Edgemode, Inc 8-K, filed Apr 8, 2025
Edgemode, Inc. (EDGM)
About this 8-K
Edgemode, Inc filed this 8-K on April 8, 2025, reporting on events of April 7, 2025.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.01: Completed an acquisition or sale of assets
- Item 2.03: New debt or off-balance-sheet obligation
- Item 3.02: Unregistered sale of equity
- Item 5.02: Director or officer change, or executive pay
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 5.06: Change in shell company status
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement.
The disclosure set forth below under Item 2.01 of this Current Report on Form 8-K (“report”) is incorporated by reference into this Item 1.01.
Item 2.01 Completion of Acquisition or Disposition of Assets.
Effective April 7, 2025 (the “Effective Time” or “Closing Date”), Edgemode, Inc., a Nevada corporation (“we,” “us,” “our,” the “Company” or “Edgemode”), Synthesis Analytics Production Ltd, an England and Wales private limited company (“SAPL”), and Adler Capital Limited, a company registered in Hong Kong, and the sole shareholder of SAPL, (“ACL”) closed on a Share Exchange Agreement (attached as Exhibit 2.1 to this report) dated April 7, 2025 (the “Share Exchange” or “Transaction”). In accordance with the Share Exchange, SAPL agreed to transfer 100% of SAPL’s outstanding capital stock to Edgemode in exchange for 1,260,246,354 shares of Edgemode common stock, par value $0.001 per share, which represent approximately 55% of the Company’s outstanding common stock at the Effective Time. The Company will account for the acquisition as an asset acquisition under ASC 805 as SAPL does not meet the definition of a business as it does not contain a full set of integrated inputs and outputs at the time of closing.
Pursuant to the terms of the Share Exchange, the Edgemode board of directors (the “Board”) increased the number of seats on the Board to three members and Niclas Adler, the chief executive officer of SAPL, is to fill the vacancy. The Board further approved Edgemode to enter into an employment agreement with Dr. Adler and appoint Dr. Adler as Chief Technology Officer of Edgemode (the “Adler Employment Agreement”). Pursuant to the terms of the Adler Employment Agreement, Dr. Adler will be paid an annual base salary of $400,000 and has been issued a five-year non-qualified stock option to purchase up to 385,789,700 shares of Edgemode common stock at an exercise price of $0.005. Additionally, based on Dr. Adler’s time devoted to Edgemode, he will be entitled to receive a quarterly bonus of $150,000. These terms are based on full-time engagement and it has been agreed that Dr Adler will have a 50% engagement for the first three months of his employment. The Adler Employment Agreement is attached as Exhibit 10.1 to this report.
The Adler Employment Agreement may be terminated with cause at any time and, if terminated with cause, Dr. Adler would be entitled to compensation only for the period ending with the date of such termination. The Adler Employment Agreement may also be terminated by Edgemode without cause upon providing Dr. Adler 30 days’ prior written notice. In the event of termination without cause, Edgemode would continue to pay Dr. Adler his annual base salary and any benefits for the lesser of: (i) the balance of the term of the Adler Employment Agreement or (ii) 12 months from the date of termination, together with any performance bonuses (as defined in the Adler Employment) which may have been earned as of the date of termination.
Furthermore, the Company entered into a consultancy agreement with AI Capital Mineco Limited, an affiliate of Adler, and agreed to pay the consultant a fee of $300,000, subject to the Company receiving financing in excess of $2,000,000 (the “Consultancy Agreement”). The Consultancy Agreement is attached as Exhibit 10.2 to this report.
Charlie Faulkner and Simon Wajcenberg, the current executive officers of Edgemode, remain as directors and executive officers of Edgemode.
Pursuant to the Share Exchange, Mr. Faulkner and Mr. Wajcenberg entered into amendments to their Executive Employment Agreements (the “Executive Employment Amendments”), to increase their base salary to $400,000 per annum and a quarterly bonus of up to $150,000 at the discretion of the Board. The form of Executive Employment Amendment is attached as Exhibit 10.3 to this report.
Additionally, the Board approved the following stock option grants to Mr. Faulkner, Mr. Wajcenberg, and Dmitry Strukov, a consultant to the Company:
| · | Faulkner an option to purchase 257,193,133 shares of common stock of the Company at an exercise price of $0.005 per share; |
| · | Wajcenberg an option to purchase 257,193,133 shares of common stock of the Company at an exercise price of $0.005 per share; and |
| · | Strukov an option to purchase 128,596,567 shares of common stock of the Company at an exercise price of $0.005. |
The form of option grant (the “Option Grant”) is attached as Exhibit 10.4 to this report.
The foregoing description of the Share Exchange, Adler Employment Agreement, Consultancy Agreement, Executive Employment Amendments and Option Grant thereby are qualified in their entirety by the full text of the Share Exchange Agreement, Adler Employment Agreement, Consultancy Agreement, form of Executive Employment Amendment, and form of Stock Option Grant which are filed herewith as Exhibit 2.1, Exhibit 10.1, Exhibit 10.2, Exhibit 10.3, and Exhibit 10.4, respectively.
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Form 10 Information
Cautionary Note Regarding Forward-Looking Statements
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning paying off the amounts due on our equipment, expected delivery, anticipated future results of operations, the growth of our business, our future capital needs, and ability to obtain financings and liquidity. Words such as “expect,” “may,” “anticipate,” “intend,” “would,” “plan,” “believe,” “estimate,” “should,” and similar words and expressions identify forward-looking statements. These statements are based on the Company’s estimates, projections, beliefs, and assumptions and are not guarantees of future performance.
The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties, and risks that may cause actual results to differ materially from these forward-looking statements are discussed in the Risk Factors section of this report and include, without limitation, failure to obtain the necessary financing to execute our business plan on favorable terms or at all, challenges we may face in attracting customers, and our reliance on third-parties to provide the necessary services for the operation of our planned data centers. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. For more information regarding some of the ongoing risks and uncertainties of our business, see the Risk Factors section of this report.
BUSINESS
Corporate History
Edgemode was previously incorporated under the laws of the State of Nevada in 2011. Our subsidiary, Edgemode Wyoming, was incorporated in the State of Wyoming in March 2020. Between 2021 and 2023, we attempted to become a key figure in Bitcoin mining but lacked the necessary funding to finance the purchase of Bitcoin mining hardware and hosting contracts. As a result, since late 2023, our sole business activity consisted of identifying and evaluating suitable acquisition transaction candidates, which led to our now-planned strategic transition from cryptocurrency mining to digital infrastructure colocation services and high-performance computing (“HPC”) hosting.
Our principal executive offices and telephone number are listed on the cover page of this report and our website address is www.Edgemode.io. We have not incorporated by reference into this report the information that can be accessed through our website and you should not consider such information to be part of this report.
