity of which more than 50% of the outstanding voting securities is owned directly or indirectly by the Company.
2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to serve as an Indemnifiable Person in the capacity or capacities in which Indemnitee currently serves the Company as an Indemnifiable Person, and any additional capacity in which Indemnitee may agree to serve, until such time as Indemnitee’s service in a particular capacity shall end according to the terms of an agreement, the Company’s memorandum and articles of association (the ” M&A “), applicable law, or otherwise. Nothing contained in this Agreement is intended to create any right to continued employment or other form of service for the Company or a Subsidiary or Affiliate of the Company by Indemnitee. The Company acknowledges that it has entered into this Agreement with Indemnitee to induce Indemnitee to serve as an Indemnifiable Person, and the Company further acknowledges that Indemnitee is relying upon this Agreement in serving as an Indemnifiable Person.
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3. Mandatory Indemnification.
(a) Agreement to Indemnify. In the event Indemnitee is a person who was or is a party to or witness in or is threatened to be made a party to or witness in any Proceeding by reason of an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses and Other Liabilities incurred by Indemnitee in connection with (including in preparation for) such Proceeding to the fullest extent not prohibited by the provisions of the M&A and applicable law.
(b) Exception for Amounts Covered by Insurance and Other Sources. Notwithstanding the foregoing, except as provided in Section 3(c), the Company shall not be obligated to indemnify Indemnitee for Expenses or Other Liabilities of any type whatsoever (including, but not limited to judgments, fines, penalties, ERISA excise taxes or penalties and amounts paid in settlement) to the extent such have been paid directly to Indemnitee (or paid directly to a third party on Indemnitee’s behalf) by any directors and officers, or other type, of insurance maintained by the Company or other indemnity arrangements with third parties.
(c) Company Obligations Primary. The Company acknowledges that an Indemnitee that is a member of the Board may have rights to indemnification for Expenses and Other Liabilities provided by another sponsoring organization (“Other Indemnitor”). The Company agrees with such an Indemnitee that the Company is the indemnitor of first resort of such Indemnitee with respect to matters for which indemnification is provided under this Agreement and that the Company will be obligated to make all payments due to or for the benefit of such Indemnitee under this Agreement without regard to any rights that such Indemnitee may have against the Other Indemnitor. The Company waives any equitable rights to contribution or indemnification from the Other Indemnitor in respect of any amounts paid to such Indemnitee. The Company further agrees that no reimbursement of Other Liabilities or payment of Expenses by the Other Indemnitor to or for the benefit of such Indemnitee shall affect the obligations of the Company, and that the Company shall be obligated to repay the Other Indemnitor for all amounts so paid or reimbursed to the extent that the Company has an obligation to indemnify such Indemnitee for such Expenses or Other Liabilities.
4. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses or Other Liabilities but not entitled, however, to indemnification for the total amount of such Expenses or Other Liabilities, the Company shall nevertheless indemnify Indemnitee for such total amount except as to the portion for which indemnification is prohibited by the provisions of the M&A or applicable law. In any review or Proceeding to determine the extent of indemnification, the Company shall bear the burden to establish, by clear and convincing evidence, the lack of a successful resolution of a particular claim, issue or matter and which amounts sought in indemnity are allocable to claims, issues or matters which were not successfully resolved.
5. Liability Insurance. So long as Indemnitee shall continue to serve the Company or a Subsidiary or Affiliate of the Company as an Indemnifiable Person and so long as Indemnitee shall be subject to any possible claim or threatened, pending or completed Proceeding as a result of an Indemnifiable Event, the Company shall use reasonable efforts to maintain in full force and effect for the benefit of Indemnitee as an insured (i) liability insurance issued by one or more reputable insurers and having the policy amount and deductible deemed appropriate by the Board and providing in all respects coverage at least comparable to and in the same amount as that provided to the Chairman of the Board or a Chief Executive Officer of the Company and (ii) any replacement or substitute policies issued by one or more reputable insurers providing in all respects coverage at least comparable to and in the same amount as that being provided to the Chairman of the Board or a Chief Executive Officer of the Company. The purchase, establishment and maintenance of any such insurance or other arrangements shall not in any way limit or affect the rights and obligations of the Company or of Indemnitee under this Agreement except as expressly provided, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights and obligations of the Company or the other party or parties under any such insurance or other arrangement.
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6. Mandatory Advancement of Expenses.
(a) Advancement. If requested by Indemnitee, the Company shall advance before the final disposition of the Proceeding all Expenses and reasonably incurred by Indemnitee in connection with (including in preparation for) a Proceeding related to an Indemnifiable Event. Indemnitee undertakes to repay such amounts advanced if, and only if and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company under the provisions of this Agreement, the M&A or applicable law. The advances to be made shall be paid by the Company to Indemnitee or directly to a third party designated by Indemnitee within thirty (30) days following delivery of a written request by Indemnitee to the Company. Indemnitee’s undertaking to repay any Expenses advanced to Indemnitee shall be unsecured and shall not be subject to the accrual or payment of any interest and shall not be conditioned upon Indemnitee’s ability to repay such advances.
(b) Exception. Notwithstanding the provisions of Section 6(a), the Company shall not be obligated to make any further advance of Expenses to Indemnitee if any one of the following determines in good faith that the facts known to them at the time such determination is made demonstrate clearly and convincingly that Indemnitee acted in bad faith: (i) those members of the Board consisting of directors who were not parties to the Proceeding for which a claim is made under this Agreement (“Independent Directors”), even though less than a quorum, (ii) by a committee of Independent Directors designated by a majority vote of Independent Directors, even though less than a quorum, (iii) Independent Counsel, by written legal opinion, or (iv) a panel of arbitrators (one of whom is selected by the Company, another of whom is selected by Indemnitee and the last of whom is selected by the first two arbitrators so selected). The Company shall have the option to submit the question of whether Indemnitee has acted in bad faith to one of the four alternative decision makers set forth in the preceding sentence and to select the decision maker, but following a favorable determination to Indemnitee rendered by the first decision maker selected, the Company may not submit the matter to another of the named decision makers. If the Company elects to submit the matter to Independent Counsel, such counsel shall be selected by Indemnitee and approved by the Independent Directors or a committee of Independent Directors (which approval may not be unreasonably withheld). Any decision maker so selected shall render a decision within thirty (30) days of such decision maker’s selection (which shall include in the case of Independent Counsel or a panel of arbitrators, when the person or persons acting as such counsel or such panel has or have been selected as provided above). If a decision is made by the decision maker that Indemnitee acted in bad faith, Indemnitee shall have the right to apply to the Delaware Court of Chancery for the purpose of determining whether Indemnitee has acted in bad faith.
7. Notice and Other Indemnification Procedures.
(a) Notification. Promptly after receipt by Indemnitee of notice of the commencement of or the threat of commencement of any Proceeding, Indemnitee shall, if Indemnitee believes that indemnification or advancement of Expenses with respect may be sought from the Company under this Agreement, notify the Company of the commencement or threat of commencement. However, a failure so to notify the Company promptly following Indemnitee’s receipt of such notice shall not relieve the Company from any liability that it may have to Indemnitee except to the extent that the Company is actually and materially prejudiced in its defense of such Proceeding as a result of such failure.
(b) Insurance and Other Matters. If, at the time of the receipt of a notice of the commencement of a Proceeding under Section 7(a), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the issuers in accordance with the procedures set forth in the respective policies. The Company shall take all reasonable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such insurance policies.
(c) Assumption of Defense. If the Company shall be obligated to advance the Expenses for any Proceeding against Indemnitee, the Company, if deemed appropriate by the Company, shall be entitled to assume the defense of such Proceeding. Such defense by the Company may include the representation of two or more parties by one attorney or law firm as permitted under the ethical rules and legal requirements related to joint representations. Following delivery of written notice to Indemnitee of the Company’s election to assume the defense of such Proceeding, the approval by Indemnitee (which approval shall not be unreasonably withheld) of counsel designated by the Company and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees and expenses of counsel subsequently incurred by Indemnitee with respect to the same Proceeding. If (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have notified the Board in writing that Indemnitee has reasonably concluded that there is likely to be a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company fails to employ counsel to assume the defense of such Proceeding, the fees and expenses of Indemnitee’s counsel shall be subject to indemnification and/or advancement under the terms of this Agreement. Nothing shall prevent Indemnitee from employing counsel for any such Proceeding at Indemnitee’s expense.
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(d) Settlement. The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent; provided, however, that if a Change in Control has occurred, the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement. Neither the Company nor any Subsidiary or Affiliate of the Company shall enter into a settlement of any Proceeding that might result in the imposition of any Expense, Other Liability, penalty, limitation or detriment on Indemnitee, whether indemnifiable under this Agreement or otherwise, without Indemnitee’s written consent. Neither the Company nor Indemnitee shall unreasonably withhold consent from any settlement of any Proceeding.
8. Determination of Right to Indemnification.
(a) Success on the Merits or Otherwise. To the extent that Indemnitee has been successful on the merits or otherwise in defense of any Proceeding referred to in Section 3(a) or in the defense of any claim, issue or matter, the Company shall indemnify Indemnitee against Expenses actually and reasonably incurred.
(b) Indemnification in Other Situations. If Section 8(a) is inapplicable, the Company shall also indemnify Indemnitee if he or she has not failed to meet the applicable standard of conduct for indemnification.
(c) Forum. Indemnitee shall be entitled to select the forum in which determination of whether or not Indemnitee has met the applicable standard of conduct shall be decided, and such election will be made from among the following:
(1) Those members of the Board who are Independent Directors even though less than a quorum;
(2) A committee of Independent Directors designated by a majority vote of Independent Directors, even though less than a quorum; or
(3) Independent Counsel selected by Indemnitee and approved by the Board, which approval may not be unreasonably withheld, which counsel shall make such determination in a written opinion.
If Indemnitee is an officer or a director of the Company at the time that Indemnitee is selecting the forum, then Indemnitee shall not select Independent Counsel as such forum unless there are no Independent Directors or unless the Independent Directors agree to the selection of independent counsel as the forum. The selected forum shall be referred to as the “Reviewing Party.” Notwithstanding the foregoing, following any Change in Control, the Reviewing Party shall be Independent Counsel selected in the manner provided in (3) above.
(d) As soon as practicable, and in no event later than thirty (30) days after receipt by the Company of written notice of Indemnitee’s choice of forum under Section 8(c) above, the Company and Indemnitee shall each submit to the Reviewing Party such information as they believe is appropriate for the Reviewing Party to consider. The Reviewing Party shall arrive at its decision within a reasonable period of time following the receipt of all such information from the Company and Indemnitee, but in no event later than thirty (30) days following the receipt of all such information, provided that the time by which the Reviewing Party must reach a decision may be extended by mutual agreement of the Company and Indemnitee. Indemnitee shall cooperate with the Reviewing Party, including providing to the Reviewing Party, upon reasonable advance request, any documentation or information which is not subject to attorney-client privilege or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to the Reviewing Party’s determination. The Reviewing Party shall act reasonably and in good faith in making a determination under this Section 8. All Expenses associated with the process set forth in this Section 8(d), including but not limited to the Expenses of the Reviewing Party, shall be paid by the Company.
(e) Delaware Court of Chancery. Notwithstanding a final determination by any Reviewing Party that Indemnitee is not entitled to indemnification with respect to a specific Proceeding, Indemnitee shall have the right to apply to the Court of Chancery, for the purpose of enforcing Indemnitee’s right to indemnification under this Agreement. The Company shall be precluded from asserting in any judicial proceeding commenced under this Section 8(e) that the procedures and presumptions of this Agreement are not valid, binding or enforceable.
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(f) Expenses. The Company shall indemnify Indemnitee against all Expenses incurred by Indemnitee in connection with any hearing or Proceeding under this Section 8 or under Section 6(b) involving Indemnitee and against all Expenses and Other Liabilities incurred by Indemnitee in connection with any other Proceeding between the Company and Indemnitee involving the interpretation or enforcement of the rights of Indemnitee under this Agreement unless a court of competent jurisdiction finds that each of the material claims of Indemnitee in any such Proceeding was frivolous or made in bad faith.
(g) Determination of “Good Faith”. For purposes of any determination of whether Indemnitee acted in “good faith” or acted in “bad faith,” Indemnitee shall be deemed to have acted in good faith or not acted in bad faith if in taking or failing to take the action in question Indemnitee relied on the records or books of account of the Company or a Subsidiary or Affiliate of the Company, including financial statements, or on information, opinions, reports or statements provided to Indemnitee by the officers or other employees of the Company or a Subsidiary or Affiliate of the Company in the course of their duties, or on the advice of legal counsel for the Company or a Subsidiary or Affiliate of the Company, or on information or records given or reports made to the Company or a Subsidiary or Affiliate of the Company by an independent certified public accountant or by an appraiser or other expert selected by the Company or a Subsidiary or Affiliate of the Company, or by any other person (including legal counsel, accountants and financial advisors) as to matters Indemnitee reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company. In connection with any determination as to whether Indemnitee is entitled to be indemnified, or to advancement of expenses, the Reviewing Party, decision maker under Section 6(b) or court shall presume that Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification or advancement of Expenses, as the case may be, and the burden of proof shall be on the Company to establish, by clear and convincing evidence, that Indemnitee is not so entitled. The provisions of this Section 8(g) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement. In addition, the knowledge and/or actions, or failures to act, of any other person serving the Company or a Subsidiary or Affiliate of the Company as an Indemnifiable Person shall not be imputed to Indemnitee for purposes of determining the right to indemnification. Notwithstanding anything in this Agreement to the contrary, no determination as to Indemnitee’s entitlement to indemnification shall be required to be made before the final disposition of a Proceeding.
9. Exceptions. Any other provision to the contrary notwithstanding,
(a) Claims Initiated by Indemnitee. The Company shall not be obligated under the terms of this Agreement to indemnify or advance Expenses to Indemnitee with respect to Proceedings or claims initiated or brought voluntarily by Indemnitee and not by way of defense, except (1) with respect to Proceedings brought to establish or enforce a right to indemnification under this Agreement, any other statute or law or otherwise, (2) where the Board has consented to the initiation of such Proceeding, or (3) with respect to Proceedings brought to discharge Indemnitee’s fiduciary responsibilities, whether under ERISA or otherwise, but such indemnification or advancement of Expenses may be provided by the Company in specific cases if the Board finds it to be appropriate; or
(b) Section 16(b) Actions. The Company shall not be obligated under the terms of this Agreement to indemnify Indemnitee on account of any suit in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company under the provisions of Section 16(b) of the Securities Exchange Act of l934, as amended, or similar provisions of any applicable law; or
(c) Unlawful Indemnification. The Company shall not be obligated under the terms of this Agreement to indemnify Indemnitee for Other Liabilities if such indemnification is prohibited by law.
10. Non-exclusivity. The provisions for indemnification and advancement of Expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may have under any provision of law, the M&A, the vote of the Company’s shareholders or disinterested directors, other agreements, or otherwise, both as to acts or omissions in his or her official capacity and to acts or omissions in another capacity while serving the Company or a Subsidiary or Affiliate of the Company as an Indemnifiable Person and Indemnitee’s rights shall continue after Indemnitee has ceased serving the Company or a Subsidiary or Affiliate of the Company as an Indemnifiable Person and shall inure to the benefit of the successors and assigns, heirs, executors, personal and legal representatives, and administrators of Indemnitee.
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11. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality and enforceability of the remaining provisions of the Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired, and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
12. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision (whether or not similar) and except as expressly provided, no such waiver shall constitute a continuing waiver.
13. Successors and Assigns. The terms of this Agreement shall bind, and shall inure to the benefit of, the successors and assigns, heirs, executors, personal and legal representatives, and administrators of the parties.
14. Notice. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and a receipt is provided by the party to whom such communication is delivered, (ii) if mailed by certified or registered mail with postage prepaid, return receipt requested, on the signing by the recipient of an acknowledgement of receipt form accompanying delivery through the U.S. mail, (iii) personal service by a process server, or (iv) delivery to the recipient’s address by overnight delivery (e.g., FedEx, UPS or DHL) or other commercial delivery service. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice complying with the provisions of this Section. Delivery of communications to the Company with respect to this Agreement shall be sent to the attention of the Company’s General Counsel.
15. No Presumptions. For purposes of this Agreement, the termination of any Proceeding, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law or otherwise. In addition, neither the failure of the Company or a Reviewing Party or one of the decision makers described in Section 6(b) to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Company including a determination under Section 6(b), or a Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, before the commencement of Proceedings by Indemnitee to secure a judicial determination by exercising Indemnitee’s rights under Section 6(b) or 8(e) of this Agreement shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has failed to meet any particular standard of conduct or did not have any particular belief or is not entitled to indemnification under applicable law or otherwise.
16. Survival of Rights. The rights conferred on Indemnitee by this Agreement shall continue after Indemnitee has ceased to serve the Company or a Subsidiary or Affiliate of the Company as an Indemnifiable Person and shall inure to the benefit of Indemnitee’s successors and assigns, heirs, executors, personal and legal representatives, and administrators.
17. Subrogation and Contribution.
(a) Except as otherwise expressly provided in this Agreement, in the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.
(b) Whether or not the indemnification provided for in this Agreement is available to Indemnitee, in respect of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without prejudice to any right of contribution it may have against Indemnitee.
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(c) Without diminishing or impairing the obligations of the Company in Section 17(b), if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses and Other Liabilities paid in settlement and actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such Expenses and Other Liabilities, as well as any other equitable considerations which the law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.
(d) The Company agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.
(e) To the fullest extent permissible under applicable law and without diminishing or impairing the obligations of the Company set forth in Section 17(b), Section 17(c), and Section 17(d), if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by or on behalf of Indemnitee, whether for Other Liabilities and/or for Expenses, in connection with any claim relating to an Indemnifiable Event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
18. Security. To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations through an irrevocable bank line of credit, funded trust or other collateral.
19. Specific Performance, Etc. The parties recognize that if any provision of this Agreement is violated by the Company, Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, Indemnitee shall be entitled, if Indemnitee so elects, to institute Proceedings, either in law or at equity, to obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as Indemnitee may elect to pursue.
20. Counterparts. This Agreement may be executed in counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
21. Headings. The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation.
22. Governing Law. This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely with Delaware.
23. Consent to Jurisdiction. The Company and Indemnitee each irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any Proceeding which arises out of or relates to this Agreement.
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The parties have entered into this Indemnity Agreement effective as of the date first above written.
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Exhibit 4.25
CONVERTIBLE NOTE PURCHASE AGREEMENT
This Convertible Note Purchase Agreement (this “Agreement”) is made as of June ___, 2025 by and between Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (the “Company”), and the investors listed on Exhibit A attached to this Agreement (each a “Purchaser” and together the “Purchasers”).
RECITALS
A. The Company desires to issue and sell, and the Purchasers desire to purchase, convertible promissory notes in substantially the form attached to this Agreement as Exhibit B (the “Notes” and each, a “Note”), which shall be convertible on the terms stated therein into equity securities of Blue Gold Limited.
B. The Notes and the equity securities issuable upon conversion thereof are collectively referred to herein as the “Securities.” Terms not otherwise defined in this Agreement shall have the meaning given to them in the form of Note.
AGREEMENT
In consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties to this Agreement agree as follows:
1. Purchase and Sale of Notes.
1.1 Sale and Issuance of Notes. Subject to the terms and conditions of this Agreement, each Purchaser agrees to purchase at the applicable Closing (as defined below) and the Company agrees to sell and issue to each Purchaser at the applicable Closing, a Note in the principal amount set forth opposite each Purchaser’s name on Exhibit A. The purchase price of each Note shall be equal to 100% of the principal amount of such Note. The Notes shall be convertible into equity securities of Blue Gold Limited as provided for therein.
1.2 Closings; Funding; Delivery. The closing of the purchase and sale of the Notes shall take place remotely by exchange of signatures (or their electronic counterparts) on the date first listed above (the “Initial Closing”). At any time following the Initial Closing, the Company may sell Notes (each such additional sale, a “Closing”) until the date on which the Company has sold Notes with an aggregate principal amount of up to $3,000,000 to purchasers (the “Additional Purchasers”). All such sales made at any additional Closings shall be made on the terms and conditions set forth in this Agreement and (i) the representations and warranties of the Company set forth in Section 2 hereof shall speak as of the Initial Closing and the Company shall have no obligation to update any disclosure related thereto, and (ii) the representations and warranties of the Additional Purchasers in Section 3 hereof shall speak as of such Closing. This Agreement, including without limitation, the Schedule of Purchasers, may be amended by the Company without the consent of Purchasers to include any Additional Purchasers upon the execution by such Additional Purchasers of a counterpart signature page hereto. Any Notes sold pursuant to this Section 1.2 shall be deemed to be “Notes,” for all purposes under this Agreement and any Additional Purchasers thereof shall be deemed to be “Purchasers” for all purposes under this Agreement. At each Closing, the Company shall deliver to each Purchaser an originally signed Note reflecting the Purchaser’s investment, against payment of the purchase price thereof by check payable to the Company or wire transfer to a bank account designated by the Company.
1.3 Lock-up Release of Shares: To the extent Purchasers hold at the time of listing of Blue Gold Limited (the “Listing”) restricted shares of Blue Gold Limited, such restricted shares shall be release from lock-up, on a 1-for-1 basis, for each Note purchased.
2. Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchasers that, except as set forth on the Disclosure Schedule attached as Exhibit C to this Agreement, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true and complete as of the date of the Closing. The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections and subsections contained in this Section 2, and the disclosures in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Section 2 only to the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections and subsections.
2.1 Organization, Corporate Power and Qualification. The Company is a corporation duly organized and validly existing under the laws of England and Wales and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted. The Company is duly qualified to transact business in the United Kingdom and each other jurisdiction in which the failure to so qualify would have a material adverse effect on the Company.
2.2 Authorization; Enforceability. All corporate action required to be taken by the Company’s Board of Directors and shareholders in order to authorize the Company to enter into this Agreement and the Notes, and to issue the Notes at the Closing, has been taken or will be taken prior to the Initial Closing. All action on the part of the officers of the Company necessary for the execution and delivery of this Agreement and the Notes, the performance of all obligations of the Company under this Agreement and the Notes to be performed as of the Initial Closing, and the issuance and delivery of the Notes have been taken or will be taken prior to the Initial Closing. This Agreement and the Notes, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
2.3 Valid Issuance. The Securities, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement and the Notes, applicable state and federal securities laws and liens or encumbrances created by or imposed by the Purchaser. Assuming the accuracy of the representations of the Purchasers in Section 3 of this Agreement and subject to the filings described in Section 2.4 below, the Securities will be issued in compliance with all applicable federal and state securities laws.
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2.4 Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchasers in Section 3 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of the Company in connection with the consummation of the transactions contemplated by this Agreement, except for filings pursuant to Regulation D of the Securities Act of 1933, as amended (the “Securities Act”) and applicable state securities laws, which have been made or will be made in a timely manner.
2.5 Intellectual Property. For purposes of this Agreement, the term “Company Intellectual Property” shall mean all patents, patent applications, trademarks, trademark applications, service marks, tradenames, copyrights, trade secrets, licenses, domain names, mask works, information and proprietary rights and processes, similar or other intellectual property rights, subject matter of any of the foregoing, tangible embodiments of any of the foregoing, licenses in, to and under any of the foregoing, and any and all such cases as are necessary to the Company in the conduct of the Company’s business as now conducted and as presently proposed to be conducted. The Company owns or possesses, or believes it can acquire on commercially reasonable terms, sufficient legal rights to all Company Intellectual Property without any known conflict with, or infringement of, the rights of others. To the Company’s knowledge, no product or service marketed or sold (or proposed to be marketed or sold) by the Company violates or will violate any license or infringes or will infringe any intellectual property rights of any other party. Other than with respect to commercially available software products under standard end-user object code license agreements, there are no outstanding options, licenses, agreements, claims, encumbrances or shared ownership interests of any kind relating to the Company Intellectual Property, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other individual, corporation, partnership, trust, limited liability company, association or other entity (each, a “Person” and collectively, “Persons”). The Company has not received any communications alleging that the Company has violated or, by conducting its business, would violate any of the patents, trademarks, service marks, tradenames, copyrights, trade secrets, mask works or other proprietary rights or processes of any other Person. The Company has obtained and possesses valid licenses to use all of the software programs present on the computers and other software-enabled electronic devices that it owns or leases or that it has otherwise provided to its employees for their use in connection with the Company’s business. To the Company’s knowledge, it will not be necessary to use any inventions of any of its employees or consultants (or persons it currently intends to hire) made prior to their employment by the Company (except as have already been assigned to the Company). Each employee and consultant has assigned to the Company all intellectual property rights he or she owns that are related to the Company’s business as now conducted and as presently proposed to be conducted. The Company has not embedded any open source, copyleft or community source code in any of its products generally available or in development, including but not limited to any libraries or code licensed under any General Public License, Lesser General Public License or similar license arrangement. For purposes of this Section 2.5, the Company shall be deemed to have knowledge of a patent right if the Company has actual knowledge of the patent right or would be found to be on notice of such patent right as determined by reference to United States patent laws.