Company Overview
Following the closing of the Share Exchange, Edgemode, through SAPL, its wholly owned subsidiary, is now designing, building, and operating digital infrastructure for HPC with the goal of becoming a leading provider of digital colocation services. SAPL is an entity organized in 2022 under the laws of England and Wales. SAPL will change its name to EdgeMode Europe Limited.
The acquisition of SAPL has positioned us to enter the rapidly evolving HPC hosting market in an efficient and effective manner. The acquisition has enabled us to plan to leverage SAPL’s existing infrastructure and expertise to meet the growing demand for data center facilities for third-party customers focused on cloud computing as well as machine learning and artificial intelligence.
The acquisition of SAPL will enable us to become a premier provider and operator of dedicated, purpose-built data center facilities for our third-party customers. We believe that opportunities for growth exist in various applications of our data centers, which is another factor as to why we have decided to begin offering digital infrastructure colocation services to third parties engaged in HPC.
Our goal is to utilize the assets we have acquired via the purchase of SAPL for HPC hosting operations which will provide consistent dollar-based revenue and which represent substantially less risk than our historical digital asset self-mining operations. Our intent is to focus our business on development and marketing efforts to build data centers and expand our foundational HPC hosting customer base.
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Business Strategy
Our business strategy is to generate revenue and achieve profitability by building large-scale data center infrastructure configured for specialized computers performing specific, high-value applications such as cloud computing, machine learning, and artificial intelligence and maximizing the use of assets acquired in the SAPL acquisition. We intend to strategically develop and to work to make operational the infrastructure necessary to support our contractual commitments to our HPC customers and to support expected customer growth and additional demand by leveraging our data center expertise and capabilities. We intend to seek additional opportunities and to engage additional customers in the HPC hosting market to expand our business using our knowledge, expertise, and existing and future infrastructure where favorable market opportunities exist.
Our strategy is focused on hyperscale cloud-based providers and enterprises, including potential customers that we believe have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology infrastructure in their operations. We believe our capabilities for serving the needs of large hyperscale providers and enterprises will continue to enable us to capitalize on the growing demand for outsourced data center facilities in our markets and in new markets where our customers are located or plan to be located in the future. Our business strategy requires immediate funding of approximately $2,000,000 to enable us to commence our new operations and repay debt, as well as additional significant financing to develop and expand our new operations. There are no assurances that we will raise sufficient capital to execute our business plan or satisfy our liabilities. See “Risk Factors.”
Operations
High-Performance Computing Hosting
HPC is a technology that uses clusters of powerful processors that work in parallel to process massive data sets and solve complex problems at extremely high speeds. The proliferation of data, as well as data-intensive and AI enabled applications and use cases, is driving demand for the computing power of HPC. Traditionally, HPC has involved an on-premises infrastructure, investing in supercomputers or computer clusters.
Our HPC hosting revenue will be generated by licensing colocation data center space and related services to a licensee at our Marviken data center. These licensing agreements and orders include lease components, non-lease components (such as power delivery, physical security, maintenance and other billable expenses), as well as non-component elements such as taxes. Under these contracts, customers pay fixed payments (based on electric capacity) and variable payments on a recurring basis. HPC colocation leases may include all or portions of a data center, where customers may also lease office space to support their colocation operations where revenue is primarily based on power usage as well as square footage.
Competition
The HPC market is highly competitive. In the HPC market, we compete with numerous established data center providers, including Equinix, Inc., Digital Realty Trust, NTT, Switch, Inc., Core Scientific, Inc., and CyrusOne Inc., as well as private operators specializing in HPC or colocation services, and digital asset miners looking to convert existing digital mining facilities into HPC colocation facilities. Many of these competitors are better established, have better brand recognition, are well capitalized, and organized to take advantage of certain tax benefits for their investors, lowering their external cost of capital. Many of our competitors seek to establish data centers in the same geographic regions as we do and compete for the same sources of power, equipment, and customers as our Company. Competitors compete on price, facility location, reputation, and perceived skill with respect to performance. We believe that our ability to take advantage of our recently acquired assets to rapidly deliver scalable, purpose-built data centers, combined with cutting-edge, energy-efficient technologies, will enable us to compete favorably within the HPC market.
Our hosting activities will compete with many other hosting operations. Our success in our hosting operations depends on our ability to supply hosting space and power, our performance with respect to installation, operation, and repair of customer equipment, our ability to obtain replacement parts, the value of our service offering to our customers, and the availability of necessary equipment. To compete effectively as a hosting provider, we will market our services to large-scale third-party HPC customers that value our ability to host at scale and who are willing to pay a premium-hosting fee for our high up-time and operational expertise.
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Revenues
Our HPC hosting operations will generate revenue by providing colocation, cloud, and connectivity services to customers in exchange for a fee. The HPC hosting operation provides colocation, facilities operations, security, and other services to third-party HPC customers to support workloads for machine learning and artificial intelligence. Through the acquisition of SAPL we have secured approximately 95MW of contracted power capacity and operational capacity of approximately 68 MW IT Load.
Suppliers and Development Efforts
Power Providers
Through SAPL, and the agreement dated December 27, 2024, as amended on February 20, 2025, between SAPL and Marviken ONE AB, a company organized in Sweden (“Marviken One”), we have secured a 95MW power purchase agreement (the “Power Purchase Agreement”). We will continue to cultivate relationships with power providers and work to leverage our operating capabilities to take advantage of any potential cost saving opportunities. The Power Purchase Agreement is attached as Exhibit 10.5 to this report.
Facility Development
Through our acquisition of SAPL, and SAPL’s agreement with Marviken One dated December 27, 2024, we acquired a 10-year lease on a 1,050 square meter (“sqm”) building space and 28 sqm of office space located in Marviken, Sweden (the “Building Lease”). Our initial intent is to use the 1,050 sqm space to build a Tier 3 specification datacenter with a total of 16MW IT load capacity (a 20MW gross) (the “20MW Center”). The estimated cost to complete the 20MW Center is $70 million, which necessitates the need to raise further equity and debt capital to finance the build. Based on our acquisition, we have already secured our first client for an initial 1MW, which we plan to have operational in April 2025, and we are negotiating with another client for use of the remaining 15MW IT capacity. The Building Lease is attached as Exhibit 10.6 to this report.
In addition to the acquisition of the Building Lease, we also obtained a 20,000 sqm plot of land in Marviken, Sweden (the “Marviken Property”), via a property purchase agreement entered into between SAPL and Marviken TWO AB, a company incorporated in Sweden (“Marviken Two”), on December 4, 2024 (the “Property Purchase”). The property is located at Marviken Kraftverk, 610 27 Vikbolandet, Sweden and we plan to build an additional datacenter with 75MW gross capacity (the “75MW Center”). The estimated cost to complete this development is between $400-470 million. The Company will have to raise further equity and debt capital to finance the development and construction, but we anticipate that a significant amount of the cost will be borne by our clients. Regarding both the 20MW Center and the 75MW Center, we will not commence building until the clients are secured. The Property Purchase is attached as Exhibit 10.7 to this report.