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2.6 Compliance with Other Instruments. The Company is not in violation or default (a) of any provisions of its Certificate of Incorporation or Memorandum and Articles of Association, (b) of any instrument, judgment, order, writ or decree, (c) under any note, indenture or mortgage, or (d) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound that is required to be listed on the Disclosure Schedule, or, to its knowledge, of any provision of federal or state statute, rule or regulation applicable to the Company, the violation of which would have a material adverse effect, except as this Section 2.6 is qualified by the Disclosure Schedule.
2.7 Compliance with Laws. To its knowledge, the Company is not in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties, which violation would materially and adversely affect the business, assets, liabilities, financial condition or operations of the Company.
2.8 Disclosure. The Company has made available to the Purchasers all the information reasonably available to the Company that the Purchasers have requested for deciding whether to acquire the Notes. No representation or warranty of the Company contained in this Agreement, as qualified by the Disclosure Schedule, contains any untrue statement of a material fact or, to the Company’s knowledge, 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.
3. Representations and Warranties of the Purchaser. Each Purchaser hereby represents and warrants to the Company that:
3.1 Authorization; Due Execution; Enforceability. The Purchaser has the full right, power and authority to enter into and perform the Purchaser’s obligations under this Agreement, has duly executed this Agreement and documents referred to herein, and this Agreement when executed and delivered by the Purchaser will constitute a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. The Purchaser’s residence or principal place of business, as applicable, is as shown on the signature page of this Agreement.
3.2 Purchase Entirely for Own Account. The Securities to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. The Purchaser is not an entity formed for the specific purpose of acquiring any of the Securities.
3.3 Knowledge and Sophistication. Without lessening or obviating the representations and warranties of the Company set forth in Section 2, each Purchaser hereby: (i) acknowledges that it has received all the information it has requested from the Company and that it considers necessary or appropriate for deciding whether to acquire the Securities, (ii) represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities and to obtain any additional information necessary to verify the accuracy of the information given the Purchaser, (iii) represents that it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risk of this investment, and (iv) further represents that it has the capacity to protect its own interests in connection with an investment in the Securities and that neither the Company, its officers, or any of their respective affiliates or representatives, nor any other person or entity has made any commitment, representation or warranty to the Purchaser of any type or manner except as set forth herein. The Purchaser has received no general solicitation or general advertisement in connection with the purchase of the Securities or an investment in the Company.
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3.4 Restricted Securities.
(a) The Purchaser understands that the Notes have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein. The Purchaser understands that the Notes are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the Notes indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Purchaser acknowledges that the Company has no obligation to register or qualify the Notes for resale. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Notes, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.
(b) The Purchaser understands that the equity securities underlying the Notes have not been, and will not be until the time specified in this Agreement, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein. The Purchaser understands that the equity securities underlying the Notes are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the equity securities underlying the Notes indefinitely unless such securities are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for such securities, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.
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3.5 No Public Market. The Purchaser understands that no public market now exists for any of the Securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Securities.
3.6 Accredited Investor. The Purchaser is an accredited investor as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
3.7 Ability to Bear Economic Risk; No Reliance. Each Purchaser acknowledges that investment in the Securities involves a high degree of risk, and represents that it is able, without materially impairing its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment. The Purchaser has full cognizance of and understands all of the risk factors and tax considerations related to the purchase of the Securities. The Purchaser understands that any financial and other projections provided to the Purchaser (including without limitation a business plan) are for informational purposes only and were based upon certain assumptions as outlined therein, and no assurances can be given that such assumptions will be satisfied or that any such projections will be achieved, and the Purchaser is not relying on such projections in connection with its investment.
3.8 No Disqualification Events. Neither Purchaser nor, to the extent Purchaser has them, any of Purchaser’s stockholders, members, managers, general or limited partners, directors, affiliates or executive officers (collectively with Purchaser, the “Purchaser Covered Persons”), are subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). Purchaser has exercised reasonable care to determine whether any Purchaser Covered Person is subject to a Disqualification Event. The purchase of a Note by Purchaser will not subject the Company to any Disqualification Event.
3.9 Tax, Legal and Economic Considerations. The Purchaser is not relying on the Company for advice with respect to tax considerations, the suitability of its investment in the Company or legal or economic considerations.
4. General Provisions.
4.1 No Security; Pari Passu Status. The Notes will be unsecured obligations of the Company and will rank pari passu in right of payment with all other present and future unsecured indebtedness of the Company, and senior to any subordinated indebtedness.
4.2 Registration: The resale of the equity securities underlying the Notes shall be registered under the Securities Act and released from lock-up sixty (60) days following the Listing.
4.3 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
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4.4 Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law. The parties agree that the state or federal courts located in the State of New York constitute the sole and exclusive venue, and the exclusive jurisdiction, for disputes arising under or with respect to this Agreement.
4.5 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one (1) instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes.
4.6 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
4.7 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt, or (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s 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) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page to this Agreement, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Agreement. A confirming copy of any notice sent by electronic mail or facsimile shall be sent promptly by registered or certified mail, or overnight courier.
4.8 Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Company and the holders of Notes whose aggregate principal amount represents a majority of the outstanding principal amount of all then outstanding Notes (the “Requisite Holders”); provided, however, that the Company may amend this Agreement without the approval of the Requisite Holders or any holder of Notes to add additional forms of Notes to be issued hereunder with a valuation cap of $5,000,000 or greater. Any amendment or waiver effected in accordance with this Section 4.8 shall be binding upon each Purchaser and each transferee of the Securities, each future holder of all such Securities, and the Company.
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4.9 Severability. If one (1) or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of this Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of this Agreement shall be enforceable in accordance with its terms.
4.10 Entire Agreement. This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto are expressly canceled.
4.11 Expenses. Each party to this Agreement shall be responsible for their own fees and expenses related to this Agreement.
4.12 Confidentiality. The terms of this Agreement and the Notes are confidential. Without the prior written consent of the other party, neither party will disclose the terms of this Agreement or the Notes to any person or entity, except to such party’s representatives who need to know such terms to assist such party, or act on its behalf, to exercise its rights or perform its obligations under this Agreement or the Notes.
[SIGNATURE PAGE FOLLOWS]
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The parties have executed this Convertible Note Purchase Agreement as of the date first written above.
| COMPANY: | ||
| By: | ||
| Name: | Lorenz Werndle | |
| Title: | Chief Financial Officer | |
| Address: | 124 City Road, London, EC1V 2NX | |
| Email Address: | lwerndle@bluegoldmine.com | |
| PURCHASER: | ||
| By: | ||
| Name: | ||
| Title: | ||
| Purchaser: | ||
| Address: | ||
| Email Address: | ||
SIGNATURE PAGE TO CONVERTIBLE NOTE PURCHASE AGREEMENT
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EXHIBIT A
LIST OF PURCHASERS
| PURCHASER | INVESTMENT AMOUNT |
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EXHIBIT B
FORM OF CONVERTIBLE PROMISSORY NOTE
(3M VALUE CAP)
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM. THE OBLIGATIONS UNDER THIS NOTE ARE PARI PASSU IN RIGHT OF PAYMENT WITH ALL OTHER PRESENT AND FUTURE UNSECURED INDEBTEDNESS OF THE COMPANY, AND SENIOR TO ANY SUBORDINATED INDEBTEDNESS.
BLUE
GOLD HOLDINGS LIMITED
CONVERTIBLE PROMISSORY NOTE
Issue Date: ____________
Note #: ___
THIS CERTIFIES THAT, for value received, Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (the “Company”), promises to pay to _____________________________________ (“Holder”), or its assigns, the principal sum of $______________, plus a redemption premium of 20% (the “Redemption Premium”) payable on October 31, 2025 (the “Maturity Date”). This Convertible Promissory Note (this “Note”) is issued pursuant to the terms of that certain Convertible Note Purchase Agreement dated as of ____ ___, 2025 (the “Purchase Agreement”). Capitalized terms that are not otherwise defined in this Note shall have the meanings set forth in the Purchase Agreement.
1. Payments. Subject to the provisions herein relating to conversion, the outstanding principal balance on this Note shall be due and payable on the earlier of (a) the Maturity Date or (b) an Event of Default (as defined below). Payment shall be credited first against costs of collection (if any), then to the Redemption Premium.
2. Conversion. The Notes will be automatically converted into ordinary shares of Blue Gold Limited (the “Shares”) thirty (30) days after the listing of Blue Gold Limited (the “Listing”). The conversion price will be the lower of (i) the Volume Weighted Average Price (VWAP) over the 30-day period following the Listing lesser the Applicable Discount and (ii) the closing price on the day prior to the conversion lesser the Applicable Discount. “Applicable Discount” means either (i) a forty percent (40%) discount for Holders of Notes purchased prior to the Listing or (ii) a twenty percent (20%) discount for Holders of Notes purchased following the Listing.
3. Conversion Procedure. Upon the occurrence of the conversion of the Notes, the outstanding Conversion Amount (as defined below) will automatically convert into that number of Shares issuable upon conversion of this Note, without any further action by the Company, provided that the Holder surrenders this Note, with appropriate adjustments (reasonably acceptable to the Company) to account for the fact that Holder will be receiving Shares. Upon the conversion of this Note, the Company will, at its expense, issue and deliver to the Holder a certificate or certificates evidencing that number of Shares to which the Holder is entitled upon such conversion (bearing such legends as are required by applicable state and federal securities laws in the opinion of counsel to the Company). “Conversion Amount” shall mean the outstanding principal amount of the Note.
4. Lock-up Release of Shares: To the extent Holders hold at the time of Listing restricted shares of Blue Gold Limited, such restricted shares shall be release from lock-up, on a 1-for-1 basis, for each Note purchased.
5. Registration: The resale of the Shares shall be registered under the Securities Act and released from lock-up sixty (60) days following the Listing.
6. Default.
6.1 Events of Default. So long as this Note remains unpaid in whole or in part, each of the following will constitute an “Event of Default” under this Note: (a) the failure of the Company to pay all or any part of the principal of, or Redemption Premium on, the Note within 10 days of such amount becoming due; (b) (i) the commencement by the Company of a proceeding in bankruptcy, (ii) the consent by the Company to a proceeding in bankruptcy filed against it by another party or (iii) the appointment of a receiver, liquidator, assignee or trustee of the Company’s assets for the benefit of creditors; or (c) any material breach by the Company of this Note or the Purchase Agreement, which breach is not cured within thirty (30) days of delivery of written notice to the Company of such breach by the Holder.
6.2 Acceleration Upon Default. If an Event of Default occurs and continues, then the Requisite Holders may, by written notice to the Company, declare the unpaid principal amount of the Notes, together with the Redemption Premium thereunder, to be forthwith due and payable immediately in cash, without further presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Company, to the fullest extent permitted by applicable law. Notwithstanding any other provision of this Note, upon an Event of Default described in Sections 6.1(b) or (c) the entire unpaid principal amount of this Note, together with the Redemption Premium, shall automatically become and be immediately due and payable.
7. Prepayment. The Company may not make prepayments of principal on this Note except with the advance written consent of the Holder. Notwithstanding the foregoing, the Notes may be prepaid upon the written consent of the Requisite Holders.
8. General Provisions.
8.1 No Security; Pari Passu Status. The Notes will be unsecured obligations of the Company and will rank pari passu in right of payment with all other present and future unsecured indebtedness of the Company, and senior to any subordinated indebtedness.
8.2 Governing Law. This Note and all actions arising out of or in connection with this Note will be governed by and construed in accordance with the laws of the State of New York as applied to agreements made and performed in New York by residents of New York.
8.3 Successors and Assigns. The rights and obligations of the Company and Holder of this Note will be binding upon and benefit the respective successors, assigns, heirs, administrators and transferees of the parties. Notwithstanding the foregoing, the Company may not assign its rights or delegate any obligations (a) under this Note without the prior written consent of the Holder or (b) under all Notes, collectively, without the prior written consent of the Requisite Holders.
8.4 Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of (a) the Company and the Holder, or (b) so long as all Notes are subject to identical amendment(s), the Company and the Requisite Holders.
8.5 Notices. All notices and other communications given or made pursuant to this Note shall be in writing and shall be deemed effectively given upon the earlier of actual receipt, or (a) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (b) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (c) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page to the Purchase Agreement, or to such e-mail address, facsimile number or address as subsequently modified by written notice given in accordance with this Note and the Purchase Agreement.
8.6 Severability. In case any provision of this Note is deemed to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.
8.7 Expenses. Except as otherwise provided in the Purchase Agreement, each party shall be responsible for such party’s own fees and expenses in connection with this Note. However, the Company hereby agrees, subject only to any limitation imposed by applicable law, to pay reasonable attorneys’ fees and expenses incurred by the Holder in collecting any amounts not paid within 30 days after such amounts were due and payable.
[Signature page follows]
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IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to be issued as of the date first written above.
| COMPANY: | ||
| By: | ||
| Name: | [●] | |
| Title: | [●] | |
| Address: | [●] | |
Email: [●]
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EXHIBIT C
DISCLOSURE SCHEDULE
Section 2.6
| ● | The Company has issued convertible loan notes for $2.5 million which matures on June 14, 2025 (“CLN”). The Company has initiated discussions with these investors to understand if they will be converting their loan into shares of the company (in accordance with the terms of the convertible loan agreement), or if they are willing to accept an extension. On June 14, 2025, if these investors have not agreed to an extension or to convert their loan into shares, the Company will be in default under the CLN. Repayment or default of the CLN will increase the funding needs of the Company and could pose a threat to Blue Gold Limited’s listing status. |
| ● | The Company entered a loan agreement with Attachy Construction dated 31 October 2024 (the “Loan Agreement) for $345,000 under an unsigned loan agreement. This loan was due to be repaid on 13 December 2024, but remains unpaid. No security is given for this loan. Attachy has not demanded the repayment of the loan. Should Attachy require immediate repayment, this will increase the funding needs of the Company and could pose a threat to Blue Gold Limited’s listing status. |
Exhibit 8.1
Subsidiaries of Blue Gold Limited
| Name | Jurisdiction of Organization | |
| Blue Gold (Cayman) Limited | Cayman Islands | |
| Blue Gold Holdings Limited | England and Wales | |
| Blue Gold Bogoso Prestea Limited | Republic of Ghana |
Exhibit 15.1
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Defined terms included below shall have the same meaning as terms defined and included elsewhere in this Shell Company Report on Form 20-F (the “Form 20-F”) filed with the Securities and Exchange Commission (the “SEC”.)
Introduction
The following unaudited pro forma condensed combined financial information presents the combination of financial information of Perception and BGHL, adjusted to give effect to the Business Combination and related transactions. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Perception has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information.
The following unaudited pro forma condensed combined balance sheet as of December 31, 2024, assumes that the Business Combination occurred on December 31, 2024. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024, assume that the Business Combination occurred on January 1, 2024.
The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what the Post-Combination Company’s financial condition or results of operations would have been had the Business Combination occurred on the dates indicated. Further, the pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the Post-Combination Company. The actual financial position and results of operations of the Post-Combination Company may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
The historical financial information of Perception as of and for the year ended December 31, 2024 was derived from the audited financial statements as of and for the year ended December 31, 2024 which are incorporated by reference and includes the historical financial information of its subsidiary Blue Gold Limited as of and for the year ended December 31, 2024. The historical financial information of BGHL as of and for the year ended December 31, 2024 was derived from the audited financial statements as of and for the year ended December 31, 2024 which are incorporated by reference. This information should be read together with Perception’s and BGHL’s audited financial statements, and related notes and other financial information incorporated by reference.
Description of the Business Combination and merger consideration
On June 25, 2025 (the “Closing Date”), Blue Gold Limited, a Cayman Islands exempted company limited by shares (“BGL”), consummated the previously announced business combination pursuant to the Second Amended and Restated Business Combination Agreement, dated as of June 12, 2024 (as amended and restated, the “BCA”), and further amended on January 8, 2025, March 28, 2025, April 20, 2025, May 8, 2025, and June 10, 2025, by and among BGL, Perception Capital Corp. IV, a Cayman Islands exempted company limited by shares formerly known as RCF Acquisition Corp. (“Perception”), and BGHL. The following transactions occurred pursuant to the terms of the BCA (collectively, the “Business Combination”):
| ● | BGL formed Blue Merger Sub, an exempted company incorporated under the laws of the Cayman Islands (“Blue Merger Sub”), for the purposes of the effectuating the business combination; |
| ● | Perception merged with and into BGL, with BGL being the surviving entity (the “Perception Reorganization”); |
| ● | Blue Cayman 1, an exempted company incorporated under the laws of the Cayman Islands (“BC1”), acquired the entirety of the BGHL Shares; |
| ● | BC1 transferred the entire undertaking of BC1, including the entire share capital of BGHL to Blue Cayman 2, an exempted company incorporated under the laws of the Cayman Islands (“BC2”). The name of Blue Cayman 2 was changed to Blue Gold (Cayman) Limited; |
| ● | Blue Merger Sub merged with and into BC2, with BC2 being the surviving entity and becoming a wholly owned subsidiary of BGL; |
Following the Business Combination, BGL Ordinary Shares are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “BGL”. Upon the terms and subject to the conditions set forth in the BCA, prior to the Merger, the stockholders of BC2 surrendered all of its original certificates of BC2 Common Stock, and, in exchange, Blue Gold Limited issued to the stockholders of BC2 the amount of Blue Gold Limited Class A Ordinary Shares with an aggregate value equal to $114,500,000.
Each Unit consisting of one Perception Class A Ordinary Shares and one-half of one Perception Warrant, as of immediately prior to the Perception Reorganization, automatically separated into its component securities and was converted into Perception Class A Ordinary Shares or Warrants to purchase Perception Class A Ordinary Shares; provided, however, no fractional Warrants to purchase Perception Class A Ordinary Shares were issued or any fraction that remained after issuance of whole Warrants became worthless.
Other Related Events in connection with the Business Combination
Perception issued a convertible promissory note on November 6, 2023, to Blue Capital Management Partners, LLP with a principal amount up to $2,000,000. Such note was subsequently novated to Blue Perception Capital LLP (“Blue Capital”) on November 27, 2023 and on September 24, 2024, Perception entered into a cancellation agreement pursuant to which the convertible promissory note was cancelled. Concurrently with the cancellation, Perception entered into a new convertible promissory note (the “Note”) with Blue Capital with a principal amount of up to $2,000,000. On April 19, 2025 an amendment to the Note was entered into by Perception and Blue Capital. Any amounts outstanding under the note (or any portion thereof) will automatically convert into Class A ordinary shares of Perception, par value $0.0001 per share, at a conversion price equal to a Dollar price per share calculated as the entire funded principal balance of the Note at Closing divided by 2,000,000, and the Former Sponsor will forfeit an equal number of shares owned.
On September 6, 2024, Perception entered into the Preferred Stock Purchase Agreement to issue an aggregate of 609,250 preference shares to BCMP Services Limited for total proceeds of $700,000. The preference shares will automatically convert into 12,185,000 Class A ordinary shares at a conversion rate of 20 Class A ordinary shares for each one preference share. On April 9, 2025, BCMP Services Limited entered into a Preferred Stock Purchase Agreement to sell 110,000 preference shares to Blue Gold Holdings Limited to be effective following the receipt of such shares from Perception to BCMP Services Limited. On April 9, 2025, BCMP Services Limited entered into a Preferred Stock Purchase Agreement to sell 148,000 preference shares to Blue International Holdings Limited. On April 11, 2025, Blue International Holdings Limited entered into a Preferred Stock Purchase Agreement to sell 8,000 preference shares to Bonaventura Industries Inc. (the “Advisor”). On April 9, 2025, BCMP Services Limited entered into a Preferred Stock Purchase Agreement to sell 120,000 preference shares to Pegasus Capital Limited. On April 9, 2025, BCMP Services Limited entered into a Preferred Stock Purchase Agreement to sell 145,000 preference shares to Mark Green. On April 9, 2025, BCMP Services Limited entered into a Preferred Stock Purchase Agreement to sell 25,000 preference shares to Kaela Ritchie.
On November 8, 2024, Perception and an affiliated party entered into a letter agreement (the “Letter Agreement”) with Cibreo Partners LLC (the “Second Advisor”) pursuant to which the Second Advisor will receive subscription agreements to purchase 432,891 Class A ordinary shares of Blue Gold Limited. The Second Advisor holds an additional 1,891 Class A Ordinary shares of Blue Gold Limited by virtue of their shareholding in BGHL and thus part of the BGHL Shareholders.
2
The following table summarizes the pro forma number of shares of BGL Ordinary Shares outstanding immediately following the consummation of the Business Combination:
| Equity Capitalization Summary | Shares | % | ||||||
| BGHL shareholders | 11,450,000 | 37.5 | % | |||||
| Perception Public Shareholders | 25,186 | 0.1 | % | |||||
| Perception Managing Sponsor, Former Sponsor and related parties | 4,478,687 | 14.6 | % | |||||
| Blue Capital | 2,000,000 | 6.5 | % | |||||
| BCMP Services Limited | 1,225,000 | 4.0 | % | |||||
| Blue International Holdings Limited. | 2,800,000 | 9.2 | % | |||||
| Blue Gold Holdings Limited | 2,200,000 | 7.2 | % | |||||
| Pegasus Capital Limited | 2,400,000 | 7.9 | % | |||||
| Mark Green | 2,900,000 | 9.5 | % | |||||
| Kaela Ritchie | 500,000 | 1.6 | % | |||||
| Bonaventura Investment Inc. | 160,000 | 0.5 | % | |||||
| Cibreo Partners LLC | 432,891 | 1.4 | % | |||||
| Total Blue Gold Limited Ordinary Shares | 30,571,764 | 100.0 | % | |||||
Accounting Treatment
The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. generally accepted accounting principles (“GAAP”). Under this method of accounting, although Blue Gold Limited acquired all of the outstanding equity interests of BGHL in the Business Combination, Blue Gold Limited was treated as the “acquired” company and BGHL was treated as the accounting acquirer for financial statement reporting purposes. Accordingly, the Business Combination was treated as the equivalent of BGHL issuing stock for the net assets of Blue Gold Limited, accompanied by a recapitalization. The net assets of Blue Gold Limited were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination were those of BGHL.
BGHL was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:
| ● | The BGHL shareholders have the greatest voting interest in the Post-Combination Company; |
| ● | The BGHL shareholders have the ability to control decisions regarding election and removal of directors and officers of the Post-Combination Company; |
| ● | BGHL comprise the ongoing operations of the Post-Combination Company; and |
| ● | BGHL existing senior management is the senior management of the Post-Combination Company. |
The following unaudited pro forma condensed combined statements of operations for the year ended December 31, 2024, are based on the audited historical financial statements of Perception and BGHL. The unaudited pro forma condensed balance sheet as of December 31, 2024 is based on the audited historical financial statements of Perception and BGHL. The audited historical financial statements of Perception contains the historical financial statements of its subsidiary Blue Gold Limited. The unaudited pro forma adjustments are based on information currently available, and assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information and include immaterial rounding differences.