We have also secured a cooling agreement (the “Cooling Agreement”) via the agreement dated December 27, 2024 between SAPL and Marviken One. Marviken One has water rights which provide access to the Baltic Sea. Through our relationship with Marviken One, we intend to supply power and cooling to the 20MW Center and 75MW Center. The Cooling Agreement is attached as Exhibit 10.8 to this report.
We also assumed a 5% promissory note in the principal amount of $1,750,000 issued by SAPL to Marviken Two on December 4, 2024 (the “Note”), which represents part of the purchase price for the Property Purchase. The Note, together with accrued interest, shall be repaid in full on or before December 3, 2027. In the event SAPL raises any capital during 2025, a portion of the proceeds shall be used to pay down the Note. The Note is secured by the Marviken Property. Marviken One and Marviken Two are entities beneficially owned and controlled by Dr. Adler. The Note is attached as Exhibit 10.9 to this report.
Further, from our acquisition of SAPL, we also received cooling systems, tanks, heat exchangers, dielectric fluids, and other necessary data center components. These components will be used to build out our data center infrastructure throughout the spaces we have acquired.
For all facility development, we will rely heavily on the expertise of third parties, focusing on sourcing, evaluating, designing, engineering, and developing the facilities where we will host our customers’ HPC colocation needs.
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Intellectual Property
We have acquired the intellectual property (“IP”) consisting of trade secrets associated with the SAPL brand, as well as SAPL’s immersion cooling technology and heat exchange technology through an intellectual property and trade secrets agreement originally entered into between SAPL and ACL on August 31, 2024 (the “IP Agreement”). This IP may be used in the future to build and provide services to data center clients, however there is no immediate use planned. There is potential to provide heated water to local utility companies from the residual heat created by our data centers using the heat exchange technology and IP that we are acquiring. The IP Agreement is attached as Exhibit 10.10 to this report.
The foregoing description of the Power Purchase Agreement, Building Lease, Property Purchase, Cooling Agreement, Note, and IP Agreement are qualified in their entirety by the full text of the Power Purchase Agreement, Building Lease, Property Purchase, Cooling Agreement, Note, and IP Agreement which are filed herewith as Exhibit 10.5, Exhibit 10.6, Exhibit 10.7, Exhibit 10.8, Exhibit 10.9, and Exhibit 10.10, respectively.
Environmental
The effects of human activity on global climate change have attracted considerable public and scientific attention, as well as the attention of the United States and other foreign governments. In general, efforts are being made by government regulators and others to reduce greenhouse gas emissions, particularly those from coal combustion power plants. Some of these plants may be those our operations rely upon for power. In addition, there are increasing concerns over the quantity of energy, particularly from non-renewable sources, used for bitcoin mining and its effects on the environment.
While the nature or effect on the Company of any environmental regulatory changes by federal, state, local or foreign governments or self-regulatory agencies is impossible to predict, the added cost of any environmental taxes, charges, assessments, or penalties levied on power plants we rely upon could be passed on to us, increasing the cost to run our facilities. If environmental laws or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance requirements on our operations, our business, capital expenditures, results of operations, financial condition, and competitive position could be materially adversely impacted.
Human Capital/Employees
As of April 7, 2025, we had 2 full-time employees, including 2 of our executive officers, and 1 part time employee including one of our executive officers. We also intend to engage consultants and contractors to supplement our permanent workforce on an as needed basis. None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not experienced any work stoppages.
Regulation
The regulatory landscape surrounding HPC services, AI, and cloud computing is evolving rapidly, and we anticipate increased scrutiny and potential regulation in the near and long term. These developments may significantly affect our business and operations in ways that are difficult to predict. In the realm of cloud computing, there are growing concerns about the ethical implications and potential misuse of these technologies, particularly in association with AI and machine learning. Governments and regulatory bodies are considering measures to ensure the responsible development and deployment of AI systems, including transparency, accountability, and fairness guidelines. As a company whose customers will be operating in this space, we closely monitor these developments and attempt to adhere to any forthcoming regulations or industry best practices.
SAPL Financial Condition
We have determined that SAPL does not meet the requirements to be considered a business. At the time of closing of the Share Exchange, SAPL did not have an active customer list or an active workforce and the equipment that Edgemode would be receiving from SAPL did not have the ability to generate revenues for its intended use in an HPC. As a result, we determined that the Share Exchange did not meet the definition of a business acquisition, and that the Transaction would be considered an asset acquisition.
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Related Party Transactions
As disclosed above under this Item 2.01, SAPL is a party to the following agreements: (1) the Power Purchase Agreement with Marviken One; (2) the Building Lease with Marviken One; (3) the Property Purchase with Marviken Two; (4) the Cooling Agreement with Marviken One; (5) the 5% Promissory Note in favor of Marviken Two; and (6) the Intellectual Property Agreement with ACL.
Dr. Adler, an officer and director of our company effective April 7, 2025, is the chief executive officer of SAPL, an executive officer and beneficial owner of Marviken One and Marviken Two, and the sole shareholder ACL.