3
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE
SHEET
DECEMBER 31, 2024
(in thousands, except share and per share data)
| BGHL (Historical) |
Perception (Historical) |
Transaction Accounting Adjustments |
Pro Forma Combined |
|||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Current assets | ||||||||||||||||||||
| Cash | $ | 171 | $ | 43 | $ | 295 | (C) | $ | 2,061 | |||||||||||
| (459 | ) | (D) | ||||||||||||||||||
| 108 | (E) | |||||||||||||||||||
| 1,903 | (S) | |||||||||||||||||||
| Prepaid expenses and other assets | 260 | 29 | — | 289 | ||||||||||||||||
| Other receivables | 2 | — | — | 2 | ||||||||||||||||
| Total current assets | 433 | 72 | 1,847 | 2,352 | ||||||||||||||||
| Investments held in Trust Account | — | 3,954 | (3,655 | ) | (A) | — | ||||||||||||||
| (4 | ) | (B) | ||||||||||||||||||
| (295 | ) | (C) | ||||||||||||||||||
| Property, plant and equipment, net | 2,914 | — | 1,389 | (P) | 4,303 | |||||||||||||||
| Mineral rights | 30,100 | — | 16,191 | (P) | 46,291 | |||||||||||||||
| Total Assets | $ | 33,447 | $ | 4,026 | $ | 15,473 | $ | 52,946 | ||||||||||||
| LIABILITIES, REDEEMABLE CLASS A ORDINARY SHARES AND SHAREHOLDERS’ DEFICIT | ||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 2,784 | $ | 1,084 | $ | 966 | (D) | $ | 4,834 | |||||||||||
| Accounts payable - related party | 2,101 | — | — | 2,101 | ||||||||||||||||
| Convertible senior secured promissory note | — | 1,329 | 108 | (E) | — | |||||||||||||||
| (1,437 | ) | (F) | ||||||||||||||||||
| Convertible notes payable | 2,473 | — | (2,473 | ) | (H) | — | ||||||||||||||
| New convertible note | — | — | 1,903 | (S) | 1,903 | |||||||||||||||
| Advances payable | 648 | — | — | 648 | ||||||||||||||||
| Total current liabilities | 8,006 | 2,413 | (933 | ) | 9,486 | |||||||||||||||
| Non-current liabilities | ||||||||||||||||||||
| Warrant liability | — | 283 | (53 | ) | (M) | 230 | ||||||||||||||
| Royalty obligation | 2,700 | — | — | 2,700 | ||||||||||||||||
| Contingent consideration liability | 17,100 | — | — | 17,100 | ||||||||||||||||
| Asset retirement obligation | 13,937 | — | — | 13,937 | ||||||||||||||||
| Total non-current liabilities | 33,737 | 283 | (53 | ) | 33,967 | |||||||||||||||
| Total Liabilities | 41,743 | 2,696 | (986 | ) | 43,453 | |||||||||||||||
| REDEEMABLE CLASS A ORDINARY SHARES | ||||||||||||||||||||
| Perception redeemable Class A ordinary shares, $0.0001 par value, 332,928 shares at redemption value | — | 3,854 | (3,655 | ) | (A) | — | ||||||||||||||
| (4 | ) | (B) | ||||||||||||||||||
| (195 | ) | (L) | ||||||||||||||||||
4
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE
SHEET
DECEMBER 31, 2024
(in thousands, except share and per share data) — (Continued)
| BGHL (Historical) |
Perception (Historical) |
Transaction Accounting Adjustments |
Pro Forma Combined |
|||||||||||||
| SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||
| Perception preference shares, $0.0001 par value; 1,000,000 shares authorized; 609,250 issued and outstanding | — | — | — | (I) | — | |||||||||||
| BGL preference shares, $0.0001 par value; 100,000,000 shares authorized; none issued and outstanding | — | — | — | — | ||||||||||||
| Perception Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 6,505,264 shares issued and outstanding | — | 1 | — | (G) | — | |||||||||||
| 1 | (I) | |||||||||||||||
| 1 | (J) | |||||||||||||||
| — | (L) | |||||||||||||||
| — | (M) | |||||||||||||||
| (3 | )(Q) | |||||||||||||||
| BGL Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized | — | — | 3 | (Q) | 3 | |||||||||||
| Perception Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; one share issued and outstanding | — | — | — | (Q) | — | |||||||||||
| BGHL common stock, $0.00000000001 par value, 100,000,000 authorized and issued shares | — | — | — | (J) | — | |||||||||||
| Additional paid-in capital | 3,718 | 1,789 | (756 | )(D) | 7,624 | |||||||||||
| 1,437 | (F) | |||||||||||||||
| 8,658 | (G) | |||||||||||||||
| 2,473 | (H) | |||||||||||||||
| (1 | )(I) | |||||||||||||||
| (1 | )(J) | |||||||||||||||
| (23,788 | )(K) | |||||||||||||||
| 195 | (L) | |||||||||||||||
| 4,388 | (M) | |||||||||||||||
| 2,612 | (N) | |||||||||||||||
| 3,200 | (O) | |||||||||||||||
| 3,700 | (R) | |||||||||||||||
| Foreign currency translation | (42 | ) | — | — | (42 | ) | ||||||||||
| Accumulated deficit | (11,972 | ) | (4,314 | ) | (669 | )(D) | (15,672 | ) | ||||||||
| (8,658 | )(G) | |||||||||||||||
| 23,788 | (K) | |||||||||||||||
| (4,335 | )(M) | |||||||||||||||
| (2,612 | )(N) | |||||||||||||||
| (3,200 | )(O) | |||||||||||||||
| (3,700 | )(R) | |||||||||||||||
| Shareholders’ Equity (Deficit) attributable to BGL shareholders | (8,296 | ) | (2,524 | ) | 2,733 | (8,087 | ) | |||||||||
| Non-controlling interest | — | — | 17,580 | (P) | 17,580 | |||||||||||
| Total Shareholders’ Equity (Deficit) | (8,296 | ) | (2,524 | ) | 20,313 | 9,493 | ||||||||||
| Total Liabilities, Redeemable Class A Ordinary Shares and Shareholders’ Equity (Deficit) | $ | 33,447 | $ | 4,026 | $ | 15,473 | $ | 52,946 | ||||||||
5
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2024
(in thousands, except share and per share data)
| BGHL (Historical) | Perception (Historical) | Transaction Accounting Adjustments | Pro Forma Combined | |||||||||||||||||
| EXPENSES | ||||||||||||||||||||
| General and administrative expense | $ | 2,112 | $ | 817 | $ | 3,700 | (AA) | $ | 25,434 | |||||||||||
| 8,658 | (HH) | |||||||||||||||||||
| 4,335 | (II) | |||||||||||||||||||
| 2,612 | (JJ) | |||||||||||||||||||
| 3,200 | (KK) | |||||||||||||||||||
| Merger and acquisition expenses | 1,682 | 1,321 | 669 | (GG) | 3,672 | |||||||||||||||
| Plant maintenance costs | 6,252 | — | — | 6,252 | ||||||||||||||||
| Accretion of asset retirement obligation | 1,037 | — | — | 1,037 | ||||||||||||||||
| Depreciation | 42 | — | — | 42 | ||||||||||||||||
| Total operating expenses | 11,125 | 2,138 | 23,174 | 36,437 | ||||||||||||||||
| Loss from operations | (11,125 | ) | (2,138 | ) | (23,174 | ) | (36,437 | ) | ||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||||||
| Change in fair value of warrant liability | — | 424 | (78 | ) | (FF) | 346 | ||||||||||||||
| Change in fair value of derivative liability | — | 123 | (123 | ) | (EE) | — | ||||||||||||||
| Related party interest expense, net | (69 | ) | — | — | (69 | ) | ||||||||||||||
| Interest expense | (443 | ) | — | 443 | (LL) | — | ||||||||||||||
| Interest expense – debt discount | — | (115 | ) | 115 | (BB) | — | ||||||||||||||
| Interest earned in Trust Account | — | 2,409 | (2,409 | ) | (CC) | — | ||||||||||||||
| Total other (expense) income, net | (512 | ) | 2,841 | (2,052 | ) | 277 | ||||||||||||||
| Total net income (loss) | (11,637 | ) | 703 | (25,226 | ) | (36,160 | ) | |||||||||||||
| Net loss attributable to non-controlling Interest | — | — | (872 | ) | (DD) | (872 | ) | |||||||||||||
| Net income (loss) attributable to the Shareholders of the Company | $ | (11,637 | ) | $ | 703 | $ | (24,354 | ) | $ | (35,288 | ) | |||||||||
| Loss per share – basic and fully diluted | $ | (0.11 | ) | |||||||||||||||||
| Basic and diluted net income per share, redeemable Class A Ordinary Shares | $ | 0.46 | ||||||||||||||||||
| Basic net loss per share, non-redeemable Class A and Class B ordinary shares | $ | (0.21 | ) | |||||||||||||||||
| Diluted net loss per share, non-redeemable Class A and Class B ordinary shares | $ | (0.20 | ) | |||||||||||||||||
| Weighted average number of shares outstanding, basic and diluted | 30,571,764 | |||||||||||||||||||
| Net loss per share attributable to shareholders of the Company, basic and diluted | $ | (1.15 | ) | |||||||||||||||||
6
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1. Basis of Presentation
The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP as BGHL was determined to be the accounting acquirer, primarily due to the fact that BGHL’s stockholders continue to control the Post-Combination Company. Under this method of accounting, although Blue Gold Limited acquired all of the outstanding equity interests of BGHL in the Business Combination, Blue Gold Limited was treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of BGHL issuing stock for the net assets of Blue Gold Limited, accompanied by a recapitalization. The net assets of Blue Gold Limited were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination were those of BGHL.
The unaudited pro forma condensed combined balance sheet as of December 31, 2024, assumes that the Business Combination and related transactions occurred on December 31, 2024. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024, presents pro forma effect to the Business Combination as if it had been completed on January 1, 2024.
The unaudited pro forma condensed combined balance sheet as of December 31, 2024, has been prepared using, and should be read in conjunction with, the following:
| ● | Perception’s audited balance sheet as of December 31, 2024 and the related notes for the year ended December 31, 2024, incorporated by reference; and |
| ● | BGHL’s audited balance sheet as of December 31, 2024 and the related notes for the year ended December 31, 2024, incorporated by reference. |
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024, has been prepared using, and should be read in conjunction with, the following:
| ● | Perception’s audited statement of operations for the year ended December 31, 2024, and the related notes, incorporated by reference; and |
| ● | BGHL’s audited statement of operations for the year ended December 31, 2024, and the related notes, incorporated by reference. |
As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.
The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with the Business Combination.
The pro forma adjustments reflecting the consummation of the Business Combination are based on certain currently available information and certain assumptions and methodologies that Perception believes are reasonable under the circumstances. The unaudited condensed pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. Perception, Blue Gold Limited and BGHL believe that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination based on information available to management at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position of the Post-Combination Company would have been had the Business Combination taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the Post-Combination Company. They should be read in conjunction with the historical financial statements and notes thereto of Perception and BGHL.
7
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
2. Accounting Policies
Upon consummation of the Business Combination, management of the Post-Combination Company performed a comprehensive review of the three entities’ accounting policies. As a result of the review, management of the Post-Combination Company did not identify differences between the accounting policies of the three entities which, when conformed, have a material impact on the financial statements of the Post-Combination Company. Based on its analysis, management of the Post-Combination Company did not identify any differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited pro forma condensed combined financial information does not assume any differences in accounting policies.
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and has been prepared for informational purposes only.
The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” to depict the Transaction Accounting Adjustments and present the Management’s Adjustments. Perception has elected not to present Management’s Adjustments and is only presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to include all necessary Transaction Accounting Adjustments pursuant to Article 11 of Regulation S-X, including those that are not expected to have a continuing impact.
The audited historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give pro forma effect to Transaction Accounting Adjustments that reflect the accounting for the transaction under GAAP. BGHL, BGL and Perception have not had any historical business activities prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between these two companies. Blue Gold Limited is the wholly owned subsidiary of Perception and accordingly, pro forma adjustments were included to eliminate activities between these two companies.
The pro forma combined statement of operations does not reflect a provision for income taxes or any amounts that would have resulted had the Post-Combination Company filed consolidated income tax returns during the period presented. The pro forma condensed combined balance sheet does not reflect the deferred taxes of the Post-Combination Company as a result of the Business Combination. Since it is likely that the Post-Combination Company will record a valuation allowance against the total U.S. and state deferred tax assets given the net operating losses as the recoverability of the tax assets is uncertain, the tax provision is zero.
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet
| (A) | Reflects the redemption of 307,742 Perception Class A ordinary shares for aggregate redemption payments of $3.66 million at a redemption price of approximately $11.88 per share in March 3025. |
| (B) | Reflects the true up of investments held in Trust Account share upon consummation of the Business Combination. |
| (C) | Reflects the transfer of investments held in Trust Account to cash. |
| (D) | Represents transaction costs incurred by Perception and BGHL of approximately $2.5 million and $2.1 million, respectively. These costs are accounted for as a reduction in the combined cash account with a corresponding reduction in additional paid-in capital or accumulated deficit consistent with the treatment described in SEC Staff Accounting Bulletin Topic 5.A. These transaction costs will not recur in the Post-Combination Company’s income beyond 12 months after the transaction. |
For the Perception transaction costs, $0.8 million has been paid and $1.0 million has been accrued as of the pro forma balance sheet date. The remaining amount of $0.7 million is reflected as an adjustment to accumulated losses.
For the BGHL transaction costs, $0.7 million has been paid and $0.7 million has been accrued as of the pro forma balance sheet date. The remaining amount of $0.7 million is included as an adjustment to additional paid-in capital.
8
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
| (E) | Represents the receipt of additional proceeds of $0.1 million from the issuance of promissory notes to Blue Capital. |
| (F) | Represents the conversion of the Blue Capital promissory notes to equity upon the Closing of the Business Combination. |
| (G) | Reflects the cancellation of 246,313 Managing Sponsor shares pursuant to the restated and amended Sponsor Support Agreement and Lockup Agreement and the issuance of 432,891 shares pursuant to the Cibreo Letter Agreement. |
| (H) | Represents the conversion of $2.5 million convertible notes to equity upon the Closing of the Business Combination. |
| (I) | Represents the conversion of 609,250 preference shares to 12,185,000 Class A Ordinary Shares. |
| (J) | Represents the issuance of 11,450,000 Class A Ordinary Shares to the existing BGHL’s shareholders upon the Closing of the Business Combination. |
| (K) | Reflects the elimination of Perception’s historical accumulated deficit after recording the transaction costs as described in (D) above, the issuance of shares pursuant to the Cibreo Letter Agreement as described in (G) above, the exchange of warrants to shares as described in (M) below, the recognition of share-based compensation as described in (N) below, and the issuance of shares for advisory services as described in (O) below. |
| (L) | Reflects the reclassification of 25,186 shares of Perception Class A ordinary shares subject to possible redemption to permanent equity. |
| (M) | Reflects the exchange of 2,632,500 Private Placement Warrants owned by the Sponsor for 219,375 Class A Ordinary Shares. |
| (N) | Reflects the recognition of share-based compensation upon the closing of the Business Combination for the founder shares transferred from Sponsor to Perception’s directors and management. |
| (O) | Reflects the sale of 160,000 shares at $0.0001 per share for advisory services pursuant to the settlement and release agreement dated August 7, 2024. |
| (P) | Represents non-controlling interest of 10% of BG-BPL at the acquisition date of the mine. In accordance with ASC 810-10-30-4, the 10% ownership of Blue Gold Bogoso Prestea Ltd by the Government of the Republic of Ghana has been recorded at fair value. |
| (Q) | Reflects outcome of the Business Combination with BGL as the surviving entity. |
| (R) | Represents stock-based compensation expense on grant of options on 17,500 preference shares to officers of BGHL with an exercise price of $1.15 per share. |
| (S) | Reflects the cash proceeds received in connection with the issuance of a convertible note (“New Convertible Note”) by BGHL upon the Closing. As of June 25, 2025, BGHL is undertaking a fundraising in the form of a convertible note (“CLN”), with $1,902,586 having been subscribed to date. The CLN has a maturity date of October 31, 2025 and a redemption premium of 20%. The CLNs will be automatically converted into ordinary shares of Blue Gold Limited thirty (30) days after the Listing of Blue Gold Limited. The conversion price will be the lower of (i) the Volume Weighted Average Price (VWAP) over the 30-day period following the Listing less the Applicable Discount and (ii) the closing price on the day prior to the conversion less the Applicable Discount. The Applicable Discount is a 40% discount for investments made prior to the Listing and a 20% discount for investments made following the Listing. |
9
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations
| (AA) | Represents stock-based compensation expense on grant of options on 17,500 preference shares to officers of BGHL for an exercise price of $1.15 per share. |
| (BB) | Represents an adjustment to eliminate debt discount amortization after giving effect to the conversion of the Blue Capital promissory notes as if the Business Combination had occurred on January 1, 2024. |
| (CC) | Represents an adjustment to eliminate interest earned on investments held in Trust Account after giving effect to the Business Combination as if it had occurred on January 1, 2024. |
| (DD) | Represents non-controlling interest of 10% of losses of BG-BPL for year ended December 31, 2024. |
| (EE) | Represents an adjustment to eliminate change in fair value of derivative liability after giving effect to the conversion of the Blue Capital promissory notes as if the Business Combination had occurred on January 1, 2024. |
| (FF) | Represents an adjustment to eliminate change in fair value of warrant liability after giving effect to the exchange of Private Placement Warrants to shares as described in (M) above as if the Business Combination had occurred on January 1, 2024. |
| (GG) | Represents an adjustment to reflect the effect of the pro forma balance sheet adjustment presented in (D) above in the aggregate amount of $0.7 million for the direct, incremental costs of the Business Combination incurred by Perception, assuming those adjustments were made as of the beginning of the fiscal year presented. As these costs are directly related to the Business Combination, they are not expected to recur in the income of the Post-Combination Company beyond 12 months after the Business Combination. |
| (HH) | Represents the cancellation of 246,313 Managing Sponsor shares pursuant to the restated and amended Sponsor Support Agreement and Lockup Agreement and the issuance of 432,891 shares pursuant to the Cibreo Letter Agreement, as described in (G) above. |
| (II) | Represents the exchange of 2,632,500 Private Placement Warrants owned by the Sponsor for 219,375 Class A Ordinary Shares, as described in (M) above. |
| (JJ) | Represents the recognition of share-based compensation upon the closing of the Business Combination for the founder shares transferred from Sponsor to Perception’s directors and management, as described in (N) above. |
10
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
| (KK) | Represents the sale of 160,000 shares at $0.0001 per share for advisory services pursuant to the settlement and release agreement dated August 7, 2024, as described in (O) above. |
| (LL) | Represents an adjustment to eliminate interest expense after giving effect to the conversion of the $2.5 million convertible notes as if it had occurred on January 1, 2024. |
4. Net Loss per Share
Represents the net loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2024. As the Business Combination and related transactions are being reflected as if they had occurred at the beginning of January 1, 2024, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Business Combination have been outstanding for the entire period presented.
The unaudited pro forma condensed combined financial information has been prepared with the actual redemptions by Perception Public Shareholders of shares of Perception Class A Ordinary Shares for the year ended December 31, 2024:
| (in thousands, except share and per share data) | ||||
| Net loss attributable to the shareholders of the Company | $ | (35,288 | ) | |
| Weighted average shares outstanding, basic and diluted(1) | 30,571,764 | |||
| Net loss per share attributable to shareholders of the Company, basic and diluted | $ | (1.15 | ) | |
| (1) | For the purposes of calculating diluted earnings per share, all outstanding 11,500,000 Perception Public Warrants and Gerald warrants have been assumed to have been exercised. However, since this results in anti-dilution, the effect of such exercise was not included in calculation of diluted loss per share. |
11
Exhibit 15.2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
Perception Capital Corp IV.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Perception Capital Corp IV. (the “Company”) as of December 31, 2024 and 2023, the related statements of operations, changes in redeemable class A ordinary shares and shareholders’ deficit, and cash flows for the year ended December 31, 2024 and 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the year ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs or complete a business combination by April 15, 2025, then the Company will cease all operations except for the purpose of liquidating. Both the liquidity condition and mandatory redemption raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company’s auditor since 2023.
New York, New York
March 27, 2025
PCAOB Number 100
1
PERCEPTION
CAPITAL CORP IV.
CONSOLIDATED BALANCE SHEETS
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 43,499 | $ | 222,581 | ||||
| Prepaid expenses | 28,500 | 407,235 | ||||||
| Total current assets | 71,999 | 629,816 | ||||||
| Cash held in Trust Account | 3,954,190 | 52,977,929 | ||||||
| Total Assets | $ | 4,026,189 | $ | 53,607,745 | ||||
| LIABILITIES, REDEEMABLE CLASS A ORDINARY SHARES AND SHAREHOLDERS’ DEFICIT LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 1,084,378 | $ | 118,682 | ||||
| Convertible senior secured promissory note | 1,328,839 | 1,000,000 | ||||||
| Derivative liability | — | 7,273 | ||||||
| Total current liabilities | 2,413,217 | 1,125,955 | ||||||
| Non-current liabilities | ||||||||
| Warrant liabilities | 282,650 | 1,162,320 | ||||||
| Total non-current liabilities | 282,650 | 1,162,320 | ||||||
| Total Liabilities | 2,695,867 | 2,288,275 | ||||||
COMMITMENTS AND CONTINGENCIES (NOTE 7)
| ||||||||
| CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION | ||||||||
| Class A ordinary shares subject to possible redemption, $0.0001 par value; 332,928 and 4,777,672 shares issued and outstanding subject to possible redemption, at approximately $11.58 and $11.07 redemption value at December 31, 2024 and 2023, respectively | 3,854,190 | 52,877,929 | ||||||
| SHAREHOLDERS’ DEFICIT | ||||||||
| Preference shares, $0.0001 par value; 1,000,000 shares authorized; 609,250 issued and outstanding and none issued or outstanding at December 31, 2024 and 2023, respectively | 60 | — | ||||||
| Class A ordinary shares; $0.0001 par value; 200,000,000 shares authorized; 6,505,624 and 5,749,999 shares issued and outstanding, at December 31, 2024 and 2023, respectively (excluding shares subject to redemption) | 650 | 575 | ||||||
| Class B ordinary shares; $0.0001 par value; 20,000,000 shares authorized; one share issued and outstanding at December 31, 2024 and 2023 | — | — | ||||||
| Additional paid-in capital | 1,789,280 | 3,457,783 | ||||||
| Accumulated deficit | (4,313,858 | ) | (5,016,817 | ) | ||||
| Total Shareholders’ Deficit | (2,523,868 | ) | (1,558,459 | ) | ||||
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | 4,026,189 | $ | 53,607,745 | ||||
The accompanying notes are an integral part of these consolidated financial statements
2
PERCEPTION CAPITAL CORP IV.
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Years Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| EXPENSES | ||||||||
| General and administrative expenses | $ | 2,137,873 | $ | 4,565,129 | ||||
| Loss from operations | (2,137,873 | ) | (4,565,129 | ) | ||||
| OTHER INCOME | ||||||||
| Forgiveness of debt | — | 720,077 | ||||||
| Gain attributable to derecognition of deferred underwriting fee allocated to warrants | — | 409,845 | ||||||
| Change in fair value of warrant liability | 424,482 | 461,680 | ||||||
| Change in fair value of derivative liability | 122,297 | 9,159 | ||||||
| Interest expense – debt discount | (115,024 | ) | (16,432 | ) | ||||
| Interest earned in Trust Account | 2,409,077 | 8,128,147 | ||||||
| Total other income, net | 2,840,832 | 9,712,476 | ||||||
| NET INCOME ALLOCABLE TO COMMON SHAREHOLDERS | $ | 702,959 | $ | 5,147,347 | ||||
| WEIGHTED AVERAGE SHARES OUTSTANDING OF REDEEMABLE ORDINARY SHARES, BASIC AND DILUTED | 4,243,331 | 16,459,493 | ||||||
| BASIC AND DILUTED NET INCOME PER SHARE, REDEEMABLE ORDINARY SHARES | $ | 0.46 | $ | 0.39 | ||||
| WEIGHTED AVERAGE SHARES OUTSTANDING OF NON-REDEEMABLE ORDINARY SHARES, BASIC | 5,991,552 | 5,750,000 | ||||||
| BASIC NET LOSS PER SHARE, NON-REDEEMABLE ORDINARY SHARES | $ | (0.21 | ) | $ | (0.23 | ) | ||
| WEIGHTED AVERAGE SHARES OUTSTANDING OF NON-REDEEMABLE ORDINARY SHARES, DILUTED | 6,148,938 | 5,750,000 | ||||||
| DILUTED NET LOSS PER SHARE, NON-REDEEMABLE ORDINARY SHARES | $ | (0.20 | ) | $ | (0.23 | ) | ||
The accompanying notes are an integral part of these consolidated financial statements
3
PERCEPTION CAPITAL CORP IV.
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CLASS A ORDINARY SHARES AND
SHAREHOLDERS’ DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 2024
| Shareholders’ Deficit | ||||||||||||||||||||||||||||||||||||||||
| Redeemable Class A | Preference | Class A Ordinary | Class B Ordinary | Additional | Total | |||||||||||||||||||||||||||||||||||
| Ordinary Shares | Shares | Shares | Shares | paid-in | Accumulated | shareholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Amount | Shares | Amount | Shares | Amount | capital | deficit | deficit | |||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | 4,777,672 | $ | 52,877,929 | $ | — | 5,749,999 | $ | 575 | 1 | $ | — | $ | 3,457,783 | $ | (5,016,817 | ) | $ | (1,558,459 | ) | |||||||||||||||||||||
| Remeasurement of Redeemable Class A ordinary shares subject to possible redemption | — | 2,823,556 | — | — | — | — | — | (2,823,556 | ) | — | (2,823,556 | ) | ||||||||||||||||||||||||||||
| Conversion of Private Warrants to Class A ordinary shares | — | — | — | 755,625 | 75 | — | — | 455,113 | — | 455,188 | ||||||||||||||||||||||||||||||
| Issuance of Preference Shares | — | — | 60 | — | — | — | — | 699,940 | — | 700,000 | ||||||||||||||||||||||||||||||
| Redemption of Redeemable Class A Ordinary Shares | (4,444,744 | ) | (51,847,295 | ) | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | 702,959 | 702,959 | |||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | 332,928 | $ | 3,854,190 | $ | 60 | 6,505,624 | $ | 650 | 1 | $ | — | $ | 1,789,280 | $ | (4,313,858 | ) | $ | (2,523,868 | ) | |||||||||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, 2023
| Shareholders’ Deficit | ||||||||||||||||||||||||||||||||||||
| Redeemable Class A | Class A Ordinary | Class B Ordinary | Additional | Total | ||||||||||||||||||||||||||||||||
| Ordinary Shares | Shares | Shares | paid-in | Accumulated | shareholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | capital | deficit | deficit | ||||||||||||||||||||||||||||
| Balance, December 31, 2022 | 23,000,000 | $ | 237,941,214 | — | $ | — | 5,750,000 | $ | 575 | $ | — | $ | (9,906,251 | ) | $ | (9,905,676 | ) | |||||||||||||||||||
| Remeasurement of Redeemable Class A ordinary shares subject to possible redemption | — | 10,337,286 | — | — | — | — | (2,439,217 | ) | (257,913 | ) | (2,697,130 | ) | ||||||||||||||||||||||||
| Redemption of Redeemable Class A ordinary shares | (18,222,328 | ) | (195,400,571 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| Capital Contribution – Sponsor | — | — | — | — | — | — | 5,897,000 | — | 5,897,000 | |||||||||||||||||||||||||||
| Conversion of Non-Redeemable Class B ordinary shares to Non-Redeemable Class A ordinary shares | — | — | 5,749,999 | 575 | (5,749,999 | ) | (575 | ) | — | — | — | |||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | 5,147,347 | 5,147,347 | |||||||||||||||||||||||||||
| Balance, December 31, 2023 | 4,777,672 | $ | 52,877,929 | 5,749,999 | $ | 575 | 1 | $ | — | $ | 3,457,783 | $ | (5,016,817 | ) | $ | (1,558,459 | ) | |||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
4
PERCEPTION CAPITAL CORP IV.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the year ended December 31, 2024 | For the year ended December 31, 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 702,959 | $ | 5,147,347 | ||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Change in fair value of warrant liability | (424,482 | ) | (461,680 | ) | ||||
| Change in fair value of derivative liability | (122,297 | ) | (9,159 | ) | ||||
| Gain attributable to derecognition of deferred underwriting fee allocated to warrants | — | (409,845 | ) | |||||
| Forgiveness of debt | — | (720,077 | ) | |||||
| Interest expense – debt discount | 115,024 | 16,432 | ||||||
| Interest earned in Trust Account | (2,409,077 | ) | (8,128,147 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | 378,735 | (138,867 | ) | |||||
| Accounts payable and accrued expenses | 965,696 | 534,440 | ||||||
| Net cash flows used in operating activities | (793,442 | ) | (4,169,556 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Investment of cash into Trust Account | (414,479 | ) | (2,209,139 | ) | ||||
| Cash withdrawn from Trust Account in connection with redemption | 51,847,295 | 195,400,571 | ||||||
| Net cash flows provided by investing activities | 51,432,816 | 193,191,432 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from Sponsor convertible note | — | 5,560,000 | ||||||
| Proceeds from promissory note | 328,839 | 1,000,000 | ||||||
| Preferred Stock Purchase Agreement | 700,000 | — | ||||||
| Redemption of shares | (51,847,295 | ) | (195,400,571 | ) | ||||
| Net cash flows used in financing activities | (50,818,456 | ) | (188,840,571 | ) | ||||
| NET CHANGE IN CASH | (179,082 | ) | 181,305 | |||||
| CASH, BEGINNING OF YEAR | 222,581 | 41,276 | ||||||
| CASH, END OF YEAR | $ | 43,499 | $ | 222,581 | ||||
| Supplemental disclosure of noncash activities: | ||||||||
| Change in value of Class A subject to possible redemption | $ | 2,823,556 | $ | 10,337,286 | ||||
| Conversion of Private Warrants to Class A ordinary shares | $ | 455,188 | $ | — | ||||
| Capital Contribution - former Sponsor | $ | — | $ | 5,897,000 | ||||
| Derecognition of deferred underwriting fee, net of amount recognized as a gain | $ | — | $ | (7,640,155 | ) | |||
| Conversion of Founder Shares | $ | — | $ | (575 | ) | |||
The accompanying notes are an integral part of these consolidated financial statements
5
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Description of Organization and Business Operations
Perception Capital Corp IV. (the “Company”) was incorporated in the Cayman Islands on June 9, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company’s original sponsor was RCF VII Sponsor LLC, a Delaware limited liability company (the “Original Sponsor”).
On November 2, 2023, the Original Sponsor entered into a Securities Purchase Agreement (the “SPA”) with Perception Capital Partners IV. LLC (the “Buyer” or “New Sponsor”), pursuant to which, among other things, the Buyer acquired certain of the Original Sponsor’s (i) Class A Ordinary Shares, par value $0.0001 per share (“Class A Ordinary Shares”), of the Company and (ii) private placement warrants (together with the Class A Ordinary Shares, the “Securities”).
On November 6, 2023, in connection with the closing (“Closing”) of the transactions contemplated by the SPA, the Company entered into a Joinder Agreement (the “Joinder”) to that certain Registration Rights Agreement dated November 9, 2021, with the Original Sponsor and New Sponsor. Pursuant to the Joinder, New Sponsor will receive the same rights and benefits with respect to its newly acquired Class A Ordinary Shares (as defined below) and private placement warrants as the Original Sponsor has with respect to its Class A Ordinary Shares and private placement warrants.
In connection with the Closing of the transactions contemplated by the SPA, on November 6, 2023: (i) each of the Company’s then-current directors, James McClements, Sunny S. Shah, Thomas M. Boehlert, Hugo Dryland, Elodie Grant Goodey, Timothy Baker, and Daniel Malchuk, resigned as directors, and the Company accepted their resignations; (ii) the vacancies on the Company’s board of directors caused by such resignations were filled by Scott Honour, Rick Gaenzle, R. Rudolph Reinfrank, Thomas J. Abood and Karrie Willis (the “New Directors”); (iii) each of the Company’s then-current officers, Sunny S. Shah, Thomas M. Boehlert and Rebecca Coffelt, resigned as Chief Executive Officer, Chief Financial Officer, and Secretary, respectively, and the Company accepted their resignations; and (iv) the appointments of Rick Gaenzle as Chief Executive Officer, John Stanfield as Chief Financial Officer and Secretary, Scott Honour as Chairman of the Board, and Tao Tan as President (the “New Officers”) became effective. R. Rudolph Reinfrank, Thomas J. Abood and Karrie Willis will serve as members of the Company’s Audit Committee, Nominating Committee and Compensation Committee.
On November 6, 2023, the Original Sponsor and New Sponsor consummated the transactions contemplated by the SPA pursuant to which, among other things, New Sponsor acquired certain of the Original Sponsor’s (i) Class A Ordinary Shares and (ii) private placement warrants, subject to the terms and conditions described in the SPA.
On January 19, 2024, the Company received a notice from the New York Stock Exchange (the “NYSE”) that it was not in compliance with the NYSE’s continued listing requirements. Specifically, the NYSE advised the Company that it is not in compliance with Section 802.01B of the NYSE Listed Company Manual, which requires an NYSE-listed company to maintain a minimum of 300 public stockholders on a continuous basis.
The Company submitted a business plan to the NYSE demonstrating the Company’s ability to regain compliance with the NYSE’s rules. The NYSE has accepted the plan and as a result, the Company is subject to quarterly monitoring for compliance with the business plan and the Company’s common stock will continue to trade on the NYSE during the period, subject to the Company’s compliance with other NYSE continued listing requirements.
On November 15, 2024, the Company received a letter from the NYSE stating that the staff of NYSE Regulation has determined to commence proceedings to delist the Company’s Ordinary Shares, Units and Warrants (collectively, the “Securities”) pursuant to Sections 802.01B and 102.06(e) of the NYSE’s Listed Company Manual because the Company failed to consummate a business combination within 36 months of the effectiveness of its initial public offering registration statement, or such shorter period that the Company specified in its registration statement. Trading in the Securities has been suspended.
Effective November 18, 2024, the Ordinary Shares, Units and Warrants began trading in the over-the-counter market under the symbols “RCFAF,” “RCFUF” and “RCFWF,” respectively.
As of December 31, 2024, the Company had not commenced any operations. All activity for the period from June 9, 2021 (inception) through December 31, 2024 relates to the Company’s formation, the initial public offering (“Public Offering”), redemptions and activities related to pursuing merger opportunities and closing on its initial Business Combination (Note 7). The Company will not generate operating revenues prior to the completion of a Business Combination and generates non-operating income in the form of interest income on Permitted Investments (as defined below) from the proceeds derived from the Public Offering and extension payments as defined under Trust Account in Note 1.
6
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Financing
The registration statement for the Company’s Public Offering was declared effective by the United States Securities and Exchange Commission (the “SEC”) on November 9, 2021. The Public Offering closed on November 15, 2021 (the “Closing Date”). Simultaneously with the closing of the Public Offering, the Sponsor purchased an aggregate of 11,700,000 warrants to purchase Class A Ordinary Shares (“Private Placement Warrants”) for $1.00 each, or $11,700,000 in the aggregate, in a private placement on the Closing Date (the “Private Placement”).
In its Public Offering, the Company sold 23,000,000 Units at a price of $10.00 per Unit. Each unit consists of one Class A Ordinary Share and one-half of a redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles the holder to purchase one Class A Ordinary share at a price of $11.50 per share, subject to adjustment (see Note 6). The Company intends to finance a Business Combination with the remaining proceeds from its $230,000,000 Public Offering and $11,700,000 Private Placement.
At the Closing Date, proceeds of $241,700,000, net of underwriting discounts of $4,600,000 and $2,500,000 designated for operational use were deposited in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “Trust Account”) as described below. Transaction costs amounted to $13,267,977, consisting of $12,650,000 of underwriters fees of which $8,050,000 was for Deferred Underwriting Commissions (see Note 8) and $617,977 of other offering costs.
On October 26, 2023 and November 6, 2023, the underwriters for the Company’s Initial Public Offering, consisting of Barclays Capital Inc. and Citigroup Global Markets Inc., agreed to waive all rights to their respective portion of the underwriting commissions (or approximately $8.1 million) with respect to any future Business Combination.
Of the $241,700,000 total proceeds from the Public Offering and Private Placement, $234,600,000 was deposited into the Trust Account on the Closing Date. The funds in the Trust Account was invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations (collectively “Permitted Investments”). Funds will remain in the Trust Account except for the withdrawal of interest earned on the funds that may be released to the Company to pay taxes and redemptions of public shares.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a target business. The Company is focused on sponsoring the public listing of a company that combines attractive business fundamentals with, or with the potential for strong environmental, social and governance principles and practices through a Business Combination. As used herein, the target business must be with one or more target businesses that together have an aggregate fair market value equal to at least 80% of the balance in the Trust Account at the time of the Company signing a definitive agreement.
Trust Account
On May 9, 2023, the Company held an extraordinary general meeting of shareholders (the “Extraordinary General Meeting”). At the Extraordinary General Meeting, the Company’s shareholders approved several proposals to amend the Company’s Amended and Restated Memorandum and Articles of Association (the “Charter”) to (i) extend the date by which the Company must consummate a Business Combination from May 15, 2023 to May 15, 2024 (the “Extended Date”), (ii) permit the Company’s board of directors, in its sole discretion, to elect to wind up the Company’s operations on an earlier date than the Extended Date as determined by the Board and included in a public announcement, (iii) eliminate from the Charter the limitation that the Company may not redeem public shares in an amount that would cause the Company’s net tangible assets to be less than $5,000,001 in connection with the Company’s Business Combination, and (iv) provide for the right of a holder of the Company’s Class B ordinary shares, par value $0.0001 per share, to convert into Class A Ordinary Shares on a one-for-one basis prior to the closing of Business Combination at the election of the holder.
Additionally, on May 9, 2023, the Company held the Extraordinary General Meeting, in connection with which, shareholders holding an aggregate of 9,985,568 Class A Ordinary Shares exercised their right to redeem their shares for approximately $10.50 per share (the “Redemption”), for an aggregate redemption amount of $104,889,892 of the funds held in the Company’s Trust Account.
On December 5, 2023, at an Extraordinary General Meeting (the “Meeting”), shareholders approved an amendment to the Company’s Amended and Restated Memorandum and Articles of Association (the “Memorandum”) extending the deadline by which the Company must consummate an initial business combination from May 15, 2024 to November 15, 2024 provided that the Company make a payment into the trust account for the first three-month extension (from December 15, 2023 through March 15, 2024) equal to the lesser of $150,000 or $0.045 per share of Class A Ordinary Shares entitled to redemption rights and thereafter, a payment of equal to the lesser of $50,000 or $0.015 per Public Share per month through November 15, 2024. Shareholders also approved an amendment to change the name of the Company from RCF Acquisition Corp. to Perception Capital Corp IV.
In connection with the extensions amendment proposal voted on at the Meeting, shareholders holding an aggregate of 8,236,760 Class A ordinary shares exercised their right to redeem their shares for approximately $10.99 per share, for an aggregate redemption amount of $90,510,679 of the funds held in the Company’s Trust Account.
7
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On November 13, 2024, at an Extraordinary General Meeting (the “Third Meeting”), shareholders approved an amendment to the Company’s Amended and Restated Memorandum and Articles of Association (the “Memorandum”) extending the deadline by which the Company must consummate an initial business combination from November 15, 2024 to November 15, 2025 on a month to month basis provided that the Company make a payment into the Trust Account established in connection with the Company’s IPO equal to $5,000 per month for each month extended. This proposal was approved.
In connection with the extensions amendment proposal voted on at the Second Meeting, shareholders holding an aggregate of 4,444,744 Class A ordinary shares exercised their right to redeem their shares for approximately $11.66 per share, for an aggregate redemption amount of $51,847,295 of the funds held in the Company’s Trust Account.
On November 15, 2024, December 13, 2024, January 15, 2025, February 10, 2025 and March 17, 2025, a deposit of $5,000 was made into the Trust Account to extend the deadline by which an initial business combination must be completed from November 15, 2024 to December 15, 2024, from December 15, 2024 to January 15, 2025, from January 15, 2025 to February 15, 2025, from February 15, 2025 to March 15, 2025 and from March 15, 2025 to April 15, 2025.
If the Company does not complete a Business Combination within this period, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds in the Trust Account and not previously released to the Company to pay its taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under law to provide for claims of creditors and the requirements of other applicable law.
The Initial Shareholders (as defined in Note 4 below) and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to their Founder Shares (as defined in Note 4 below) if the Company fails to complete a Business Combination by April 15, 2025 (or as late as November 15, 2025 if the Company further extends the deadline and makes the required deposit into the Trust Account). However, if the Initial Shareholders acquire public shares after the Closing Date, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if the Company fails to complete a Business Combination by April 15, 2025.
If the Company fails to complete a Business Combination, the redemption of the Company’s public shares will reduce the book value of the shares held by the Sponsor, who will be the only remaining shareholder after such redemptions. If the Company holds a shareholder vote or there is a tender offer for shares in connection with a Business Combination, a Public Shareholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of a Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes. As a result, such shares are recorded at their redemption amount and classified as temporary equity on the consolidated balance sheets, in accordance with Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity.”
The funds held in the Trust Account will not be released until the earliest of (i) the completion of a Business Combination, (ii) the redemption of the public shares if the Company has not completed a Business Combination by April 15, 2025 (or as late as November 15, 2025 if the Company further extends the deadline and makes the required deposit into the Trust Account), subject to applicable law, or (iii) the redemption of the public shares properly submitted in connection with a shareholder vote to amend the amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company obligation to allow redemption in connection with a Business Combination or to redeem 100% of the Company’s public shares if the Company has not consummated a Business Combination by April 15, 2025 (or as late as November 15, 2025 if the Company further extends the deadline and makes the required deposit into the Trust Account) or (B) with respect to any other provisions relating to shareholders’ rights or pre-initial business combination activity.
Liquidity, Capital Resources and Going Concern
As of December 31, 2024, the Company had $43,499 in its operating bank accounts, $3,954,190 in cash held in the Trust Account (Note 2) to be used for a Business Combination or to repurchase or redeem its ordinary shares in connection therewith and a working capital deficit of $2,341,218.
Until the consummation of a business combination, the Company will be using the funds held outside of the Trust Account primarily to complete a Business Combination.
8
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. The Company anticipates that the cash held outside of the Trust Account as of December 31, 2024, will not be sufficient to allow the Company to operate until April 15, 2025 (or as late as November 15, 2025 if the Company further extends the deadline and makes the required deposit into the Trust Account), the extended date at which the Company must complete a Business Combination. If the Company is unable to complete a Business Combination by April 15, 2025, then the Company will cease all operations except for the purpose of liquidating.
If the Company completes the initial business combination, the Company will repay any loaned amounts. In the event that the Company’s initial business combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts.
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Codification (“ASC”) 205-40, “Going Concern,” while the Company expects to have sufficient access to additional sources of capital under the Sponsor Convertible Note, there is no current obligation on the part of the Sponsor to provide additional capital and no assurances can be provided that such additional capital will ultimately be available if necessary. In the event that the Company does not consummate a Business Combination on or before April 15, 2025 (or such earlier date as determined by the board of Directors and included in a public announcement). Management has determined that substantial doubt exists about the Company’s ability to continue as a going concern due to the need to obtain additional capital from the Sponsor to address the Company’s liquidity condition, the date for mandatory liquidation and subsequent dissolution. The Sponsor is not obligated to advance additional capital. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after April 15, 2025.
Risks and Uncertainties
The length and impact of the ongoing military conflict between Russia and Ukraine and the most recent escalation of ongoing conflict in the Middle East are highly unpredictable, it could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. As a result, these could have a negative effect domestically and internationally and the impact of these conflicts are not determinable as of the date of these financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 2 - Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”).
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Blue Gold Limited. There has been no intercompany activity since inception.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates reflected in the Company’s consolidated financial statements include, but are not limited to, valuation of the warrant liability and the derivative liability.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash and cash equivalents. The Company did not have any cash equivalents as of December 31, 2024 and 2023.
Cash Held in Trust Account
On November 21, 2023, the Company liquidated the U.S. government treasury obligations or money market funds held in the Trust Account. As of December 31, 2024 and 2023, the funds in the Trust Account were maintained in cash in an interest-bearing demand deposit account at a bank until the earlier of consummation of the Company’s initial Business Combination and liquidation. Prior to November 21, 2023, the Company’s portfolio of investments was comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the consolidated balance sheets at fair value at the end of each reporting period. The change in fair value of these securities is included in income from investments held in the Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
9
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations and cash flows.
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the consolidated balance sheets, primarily due to their short-term nature, except for the warrants and redeemable shares.
Fair Value Measurement
ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value.
The three levels of the fair value hierarchy under ASC 820 are as follows:
| ● | Level 1 - Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used. |
| ● | Level 2 - Pricing inputs are other than quoted prices included within Level 1 that are observable for the investment, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| ● | Level 3 - Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation. |
In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the investment is categorized in its entirety is determined based on the lowest level input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its entirety requires judgment and considers factors specific to the investment. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment. See Note 6 for additional information on assets and liabilities measured at fair value.
Warrant Liabilities
The Company evaluated the Public Warrants and Private Placement Warrants (collectively, “Warrant Securities”) in accordance with ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity” and concluded that the Warrant Securities could not be accounted for as components of equity. As the Warrant Securities meet the definition of a derivative in accordance with ASC 815, the Warrant Securities are recorded as warrant liability on the accompanying consolidated balance sheets and measured at fair value at inception (the Closing Date) and remeasured at each reporting date in accordance with ASC 820, “Fair Value Measurement,” with changes in fair value recognized in the consolidated statements of operations in the period of change.
Convertible Senior Secured Promissory Note
The Company evaluated the Convertible Senior Secured Promissory Note (“Blue Capital Note”) in accordance with ASC 815-15, “Derivatives and Hedging” and concluded that with the exception of the Private Placement Warrants feature for which the fair value of the embedded derivative feature was bifurcated, the remaining debt proceeds received have been allocated to the debt host at Par (i.e., recorded at proceeds received). Pursuant to ASC 470, the Company recorded the fair value of the embedded derivative feature on the consolidated balance sheets using the relative fair value method and the related amortization of the debt discount on its consolidated statements of operations. The Blue Capital Note and the corresponding embedded derivative feature was recorded as convertible senior secured promissory note and derivative liability, respectively, on the accompanying consolidated balance sheets.
Due to the Cancellation Agreement entered into on September 26, 2024, the derivative liability in connection with the Blue Capital Note was terminated. See Note 7.
10
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Class A Ordinary Shares Subject to Possible Redemption
All of the 23,000,000 Class A Ordinary Shares sold as part of the Units in the Public Offering contained a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation if there is a shareholder vote or tender offer in connection with a Business Combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles of association. In accordance with SEC staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in capital, or in the absence of additional paid-in capital, in retained earnings.
At December 31, 2024 and 2023 the Redeemable Class A Ordinary Shares reflected in the consolidated balance sheets is reconciled in the following table:
| Redeemable Class A Ordinary Shares subject to possible redemption at December 31, 2022 | $ | 237,941,214 | ||
| Less: | ||||
| Redemption of Redeemable Class A Ordinary Shares | (195,400,571 | ) | ||
| Plus: | ||||
| Waiver of Class A shares issuance costs | 7,640,156 | |||
| Remeasurement of carrying value to redemption value | 2,697,130 | |||
| Redeemable Class A Ordinary Shares subject to possible redemption at December 31, 2023 | $ | 52,877,929 | ||
| Plus: | ||||
| Remeasurement of carrying value to redemption value | 2,823,556 | |||
| Less: | ||||
| Redemptions | (51,847,295 | ) | ||
| Redeemable Class A Ordinary Shares subject to possible redemption at December 31, 2024 | $ | 3,854,190 |
Income Taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the consolidated financial statements and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2024 and 2023. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2024 or 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
There is currently no taxation imposed by the Government of the Cayman Islands. The Company has no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. Consequently, income taxes are not reflected in the Company’s consolidated financial statements.
Stock Compensation Expense
The Company accounts for stock-based compensation expense in accordance with ASC 718, “Compensation - Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. The fair value of equity awards has been estimated using a market approach. Forfeitures are recognized as incurred.
The Company’s Founder Shares transferred to incoming directors and management (see Note 3) were deemed to be within the scope of ASC 718, “Stock Compensation”, and are subject to a performance condition, namely the occurrence of a Business Combination. Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of occurrence, or more specifically when a Business Combination is consummated. Therefore, no stock-based compensation expense has been recognized during the period ended December 31, 2024 and 2023. The unrecognized compensation expense related to the Founder Shares at December 31, 2024 was $2,612,244 and will be recorded when the performance condition occurs.
11
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.
Net (Loss) Income Per Ordinary Share
The Company’s consolidated statements of operations include a presentation of net (loss) income per share for redeemable ordinary shares in a manner similar to the two-class method in calculating net (loss) income per ordinary share. Net (loss) income per ordinary share, basic and diluted, for Class A redeemable ordinary shares is computed by dividing the pro rata net income between the Class A redeemable ordinary share and the non-redeemable ordinary share by the weighted average number of ordinary shares outstanding for the period, adjusted for the effects of deemed dividend under the assumption that they represent dividends to the holders of Class A redeemable ordinary shares. Net (loss) income per non-redeemable ordinary shares, basic and diluted is computed by dividing the pro rata net income between the Class A redeemable ordinary share and the non-redeemable ordinary share by the weighted average number of ordinary shares outstanding for the period.
With respect to the accretion of ordinary shares subject to possible redemption and consistent with ASC 480-10-99-3A, “Distinguishing Liabilities and Equity-Overall-SEC Materials,” the Company treated accretion in the same manner as a dividend, paid to the shareholder in the calculation of the net (loss) income per ordinary share.
| For
the Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Redeemable Ordinary Shares | ||||||||
| Numerator: Net loss allocable to Redeemable Ordinary Shares subject to possible redemption | ||||||||
| Net loss allocable to ordinary shareholders | $ | (879,189 | ) | $ | (3,846,271 | ) | ||
| Less: Net income (loss) allocable to Non-Redeemable Ordinary Shares | 2,823,556 | 10,337,286 | ||||||
| Net income allocable to Redeemable Ordinary Shares subject to possible redemption | $ | 1,944,367 | $ | 6,491,015 | ||||
| Denominator: Weighted Average Shares Outstanding of Redeemable Ordinary Shares | ||||||||
| Basic and Diluted Weighted Average Shares Outstanding | 4,243,331 | 16,459,493 | ||||||
| Basic and Diluted net income per share | $ | 0.46 | $ | 0.39 | ||||
| Non-Redeemable Ordinary Shares | ||||||||
| Numerator: Net loss allocable to Non-Redeemable Ordinary Shares | $ | (1,241,408 | ) | $ | (1,343,666 | ) | ||
| Denominator: Weighted Average Shares Outstanding of Non-Redeemable Ordinary Shares | ||||||||
| Basic Weighted Average Shares Outstanding | 5,991,552 | 5,750,000 | ||||||
| Basic net income per share | $ | (0.21 | ) | $ | (0.23 | ) | ||
| Non-Redeemable Ordinary Shares | ||||||||
| Numerator: Net loss allocable to Non-Redeemable Ordinary Shares | $ | (1,254,723 | ) | $ | (1,343,666 | |||
| Denominator: Weighted Average Shares Outstanding of Non-Redeemable Ordinary Shares | ||||||||
| Diluted Weighted Average Shares Outstanding | 6,148,938 | 5,750,000 | ||||||
| Diluted net income per share | $ | (0.20 | ) | $ | (0.23 | ) | ||
12
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The calculation of diluted net (loss) income per ordinary share does not consider the effect of the warrants issued in connection with the Public Offering since the exercise of the warrants are contingent upon the occurrence of future events. For the year ended December 31, 2024 and 2023, the Company did not have any dilutive warrants, securities or other contracts that could potentially be exercised or converted into ordinary shares.