RISK FACTORS
Summary Risk Factors
Any investment in our securities involves a high degree of risk. Investors should carefully consider the risks described below and all of the information contained in this filing before deciding whether to purchase our securities. Our business, financial condition, and results of operations could be materially adversely affected by these risks if any of them actually occur. This filing also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face as described below and elsewhere in this report and risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Risks Relating to Our Business Operations
| · | We require significant working capital to develop our new business. |
| · | Our business depends upon the demand for data centers. |
| · | Our new focus on HPC hosting may not be successful and depends on the continuing development and resource and computational requirements of HPC hosting applications such as cloud computing, machine learning, and artificial intelligence (“AI”) and continuing need for the infrastructure and services we provide. |
| · | We face significant competition, which may adversely affect the occupancy and rental rates of our data centers. |
| · | We have limited resources which may affect our abilities to develop our SAPL operations. |
| · | At the outset, our HPC business will be highly dependent on a single customer. |
| · | Any failure of our physical or information technology (“IT”) or operational technology infrastructure or services could lead to significant costs and disruptions. |
| · | Our third-party providers and we are vulnerable to cyberattacks and security breaches that could materially disrupt or compromise our operations, data and results. |
| · | Our contracts with our potential customers could subject us to significant liability. |
| · | We may depend on significant customers for our HPC data centers. |
| · | Even if we have additional space available for lease at any one of our data centers, our ability to lease this space to existing or new customers could be constrained by our ability to provide sufficient electrical power. |
| · | We will depend upon third-party suppliers for power, and we are vulnerable to service failures and price increases by such suppliers and to volatility in the supply and price of power in the open market. |
| · | If we do not accurately predict our facility requirements, it could have a material adverse effect on our business, financial condition, and results of operations. |
| · | We will depend on third parties to provide network connectivity to the customers in our data centers and any delays or disruptions in connectivity may materially adversely affect our operating results and cash flow. |
| · | Many of our costs, such as operating and general and administrative expenses, interest expenses, and real estate acquisition and construction costs, could be adversely impacted by periods of heightened inflation. |
| · | Our business and operations, customers, suppliers, and business partners may be adversely affected by epidemics, pandemics or other outbreaks. |
| · | We face additional risks in expanding our business, including the significant amount of capital required. |
| · | We may not be able to adapt to changing technologies and customer requirements, and our data center infrastructure may become obsolete. |
| · | Our success is dependent on the ability of our management team and our ability to attract, develop, motivate and retain other well-qualified employees, which may be more difficult, costly or time-consuming than expected. |
| · | The development and advancement in the efficiency of AI models presents risks and challenges that may adversely impact our business and operating results. |
| · | We are subject to risks associated with our need for significant electrical power. |
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Risks Related to Our Limited Operating History and Transition
| · | Our new services and any changes to services in the future could fail to attract or retain users or generate revenue and profits, or otherwise adversely affect our business. | |
| · | We operate in a rapidly developing industry and have an evolving business model with no history of generating revenue from our colocation services. In addition, our evolving business model increases the complexity of our business, which makes it difficult to evaluate our future business prospects and could have a material adverse effect on our business, financial condition, and results of operations. |
Risks of Regulatory Laws, Regulatory Frameworks, and Legal Action
| · | Regulatory developments surrounding HPC may negatively impact our efforts to expand into HPC hosting. |
| · | Any potential use of emerging technologies like AI, machine learning, and generative AI could lead to unintended consequences and result in reputational harm and litigation. |
| · | We may become involved in litigation arising in the ordinary course of our business that may materially adversely affect us. |
| · | Changing environmental regulation and public energy policy may expose our business to new risks. |
Risks Related to Operating in Sweden and Europe
| · | Our operations in Sweden, Europe, and internationally as a whole could expose us to substantial business, regulatory, political, financial, and economic risks. |
| · | We may be susceptible to prolonged periods of inflationary pressure, including the risk of energy shortages and elevated electricity and energy prices throughout Europe. |
| · | Existing and new laws, rules, regulations, and orders may impose additional security requirements on our operations. |
| · | Fluctuations in currency exchange rates could negatively affect our earnings. |
Risks Related to Ownership of Our Common Stock
| · | We are a former shell company. |
There are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks actually occur, our business, financial condition, or results of operation may be materially adversely affected. In such case, the trading price of our common stock could decline and investors could lose all or part of their investment.
Risks Related to Our Business and Operations
We require significant capital to fund our operations and we may have difficulty raising capital, which could deprive us of necessary revenues.
SAPL has not generated any revenues to date and, subject to the availability of sufficient capital, does not expect to generate revenues until mid-2025 or later. We require funding of approximately $70,000,000 to develop our operations. In order to support our initiatives, we will need to raise additional funds through public or private debt or equity financing, collaborative relationships, or other arrangements with well-capitalized companies. Our ability to raise additional financing depends on many factors beyond our control, including the current volatility in the capital markets, risks associated with investing in a pre-revenue company with no assurances our products can be commercialized, the lack of a public market for our common stock, and the development or prospects for development of competitive technology by others. Sufficient additional financing may not be available to us or may be available only on terms that would result in further dilution to the current owners of our common stock. If we are unsuccessful in raising additional capital, or the terms of raising such capital are unacceptable, we may never be able to effectively monetize our SAPL assets and/or we may default on the SAPL note. In that event, we may have to modify our business plan and/or significantly curtail our planned activities and other operations.
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Our business depends upon the demand for data centers.
We are venturing into the business of owning, acquiring, developing, and operating data centers. A reduction in the demand for data center space, power or connectivity would have a greater adverse effect on our business and financial condition than if we owned a portfolio with a less specialized use. Our substantial development activities make us particularly susceptible to general economic slowdowns as well as adverse developments in the data center, Internet and data communications and broader technology industries. Any such slowdown or adverse development could lead to reduced corporate IT spending, reduced demand for HPC hosting applications, such as cloud computing, machine learning, and AI, and overall reduced demand for data center space. Changes in industry practice or in technology could also reduce demand for the physical data center space we provide.
In addition, our customers may choose to develop new data centers or expand their own existing data centers or consolidate into data centers that we do not own or operate, which could reduce demand for our newly developed data centers or result in the loss of one or more key customers. If any of our key customers were to do so, it could result in a loss of business to us or put pressure on our pricing. Mergers or consolidations of technology companies could reduce further the number of our customers and potential customers and make us more dependent on a more limited number of customers. If our customers merge with or are acquired by other entities that are not our customers, they may discontinue or reduce the use of our data centers in the future. Our financial condition, results of operations, cash flow, cash available for distribution, and ability to satisfy our debt service obligations could be materially adversely affected as a result of any or all of these factors.
Our new focus on HPC hosting may not be successful and depends on the continuing development and resource and computational requirements of HPC hosting applications such as cloud computing, machine learning and AI, and the continuing need for the infrastructure and services we provide.
If our target customer markets, which are new and still developing, do not grow or develop as expected or in a manner consistent with our current business model, our business, financial condition, and results of operation would be adversely affected. Further, increases in power costs could negatively impact our hosting customers’ demand for services, harm our growth prospects, and could have a material adverse effect on our business, financial condition, and results of operations.
Our success also depends in large part on our ability to attract additional customers and retain our existing customer for our HPC hosting capabilities in a profitable manner, which we may not be able to do if:
| · | high energy costs, supply chain disruptions (including labor availability), government regulation, and compliance costs increase HPC hosting service costs, reduce potential demand for services and reduce revenue and profitability; |
| · | we fail to provide competitive hosting terms or effectively market them to potential customers; |
| · | we provide hosting services that are deemed by existing and potential customers or suppliers to be inferior to those of our competitors, or that fail to meet customers’ or suppliers’ ongoing and evolving program qualification standards, based on a range of factors, including available power, preferred design features, security considerations, and connectivity; |
| · | businesses decide to host internally as an alternative to the use of our services; |
| · | we fail to successfully communicate the benefits of our services to potential customers; |
| · | we are unable to strengthen awareness of our brand; or |
| · | we are unable to provide services that our existing and potential customers desire. |
We face significant competition, which may adversely affect the occupancy and rental rates of our data centers.
We will compete with numerous data center providers globally, many of whom own or operate properties similar to ours, as well as private operators specializing in HPC hosting or colocation services, and digital asset miners seeking to convert existing mining facilities into HPC colocation facilities. In addition, we may in the future face competition from new entrants into the data center market, including new entrants who may acquire our current competitors. Some of our competitors and potential competitors have significant advantages over us, including greater name recognition, longer operating histories, pre-existing relationships with current or potential customers, significantly greater financial, marketing, and other resources and more ready access to capital which allow them to respond more quickly to new or changing opportunities.
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If our competitors offer space that our customers or potential customers perceive to be superior to ours based on factors such as available power, security, location, or connectivity, or if they offer rental rates below current market rates, or below the rental rates we are offering, we may lose customers or potential customers or be required to incur costs to improve our data centers or reduce our rental rates. In addition, many of our competitors have developed and continue to develop additional data center space. If the supply of data center space continues to increase as a result of these activities or otherwise, rental rates may be reduced or we may face delays in leasing or be unable to lease our vacant space, including space that we develop. Further, if customers or potential customers desire services that we do not offer, we may not be able to lease our space to those customers. Our financial condition, results of operations, cash flow, cash available for distribution, and ability to satisfy our debt service obligations could be materially adversely affected as a result of any or all of these factors.
We have limited resources which may affect our abilities to develop our SAPL operations.
With the limited resources we have available, we may experience difficulties in developing our SAPL operations, including, but not limited to, our colocation data center, services, and colocation to commence generating revenues and compete in the HPC hosting industry. Competition from existing and future competitors, particularly those better capitalized, could result in our inability to secure acquisitions and partnerships that we may need to expand our business in the future. This competition from other entities with greater resources, experience, and reputations may result in our failure to maintain or expand our business, as we may never be able to successfully execute our business plan. If we are unable to develop, expand, and remain competitive, our business could be negatively affected, which would have an adverse effect on the trading price of our ordinary shares, which would harm our investors.
We have no operating history, require significant capital to develop our business, expect negative cash flows from our operations to continue for the foreseeable future, and we expect that our net losses will continue for the foreseeable future as we seek to develop and increase the efficiency of our operations and find new colocation customers.
At the outset, our HPC business will be highly dependent on a single customer.
One customer, Cudo Ventures Ltd (“Cudo Ventures”), will initially account for 100% of our HPC Hosting segment revenue. Our success in the HPC Hosting segment is highly dependent on the success of our master services agreement with Cudo Ventures and the fulfillment by it of its obligations under the master services agreement. Any failure to meet Cudo Ventures’ expectations, including, but not limited to, failure to fulfill our contractual obligations, could result in cancellation or non-renewal of our business relationship, or harm to our business relationship that could impact our future growth and which could have a material adverse effect on our business, financial condition, and results of operations.
Any failure of our physical or IT or operational technology infrastructure or services could lead to significant costs and disruptions.
Our business will depend on providing customers with highly reliable services, including, but not limited to, power supply, physical security, cybersecurity, maintenance of environmental conditions, and other mission-critical infrastructure services. We may fail to provide such services because our operations are vulnerable to, among other things, mechanical or telecommunications failure, power outage, human error, physical or electronic security breaches, cyberattacks, war, terrorism, fire, earthquake, pandemics, hurricane, flood and other natural disasters, sabotage, and vandalism.
Our customer agreements will include terms requiring us to meet certain service level commitments. A failure to meet these or other commitments or equipment damage in our data centers could subject us to contractual liability, including service level credits against customer rent payments, legal liability and monetary damages, regulatory sanctions, or, in certain cases of repeated failures, the right by the customer to terminate the agreement. Service interruptions, equipment failures, or security breaches could also materially impact our brand and reputation globally and lead to customer contract terminations or non-renewals and an inability to attract customers in the future.
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We and our third-party providers are vulnerable to cyberattacks and security breaches that could materially disrupt or compromise our operations, data, and results.
We will rely on computer systems, hardware, software, online sites and networks, as well as physical, digital, and operational technology infrastructure to support our internal and external operations (collectively, “Information Systems”). We will own, operate, and manage complex, global Information Systems and also rely on third-party providers for a range of Information Systems and other products and services, such as cloud computing. As a result, we face evolving risks that threaten the confidentiality, integrity, and availability of Information Systems and data, including from state-sponsored espionage actors, financially motivated hackers, hacktivists and insiders, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), human or technological error, or due to “bugs,” misconfigurations and known and unknown vulnerabilities in hardware, software, systems and processes that support our business.
Unauthorized access to our or our customers’ physical assets or Information Systems, misappropriation of our or our customers’ sensitive or proprietary information, or disruptions to our or our customers’ operations as a result of attacks, breaches or disruptions to our, or any providers’ or our customers’, Information Systems or controls could lead to material breaches of legal and regulatory (e.g., privacy laws such as GDPR) or contractual obligations, and/or other operational and business impacts. The foregoing could expose us to material lawsuits, regulatory actions, penalties or fines, monetary damages, loss of existing or potential customers, harm to our reputation, and significant increases in our security and insurance costs, and other adverse effects on our business and results.
Our contracts with our current or future customers could subject us to significant liability.
In the ordinary course of business, we will enter into agreements with our customers pursuant to which we provide data center space, power, environmental controls, physical security and connectivity products to our customers. These contracts typically contain indemnification and liability provisions, in addition to service level commitments, which could potentially impose a significant cost on us in the event of losses arising out of certain breaches of such agreements, services to be provided by us or our subcontractors, or from third-party claims. Customers increasingly are looking to pass through their regulatory obligations and other liabilities to their outsourced data center providers and we may not be able to limit our liability or damages in an event of loss suffered by such customers whether as a result of our breach of an agreement or otherwise. Further, liabilities and standards for damages and enforcement actions, including the regulatory framework applicable to different types of losses, vary by jurisdiction, and we may be subject to greater liability for certain losses in certain jurisdictions.
In the future, we may also develop space specifically for HPC data center customers pursuant to agreements signed prior to beginning or early in the development process. In those cases, if we fail to meet our development obligations under those agreements, these customers may be able to terminate their agreements, and we would be required to find a new customer for this space. In addition, in certain circumstances we may lease HPC data center facilities prior to their completion. If we fail to complete the facilities in a timely manner, the customer may be entitled to terminate its agreement, seek damages or penalties against us or pursue other remedies and we may be required to find a new customer for the space. If we are not able to complete an HPC data center in a timely manner, if development costs are higher than we currently estimate, our financial condition, results of operations, and cash flow could be materially adversely affected.
We may depend on significant customers for our HPC data centers.