A reconciliation of net (loss) income per ordinary share as adjusted for the portion of net (loss) income that is attributable to ordinary shares subject to redemption is as follows:
For the Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net income | $ | 702,959 | $ | 5,147,347 | ||||
| Less: Accretion of temporary equity to redemption value | (2,823,556 | ) | (10,337,286 | ) | ||||
| Net loss including accretion of temporary equity to redemption value | $ | (2,120,597 | ) | $ | (5,189,939 | ) | ||
Note 3 - Related Party Transactions
Founder Shares
On June 9, 2021, the Original Sponsor purchased 5,750,000 shares (the “Founder Shares”) of the Company’s Class B ordinary shares, par value $0.0001 (“Class B ordinary shares”) for an aggregate price of $25,000. The Original Sponsor subsequently transferred an aggregate of 402,500 Founder Shares to members of the Company’s board of directors, management team, board of advisors and/or their estate planning vehicles for the same per-share consideration that it originally paid for such shares, resulting in the Original Sponsor holding 5,347,500 Founder Shares.
As of the Closing Date, the Initial Shareholders held 5,750,000 Founder Shares.
The Founder Shares are identical to the Class A Ordinary Shares sold in the Public Offering except that:
| ● | the Founder Shares are subject to certain transfer restrictions, as described in more detail below; | |
| ● | the Founder Shares are entitled to registration rights; | |
| ● | only holders of Class B ordinary shares will have the right to vote in a vote to continue the Company in a jurisdiction outside the Cayman Islands (which requires the approval of at least two-thirds of the votes of all ordinary shares); |
| ● | the Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which have agreed to (A) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination, (B) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we have not consummated an initial business combination by April 15, 2025 (or as late as November 15, 2025 if the Company further extends the deadline and makes the required deposit into the Trust Account) or (B) with respect to any other provisions relating to shareholders’ rights or pre-initial business combination activity, (C) waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination by April 15, 2025 (or as late as November 15, 2025 if the Company further extends the deadline and makes the required deposit into the Trust Account), although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within such time period and (D) vote any founder shares held by them and any public shares purchased during or after the Public Offering (including in open market and privately-negotiated transactions) in favor of our initial business combination; and |
| ● | the founder shares are automatically convertible into Class A Ordinary Shares at the time of the consummation of a Business Combination on a one-for-one basis, subject to adjustment as described in the Company’s amended and restated memorandum and articles of association. |
The initial shareholders agree, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of the initial business combination or (B) subsequent to the initial business combination, (x) if the last sale price of the Class A Ordinary Shares equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their shares of ordinary shares for cash, securities or other property.
On May 9, 2023, pursuant to the terms of the Company’s Charter, as amended, the holders of the Class B ordinary shares, totaling 5,750,000 Class B ordinary shares, elected to convert 5,749,999 Class B ordinary share held by them on a one-for-one basis into non-redeemable Class A ordinary shares, with immediate effect (see Note 4).
13
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Private Placement Warrants
On the Closing Date, the Original Sponsor purchased from the Company 11,700,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, or $11,700,000, in a Private Placement that occurred in conjunction with the completion of the Public Offering. Each Private Placement Warrant entitles the holder to purchase one Class A Ordinary Share at $11.50 per share, subject to adjustment. The Private Placement Warrants will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. The New Sponsor, or its permitted transferees, will have the option to exercise the Private Placement Warrants on a cashless basis. The Private Placement Warrants are not transferable, assignable or saleable until 30 days after the completion of a Business Combination.
If the Company does not complete a Business Combination within the extended date of April 15, 2025, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Company’s Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
On November 6, 2023, the Original Sponsor and New Sponsor consummated the transactions contemplated by the SPA pursuant to which, among other things, New Sponsor acquired certain of the Original Sponsor’s (i) Class A Ordinary Shares and (ii) Private Placement Warrants, subject to the terms and conditions described in the SPA.
On September 6, 2024, the Company entered into a Warrant Exchange Agreement by and between the Company and New Sponsor pursuant to which the New Sponsor agreed to exchange its 9,067,500 private placement warrants for an aggregate of 755,625 Class A Ordinary Shares (the “Exchange Shares”). This equates to a conversion ratio of one Class A ordinary share for each 12 Private Warrants. The Exchange Shares shall rank pari passu with the existing Ordinary Shares, other than that the Exchange Shares shall not confer on the holder thereof (i) any right to receive funds from the Trust, or (ii) any right to vote on a resolution to approve a Business Combination (as such term is defined in the Company’s articles of association). The Exchange Shares will be restricted securities under the Securities Act of 1933, as amended. As of December 31, 2024, there were 2,632,500 Private Placement Warrants outstanding.
Indemnity
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company discussed entering into a transaction agreement, reduces the amount of funds in the Trust Account to below (i) $10.20 per public share or (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the Underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such eventuality as the Company believes the likelihood of the Sponsor having to indemnify the Trust Account is limited because the Company will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Sponsor Notes
Sponsor Convertible Note
On April 1, 2022, the Company issued an unsecured convertible promissory note (the “Sponsor Convertible Note”) to the Sponsor, pursuant to which the Company was able to borrow up to $5,000,000 from the Sponsor for ongoing expenses reasonably related to the business of the Company and the consummation of a Business Combination. The Sponsor Convertible Note was non-interest bearing and all unpaid principal were initially due and payable in full on the earlier of (i) May 15, 2023 and (ii) the effective date of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination, involving the Company and one or more businesses (such earlier date, the “Maturity Date”).
Up to $1,500,000 of such loans was convertible into Private Placement Warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The Sponsor had the option, at any time on or prior to the Maturity Date, to convert any amounts outstanding under the Sponsor Convertible Note, into warrants to purchase the Company’s Class A Ordinary Shares at a conversion price of $1.00 per warrant, with each warrant entitling the holder to purchase one Class A Ordinary Share at a price of $11.50 per share, subject to the same adjustments applicable to the private placement warrants sold concurrently with the Company’s Public Offering. The Sponsor Convertible Note was accounted for within the scope of ASC 815 and as a result, the Company bifurcated from the proceeds allocated to the debt host the fair value of a single derivative that comprises all of the individual features requiring bifurcation. Any remaining debt proceeds was allocated to the debt host. The fair value of the embedded conversion feature upon the issuance of the Sponsor Convertible Note was de minimis.
14
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On May 11, 2023, the Company amended and restated the Sponsor Convertible Note to extend the maturity date from the earlier of (i) May 15, 2023 and (ii) the effective date of a Business Combination to the earlier of (i) May 15, 2024 and (ii) a Business Combination.
On November 6, 2023, as required by the SPA, the Company entered into an Omnibus Termination and Release Agreement with the Original Sponsor (the “Termination Agreement”). Pursuant to the Termination Agreement, the Company terminated the Sponsor Convertible Note in connection with the Closing of the transactions contemplated by the SPA. Accordingly, the carrying value under the Sponsor Convertible Note was recognized as a capital contribution from Original Sponsor.
As of December 31, 2024 and 2023, the Company had $0 in total outstanding borrowings under the Sponsor Convertible Note.
Issuance of Extension Convertible Promissory Note
In the second quarter of 2023, the Company issued a convertible promissory note (the “Extension Convertible Promissory Note”) to the Sponsor with a principal amount up to $3,600,000. The Extension Convertible Promissory Note bared no interest and was repayable in full upon the earlier of (a) the effective date of a Business Combination, or (b) the date of the Company’s liquidation. If the Company did not consummate a Business Combination by the Extended Date, the Extension Convertible Promissory Note would have been repaid only from funds held outside of the Trust Account or forfeited, eliminated or otherwise forgiven. Upon maturity, the outstanding principal of the Extension Convertible Promissory Note was convertible into warrants, at a price of $1.00 per warrant, at the option of the Sponsor. Such warrants would have terms identical to the warrants issued to the Sponsor in a private placement that closed simultaneously with the IPO.
On November 6, 2023, as required by the SPA, the Company entered into a Termination Agreement with the Original Sponsor. Pursuant to the Termination Agreement, the Company terminated the Extension Convertible Promissory Note in connection with the Closing of the transactions contemplated by the SPA.
In connection with the termination of the Extension Convertible Promissory Note, the Original Sponsor agreed to cancel and waive all indebtedness under the Extension Convertible Promissory Note. Accordingly, the carrying value under the Sponsor Convertible Note was recognized as a capital contribution from Original Sponsor.
As of December 31, 2024 and 2023, the Company had $0 in total outstanding borrowings under the Extension Convertible Promissory Note.
Service and Administrative Fees
The Company has agreed, commencing on November 10, 2021, to pay an affiliate of the Sponsor a total of $10,000 per month for office space, utilities, secretarial and administrative support services provided to the Company’s management team. The Company had incurred $237,000 under this arrangement.
Pursuant to the Termination Agreement, the Company terminated the Administrative Services Agreement, dated November 9, 2021, in connection with the Closing of the transactions contemplated by the SPA. The Original Sponsor forgave and discharged all outstanding fees owed under the Administrative Services Agreement. Accordingly, all outstanding fees, or $237,000, under the Administrative Services Agreement was recognized as a capital contribution from Original Sponsor.
For the year ended December 31, 2024 no services and administrative fees were incurred.
Note 4 - Shareholders’ Deficit
Preference shares - The Company is authorized to issue 1,000,000 shares of preference shares with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. On September 6, 2024, the Company entered into a Preferred Stock Purchase Agreement in which the Company agreed to sell to BCMP Services Limited an aggregate of 609,250 preference shares in two tranches for aggregate consideration of $700,000 (Note 7). As of December 31, 2024 and 2023, there were 609,250 and no shares of preference shares, respectively, issued and outstanding.
Class A Ordinary Shares - The Company is authorized to issue 200,000,000 shares of Class A Ordinary Shares with a par value of $0.0001 per share. As of December 31, 2024 and 2023, there were 6,838,552 and 10,527,671 shares of Class A Ordinary Shares issued and outstanding, respectively, of which 332,928 and 4,777,672 were subject to possible redemption and were classified at their redemption value outside of shareholders’ deficit on the consolidated balance sheets, respectively. As of December 31, 2024 and 2023, 6,505,624 and 5,749,999 Non-Redeemable Class A Ordinary Shares issued and outstanding, respectively, and were classified as shareholders’ deficit on the consolidated balance sheets.
15
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In addition, the proposed initial business combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash consideration the Company would be required to pay for all Class A Ordinary Shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount of cash available to the Company, the Company will not complete the Business Combination or redeem any shares and all Class A Ordinary Shares submitted for redemption will be returned to the holders thereof.
On May 9, 2023, the Company eliminated from the Charter the limitation that the Company may not redeem public shares in an amount that would cause the Company’s net tangible assets to be less than $5,000,001 in connection with the Company’s Business Combination.
Class B ordinary shares - The Company is authorized to issue 20,000,000 shares of Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares are entitled to one vote for each share.
On May 9, 2023, pursuant to the terms of the Company’s Charter, as amended by the amendments to the Charter, the holders of the Class B ordinary shares, totaling 5,750,000 Class B ordinary shares, elected to convert 5,749,999 Class B ordinary share held by them on a one-for-one basis into nonredeemable Class A Ordinary Shares, with immediate effect. Following such conversion, as of December 31, 2024, the Company had an aggregate of 5,749,999 Non-Redeemable Class A Ordinary shares issued and outstanding, and one Class B ordinary share issued and outstanding. The Non-Redeemable Class A Ordinary Shares and the Class B ordinary share contain the same terms and provisions and performance condition.
The Class B ordinary share will automatically convert into Class A Ordinary Share concurrently with or immediately following the consummation of the initial business combination on a one-for-one basis, subject to adjustment. In the case that additional Class A Ordinary Shares or equity-linked securities are issued or deemed issued in connection with the initial business combination, the number of Class A Ordinary Shares issuable upon conversion of the Class B ordinary share will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of Class A Ordinary Shares outstanding after such conversion (after giving effect to any redemptions of Class A Ordinary Shares by public shareholders), plus (ii) the total number of Class A Ordinary Shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding any Class A Ordinary Shares or equity-linked securities exercisable for or convertible into Class A Ordinary Shares issued, deemed issued or to be issued, to any seller in the initial business combination and any Private Placement Warrants issued to the Company Sponsor, officers or directors upon conversion of Working Capital Loans; provided that such conversion of Class B ordinary shares will never occur on a less than one-for-one basis.
Note 5 - Warrant Liability
As of December 31, 2024 and 2023, the Company had 14,132,500 and 23,200,000 warrants issued in the Public Offering, respectively, consisting of 11,500,000 Public Warrants and 2,632,500 and 11,700,000 Private Placement Warrants as of December 31, 2024 and 2023, respectively, which are accounted for in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company classified each warrant as a liability at its fair value, with the change in the fair value recognized in the Company’s consolidated statements of operations.
The Public Warrants will become exercisable 30 days after the completion of a Business Combination. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such shares of ordinary shares. Notwithstanding the foregoing, if a registration statement covering the shares of ordinary shares issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
16
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Redemption of warrants when the price per Class A Ordinary Shares equals or exceeds $18.00
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon a minimum of 30 days’ prior written notice of redemption, and |
| ● | if, and only if, the last reported sale price (the “closing price”) of the Company’s Class A Ordinary Shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
Except as set forth below, none of the Private Placement Warrants will be redeemable by the Company so long as they are held by the Company, Sponsor or its permitted transferees.
Redemption of warrants when the price per Class A Ordinary Shares equals or exceeds $10.00
Once the warrants become exercisable, the Company may redeem the outstanding warrants:
| ● | in whole and not in part; |
| ● | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth under “Description of Securities - Warrants - Public Shareholders’ Warrants” based on the redemption date and the “fair market value” of the Company Class A ordinary shares except as otherwise described in “Description of Securities - Warrants - Public Shareholders’ Warrants”; in the Public Offering prospectus; and |
| ● | if, and only if, the closing price of the Company’s Class A Ordinary Shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities - Warrants - Public Shareholders’ Warrants - Anti-dilution Adjustments” in the Public Offering prospectus) for any 20 trading days within the 30-trading day period ending three trading days before the Company send the notice of redemption to the warrant holders. |
The “fair market value” of the Company’s Class A Ordinary Shares for the above purpose shall mean the volume weighted average price of the Company’s Class A Ordinary Shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. The Company will provide the warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant (subject to adjustment). Any redemption of the warrants for Class A Ordinary Shares will apply to both the Public Warrants and the Private Placement Warrants.
No fractional Class A Ordinary Shares will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, the Company will round down to the nearest whole number of Class A Ordinary Shares to be issued to the holder.
If the Company calls the Public Warrants for redemption, Company management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The Private Warrants will be identical to the Public Warrants underlying the Units sold in the Public Offering, except that the Private Warrants and the shares of ordinary shares issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
17
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The exercise price and number of Ordinary Shares issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or the Company’s recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of shares of ordinary shares at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if the Company issues additional Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of ordinary shares (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the initial shareholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Ordinary Shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issues the additional shares of ordinary shares or equity-linked securities.
Dividend Policy
The Company has not paid any cash dividends on its Ordinary Shares to date and does not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to the Company’s initial business combination will be within the discretion of the Company’s board of directors at such time.
Note 6 - Fair Value Measurements
As of December 31, 2024 and 2023, assets held in the Trust Account were comprised of $3,954,190 and $52,977,929 in demand deposit account, respectively. The fair values of cash, prepaid assets, accounts payable and accrued expenses are estimated to approximate the carrying values as of December 31, 2024 and 2023 due to the short maturities of such instruments.
The following table presents information about the Company’s derivative assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2024 and 2023 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
| As of December 31, 2024 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities: | ||||||||||||||||
| Public Warrants | $ | — | $ | 230,000 | $ | — | $ | 230,000 | ||||||||
| Private Placement Warrants-none | — | 52,650 | — | 52,650 | ||||||||||||
| Total | $ | — | $ | 282,650 | $ | — | $ | 282,650 | ||||||||
| As of December 31, 2023 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities: | ||||||||||||||||
| Public Warrants | $ | — | $ | 576,150 | $ | — | $ | 576,150 | ||||||||
| Private Placement Warrants | — | 586,170 | — | 586,170 | ||||||||||||
| Derivative liability | — | — | 7,273 | 7,273 | ||||||||||||
| Total | $ | — | $ | 1,162,320 | $ | 7,273 | $ | 1,169,593 | ||||||||
18
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Transfer to or from Levels 1, 2, and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 1 measurement to a Level 2 fair value measurement during the year ended December 31, 2023 when the Public Warrants were not actively traded. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement and the estimated fair value of the Private Placement Warrants transferred from a Level 3 measurement to a Level 2 measurement during the year ended December 31, 2022 when the Public Warrants were separately listed and traded in January 2022.
Due to the Cancellation Agreement entered into on September 26, 2024, the derivative liability in connection with the Blue Capital Note was terminated. See Note 7.
The following table presents the changes in the fair value of the derivative liability:
| Derivative liability | ||||
| Fair value as of December 31, 2023 | $ | 7,273 | ||
| Amortization of debt discount | 115,024 | |||
| Change in fair value | 41,609 | |||
| Termination due to Cancellation Agreement (Note 7) | (163,906 | ) | ||
| Fair value as of December 31, 2024 | $ | — | ||
As of December 31, 2023, the estimated fair value of the derivative liability is determined using Level 3 inputs. The key inputs into the present value model for the derivative liability were as follows at each draw on the Blue Capital Note (Note 7):
| Valuation date | Volatility | Market warrant price | Exercise price | Risk free rate | Term of warrant exercise | |||||||||||||||
| November 24, 2023 | 176.0 | % | $ | 0.0787 | $ | 0.10 | 5.01 | % | 1.75 | |||||||||||
| December 15, 2023 | 190.3 | % | $ | 0.0746 | $ | 0.10 | 4.60 | % | 1.69 | |||||||||||
| December 28, 2023 | 194.4 | % | $ | 0.0501 | $ | 0.10 | 4.45 | % | 1.66 | |||||||||||
| December 31, 2023 | 194.8 | % | $ | 0.0501 | $ | 0.10 | 4.43 | % | 1.65 | |||||||||||
The following table presents the changes in the fair value of the derivative liability:
| Derivative liability | ||||
| Fair value as of December 31, 2022 | $ | — | ||
| Issuance of derivative liability | 131,456 | |||
| Change in fair value | (9,159 | ) | ||
| Unamortized debt discount | (131,456 | ) | ||
| Amortization of debt discount | 16,432 | |||
| Fair value as of December 31, 2023 | $ | 7,273 | ||
19
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - Commitments and Contingencies
Registration Rights
The holders of Founder Shares and any warrants that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to Class A Ordinary Shares) pursuant to a registration rights agreement to be signed on the effective date of the Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion of such shares to Class A Ordinary Shares). These holders will be entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Underwriters purchased 3,000,000 Units to cover over-allotments at the Public Offering price, less the underwriting commissions, bringing the total amount of Units purchased by the Underwriters to 23,000,000 Units.
The Underwriters were paid a cash underwriting discount of two percent (2%) of the gross proceeds of the Public Offering, or $4,600,000. Additionally, the Underwriters was entitled to a Deferred Underwriting Commission of 3.5% or $8,050,000 of the gross proceeds of the Public Offering held in the Trust Account upon the completion of the Company’s initial business combination subject to the terms of the underwriting agreement.
On October 26, 2023 and November 6, 2023, Barclays Capital Inc. and Citigroup Global Markets Inc., respectively, the underwriters for the Company’s Initial Public Offering, agreed to waive all rights to their respective portion of the Deferred Underwriting Commission.
Convertible Senior Secured Promissory Note
The Company issued a Convertible Senior Secured Promissory Note on November 6, 2023, to Blue Capital Management Partners, LLP (“Blue Capital”) with a principal amount up to Two Million Dollars ($2,000,000) (the “Blue Capital Note”). The Blue Capital Note bears no interest and is repayable in full upon the earlier of (i) the date on which the Company consummates a Business Combination, (ii) the date of the liquidation of the Company and (iii) December 31, 2024. Concurrent with the closing of the Business Combination, any amounts outstanding under the Blue Capital Note (or any portion thereof) will automatically convert into Class A Ordinary Shares of the Company, par value $0.0001 per share (“Class A Ordinary Shares”) at a conversion price equal to $1.00 per share, and the Original Sponsor will forfeit an equal number of Class A Ordinary Shares that it owns pursuant to the SPA. Additionally, from the closing of the Business Combination until the date that is eighteen (18) months after such closing, the Company has the right to purchase from New Sponsor up to 4,533,750 of the warrants that New Sponsor acquired from Original Sponsor upon the Closing of the SPA, at a price of $0.10 per private placement warrant.
If immediately prior to the closing of the Business Combination, the Maximum Amount has not yet been paid to the Company, Blue Capital shall have the right to pay any remaining amounts to the Company before the closing of the Business Combination.
20
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Effective September 24, 2024, the Company entered into a Cancellation Agreement (the “Cancellation Agreement”) with Blue Capital pursuant to which the Convertible Senior Secured Promissory Note Dated November 6, 2023 in the original principal amount of up to Two Million Dollars ($2,000,000) (the “Blue Capital Note”) was cancelled. Prior to its cancellation, the Blue Capital Note had been assigned by Blue Capital to Blue Perception Capital LLP (“Blue Perception”).
Concurrent with entering into the Cancellation Agreement, the Company entered into a new Convertible Preferred Note dated September 24, 2024 in the original principal amount of up to Two Million Dollars ($2,000,000) with Blue Perception (the “Blue Perception Note”). The Blue Perception Note bears no interest and is repayable in full upon the earlier of (i) the date on which the Company consummates a Business Combination, (ii) the date of the liquidation of the Company and (iii) December 31, 2024. Concurrent with the closing of the Business Combination, any amounts outstanding under the Blue Capital Note (or any portion thereof) will automatically convert into Class A ordinary shares of the Company, par value $0.0001 per share (“Class A Shares”) at a conversion price equal to $1.00 per share, and RCF VII Sponsor LLC (the “Former Sponsor”) will forfeit an equal number of Class A Shares that it owns pursuant to the terms of the Securities Purchase Agreement. Additionally, from the closing of the Business Combination until the date that is eighteen (18) months after such closing, Blue Perception has the right to purchase from Perception Capital Partners IV LLC up to 377,812.5 Class A Shares, at a per share price of $1.20 per Class A Share.
Under the Blue Perception Note, Blue Perception will fund each of the following amounts to the Company no later than the date set forth below:
| a. | Before the date of the Blue Perception Note, the Company received $1,275,739 in connection with the Blue Capital Note; |
| b. | $50,000 on September 30, 2024; |
| c. | $50,000 on October 15, 2024; |
| d. | $312,130 on October 31, 2024; |
| e. | $312,130 on November 29, 2024, provided, however, that the maximum amount of drawdowns outstanding under this Note may not exceed Two Million Dollars ($2,000,000) (such amount, the “Maximum Amount”). |
Subsequent to the Company receiving $1,275,739, an additional $53,100 was received under the Blue Perception Note as of December 31, 2024. As of December 31, 2024, $1,328,839 was outstanding under the Blue Perception Note.
If immediately prior to the closing of the Business Combination, the Maximum Amount has not yet been paid to the Company, Blue Perception shall have the right to pay any remaining amounts to the Company before the closing of the Business Combination.
Business Combination Agreement
On December 5, 2023, the Company, Blue Gold Limited, a Cayman Islands company limited by shares (“PubCo”), and Blue Gold Holdings Limited, a private company limited by shares formed under the laws of England and Wales (“BGHL”), entered into a Business Combination Agreement (as it may be amended and/or restated from time to time, the “Business Combination Agreement”) pursuant to which, subject to the satisfaction or waiver of the conditions contained in the Business Combination Agreement, (i) BGHL and PubCo shall consummate a share exchange (the “Exchange”) pursuant to which PubCo will purchase all of the issued and outstanding shares of BGHL in exchange for PubCo Ordinary Shares; (ii) the Company and a to-be-formed subsidiary of PubCo (“Merger Sub”) will merge (the “Merger”) with the Company surviving the merger as a wholly owned subsidiary of PubCo.
On May 2, 2024, the Company and Blue Gold Holdings Limited (“BGHL”), entered into that certain Amended and Restated Business Combination Agreement (the “Amended BCA”) to, among other things, restructure the transaction as follows: (i) the Company shall form a wholly owned subsidiary (“Merger Sub”), (ii) at the merger effective time, Merger Sub shall merge with and into BGHL, or its successor entity as set forth in the Amended BCA, and (iii) BGHL shall continue as the surviving entity and wholly owned subsidiary of the Company, and to (iv) make changes to certain representations and conditions to the Closing to match the revised structure.