Many factors, including global economic conditions, may cause our current and future HPC data center customers to experience a downturn in their businesses or otherwise experience a lack of liquidity, which may weaken their financial condition and impact our estimates as to the probability of collectability of payments, and ultimately result in their failure to make timely rental and other payments or their default under their agreements with us. Further, the development of new technologies, the adoption of new industry standards or other factors could render our HPC data center customers’ current products and services obsolete or unmarketable and contribute to a downturn in their businesses, thereby increasing the likelihood that they default under their leases, become insolvent, or file for bankruptcy. If a customer defaults or fails to make timely rent or other payments, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment, which could adversely affect our financial condition and results of operations.
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Even if we have additional space available for lease at any one of our data centers, our ability to lease this space to existing or new customers could be constrained by our ability to provide sufficient electrical power.
Customers may increase their power footprint in our data centers over time and the corresponding reduction in available power could limit our ability to increase occupancy rates or network density within our existing data centers. Our aggregate maximum contractual obligation to provide power and cooling to our customers may exceed the physical capacity at such data centers if customers were to quickly increase their demand for power and cooling. If we are not able to increase the available power and/or cooling or move the customer to another location within our data centers with sufficient power and cooling to meet such demand, we could lose the customer as well as be exposed to liability under our customer agreements. In addition, our power and cooling systems will be difficult and expensive to upgrade, especially as we plan to design our data centers to the specifications of new and evolving technologies, such as AI, which are more power-intensive. Accordingly, we may not be able to efficiently upgrade or change these systems to meet new demands without incurring significant costs that we may not be able to pass on to our customers. Any such material loss of customers, liability, or additional costs could adversely affect our business, financial condition, and results of operations.
We will depend upon third-party suppliers for power, and we may be vulnerable to service failures and price increases by such suppliers and to volatility in the supply and price of power in the open market.
We will rely on third parties to provide power to our data centers and we cannot ensure that these third parties will deliver such power in adequate quantities or on a consistent basis. We will also be reliant on third parties to deliver additional power capacity to support the growth of our business. If the amount of power available to us is inadequate to support our customer requirements, we may be unable to satisfy our obligations to our customers or grow our business. In addition, our data centers may be susceptible to power shortages and planned or unplanned power outages caused by these shortages. Power outages may last beyond our backup and alternative power arrangements, which would harm our customers and our business. Any loss of services or equipment damage could adversely affect both our ability to generate revenues and our operating results, harm our reputation, and potentially lead to customer disputes or litigation.
In addition, we may be subject to risks and unanticipated costs associated with obtaining power from various utility companies. Utilities that serve our data centers may be dependent on, and sensitive to price increases for, a particular type of fuel, such as natural gas, coal, or nuclear. In addition, the price of these fuels and the total cost of delivered electricity could increase as a result of: regulations intended to regulate carbon emissions and other pollutants, ratepayer surcharges related to recovering the cost of extreme weather events and natural disasters, geopolitical conflicts, military conflicts, grid modernization charges, as well as other charges borne by ratepayers. Increases in the cost of power at any of our planned data centers could put those locations at a competitive disadvantage relative to data centers that are supplied power at a lower price.
If we do not accurately predict our facility requirements, it could have a material adverse effect on our business, financial condition, and results of operations.
The costs of building out, leasing, and maintaining our facilities will constitute a significant portion of our capital and operating expenses. In order to develop, manage potential growth, and ensure adequate capacity for any new and existing HPC hosting customers while minimizing unnecessary excess capacity costs, we will continuously evaluate our short- and long-term data center capacity requirements. If we overestimate our business’s capacity requirements or the demand for our services and therefore secure excess data center capacity, our operating margins could be materially reduced. If we underestimate our data center capacity requirements, we may not be able to service the required or expanding needs of our existing customers and may be required to limit new customer acquisition, which could have a material adverse effect on our business, financial condition, and results of operations.
We will depend on third parties to provide network connectivity to the customers in our data centers and any delays or disruptions in connectivity may materially adversely affect our operating results and cash flow.
We are not a telecommunications carrier. Although our customers generally will be responsible for providing their own network connectivity, we will still depend upon the presence of telecommunications carriers’ fiber networks serving our data centers in order to attract and retain customers. We believe that the availability of carrier capacity will directly affect our ability to achieve our projected results. Any carrier may elect not to offer its services within our data centers. Any carrier that decides to provide network connectivity to our data centers may not continue to do so for any period of time. Further, some carriers are experiencing business difficulties or have announced consolidations. As a result, some carriers may be forced to downsize or eventually terminate connectivity within our data centers, which could have an adverse effect on the business of our customers and, in turn, our own development and operating results.
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Our data centers may require construction and operation of a sophisticated redundant fiber network. The construction required to connect multiple carrier facilities to data centers is complex and involves factors outside of our control, including regulatory requirements and the availability of construction resources. We have obtained the right to use network resources owned by other companies, including rights to use dark fiber, in order to attract telecommunications carriers and customers to our portfolio. If the establishment of highly diverse network connectivity to our data centers does not occur, is materially delayed or is discontinued, or is subject to failure, our operating results and cash flow may be materially adversely affected. Additionally, any hardware or fiber failures on this network may result in significant loss of connectivity to our data centers. This could negatively affect our ability to attract or retain customers, which could have an adverse effect on our business, financial condition, and results of operations.
Many of our costs, such as operating, general and administrative expenses, interest expenses, and real estate acquisition and construction costs, could be adversely impacted by periods of heightened inflation.
The consumer price index has increased substantially year over year. Federal policies and recent global events, such as the rising price of oil and the conflict between Russia and Ukraine, may have exacerbated, and may continue to exacerbate, inflation and increases in the consumer price index. A sustained or further increase in inflation could have an adverse impact on our operating expenses incurred in connection with, among others, the property-related contracted services such as repairs, maintenance, utilities, security, and insurance. With regard to utilities expenses, which we anticipate to be our largest expense category, the vast majority of the expense will be passed directly through to our customers which significantly mitigates our exposure to increases in power costs. For our other operating expenses, we expect to recover some increases from our customers through our planned lease structures, annual rent escalations, or from the resetting of rents from our renewal and re-leasing activities. As a result, we do not believe that inflation would result in a significant adverse effect on our net operating income and operating cash flows at the property level. However, there can be no assurance that the impact of inflation will be adequately offset by some of our annual rent escalations contained in our leases, and it is possible that the resetting of rents from our renewal and re-leasing activities would not fully offset the impact of higher operating expenses resulting from inflationary pressure. As a result, during inflationary periods in which the inflation rate exceeds the annual rent escalation percentages within our customer contracts, we may not adequately mitigate the impact of inflation, which may adversely affect our business, financial condition, results of operations, and cash flows.
Our general and administrative expenses consist primarily of compensation costs and professional service fees. Rising inflation rates may require us to provide compensation increases beyond historical annual increases, which may unexpectedly or significantly increase our compensation costs. Similarly, professional service fees are also subject to the impact of inflation and expected to increase proportionately with increasing market prices for such services. Consequently, inflation may increase our general and administrative expenses over time and may adversely impact our results of operations and cash flows.
Additionally, inflationary pricing may have a negative effect on the construction costs necessary to complete our development projects, including, but not limited to, costs of construction equipment, materials, labor, and services from third-party contractors and suppliers. We will rely on a number of third-party suppliers and contractors to supply raw materials, skilled labor, and services for our construction projects. Certain increases in the costs of construction equipment and materials can often be managed in development projects through either general budget contingencies built into overall construction cost estimates for projects or guaranteed maximum price construction contracts, which stipulate a maximum price for certain construction costs and shift inflation risk to our construction general contractors. However, no assurance can be given that our budget contingencies would accurately account for potential construction cost increases given the current severity of inflation and variety of contributing factors or that our general contractors would be able to absorb such increases in costs and complete our construction projects timely, within budget, or at all. Higher construction costs could adversely impact our investments in real estate assets and expected yields on our development projects, which may adversely impact our returns on our investments. As a result, our business, financial condition, results of operations, cash flows, liquidity, ability to satisfy our debt service obligations, and to pay dividends and distributions to security holders could be adversely affected over time.
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Our business and operations, customers, suppliers, and business partners may be adversely affected by epidemics, pandemics, or other outbreaks.
Epidemics, pandemics, other outbreaks of an illness, disease, or virus that affect countries or regions in which we or our customers, suppliers, or business partners operate, and actions taken to contain or prevent their further spread, may have a material and adverse impact on general commercial activity and on our financial condition, results of operations, liquidity, and creditworthiness. Epidemics, pandemics, other outbreaks of an illness, disease, or virus could result in significant governmental measures being implemented to control the spread of such illness, disease, or virus, including quarantines, travel restrictions, manufacturing restrictions, declarations of states of emergency, business shutdowns, prioritization and allocation of resources, and restrictions on the movement of our employees and those of our customers, suppliers and business partners on which we rely, which could adversely affect our ability and their respective abilities to adequately manage our respective businesses. Risks related to epidemics, pandemics, other outbreaks of an illness, disease, or virus could also lead to the complete or partial closure of one or more of our offices or properties or our customers’, suppliers’ or business partners’ businesses, or otherwise result in significant disruptions to our business and operations or theirs. Such events could materially and adversely impact our operations and the rental revenue we generate from our agreements with our customers or could result in defaults by our customers.
We cannot predict the full extent of the impact that epidemics, pandemics, and other global events will have on our customers, suppliers, and other business partners; however, any material effect on these parties could adversely impact us, our future financial condition, results of operations, and cash flows. The full extent to which epidemics, pandemics, and the various responses to such events impact our business, operations, and financial results will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of such event; governmental, business, and individuals’ actions that have been and continue to be taken in response to such event; the availability of and cost to access the capital markets; the effect on our customers and customer demand for and ability to pay for our services; the impact on our development projects; and disruptions or restrictions on our employees’ ability to work and travel.
We face additional risks in expanding our business, including the significant amount of capital required.
Expanding our business will require significant capital. In addition, we may be required to commit significant operational and financial resources in connection with the organic growth of our business substantially in advance of such newly developed data centers generating revenue.
The costs of constructing, developing, operating, and maintaining our HPC operations are substantial. Our HPC hosting operations may be impacted by costs and expenses beyond our control or require capital investment that neither we nor our customers are able to bear, reducing our revenue and profitability. Moreover, in order to grow our hosting business, we may need additional facilities to increase our capacity for more customers. The costs of constructing, developing, operating, and maintaining hosting facilities and growing our hosting operations may not be profitable or possible as construction costs are rising which reflect the increase in cost of labor and raw materials, as well as supply chain and logistical challenges. Unexpected disruptions to our supply chain, continued inflationary pressures, high interest rates, tariffs, delays in construction, limited financing availability, constrained supplies of new power, or changes in customer requirements could significantly affect the cost or timing of our planned expansion projects, have consequences under our project financing and partnership agreements, and interfere with our ability to meet commitments to customers who have contracted for space in new data centers under construction.
All construction-related data center projects will require us to carefully select, manage, and rely on the experience of one or more design firms, general contractors, and associated subcontractors during the design and construction process, and to obtain critical government permits and authorizations. Should a design firm, general contractor, significant subcontractor, or key supplier experience financial or operational problems during the design or construction process or fail to perform properly, or should we be unable to obtain or experience delays in obtaining, all necessary zoning, land-use, building, occupancy, and other governmental permits and authorizations, we could experience significant delays, increased costs to complete the project, penalties under customer preleases, and other negative impacts to the expected return on our committed capital. Further, there can be no assurance we will have sufficient customer demand to support the data centers we may acquire or build.
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We may not be able to adapt to changing technologies and customer requirements, and our data center infrastructure may become obsolete.
The technology industry generally and specific industries in which certain of our customers may operate are characterized by rapidly changing technology, customer requirements, and industry standards. New systems to deliver power to or eliminate heat in data centers or the development of new server technology that does not require the levels of critical load and heat removal that our facilities may be designed to provide and could be run less expensively on a different platform could make our data center infrastructure obsolete. Our power and cooling systems may be difficult and expensive to upgrade, and we may not be able to efficiently upgrade or change these systems to meet new demands without incurring significant costs. If we are unable to pass these costs on to our customers it could adversely impact our business, financial condition, and results of operations. In addition, the infrastructure that will connect our data centers to the Internet and other external networks may become insufficient, including with respect to latency, reliability, and connectivity. We may not be able to adapt to changing technologies or meet customer demands for new processes or technologies in a timely and cost-effective manner, if at all, which would adversely impact our ability to develop, sustain, and grow our business.
Further, our inability to adapt to changing customer requirements may make our data centers obsolete or unmarketable to such customers. Some of our customers may operate at significant scale across numerous data center facilities and have designed cloud and computing networks with redundancies and fail-over capabilities across these facilities, which enhances the resiliency of their networks and applications. As a result, these potential customers may realize cost benefits by locating their data center operations in facilities with less electrical or mechanical infrastructure redundancy than is found in our data center facilities. Additionally, some HPC data center customers have begun to operate their data centers using a wider range of humidity levels and at temperatures that are higher than servers customarily have operated at in the past, all of which may result in energy cost savings for these third parties. We may not be able to operate under these environmental conditions, particularly in multi-tenant facilities with other customers who are not willing to operate under these conditions, and our data centers could be at a competitive disadvantage to facilities that satisfy such requirements. If we are unable to modify or build accordingly, these or other changes in customer requirements could have a material adverse effect on our business, results of operations, and financial condition.