On June 12, 2024, the Company, Blue Gold Limited, a Cayman Islands company limited by shares and wholly owned subsidiary of the Company (“Perception Merger Sub”), and BGHL, entered into that certain Second Amended and Restated Business Combination Agreement (the “Second Amended BCA”) to, among other things, restructure the transaction as follows: (i) Perception Merger Sub shall form a wholly owned subsidiary (the “Blue Merger Sub”) for the purposes of effecting the Blue Merger, (ii) the Company shall merge with and into Perception Merger Sub, a wholly owned subsidiary of the Company with Perception Merger Sub (following such merger, the “New Perception”) being the surviving entity (the “Perception Reorganization”), (iii) BGHL will form or acquire a new Cayman Islands entity (“NewCo”) and cause the contribution of all of the issued and outstanding shares of BGHL to NewCo, (iv) NewCo shall merge with and into the Blue Merger Sub, following which the separate corporate existence of NewCo shall cease and (v) at the Blue Merger Effective Time, Blue Merger Sub shall continue as the surviving entity and wholly owned subsidiary of New Perception (“New Blue”), and to (vi) make changes to certain representations and conditions to the Closing to match the revised structure.
21
PERCEPTION CAPITAL CORP IV.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On November 7, 2024, the parties entered into Amendment No. 1 to the Second Amended BCA (“Amendment No. 1”) to, among other things (i) change the structure of the Blue Merger such that Blue Merger Sub shall be merged with and into NewCo with NewCo as the surviving entity of the Blue Merger, (ii) amend the definition of Material Adverse Effect to exempt the impact of any Perception share redemptions and delisting from the NYSE from the definition, and (iii) to amend the date that constitutes the Outside Date from November 5, 2024 to January 31, 2025. On January 8, 2025, the parties entered into Amendment No. 2 to the Second Amended BCA (“Amendment No. 2”) to make certain structural changes and to further amend the Outside Date to March 31, 2025.
On September 6, 2024 the Company approved and entered into two material agreements:
Warrant Exchange Agreement
On September 6, 2024 the Company entered into a Warrant Exchange Agreement by and between the Company and its managing sponsor, Perception Capital Partners IV (the “Managing Sponsor”) pursuant to which the Managing Sponsor agreed to exchange its 9,067,500 private placement warrants for an aggregate of 755,625 Class A Ordinary Shares (the “Exchange Shares”). This equates to a conversion ratio of one Class A ordinary share for each 12 Private Warrants. The Exchange Shares shall rank pari passu with the existing Ordinary Shares, other than that the Exchange Shares shall not confer on the holder thereof (i) any right to receive funds from the Trust Account (as such term is defined in the Company’s articles of association), or (ii) any right to vote on a resolution to approve a Business Combination (as such term is defined in the Company’s articles of association). The Exchange Shares will be restricted securities under the Securities Act of 1933, as amended.
Preferred Stock Purchase Agreement
On September 6, 2024 the Company entered into a Preferred Stock Purchase Agreement in which the Company agreed to sell to BCMP Services Limited an aggregate of 609,250 preference shares in two tranches for aggregate consideration of $700,000. The Preference Shares shall have no entitlement to the assets of the Trust Account, whether by way of interim distribution or as a distribution in respect of the winding of the Company or otherwise. The Preference Shares shall carry no right to vote on any resolution to approve a Business Combination. Each Preference Share shall automatically convert into 20 Class A Ordinary Shares on the date that is 61 days after completion of the Company’s initial Business Combination.
NOTE 9 - Segment Information
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.
The Company’s chief operating decision maker has been identified as the Chief Executive Officer (“CODM”), who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one operating segment.
When evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:
For the Year Ended December 31, 2024 | For the Year Ended December 31, 2023 | |||||||
| General and administrative expenses | $ | 2,136,963 | $ | 4,565,129 | ||||
| Interest earned on the Trust Account | $ | 2,409,077 | $ | 8,128,147 | ||||
The key measures of segment profit or loss reviewed by our CODM are interest earned on the Trust Account and general and administrative expenses. The CODM reviews interest earned on the Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the trust agreement. General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination within the business combination period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies.
Note 10 - Subsequent Events
Management evaluated subsequent events that occurred after the balance sheet date through the date of issuance of these consolidated financial statements and other than as noted below, no subsequent events required adjustment or disclosure.
On January 15, 2025, February 10, 2025 and March 17, 2025, a deposit of $5,000 was made into the Trust Account to extend the deadline by which an initial business combination must be completed from January 15, 2025 to February 15, 2025, from February 15, 2025 to March 15, 2025 and from March 15, 2025 to April 15, 2025.
On March 6, 2025, the Company held a Special Meeting of Shareholders to consider and vote on certain proposals. In connection with the proposals voted on at the meeting, the Company was required to permit holders of its ordinary shares that were sold as part of the units sold in its initial public offering the right to seek redemption of their shares. Of the 332,928 Public Shares, 307,742 Public Shares were redeemed.
22
Exhibit 15.3
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
of Blue Gold Holdings Limited
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Blue Gold Holdings Limited and subsidiary (the “Company”) as of December 31, 2024 and 2023, and the related statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2024 and for period from November 9, 2023 (Inception) to December 31, 2023, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the year ended December 31, 2024 and for the period from November 9, 2023 (Inception) to December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2 to the consolidated financial statements, the Company has no operations, has a working capital deficiency, has losses and needs to raise additional funds to meet its obligations and carry out its strategic plan to complete a business combination. Sources of liquidity have been provided from the issuance of convertible notes, the sale of common stock and from loans and advances provided by affiliated companies. There is no assurance the sources of funding will be available in the future or under similar terms. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
2
Critical Audit Matter
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Acquisition of the Bogoso Prestea Mine
As described in Note 5 to the consolidated financial statements, on May 15, 2024, the Company completed the closing of a Purchase Agreement, that completed the registration and legal transfer of certain mining assets, primarily mining leases, of the Bogoso Prestea Mine to the Company. The Purchase Agreement provided for the transfer of mining assets from Future Gold Resources Bogoso Prestea Ltd. (“FGRBPL”) (the previous leaseholder) to Blue Gold Bogoso Prestea Ltd. (“BGBPL”), including four mining leases (Bogoso I, Bogoso II, Prestea Surface and Prestea Underground), a government indemnity in favor of the previous leaseholder in respect of certain environmental damage and liabilities, fixed assets including immovable structures, buildings and facilities. Purchase consideration for the transfer of the mining assets is the assumption of the previous leaseholder’s royalty agreement obligation with Golden Star Resources (“GSR Royalty”), which comprised a smelter royalty and contingent payment due upon a decision to move forward with the Bogoso Prestea Mine Project to be paid out over stages during construction, a stream agreement with Royal Gold and the assumption of end of mine asset retirement obligations.
This transaction was accounted for as a purchase which means that the purchase consideration is allocated to the assets acquired based on a relative fair value.
Management has applied significant judgements when determining the estimates of the amounts assigned to each of the components of purchase consideration and the allocation of the purchase consideration amounts to the assets acquired which involves estimates of relative fair value. Management’s estimates of life of mine plans are tied to the measurable resources estimates which are reviewed and approved by qualified persons (management’s specialists). Management specialists were also used to derive estimates of the fair value of the contingent consideration and the asset retirement obligations.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others: the work of management’s specialists was used in performing procedures to evaluate the reasonableness of the measurable resource estimates included in the life of mine plans, which was used in determining an estimate of the amount related to the smelters royalty obligation and used to allocate the purchase consideration to the relative fair values of the assets acquired. Management specialists were also used to derive estimates of the fair value of contingent consideration owed upon a decision to move forward with the Bogoso Prestea Mine Project and the asset retirement obligation which take into consideration contract amounts, engineered abandonment costs, timing of settlement, inflation and appropriate discount rates.
As a basis for using this work, the management’s specialists’ qualifications were evaluated and the Company’s relationship with the management’s specialists was assessed. The procedures performed also included the evaluation of the methods and assumptions used by the management’s specialists, the evaluation of the data used by the management’s specialists, an evaluation of the management’s specialists’ findings and reading the purchase agreement and related royalty agreements.
/s/ Pannell Kerr Forster of Texas P.C.
We have served as the Company’s auditor since inception.
July 1, 2025
Houston, Texas
3
BLUE GOLD HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
| December 31, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 170,557 | $ | — | ||||
| Prepaid expenses and other current assets | 259,854 | 83,991 | ||||||
| Other receivables | 2,262 | — | ||||||
| Total current assets | 432,673 | 83,991 | ||||||
| Property, plant and equipment, net | 2,913,509 | — | ||||||
| Mineral rights | 30,100,000 | — | ||||||
| Total assets | $ | 33,446,182 | $ | 83,991 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 1,847,858 | $ | — | ||||
| Accounts payable- related party, net | 2,101,113 | — | ||||||
| Accrued expenses and other current liabilities | 936,289 | — | ||||||
| Advances payable | 648,000 | — | ||||||
| Related party loan | — | 418,669 | ||||||
| Convertible notes payable | 2,472,848 | — | ||||||
| Total current liabilities | 8,006,108 | 418,669 | ||||||
| Royalty obligation | 2,700,000 | — | ||||||
| Contingent consideration liability | 17,100,000 | — | ||||||
| Asset retirement obligation | 13,937,000 | — | ||||||
| Total liabilities | 41,743,108 | 418,669 | ||||||
| Commitments and contingencies (Note 15) | ||||||||
| Stockholders’ deficit | ||||||||
| Stockholders’ equity deficit | ||||||||
| Common stock, $0.00000000001 par value; 200,000,000 authorized and 108,746,245 issued and outstanding | — | — | ||||||
| Additional paid in capital | 3,717,941 | — | ||||||
| Accumulated deficit | (11,972,315 | ) | (334,678 | ) | ||||
| Accumulated other comprehensive loss | (42,552 | ) | — | |||||
| Total stockholders’ deficit | (8,296,926 | ) | (334,678 | ) | ||||
| Total liabilities and stockholders’ deficit | $ | 33,446,182 | $ | 83,991 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
4
BLUE GOLD HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
| Year ended December 31, 2024 | Period from November 9, 2023 (inception) to December 31, | |||||||
| Operating expenses | ||||||||
| General and administrative expenses | $ | 2,111,753 | $ | 333,781 | ||||
| Merger and acquisition expenses | 1,682,391 | — | ||||||
| Plant maintenance costs | 6,252,438 | — | ||||||
| Accretion of asset retirement obligations | 1,037,000 | — | ||||||
| Depreciation | 41,768 | — | ||||||
| Start - up costs | — | 897 | ||||||
| Total operating expenses | 11,125,350 | 334,678 | ||||||
| Other income (expense) | ||||||||
| Interest expense | (442,869 | ) | — | |||||
| Related party interest expense, net | (69,418 | ) | — | |||||
| Total other expense | (512,287 | ) | — | |||||
| Net loss | $ | (11,637,637 | ) | $ | (334,678 | ) | ||
| Weighted average common shares outstanding — basic and diluted | 102,134,394 | 100,000,000 | ||||||
| Income per common share — basic and diluted | $ | (0.11 | ) | $ | (0.00 | ) | ||
The accompanying notes are an integral part of these consolidated financial statements.
5
BLUE GOLD HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE PERIOD FROM NOVEMBER 9, 2023 (INCEPTION)
TO DECEMBER 31, 2023 AND FOR THE YEAR
ENDED DECEMBER 31, 2024
| Common Stock | Additional Paid- In | Accumulated | Accumulated Other Comprehensive | Total Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Loss | Deficit | |||||||||||||||||||
| Balance at November 9, 2023 | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
| Issuance of common stock | 100,000,000 | — | — | — | — | — | ||||||||||||||||||
| Net loss | — | — | — | (334,678 | ) | — | (334,678 | ) | ||||||||||||||||
| Balance at December 31, 2023 | 100,000,000 | — | — | (334,678 | ) | — | (334,678 | ) | ||||||||||||||||
| Proceeds from the issuance of common stock | 8,590,592 | — | 3,628,191 | — | — | 3,628,191 | ||||||||||||||||||
| Issuance of common stock in exchange for services | 155,653 | — | 89,749 | — | — | 89,749 | ||||||||||||||||||
| Currency translation adjustment | — | — | — | — | (42,552 | ) | (42,552 | ) | ||||||||||||||||
| Net loss | — | — | — | (11,637,637 | ) | — | (11,637,637 | ) | ||||||||||||||||
| Balance at December 31, 2024 | 108,746,245 | $ | — | $ | 3,717,941 | $ | (11,972,315 | ) | $ | (42,552 | ) | $ | (8,296,926 | ) | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
BLUE GOLD HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, 2024 | Period from November 9, 2023 (inception) to December 31, | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (11,637,637 | ) | $ | (334,678 | ) | ||
| Adjustment to reconcile net loss to cash used in operating activities: | ||||||||
| Accretion of asset retirement obligation | 1,037,000 | — | ||||||
| Depreciation | 41,768 | — | ||||||
| Operating and prepaid expenses paid by related party | 1,682,444 | 418,669 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | (174,210 | ) | (83,991 | ) | ||||
| Other receivables | (2,303 | ) | — | |||||
| Accounts payable | 1,870,285 | — | ||||||
| Accrued expenses and other liabilities | 948,335 | — | ||||||
| Net cash used in operating activities | (6,234,318 | ) | — | |||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of fixed assets | (355,277 | ) | — | |||||
| Net cash used in investing activities | (355,277 | ) | — | |||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from convertible notes | 2,850,000 | — | ||||||
| Repayment of convertible notes | (377,152 | ) | ||||||
| Proceeds from advances | 648,000 | — | ||||||
| Issuance of common stock | 3,628,191 | — | ||||||
| Net cash used in financing activities | 6,749,039 | — | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 11,113 | — | ||||||
| Net increase in cash | 170,557 | — | ||||||
| Cash and cash equivalents, beginning of period | — | — | ||||||
| Cash, end of period | $ | 170,557 | $ | — | ||||
| Supplemental cash flow information: | ||||||||
| Interest paid | $ | — | $ | — | ||||
| Taxes paid | $ | — | $ | — | ||||
| Noncash investing and financing activities: | ||||||||
| Acquisition of Mineral rights in exchange for certain obligations | $ | 30,100,000 | $ | — | ||||
| Acquisition of Property, plant and equipment, net in exchange for certain obligations | $ | 2,600,000 | $ | — | ||||
| Assumption of royalty payable in exchange for mineral rights and property, plant and equipment, net | $ | 2,700,000 | $ | — | ||||
| Assumption of contingent consideration liability in exchange for mineral rights and property, plant and equipment, net | $ | 17,100,000 | $ | — | ||||
| Assumption of asset retirement obligation in connection with obtaining mineral rights and property, plant and equipment | $ | 12,900,000 | $ | — | ||||
| Issuance of common stock in exchange for services | $ | 89,749 | $ | — | ||||
The accompanying notes are an integral part of these consolidated financial statements.
7
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS
Blue Gold Holdings Limited (“BGHL”), is an England and Wales private limited liability company that was formed on November 9, 2023 to develop, finance, license, and operate gold mines in Ghana and elsewhere.
BGHL has one subsidiary, Blue Gold Bogoso Prestea Ltd. (“BGBPL”), a wholly owned subsidiary company incorporated in Ghana on January 26, 2024. BGHL and BGBPL (collectively are herein referred to as the “Company”).
On January 27, 2024, BGBPL signed a Purchase and Assumption Agreement (the “Purchase Agreement”) to acquire certain mining assets, primarily mining leases, on an exploration property in the Ashanti gold belt of Ghana, the Bogoso Prestea gold mine (“Bogoso Prestea Mine”), subject to certain closing conditions, including the approval by the Ministry of Lands and Natural Resources of the Republic of Ghana. The closing conditions have been met, with a number of subsequent closing deliverables still to be concluded (including the Royal Gold Agreement novation, the Golden Star Resources Agreement novation, and the Corporate Social Responsibility Agreement novation). The registration of the legal transfer was completed on May 15, 2024. See Note 5 for further information.
On June 25, 2025 (the “Closing Date”), Blue Gold Limited, a Cayman Islands exempted company limited by shares (“BGL”), consummated the previously announced business combination pursuant to the Second Amended and Restated Business Combination Agreement, dated as of June 12, 2024 (as amended and restated, the “BCA”), and further amended on January 8, 2025, March 28, 2025, April 20, 2025, May 8, 2025, and June 10, 2025 by and among BGL, Perception Capital Corp. IV, a Cayman Islands exempted company limited by shares, formerly known as RCF Acquisition Corp. (“Perception”), and BGHL. The following transactions occurred pursuant to the terms of the BCA (collectively, the “Business Combination”):
| ● | BGL formed Blue Merger Sub, an exempted company incorporated under the laws of the Cayman Islands (“Blue Merger Sub”), for the purposes of the effectuating the business combination; |
| ● | Perception merged with and into BGL, with BGL being the surviving entity (the “Perception Reorganization”); |
| ● | Blue Cayman 1, an exempted company incorporated under the laws of the Cayman Islands (“BC1”), acquired the entirety of the BGHL Shares; |
| ● | BC1 transferred the entire undertaking of BC1, including the entire share capital of BGHL to Blue Cayman 2, an exempted company incorporated under the laws of the Cayman Islands (“BC2”). The name of Blue Cayman 2 was changed to Blue Gold (Cayman) Limited; |
| ● | Blue Merger Sub merged with and into BC2, with BC2 being the surviving entity and becoming a wholly owned subsidiary of BGL. |
Following the Business Combination, BGL Ordinary Shares are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “BGL” (the “Listing”).
2. LIQUIDITY AND GOING CONCERN
Since inception, BGHL’s primary sources of liquidity have been cash flows from loans provided by affiliated companies, Blue International Holdings Limited (“BIHL”) and Future Global Resources Limited (“FGR”), the previous leaseholder, as well as funds generated from the issuance of convertible loan notes payable and common stock. For the year ended December 31, 2024, BGHL reported an operating loss of $11.6 million and cash flows used in operations of $6.2 million. As of December 31, 2024, BGHL had an aggregate cash and cash equivalents balance of $170,557 and a net working capital deficit of $7.6 million.
In August 2024, BGHL signed a Gold Advance Payment Purchase Agreement (“GAPPA”) with Gerald Metals SARL (“Gerald”), whereby, subject to satisfying several conditions precedent, Gerald will make advance payments of up to an aggregate of $25,000,000 to fund restart costs. All advance payment amounts, plus interest accruing and compounding daily at 7% plus three-month SOFR per annum, are required to be prepaid 24 months after the date of the first advance payment disbursement. Until such time as all such amounts are paid in full, Gerald is granted a first ranking perfected security interest over all of BG-BPL’s assets, including real property, machinery, and equipment, its mining license, each with regard to the Bogoso Prestea mine, and certain other assets. In consideration of the advance payment, BGBPL will sell 100% of the total material produced at the Bogoso and Prestea site to Gerald for a period of 60 months after the offtake commencement date at a discount as defined in the agreement. The total amount of material sold will be no less than 760,000 oz of gold, delivered pursuant to a prescribed delivery schedule, and such 60 month period can be extended until such amount is delivered. Pursuant to the GAPPA, Gerald was also granted a right of first refusal to participate in the development funding of certain future projects. In addition, the GAPPA includes an undertaking that Blue Gold Limited will become a party to the GAPPA. The GAPPA gives Gerald the option to convert the advance payment, or part thereof, into shares and warrants of Blue Gold Limited. Under Tranche A, $15.0 million of advance payment can be converted to Blue Gold Limited shares up to 10 business days after Listing. The conversion price into BGL shares will be calculated on the basis of a conversion into BGHL shares at $0.43 cents and then applying the BCA conversion into BGL shares achieved by BGHL at the time of the Listing. Each share is paired with a warrant as part of Tranche A, giving the right to purchase shares at the listing price (cash exercise) for a period of 24 months following the date of issue of the warrants. Under Tranche B, $10.0 million of advance payment can be converted to Blue Gold Limited shares for a period of 24 months after the first disbursement of the advance payment. Under Tranche B, Gerald Gerald can elect to convert on the earlier of (i) the Listing; or (ii) during the first calendar month of commercial production. If the conversion under Tranche B takes place prior to Listing, the conversion price shall be 100 cents per share in BGHL, if the conversion is after Listing, the conversion price shall be the initial listing price. Each share is paired with a warrant as part of Tranche B giving the right to purchase shares at the listing price (cash exercise) for a period of (i) 24 months following the date of issue of the warrants if they elect to exercise Tranche B prior to the Listing, or on the IPO date, or within 12 months following the date of last disbursement of the Advance Payment, or (ii) 12 months if Gerald elects to convert after the 12th Month following the date of last disbursement of the Advance Payment. Furthermore, the GAPPA gives Gerald the right, for the duration of the agreement, to two board seats on BGL and BGBPL.
8
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In September 2024, BG-BPL signed a Mining Equipment Supply Framework Agreement with Attachy Construction Limited “Attachy”, whereby Attachy will procure certain goods and equipment necessary for the restart of the Bogoso Prestea mine, up to a total value of $8.0 million. BG-BPL must repay to Attachy the equipment purchase price plus a mark-up of 30% of such price. Repayment of the purchase price and mark-up amount will commence three months after an equipment purchase and will be repaid over seven equal monthly instalments.
On November 7, 2024, BGHL received a $345,000 advance from Attachy. On each of October 2, 2024, October 28, 2024 and November 13, 2024, BGHL’s subsidiary, BGBPL, received advances in the aggregate amount of $303,000 from Attachy. These advances are non-interest bearing and do not require collateral. The advances are due on demand and, to date, Attachy has not demanded repayment of the advances.
In March 2025, BGHL received an advance of $866,691 from BC2, BGHL’s current parent company.
As of June 25, 2025 BGHL is undertaking a fundraising in the form of a convertible note, with $1,902,586 having been subscribed to date. The CLN has a maturity date of October 31, 2025 and a redemption premium of 20%. The CLNs will be automatically converted into ordinary shares of BGL thirty (30) days after the Listing. The conversion price will be the lower of (i) the Volume Weighted Average Price (VWAP) over the 30-day period following the Listing lesser the Applicable Discount and (ii) the closing price on the day prior to the conversion lesser the Applicable Discount. The Applicable Discount is a 40% discount for investments made prior to the Listing and a 20% discount for investments made following the Listing.
The funding of BGHL’s future capital requirements will depend on many factors, including BGHL’s revenue growth rate, the timing and extent of spending to support the restart of the Bogoso Prestea Mine and further exploration activities. To finance these activities, BGHL will need to raise additional or alternative capital from outside sources. While there can be no assurances, BGHL currently intends to raise such capital through issuances of additional equity, debt finance, trade finance, and/or offtake finance. BGHL may not be able to raise it on terms acceptable to BGHL or at all. If BGHL is unable to raise additional capital when at the time or in amounts necessary, BGHL’s business, results of operations and financial condition will be materially and adversely affected.
As a result of the above, in connection with BGHL’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that BGHL’s liquidity condition raises substantial doubt about BGHL’s ability to continue as a going concern for the next twelve months and thereafter. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should BGHL be unable to continue as a going concern.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). References to GAAP issued by the FASB in these accompanying notes to the consolidated financial statements are to the FASB Accounting Standards Codification (“ASC”).
The accompanying consolidated financial statements are stated in United States Dollars unless otherwise stated.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of BGHL and its subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
Foreign currency translation and transactions
BGHL’s reporting currency is the U.S. dollar. The functional currency of each entity in the group is the currency of the primary economic environment in which it operates. Transactions in foreign currencies are initially recorded into functional currency at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured into functional currency at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are remeasured to the functional currency at exchange rates that prevailed on the date of inception of the transaction.
BGHL translates the financial statements from the local (functional) currency into US Dollars using the year or reporting period end or average exchange rates in accordance with the requirements of Accounting Standards Codification subtopic 830-10, Foreign Currency Matters (“ASC 830-10”). Assets and liabilities are translated at exchange rates as of the balance sheet date. Expenses are translated at average rates in effect for the periods presented. Translation gains and losses resulting from re-measurement from functional to reporting currency are recorded in accumulated other comprehensive income or loss as a component of shareholders’ equity.
Gains and losses resulting from transactions denominated in a currency other than the functional currency of the entity are included in general and administrative expenses in the consolidated statements of operations using the average exchange rates in effect during the period.
BGHL, through its subsidiary BGBPL, holds certain long-lived assets in Ghana including the mineral assets. Ghana has experienced economic instability and the Ghanian government has implemented various monetary policies. Ghana has also experienced high rates of inflation over the past several years. BGHL applies hyper-inflationary accounting to Ghana in accordance with the guidelines in ASC 830, “Foreign Currency.” A hyper-inflationary economy designation occurs when a country has experienced cumulative inflation of approximately 100 percent or more over a 3-year period. The hyper-inflationary designation requires the local subsidiary in Ghana to record all transactions as if they were denominated in U.S. dollars. The subsidiary in Ghana has not generated revenue through the date of this report and total net currency exchange losses were not significant.
9
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Use of Estimates
The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosures of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are adjusted to reflect actual experience when necessary. Significant estimates made by management include, but are not limited to, valuation of mineral rights, valuation of royalty liabilities, contingent consideration, reserve volumes and future net revenues associated with mine resources and the asset retirement obligations.
The Life of Mine model (“LoM”), which has been used as the basis for calculating the mineral rights value and the royalty liability value is prepared to a Scoping Study level. The LoM is preliminary in nature and there is a high degree of uncertainty over the assumptions made. The LoM is solely based on Measured and Indicated Resources which are considered too speculative geologically to have economic considerations applied to them that would allow them to be categorized as mineral reserves, and there is no certainty that the LoM will be realized.
Segment Information
ASC 280, “Segment Reporting” (“ASC 280”), defines operating segments as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. BGHL’s CODM is the chief executive officer, who has ultimate responsibility for the operating performance of BGHL and the allocation of resources. The CODM reviews the assets, operating results, and financial metrics for BGHL as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that there is only one reportable segment. The CODM assesses performance for the single reportable segment and decides how to allocate resources based on operating expenses that also is reported on the statement of operations as net income. The measure of segment assets is reported on the balance sheet as total assets. When evaluating BGHL’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in operating expenses and cash and cash equivalents.
Operating expenses, inclusive of general and administrative costs and sales and marketing costs, are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to fund operations until the Business Combination closes. The CODM also reviews operating expenses to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and the budget. The categories of operating expenses, as reported on the statement of operations, are the significant segment expenses provided to the CODM on a regular basis.
Concentration of Risk
BGHL’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash. BGHL places its cash with financial institutions of high credit worthiness. At times, its cash with a particular financial institution may exceed any applicable government insurance limits. BGHL’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Cash and cash equivalents
Cash is comprised of cash in the bank which is subject to an insignificant risk of changes in value. BGHL considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. At December 31, 2024 and 2023, cash amounted to $170,557 and $0, respectively. There were no cash equivalents at December 31, 2024 and 2023.
Property, Plant and Equipment
The value of property, plant and equipment (“PP&E”), including land, buildings and processing equipment, that were acquired as part of the Asset Acquisition are recorded at a relative fair value assessed at the time of the acquisition less depreciation. Any additional PPE acquired, and any expenditures that extend the life of such assets are recorded at historical cost, including direct acquisition costs less depreciation and impairment losses. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Capital work in progress is recorded at cost less impairment losses but is not depreciated until it is in use and transferred into other PPE classifications.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to BGHL and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to profit or loss during the financial period in which they are incurred.
10
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Depreciation
Depreciation for mobile equipment and other assets is computed using the straight-line method at rates calculated to depreciate the cost of the assets, less their anticipated residual values, if any, over their estimated useful lives as follows:
| Vehicles | 5 years | |||
| Other Equipment | 2 years | |||
| Computer and accessories | 2 years |
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.
BGHL evaluates the carrying value of property, plant and equipment and finite-lived intangible assets whenever a change in circumstances indicates that the net carrying value may not be recoverable from the entity-specific undiscounted future cash flows expected to result from our use of and eventual disposition of a long-lived asset or asset group. Events or circumstances that could trigger an impairment review of a long-lived asset or asset group include, but are not limited to: (i) a significant decrease in the market price of the asset, (ii) a significant adverse change in the extent or manner that the asset is used or in its physical condition, (iii) a significant adverse change in legal factors or in the business climate that could affect the value of the asset, (iv) an accumulation of costs significantly in excess of original expectation for the acquisition or construction of the asset, (v) a current period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast of continuing losses associated with the use of the asset and (vi) a more-likely-than-not expectation that the asset will be sold or disposed of significantly before the end of its previously estimated useful life. If an impairment exists, the net carrying values are reduced to fair values. BGHL estimates the fair values of these long-lived assets by performing a discounted future cash flow analysis for the remaining useful life of the asset, or the remaining useful life of the primary asset in the case of an asset group. An individual asset within an asset group is not impaired below its estimated fair value. There were no impairments recorded as of December 31, 2024 and 2023.
Mineral Rights and Amortization
Amortization of Mineral Rights (“Mine Properties”), buildings, leasehold land and plant and machinery (collectively the “mineral assets”) is provided for using the unit-of-production method with separate calculations made for each mineral resource.
The calculation of the units-of-production rate of amortization could be impacted to the extent that actual production in the future differs from current forecasted production resulting in possible revision to the estimate of total resources to be produced.
The carrying values of the mineral rights are assessed for impairment by management on an annual basis (while under development) or when indicators of impairment exist. BGHL compares the carrying value of the mine assets to its estimates of undiscounted future cash flows from the underlying resources. Should management determine that these carrying values cannot be recovered, the carrying value is compared to an estimate of fair value and the unrecoverable amounts are written off against earnings and cannot be subsequently reversed. As of December 31, 2024, as the lease termination and ensuing dispute (as described more fully in Note 15) represented a triggering event, in accordance with ASC 360, BGHL compared the undiscounted cash flows of the long-lived asset group to their carrying amounts which determined there was no impairment required.
Mineral Exploration Rights and Costs, Exploration, Evaluation and Development Expenditures
Exploration costs, which include maintenance, development and exploration of mineral claims, are expensed as incurred. When it is determined that a mineral deposit can be economically developed as a result of establishing proven and probable reserves and all regulatory operating permits have been secured, the costs incurred after such determination will be capitalized until the commencement of production and amortized over their useful lives. To date, BGHL has not established the commercial feasibility and received the necessary regulatory operating permits for any of its exploration prospects; therefore, all exploration costs are expensed.
Asset Retirement Obligation
BGHL follows Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), which established a uniform methodology for accounting for estimated reclamation and abandonment costs. FASB ASC 410 requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which the legal obligation associated with the retirement of the long-lived asset is incurred or when acquired. When the liability is initially recorded, the offset is capitalized by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its future value each period and charged to accretion expense, and the initial capitalized cost is amortized over the useful life of the related asset. To settle the liability, the obligation is paid, and to the extent there is a difference between the liability and the amount of cash paid, a gain or loss upon settlement is recorded.
Convertible Notes Payable
BGHL may enter into convertible notes, some of which contain fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder into common shares at a fixed rate at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. BGHL records the convertible note liability at its fixed monetary amount on the issuance date and interest expense charged over the outstanding period of the note.
11
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Business Combination and Asset acquisition
BGHL applies a screen test to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets to determine whether a transaction should be accounted for as an asset acquisition or business combination.
When an acquisition does not meet the definition of a business combination because either: (i) substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or group of similar identified assets, or (ii) the acquired entity does not have an input and a substantive process that together significantly contribute to the ability to create outputs, BGHL accounts for the acquisition as an asset acquisition. In an asset acquisition, goodwill is not recognized, but rather, any excess purchase consideration over the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable net assets as of the acquisition date and any direct acquisition-related transaction costs are capitalized as part of the purchase consideration.
When an acquisition is accounted for as a business combination, BGHL recognizes and measures the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, while transaction and integration costs related to business combinations are expensed as incurred. Any excess of the purchase consideration in excess of the aggregate fair value of the net tangible and intangible assets acquired, if any, is recorded as goodwill. For material acquisitions, BGHL engages independent appraisers to assist with the determination of the fair value of assets acquired, liabilities assumed, noncontrolling interest, if any, and goodwill, based on recognized business valuation methodologies. An income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired, liabilities assumed, and noncontrolling interest, if any, in a business combination. The income valuation method represents the present value of future cash flows over the life of the asset using discrete financial forecasts, long-term growth rates, appropriate discount rates, and expected future capital requirements. The market valuation method uses prices paid for a similar asset by other purchasers in the market, normalized for any differences between the assets. The cost valuation method is based on the replacement cost of a comparable asset at the time of the acquisition adjusted for depreciation and economic and functional obsolescence of the asset. The fair value of property, plant and mine development is estimated to include the fair value of asset retirement costs of related long-lived tangible assets. During the measurement period, not to exceed one year from the date of acquisition, BGHL may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the period the adjustment arises.
Fair Value Measurement
As defined in ASC 820, Fair Value Measurements and Disclosures, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (exit price). BGHL utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that participants used to measure fair value. The hierarchy gives us the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.
Level 1: Quoted prices are available in an active market for identical assets or liabilities as of the reporting data. Active markets are those in which transactions for the assets or liability occur in sufficient frequency and volume to provide information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.
Level 2:Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Subsequently all these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supposed by observable level at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, option and collar.
Level 3: Pricing inputs includes significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
The fair value of cash, prepaid expenses and other assets, advances to related parties, accrued expenses and other liabilities, and due to related parties approximates their carrying values due to their relatively short maturities. The royalty payable, contingent consideration payable and the asset retirement obligation were recorded at fair value as of the closing date of the Purchase and Assumption Agreement using level 3 inputs (Note 12).
12
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Income Taxes
BGHL accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. BGHL has no material uncertain tax positions for any of the reporting periods presented.
As of December 31, 2024, a valuation allowance has been recorded for the full value of its net deferred tax asset due to the uncertainty as to the future recoverability until such time that taxable income is reasonably assured.
Net Loss Per Share
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock of BGHL outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including preferred stock and convertible notes, to the extent dilutive. There were no potential dilutive common stock equivalents for the year ended December 31, 2024 and 2023.
Recent Accounting Pronouncements
Certain new standards, amendments and interpretations, and improvements to existing standards have been published by the FASB and United States Securities and Exchange Commission but are not yet effective and have not been adopted early by BGHL. BGHL does not anticipate that any of these pronouncements will have a material impact on its consolidated financial statements.
4. RESTATEMENT OF PREVIOUSLY ISSUED UNAUDITED INTERIM FINANCIAL STATEMENTS
In connection with the preparation of BGHL’s audited consolidated financial statements included in the Form 20-F, the Company identified required changes to the unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2024. On January 27, 2024, BGBPL, FGR Bogoso Prestea Ltd. (“FGRBPL”) and Bogoso Gold Streaming plc (“Bond SPV”) entered into a purchase and assumption agreement (the “Purchase Agreement”) to acquire certain mining assets, primarily mining leases, of the Bogoso Prestea Mine, subject to certain closing conditions including approval by the Ministry of Lands and Natural Resources of the Republic of Ghana. The registration of the legal transfer contemplated by the Purchase Agreement was completed on May 15, 2024. The changes relate to the initial asset acquisition accounting performed by the Company when it acquired the assets pursuant to the Purchase Agreement. Also on January 27, 2024, BGBPL entered into a Royalty Agreement (“Bond SPV Royalty”) with FGRBPL and Bond SPV. The Bond SPV Royalty provides for BGBPL to pay a royalty in refined gold to Bond SPV (as priority payee) and FGRBPL (as secondary payee, once Bond SPV debt service obligations are met) at a rate of the lesser of (i) 2,000 ounces per month, or 30% of gross production per month for the first 36 months following the start of commercial production, and (ii) 3,250 ounces per month, or 30% of gross production per month, after 36 months until Bond SPV Royalty payments total the 250,000 ounce cap.
13
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The adjustments primarily relate to the removal of the Bond SPV Royalty liability and the removal of certain fixed assets (and the related depreciation expense) that were not part of the Purchase Agreement. After further investigation, it was determined the Bond SPV Royalty agreement should be accounted for as FGRBPL’s retention of a mineral right in accordance with ASC 932 as it represents a volumetric production payment, whereas previously it was accounted for as part of the consideration payable to FGR. Under ASC 932, FGR would retain the rights to their share of the ounces of gold and no entry should be recorded on BGHL as those rights were not part of the lease transfer.
Mineral rights are measured at fair value at the acquisition date and determined by the net present value of expected future cashflows, which, under an asset acquisition, are then adjusted to match the consideration paid, in this case being the liabilities assumed. Given BGHL accounted for the purchase as an asset acquisition rather than a business combination, the total adjusted consideration transferred on the date of the acquisition was allocated to the assets and liabilities acquired on a relative fair value basis therefore the net impact of these adjustments on the consolidated balance sheet as of the acquisition date was zero.
The following table summarizes the reporting acquisition date fair value of the assets acquired and the liabilities assumed, restatement adjustments and adjusted allocation of fair value of assets acquired:
| May 15, 2024 | ||||||||||||
| As Reported | Restatement Adjustments | As Restated | ||||||||||
| Assets acquired | ||||||||||||
| Property, plant and equipment | $ | 44,600,000 | $ | (42,000,000 | ) | $ | 2,600,000 | |||||
| Intangible assets: Mineral rights | 323,600,000 | (293,500,000 | ) | 30,100,000 | ||||||||
| Total assets acquired | $ | 368,200,000 | $ | (335,500,000 | ) | $ | 32,700,000 | |||||
| Liabilities assumed | ||||||||||||
| Bond SPV royalty liabilities | $ | 335,500,000 | $ | (335,500,000 | ) | $ | — | |||||
| GSR royalty liability | 2,700,000 | — | 2,700,000 | |||||||||
| GSR contingent consideration liabilities | 17,100,000 | — | 17,100,000 | |||||||||
| Asset retirement obligation | 12,900,000 | — | 12,900,000 | |||||||||
| Total liabilities assumed | $ | 368,200,000 | $ | (343,800,000 | ) | $ | 32,700,000 | |||||
14
INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED) (RESTATED)
(Stated in US Dollars except for Number of Shares)
| June 30, 2024 | ||||||||||||
| As Reported | Restatement Adjustments | As Restated | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash | $ | 714 | $ | — | $ | 714 | ||||||
| Prepaid expenses and other current assets | 769,742 | — | 769,742 | |||||||||
| Advances to related parties | 1,252,660 | — | 1,252,660 | |||||||||
| Total current assets | 2,023,116 | — | 2,023,116 | |||||||||
| Property, plant and equipment | 44,510,619 | (41,910,619 | ) | 2,600,000 | ||||||||
| Mineral rights | 323,705,486 | (293,500,000 | ) | 30,205,486 | ||||||||
| Total assets | $ | 370,239,221 | $ | (335,410,619 | ) | $ | 34,828,602 | |||||
| Liabilities | ||||||||||||
| Current liabilities | ||||||||||||
| Accrued expenses and other current liabilities | $ | 1,378,826 | $ | — | $ | 1,378,826 | ||||||
| Due to related party | 245,583 | — | 245,583 | |||||||||
| Loan – related party | 1,500,000 | — | 1,500,000 | |||||||||
| Convertible notes payable | 2,224,918 | — | 2,224,918 | |||||||||
| Total current liabilities | 5,349,327 | — | 5,349,327 | |||||||||
| Royalty payable | 338,200,000 | (335,500,000 | ) | 2,700,000 | ||||||||
| Contingent consideration liability | 17,100,000 | — | 17,100,000 | |||||||||
| Asset retirement obligation | 13,107,200 | 200 | 13,107,400 | |||||||||
| Total liabilities | 373,765,527 | (335,499,800 | ) | 38,256,727 | ||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders’ Deficit | ||||||||||||
| Common stock, $0.00000000001 par value; 100,000,000 authorized and issued shares | — | — | — | |||||||||
| Accumulated deficit | (3,517,306 | ) | 89,181 | (3,428,125 | ) | |||||||
| Total stockholders’ deficit | (3,517,306 | ) | 89,181 | (3,428,125 | ) | |||||||
| Total liabilities and stockholders’ deficit | $ | 370,239,221 | $ | (335,410,619 | ) | $ | 34,828,602 | |||||
15
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) (RESTATED)
(Stated in US Dollars except for Number of Shares)
| Three months ended June 30, 2024 | ||||||||||||
| As Reported | Restatement Adjustments | As Restated | ||||||||||
| Operating expenses | ||||||||||||
| General and administrative expenses | $ | 374,750 | $ | — | $ | 374,750 | ||||||
| Merger and acquisition expenses | 550,100 | — | 550,100 | |||||||||
| Plant costs | 1,349,153 | — | 1,349,153 | |||||||||
| Accretion of asset retirement obligation | 207,200 | 200 | 207,400 | |||||||||
| Depreciation and amortization | 89,381 | (89,381 | ) | — | ||||||||
| Total operating expenses | 2,570,584 | (89,181 | ) | 2,481,403 | ||||||||
| Other expense | ||||||||||||
| Interest expense | (41,007 | ) | — | (41,007 | ) | |||||||
| Total other expense | (41,007 | ) | — | (41,007 | ) | |||||||
| Net loss | $ | (2,611,591 | ) | $ | 89,181 | $ | (2,522,410 | ) | ||||
| Weighted average common shares outstanding — basic and diluted | 100,000,000 | — | 100,000,000 | |||||||||
| Net loss per common share — basic and diluted | $ | (0.03 | ) | $ | — | $ | (0.03 | ) | ||||
16
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(RESTATED)
(Stated in US Dollars except for Number of Shares)
| Six months ended June 30, 2024 | ||||||||||||
| As Reported | Restatement Adjustments | As Restated | ||||||||||
| Operating expenses | ||||||||||||
| General and administrative expenses | $ | 460,392 | $ | — | $ | 460,392 | ||||||
| Merger and acquisition expenses | 1,035,495 | — | 1,035,495 | |||||||||
| Plant costs | 1,349,153 | — | 1,349,153 | |||||||||
| Accretion of asset retirement obligation | 207,200 | 200 | 207,400 | |||||||||
| 89,381 | (89,381 | ) | — | |||||||||
| Total operating expenses | 3,141,621 | (89,181 | ) | 3,052,440 | ||||||||
| Other expense | ||||||||||||
| Interest expense | (41,007 | ) | — | (41,007 | ) | |||||||
| Total other expense | (41,007 | ) | — | (41,007 | ) | |||||||
| Net loss | $ | (3,182,628 | ) | $ | 89,181 | $ | (3,093,447 | ) | ||||
| Weighted average common shares outstanding — basic and diluted | 100,000,000 | — | 100,000,000 | |||||||||
| Net loss per common share — basic and diluted | $ | (0.03 | ) | $ | — | $ | (0.03 | ) | ||||
17
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR SIX MONTHS ENDED JUNE 30, 2024
(RESTATED) (UNAUDITED)
(Stated in US Dollars except for Number of Shares)
| As Reported | Restatement Adjustments | As Restated | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ | (3,182,628 | ) | $ | 89,181 | $ | (3,093,447 | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Accretion of asset retirement obligation | 207,200 | 200 | 207,200 | |||||||||
| Depreciation | 89,381 | (89,381 | ) | — | ||||||||
| Operating and prepaid expenses paid by related party | 1,326,914 | 1,326,914 | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Prepaid expenses and other current assets | (685,751 | ) | — | (685,751 | ) | |||||||
| Advances to related party | (1,252,660 | ) | — | (1,252,660 | ) | |||||||
| Accrued expenses and other liabilities | 1,378,826 | — | 1,378,826 | |||||||||
| Net cash used in operating activities | (2,118,718 | ) | — | (2,118,718 | ) | |||||||
| Cash flows from investing activities: | ||||||||||||
| Capitalized asset acquisition costs | (105,486 | ) | — | (105,486 | ) | |||||||
| Net cash used in investing activities | (105,486 | ) | — | (105,486 | ) | |||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from convertible notes | 2,224,918 | — | 2,224,918 | |||||||||
| Net cash provided by financing activities | 2,224,918 | — | 2,224,918 | |||||||||
| Net Increase in cash | 714 | — | 714 | |||||||||
| Cash at beginning of period | — | — | — | |||||||||
| Cash at end of period | $ | 714 | $ | — | $ | 714 | ||||||
| Supplemental cash flow information | ||||||||||||
| Interest paid | $ | — | $ | — | $ | — | ||||||
| Taxes paid | $ | — | $ | — | $ | — | ||||||
| Noncash investing and financing activities: | ||||||||||||
| Acquisition of Mineral rights in exchange for certain obligations | $ | 323,600,000 | $ | (293,500,000 | ) | $ | 30,100,000 | |||||
| Acquisition of Property, plant and equipment, net in exchange for certain obligations | $ | 44,600,000 | $ | (42,000,000 | ) | $ | 2,600,000 | |||||
| Assumption of royalty payable in exchange for mineral rights and property, plant and equipment, net | $ | 338,200,000 | $ | (335,500,000 | ) | $ | 2,700,000 | |||||
| Assumption of contingent consideration liability in exchange for mineral rights and property, plant and equipment, net | $ | 17,100,000 | $ | — | $ | 17,100,000 | ||||||
| Assumption of asset retirement obligation in connection with obtaining mineral rights and property, plant and equipment, net | $ | 12,900,000 | $ | — | $ | 12,900,000 | ||||||
18
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5. ASSET ACQUISITION
On January 27, 2024, the BGBPL and FGRBPL entered into the Purchase Agreement to acquire certain mining assets, primarily mining leases, of the Bogoso Prestea Mine, subject to certain closing conditions including approval by the Ministry of Lands and Natural Resources of the Republic of Ghana. The Purchase Agreement provided for the transfer of mining assets from FGRBPL (the previous leaseholder) to BGBPL, including four mining leases (Bogoso I, Bogoso II, Prestea Surface and Prestea Underground), a government indemnity in favor of the previous leaseholder in respect of certain environmental damage and liabilities, fixed assets including immovable structures, buildings and facilities. Consideration for the transfer of the mining assets is the assumption of the previous leaseholder’s royalty agreement obligation with Golden Star Resources and stream agreement with Royal Gold.
The Purchase Agreement became effective as of May 1, 2024. The closing conditions have been met, with a number of subsequent closing deliverables still to be concluded (including the Royal Gold Agreement novation, the Golden Star Resources Agreement novation, and the Corporate Social Responsibility Agreement novation). The registration of the legal transfer was completed on May 15, 2024. In accordance with the laws of Ghana, BGBPL will ultimately be 90% owned by BGHL and 10% owned by the Government of the Republic of Ghana. As of the date of these financials, the shares have not been transferred to the Government of the Republic of Ghana.
BGHL evaluated this acquisition under ASC 805, Business Combinations. ASC 805 requires that an acquirer determine whether it has acquired a business. If the criteria of ASC 805 are met, a transaction would be accounted for as a business combination and the purchase price is allocated to the respective net assets and liabilities assumed based on their fair values and a determination is made whether any goodwill results from the transaction. This mine has been shut in with limited activities necessary to maintain the surface as required by regulation. In evaluating the criteria outlined by this standard, BGHL concluded that the acquired set of assets did not meet the US GAAP definition of a business. BGHL did not acquire an assembled workforce nor a substantive process. BGHL has contracted through a transition services agreement (the “TSA”), FGRBPL to continue various mine maintenance processes. In order to commence operations, BGHL will need to hire additional skilled workers to execute its exploration and development plan. Therefore, BGHL accounted for the purchase as an asset acquisition rather than a business combination, and allocated the total consideration transferred on the date of the acquisition to the assets and liabilities acquired on a relative fair value basis.
Also on January 27, 2024, Blue Gold Bogoso Prestea Ltd entered into the Bond SPV Royalty with FGRBPL and Bond SPV. The Bond SPV Royalty provides for Blue Gold Bogoso Prestea Ltd to pay a royalty in refined gold to Bond SPV (as priority payee) and the previous leaseholder (as secondary payee, once Bond SPV debt service obligations are met) at a rate of the lesser of (i) 2,000 ounces per month, or 30% of gross production per month for the first 36 months following the start of commercial production, and (ii) 3,250 ounces per month, or 30% of gross production per month after 36 months until Bond SPV Royalty payments total the 250,000 ounce cap. This agreement represents a volumetric production payment and in accordance with ASC 932, is accounted for as a retention of the mineral right by the pervious leaseholder and therefore not part of the asset acquisition described above.
The following table summarizes the acquisition date fair value of the assets acquired and the liabilities assumed:(1)
| Assets acquired | ||||
| Property, plant and equipment(2) | $ | 2,600,000 | ||
| Intangible assets: mineral rights(3) | 30,100,000 | |||
| Total assets acquired | $ | 32,700,000 | ||
| Liabilities assumed | ||||
| GSR royalty liability(4) | $ | 2,700,000 | ||
| GSR contingent consideration liabilities(5) | 17,100,000 | |||
| Asset retirement obligations(6) | 12,900,000 | |||
| Total Liabilities assumed | $ | 32,700,000 | ||
| (1) | The liabilities assumed and assets acquired include a mandatory 10% non- controlling interest to be held by the Government of Ghana based on Ghanaian laws. |
| (2) | Property, plant and equipment includes land, building and processing equipment excluding mobile assets. Property, plant and equipment are measured at fair value at the acquisition date. The fair value was determined by the evaluation and combination of the open market approach, comparative method and the present replacement value approach. The fair value was then adjusted based on relative fair value as compared to the other assets acquired. |
| (3) | Mineral rights are measured at fair value at the acquisition date and determined by the net present value of expected future cashflows. Key assumptions in the income valuation method include long-term gold prices (average gold price of $2,006/oz), level of gold production over the life of mine (3,885.4 koz), tonnes of ore processed (76.7 Mt), operating and capital expenditures and a 17.0% discount rate. The fair value was then adjusted based on relative fair value to match the consideration paid being the liabilities assumed. |
| (4) | The liability is recorded at fair value at the closing date determined by the net present value of estimated future obligations using the same expected future cash flows associated with the mineral rights using an appropriate credit adjusted discount rate of 10%. |
| (5) | The fair value of the liability was determined using the Black Scholes Merton Model at the closing date. Key assumptions in this model included remaining life (3.6 — 6.0 years); risk free rate (4.3%-4.4%); and cost of debt (17.6% – 18.3%). |
| (6) | Asset retirement obligation represents the fair value at the closing date associated with the estimate of cost to return the mines to their original condition upon disposal. The estimate was determined using the present value technique based on forecasted remediation costs at end of life of mine (incorporating an appropriate inflation rate), and development and application of an appropriate credit adjusted discount rate, 12.5%. |
19
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. MINERAL RIGHTS
As of December 31, 2024, BGHL has mineral rights in Ghana to mine the Bogoso and Prestea properties acquired under the Purchase Agreement. These mineral rights were acquired through staking and purchase, lease or option agreements and are subject to varying royalty interests, some of which are indexed to the sale price of gold. The mine is currently on care and maintenance, no mining activities are being undertaken and there is currently no production from the mine. As of December 31, 2024, the carrying value of the mineral rights of $30.1 million represents the relative fair value on the acquisition date allocated to the acquired mineral rights pursuant to the Purchase Agreement. Amortization is computed using the unit of production method and there was no amortization for the year ended December 31, 2024, due to the lack of gold production.
Due to the uncertainty surrounding the outcome of the lease dispute with the Government of Ghana (Note 15), and the possibility that the mining leases may not be returned to BGBPL, there is a material uncertainty that BGHL will not be able to undertake its business plan to restart the Bogoso Prestea mine. If BGHL is not successful with its arbitration proceedings with the Republic of Ghana, the leases may be relinquished which will reduce the mineral rights value reflected in BGHL’s balance sheet to zero.
7. PROPERTY, PLANT AND EQUIPMENT, NET
| Property, plant and equipment consisted of the following: | December 31, 2024 | |||
| Vehicles | $ | 354,267 | ||
| Building and leasehold land | 1,792,352 | |||
| Plant and machinery | 807,648 | |||
| Computer and accessories | 1,010 | |||
| Total Property, plant and equipment | 2,955,277 | |||
| Less: accumulated depreciation | (41,768 | ) | ||
| Property, plant and equipment, net | $ | 2,913,509 | ||
There was $41,768 of depreciation expense for the year ended December 31, 2024.
8. ADVANCES PAYABLE
On November 7, 2024, BGHL received a $345,000 advance from Attachy. The advance is interest free and without security. The advance is due on demand. At December 31, 2024, Attachy has not demanded repayment of the advance.
On each of October 2, 2024, October 28, 2024 and November 31, 2024, BGHL’s subsidiary, BGBPL, received an aggregate amount of $303,000 in advances from Attachy. The advances are interest free and without security. The advances are due on demand. At December 31, 2024, Attachy has not demanded repayment of the advances.
9. CONVERTIBLE NOTES PAYABLES
On June 16, 2024, BGHL executed $2,500,000 of convertible secured interest-bearing loan notes, as amended and restated by an amendment and restatement deed, dated June 26, 2024, with a redemption date of December 14, 2024 (the “Notes”), to fund working capital needs. The Notes are convertible into ordinary shares at a conversion rate of $0.50 per share. The Notes accrue fixed interest of 15% of the principal amount of the Notes which are repaid or redeemed but no interest shall accrue on any Notes that are converted. The Notes are secured by the underlying equity of BGHL held by three shareholders of BGHL. The Notes can be repaid or converted at the option of the Noteholder at any time, up to the redemption date of December 14, 2024. In June and July 2024, BGHL issued $2,500,000 of the Notes, of which $350,000 was redeemed and reissued to new Noteholders at a fixed rate of 10% on July 30, 2024. In September 2024, $27,152 was repaid. BGHL records the Note liability at its fixed monetary amount on the issuance date and interest expense charged over the outstanding period of the Note. At December 31, 2024, the balance of $2,472,848 was due on demand and reported as Convertible notes payables on the accompanying consolidated balance sheet. For the year ended December 31, 2024, interest expense of $442,869 was accrued on these loans and included on the consolidated statement of income.
On January 10, 2025 the Notes were amended and restated to extend the redemption date to June 14, 2025; increase the fixed interest rate to 30% of the principal amount of the Notes which are repaid or redeemed but no interest shall accrue on any Notes that are converted; and decreased the conversion rate to $0.40 per share. As at the date of these financial statements, 100% of the Notes have been converted. The Noteholders converted their Notes into shares by accepting shares issued by BC2, with a corresponding intercompany loan being put in place owing by BGHL to BC2 (see Note 16).
20
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. ROYALTY AGREEMENT AND CONTINGENT CONSIDERATION
Bond SPV Royalty Agreement
On January 27, 2024, in conjunction with the Purchase Agreement (see Note 5), BGBPL entered into the Bond SPV Royalty with FGRBPL and Bond SPV which closed in May 2024. The Bond SPV Royalty provides for BGBPL to pay a royalty in refined gold to Bond SPV (as priority payee) and the previous leaseholder (as secondary payee, once Bond SPV debt service obligations are met) at a rate of the lesser of (i) 2,000 ounces per month, or 30% of gross production per month for the first 36 months following the start of commercial production, and (ii) 3,250 ounces per month, or 30% of gross production per month after 36 months until Bond SPV Royalty payments total the 250,000 ounce cap. This agreement represents a volumetric production payment and in accordance with ASC 932, is accounted for as a retention of the mineral right by the previous leaseholder and therefore not part of the asset acquisition described above. Gold ounces available to be sold will be reduced by the amounts provided to Bond SPV.
GSR Royalty Agreement
The consideration for the transfer of mining assets under the Purchase Agreement also includes the assumption of FGRBPL’s royalty agreement with Golden Star Resources, a royalty and a contingent payment. On September 30, 2021, FGR entered into Royalty and Contingent Payment Agreement with Golden Star Resources Limited (“GSR Royalty”). The GSR Royalty provides for the payments of two types of royalties to Golden Star Resources Limited. First, a royalty of 1.0% of sale of product of net smelter returns of 100,000 to 300,000 cumulative ounces of gold, and a royalty of 2.0% of sale of product of net smelter returns of over 300,000 cumulative ounces of gold after October 1, 2020. The net smelter return royalty terminates when the aggregate payments exceed $35,000,000. To date there has been no payment triggered or made towards the net smelter return royalty. The second is a contingent payment, defined as the payment of $20,000,000 (if the price of gold is <$1,400/oz), $30,000,000 (if the price of gold is $1,400–$1,700/oz), or $40,000,000 (if the price of gold is >$1,700/oz) upon the start of sulphide mining (refractory), such payment to be made in stages during the construction and operation of the sulphide project. To date, there has been no payment triggered or made towards the sulphide mining contingent payment.
On the closing date, the GSR Royalty liability under this agreement was measured at fair value using an income approach. The contingent payment also resulted in a liability that was measured using the Black Scholes Merton model (See Note 12).
11. ASSET RETIREMENT OBLIGATIONS
BGHL accounts for its asset retirement obligations in accordance with ASC 410, Asset Retirement and Environmental Obligations. Remediation, reclamation and mine closure costs are based principally on legal and regulatory requirements. Management estimates costs associated with reclamation of mining properties as well as remediation costs for inactive properties. BGHL uses assumptions about future costs, capital costs and reclamation costs. Such assumptions are based on BGHL’s current mining plan and the best available information for making such estimates. At the closing date of acquiring the mine, the asset retirement obligation was measured at fair value. The estimate was determined using the present value technique based on forecasted remediation costs at end of life of mine (incorporating an appropriate forward rate), and development and application of appropriate discount rate.
BGHL accounts for its asset retirement obligations in accordance with ASC 410, Asset Retirement and Environmental Obligations. This requires that legal obligations associated with the retirement of long-lived assets be recognized at fair value when incurred and capitalized as part of the related long-lived asset. Over time, the liability is accreted to its future value each period, and the capitalized asset is depreciated over the useful life of the long-lived asset.
In the absence of quoted market prices, BGHL estimates the fair value of our asset retirement obligations at inception using present value techniques, in which estimates of future cash flows associated with retirement activities are discounted using a credit-adjusted risk-free rate. BGHL’s estimated liability could change significantly if actual costs vary from assumptions or if governmental regulations change significantly.
BGHL’s cash flow estimate for the asset retirement obligation is based upon the assumption of a 18.3-year expected life of the mine and discounted using a credit-adjusted risk-free discount rate of 12.5%.
BGHL’s asset retirement obligation was established in May 2024, subsequent to the Purchase Agreement, and initially recorded at fair value. BGHL’s accretion expense totaled $1,037,000 from the closing date through December 31, 2024. The asset retirement obligation totaled $13,937,000 at December 31, 2024.
Changes to the asset retirement obligations are as follows:
| December 31, 2024 | ||||
| Asset Retirement obligations, beginning of year | $ | — | ||
| Liability assumed | 12,900,000 | |||
| Accretion expense | 1,037,000 | |||
| Asset Retirement obligations, end of year | $ | 13,937,000 | ||
21
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. FAIR VALUE MEASUREMENT
Financial Assets Measured at Fair Value on a Nonrecurring Basis
The significant Level 3 assumptions used in the calculation of estimated discounted cash flow model vary depending on its application and may include projections of estimated quantities of gold resources and reserves, expectations for timing and amount of future development, operating and asset retirement costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates. See Note 5 for additional information regarding the mine acquisitions.
Royalty Liabilities
The estimated fair value of the royalty liabilities was determined using the income approach. Key inputs in the income valuation method include long-term gold prices (average gold price of $2,006/oz), level of gold production over the life of mine (3,885.4 koz), tonnes of ore processed (76.7 Mt) and the discount rate (10.0%).
Contingent Liability
The estimated fair value of the contingent consideration was determined using the Black-Scholes option-pricing model and were based on the following assumptions:
May 15, 2024 (acquisition date) | ||||
| Dividend yield | 0.0% | |||
| Volatility | 13.8% | |||
| Risk Free Rate | 4.3 – 4.4% | |||
| Expected life | 3.6 – 6 years | |||
| Cost of debt | 17.6% – 18.3%. | |||
Asset Retirement Obligation
BGHL estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Asset retirement obligation fair value measurements in the current period were Level 3 fair value measurements. The estimated fair value of the asset retirement obligation was determined using an income approach. Key assumptions included the remaining term – 18.3 years; discount rate – 12.5%; inflation rate – 4.7%; market risk premium 5.50%. As further described in Note 11, BGHL recognized the fair value of a liability for an asset retirement obligation at the close date of the Purchase Agreement. Future changes to underlying assumptions may result in revisions of the asset retirement obligation resulting in an adjustment to the asset retirement asset that is amortized prospectively using the unit of production method. The accretion expense from the closing date through December 31, 2024 was $1,037,000.
13. RELATED PARTY TRANSACTIONS
Related party loan
On December 30, 2023, BGHL entered into an unsecured promissory note (the “Working Capital Loan”) with an affiliate, FGR, pursuant to which BGHL may borrow up to an aggregate principal amount of $1,500,000. The Working Capital Loan is non-interest bearing and payable upon the consummation of the Business Combination. As of December 31, 2024 and 2023, there was $0 and $418,669, respectively, outstanding under the Working Capital Loan, respectively.
22
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Accounts Payable related party
The Company has various related party transactions with FGRBPL, its parent, BIHL and BIHL’s consolidated subsidiaries. These transactions primarily relate to mine maintenance services provided by FGRBPL to BGBPL in connection with the TSA. In order to fund these transactions, at times, money is advanced to a BIHL consolidated entity, thereby creating a due from balance. BIHL through its subsidiaries carry out the business activities of the mine and the amounts advanced are used to fund these activities. The break-out of this net balance due as of December 31, 2024 by BIHL consolidated entity is as follows:
| Legal entity name | As of December 31, 2024 | |||
| (due to)/due from | ||||
| FGR-BPL | $ | (3,887,334 | ) | |
| Future Global Resources Limited (“FGR”) | 1,762,907 | |||
| Blue International Holdings Limited (“BIHL”) | 23,314 | |||
| $ | (2,101,113 | ) | ||
On December 31, 2024, the Company owed a net amount of $2,101,113 to BIHL and its consolidated subsidiaries. The balance is due on demand. Interest is calculated on a monthly basis based on SOFR plus 1% on funds advanced as well as funds received. For the year ended December 31, 2024, a net amount of related party interest of $69,418 was recorded in the statement of operations and remains accrued at December 31, 2024 and is included in accounts payable related party in the consolidated Balance Sheet. For the year ended December 31, 2024, the Company incurred expenses of $4,241,953 in connection with the TSA which has been included in plant maintenance costs in the consolidated statement of operations.
14. STOCKHOLDERS’ DEFICIT
Common stock — BGHL is authorized to issue 200,000,000 shares of common stock with a par value of $0.00000000001 per share. During the year ended December 31, 2024, BGHL sold 8,590,592 shares of common stock of BGHL receiving proceeds totaling $3,628,191. Additionally, BGHL issued 155,654 shares of common stock of BGHL in exchange for goods and services totaling $89,749. At December 31, 2024 and 2023, there were 108,746,245 and 100,000,000 shares of common stock issued and outstanding, respectively.
15. COMMITMENTS AND CONTINGENCIES
Notice of Termination of Mining Leases
On September 20, 2024, FGR-BPL, the previous leaseholders of the Bogosa Prestea Mine, received a notice of termination of mining leases (the “Commission Notice”) from the Minerals Commission of Ghana (the “Mineral Commission”) alleging violations of the related leases. After the Commission Notice, the Mineral Commission formed an Interim Management Committee (“IMC”), and the IMC assumed managerial control of the mine site. BGHL and the Previous Leaseholder, pursuant to the Minerals and Mining Act 2006 (Act 703) (the “Mining Act”), actively dispute the contents and legality of the Commission Notice and the appointment of an IMC. On October 14, 2024, BGHL delivered notice to the Republic of Ghana requesting settlement of BGHL’s dispute pursuant to the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Ghana for the Promotion and Protection of Investments, signed in Accra on March 22, 1989 and entered into force on October 25, 1991 (“UK-Ghana BIT”).
On April 2, 2025, BGHL served a notice of arbitration on the Republic of Ghana to commence international arbitration proceedings against the Republic of Ghana pursuant to Article 10 of the UK-Ghana BIT. On June 6, 2025, the Republic of Ghana submitted its response to the notice of arbitration in which it contests jurisdiction and disputes the validity and merits of BGHL’s claims and has agreed to have a three-person tribunal hear the dispute and for it to be administered by an arbitral institution (the Permanent Court of Arbitration in The Hague). Pending the resolution of the dispute, BGHL has been advised by Kimathi Partners, its legal counsel in Ghana, that pursuant to Section 27(5) of the Mining Act, the leases remain valid and in full effect.
In the event the arbitration outcome or any of these actions is favourable to the existing mining leases, successful mine development, infrastructure construction, and mineral production is dependent on obtaining all necessary consents, approvals, and licenses for a successful design, construction, and operation of efficient mining, processing, and transportation facilities. No assurance can be given that we will be able to resolve this matter or obtain all necessary consents, approvals, and licenses in a timely manner, or at all. If the outcome of the arbitration is unfavourable, it will adversely affect the value of BGHL’s business. Delays or difficulties in obtaining a favourable arbitration outcome or in obtaining relevant approvals, may interfere with future mining operations or plans of BGHL, which will materially impact our business and financial position in the future.
Due to the uncertainty surrounding the outcome of the lease dispute with the Government of Ghana, and the possibility that the mining leases may not be returned to BGBPL, there is a material uncertainty that BGHL will be able to undertake its business plan to restart the Bogoso Prestea mine. If the Company is not successful with its arbitration proceedings with the Republic of Ghana, the leases may be relinquished which will reduce the mineral rights value reflected in BGHL’s balance sheet to zero.
23
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Business Combination Agreement
On June 25, 2025 (the “Closing Date”), Blue Gold Limited, a Cayman Islands exempted company limited by shares (“BGL”), consummated the previously announced business combination pursuant to the Second Amended and Restated Business Combination Agreement, dated as of June 12, 2024 (as amended and restated, the “BCA”), and further amended on January 8, 2025, March 28, 2025, April 20, 2025, May 8, 2025 and June 10, 2025, by and among BGL, Perception Capital Corp. IV, a Cayman Islands exempted company limited by shares formerly known as RCF Acquisition Corp. (“Perception”), and BGHL. The following transactions occurred pursuant to the terms of the BCA (collectively, the “Business Combination”):
| ● | BGL formed Blue Merger Sub, an exempted company incorporated under the laws of the Cayman Islands (“Blue Merger Sub”), for the purposes of the effectuating the business combination; |
| ● | Perception merged with and into BGL, with BGL being the surviving entity (the “Perception Reorganization”); |
| ● | Blue Cayman 1, an exempted company incorporated under the laws of the Cayman Islands (“BC1”), acquired the entirety of the BGHL Shares; |
| ● | BC1 transferred the entire undertaking of BC1, including the entire share capital of BGHL to Blue Cayman 2, an exempted company incorporated under the laws of the Cayman Islands (“BC2”). The name of Blue Cayman 2 was changed to Blue Gold (Cayman) Limited; |
| ● | Blue Merger Sub merged with and into BC2, with BC2 being the surviving entity and becoming a wholly owned subsidiary of BGL. |
The Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, although Perception will acquire all of the outstanding equity interests of BGHL in the Business Combination, Perception will be treated as the “acquired” company and BGHL will be treated as the accounting acquirer for financial statement reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of BGHL issuing stock for the net assets of Perception, accompanied by a recapitalization. The net assets of Perception will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of BGHL.
BGHL has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances under both the Assuming Minimum Redemptions Scenario and the Assuming Maximum Redemptions Scenario:
| ● | BGHL’s stockholders will have the greatest voting interest in the Post-Combination Company; |
| ● | BGHL’s stockholders will have the ability to control decisions regarding election and removal of directors and officers of the Post-Combination Company; |
| ● | BGHL will comprise the ongoing operations of the Post-Combination Company; and |
| ● | BGHL’s existing senior management will be the senior management of the Post-Combination Company. |
Royal Gold Stream Agreement
Another obligation for the transfer of mining assets under the Purchase Agreement is the assumption by BGBPL of the previous leaseholder’s stream agreement with RGLD Gold AG (“Royal Gold”). Royal Gold has the right to purchase 5.5% of payable gold produced from the Bogoso Prestea Mine. The cash purchase price for gold is 30% of the spot price of gold per ounce delivered.
24
BLUE GOLD HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Gold Advance Payment Purchase Agreements
In August 2024, BGHL signed a Gold Advance Payment Purchase Agreement (“GAPPA”) with Gerald Metals SARL (“Gerald”), whereby, subject to satisfying several conditions precedent, Gerald will make advance payments of up to an aggregate of $25,000,000 to fund restart costs. All advance payment amounts, plus interest accruing and compounding daily at 7% plus three-month SOFR per annum, are required to be prepaid 24 months after the date of the first advance payment disbursement. Until such time as all such amounts are paid in full, Gerald is granted a first ranking perfected security interest over all of BG-BPL’s assets, including real property, machinery, and equipment, its mining license, each with regard to the Bogoso Prestea mine, and certain other assets. In consideration of the advance payment, BGBPL will sell 100% of the total material produced at the Bogoso and Prestea site to Gerald for a period of 60 months after the offtake commencement date at a discount as defined in the agreement. The total amount of material sold will be no less than 760,000 oz of gold, delivered pursuant to a prescribed delivery schedule, and such 60 month period can be extended until such amount is delivered. Pursuant to the GAPPA, Gerald was also granted a right of first refusal to participate in the development funding of certain future projects. In addition, the GAPPA includes an undertaking that Blue Gold Limited will become a party to the GAPPA. The GAPPA gives Gerald the option to convert the advance payment, or part thereof, into shares and warrants of Blue Gold Limited. Under Tranche A, $15.0 million of advance payment can be converted to Blue Gold Limited shares up to 10 business days after Listing. The conversion price into BGL shares will be calculated on the basis of a conversion into BGHL shares at $0.43 cents and then applying the BCA conversion into BGL shares achieved by BGHL at the time of the Listing. Each share is paired with a warrant as part of Tranche A, giving the right to purchase shares at the listing price (cash exercise) for a period of 24 months following the date of issue of the warrants. Under Tranche B, $10.0 million of advance payment can be converted to Blue Gold Limited shares for a period of 24 months after the first disbursement of the advance payment. Under Tranche B, Gerald Gerald can elect to convert on the earlier of (i) the Listing; or (ii) during the first calendar month of commercial production. If the conversion under Tranche B takes place prior to Listing, the conversion price shall be 100 cents per share in BGHL, if the conversion is after Listing, the conversion price shall be the initial listing price. Each share is paired with a warrant as part of Tranche B giving the right to purchase shares at the listing price (cash exercise) for a period of (i) 24 months following the date of issue of the warrants if they elect to exercise Tranche B prior to the Listing, or on the IPO date, or within 12 months following the date of last disbursement of the Advance Payment, or (ii) 12 months if Gerald elects to convert after the 12th Month following the date of last disbursement of the Advance Payment. Furthermore, the GAPPA gives Gerald the right, for the duration of the agreement, to two board seats on BGL and BGBPL.
Mining Equipment Supply Framework Agreement
In September 2024, BG-BPL signed a Mining Equipment Supply Framework Agreement with Attachy, whereby Attachy will procure certain goods and equipment necessary for the restart of the Bogoso Prestea mine, up to a total value of $8.0 million. BG-BPL must repay to Attachy the equipment purchase price plus a mark-up of 30% of such price. Repayment of the purchase price and mark-up amount will commence three months after an equipment purchase and will be repaid over seven equal monthly instalments. The Company paid $1,084,872 to Attachy under this agreement as a service fee which has been expensed as plant maintenance costs for the year ended December 31, 2024.
25
16. SUBSEQUENT EVENTS
Subsequent events have been evaluated through July 1, 2025, which represents the date the consolidated financial statements were available to be issued and those that are material to the consolidated financial statements are included below.
Advance from Parent
In March 2025, BGHL received an advance of $866,691 from BC2, BGHL’s current parent company.
Preferred Stock Purchase
In March 2025, BGHL entered into a Preferred Stock Purchase Agreement to purchase 110,000 preference shares of Perception Capital Corp. IV from BCMP Services Limited (“BCMP”), an entity jointly owned by the CEO of BGHL and a significant shareholder, for a total consideration of $126,385, which was BCMP’s cost basis. In April 2025, BGHL granted options over 17,500 of these preference shares to employees at an exercise price $1.15 per preference share with an option term of five years. The Preference Shares are convertible on a 1-to-20 basis into Class A Ordinary Shares for an effective price of approximately $0.06 per Class A Ordinary Share.
Amendment to convertible notes
As referred to in Note 9, on June 16, 2024, BGHL executed $2,500,000 of notes, as amended and restated by an amendment and restatement deed, dated June 26, 2024, with a redemption date of December 14, 2024. On January 10, 2025, the Notes were amended and restated to extend the redemption date to June 14, 2025; increase the fixed interest rate to 30% of the principal amount of the Notes which are repaid or redeemed but no interest shall accrue on any Notes that are converted; and decreased the conversion rate to $0.40 per share. As at the date of these financial statements 100% of the Notes have been converted and upon conversion no interest was charged. The Noteholders converted their notes into shares by accepting shares issued by BC2. As the debt was owed by BGHL, the Company recorded an intercompany loan to BC2 at the time of conversion to relieve the convertible notes payable.
New Convertible Note issue
As of June 25, 2025, BGHL is undertaking a fundraising in the form of a convertible note (“CLN”), with $1,902,586 having been subscribed to date. The CLN has a maturity date of October 31, 2025 and a redemption premium of 20%. The CLNs will be automatically converted into ordinary shares of Blue Gold Limited thirty (30) days after the Listing of Blue Gold Limited. The conversion price will be the lower of (i) the Volume Weighted Average Price (VWAP) over the 30-day period following the Listing less the Applicable Discount and (ii) the closing price on the day prior to the conversion less the Applicable Discount. The Applicable Discount is a 40% discount for investments made prior to the Listing and a 20% discount for investments made following the Listing.
Accounts Payable Related Party
As of May 31, 2025, BGHL owed a net amount of $718,382 to BIHL and its consolidated subsidiaries to cover plant maintenance costs in connection with the TSA. BIHL is the parent company of the previous leaseholder. The balance is due on demand. Interest continues to be calculated on a monthly basis based on SOFR plus 1% on funds advanced as well as funds received.
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Exhibit 15.4
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use and incorporation by reference in this Form 20-F of Blue Gold Limited of our report dated July 1, 2025, with respect to the consolidated financial statements of Blue Gold Holdings Limited as of December 31, 2024 and 2023 and for the year ended December 31, 2024 and for the period from inception (November 9, 2023) through December 31, 2023. We also consent to the reference to us under the caption “Statement by Experts” in this Form 20-F of Blue Gold Limited.
/s/ Pannell Kerr Forster of Texas, P.C.
Houston, Texas
July 1, 2025
Exhibit 15.5
Consent of Independent Registered Public Accounting Firm
We hereby consent to the use in this Shell Company Report on Form 20-F of our report dated March 27, 2025, which includes an explanatory paragraph relating to the Perception Capital Corp. IV’s ability to continue as a going concern, relating to the consolidated financial statements of Perception Capital Corp. IV as of December 31, 2024 and 2023 and for the years then ended. We also consent to the reference to us under the caption “Statement by Experts”.
/s/ WithumSmith+Brown, PC
New York, New York
July 1, 2025