Further, due to regulations that apply to our potential customers as well as industry standards, such as ISO and SOC certifications which customers may deem desirable, they may seek specific requirements and certifications from their data centers that we are unable to provide. If new or different regulations or standards are adopted or such extra requirements are demanded by our customers, we could lose some customers in the future or be unable to attract new customers in certain industries, which could materially and adversely affect our operations.
Our success is dependent on the ability of our management team and our ability to attract, develop, motivate, and retain other well-qualified employees, which may be more difficult, costly, or time-consuming than expected.
Our success depends largely on the development and execution of our business strategy by our senior management team. We cannot assure you that our management will work well together, work well with our other existing employees, or successfully execute our business strategy in the near-term or at all, which could have a material adverse effect on our business, financial condition, and results of operations.
Our future success also depends on our continuing ability to attract, develop, motivate, and retain highly qualified and skilled management and other employees. It is difficult to locate experienced executives in our industry. Further, competition for facility design, construction management, operations, data processing, engineering, IT, risk management, sales and marketing, and other highly skilled personnel is extremely intense. We may not be able to hire and retain these personnel at compensation levels consistent with our existing compensation and salary structure at this stage in our development. We may be unable to attract and retain our senior executives and other key personnel, which could have a material adverse effect on our business, financial condition, and results of operations.
The development and advancement in the efficiency of AI models presents risks and challenges that may adversely affect our business and operating results.
The introduction of, and advancement in the efficiency of AI models could potentially adversely affect data center usage by significantly reducing the computational power needed to train AI models, potentially leading to less demand for high-power density, liquid-cooled data center infrastructure and colocation facilities. New advancements in AI models could also alter the way data centers are currently designed and utilized and may adversely affect our business and results of operations.
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We are subject to risks associated with our need for significant electrical power.
Our operations will require significant amounts of electrical power and we anticipate our demand for electrical power will continue to grow. The fluctuating price of electricity required for our operations and to power our expansion may inhibit our profitability. If we are unable to obtain, and then continue to obtain, sufficient electrical power on a cost-effective basis, we may not realize the anticipated benefits of our significant capital investments.
Risks Related to Our Limited Operating History and Transition
Our new services and changes to services in the future could fail to attract or retain users, generate revenue and profits, or otherwise adversely affect our business.
Our ability to retain, increase, and engage our customer base and to increase our revenue will depend heavily on our ability to continue to evolve our services and to create successful new services, both independently and in conjunction with developers or other third parties. We may introduce significant changes to our services or acquire or introduce new and unproven services, including using technologies with which we have little or no prior development or operating experience. These efforts, including the introduction of new services or changes to existing services, may result in new or enhanced governmental or regulatory scrutiny, litigation, ethical concerns, or other complications that could adversely affect our business, reputation, or financial results. If our services fail to engage users or developers, or if our business plans are unsuccessful, we may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify our investments and our business may be adversely affected.
We operate in a rapidly developing industry and have an evolving business model with no history of generating revenue from our colocation services. In addition, our evolving business model increases the complexity of our business, which makes it difficult to evaluate our future business prospects and could have a material adverse effect on our business, financial condition, and results of operations.
Our business model has evolved in the past and continues to do so. After originally being founded in order to engage in the business of verifying and confirming transactions on a blockchain (also known as transaction processing, or “mining”), we have transitioned to provide colocation services to other HPC customers. We have not yet generated revenue from providing HPC services, and we do not know whether our change in business model will be successful. The evolution of and modifications to our business strategy will continue to increase the complexity of our business and have placed significant strain on our management, personnel, operations, systems, technical performance, and financial resources. Future additions to, or modifications of, our business strategy are likely to have similar effects. Further, any new services that we offer in the future that are not favorably received by the market could damage our reputation or our brand. We may not ever generate sufficient revenues or achieve profitably in the future or have adequate working capital to meet our obligations.
We cannot be certain that our current business strategy or any new or revised business strategies will be successful or that we will successfully address the risks we face. In the event that we do not effectively evaluate future business prospects, successfully implement new strategies, or adapt to our evolving industry, it will have a material adverse effect on our business, financial condition, and results of operations.
Risks of Regulatory Laws, Regulatory Frameworks, and Legal Action
Regulatory developments surrounding HPC may negatively impact our efforts to expand into HPC hosting.
The regulatory landscape surrounding HPC and AI is evolving rapidly, and we anticipate increased scrutiny and potential regulation in the near and long term. These developments may affect our business and operations in ways that are difficult to predict.
There are growing concerns about the ethical implications and potential misuse of the growing AI technologies and the AI landscape is facing challenges and uncertainties. The development of more advanced AI systems, such as large language models and generative AI, has raised concerns about potential misuse, bias, and the displacement of human workers. Governments and regulatory bodies are considering measures to ensure responsible development and deployment of AI systems, including guidelines for transparency, accountability, and fairness. We expect that regulatory efforts in this area will continue to evolve and potentially affect our business.
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Any potential use of emerging technologies like AI, machine learning, and generative AI could lead to unintended consequences and result in reputational harm and litigation.
We continue to evaluate emerging technologies like AI, machine learning, and generative AI for incorporation into our business. State and federal regulations relating to these emerging technologies are quickly evolving, and should we adopt such technologies, we may require significant resources to maintain our business practices while seeking to comply with U.S. laws. Any failure to accurately identify and address our responsibilities and liabilities in this new environment could negatively affect any solutions we develop by incorporating such technologies and could subject us to reputational harm, regulatory action, or litigation, any of which may harm our financial condition and operating results. These same risks apply to our use of third-party service providers who are implementing these tools into the products or services they provide to us.
We may become involved in litigation arising in the ordinary course of our business that may materially adversely affect us.
From time to time, we may become involved in various legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings. Attending to such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability, or require us to change our business practices. Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that we have meritorious claims or defenses, and we cannot assure you that the results of any of these actions will not have a material adverse effect on our business. Adverse outcomes in such proceedings or claims could result in significant liabilities, monetary damages, fines, or injunctive relief, which may materially affect our financial condition, results of operations, or cash flows. Additionally, the uncertainty surrounding litigation and the potential for adverse publicity related to such matters could harm our reputation and brand image, affecting customer confidence and investor perception.
Changing environmental regulation and public energy policy may expose our business to new risks.
Our HPC data center operations will require a substantial amount of power and can only be successful, and ultimately profitable, if the costs we incur, including for electricity, are lower than the revenue we generate from our operations. As a result, any HPC data center facility we establish can only be successful if we can obtain sufficient electrical power for that facility on a cost-effective basis, and our establishment of new facilities requires us to find locations where that is the case. If new regulations are imposed, or if existing regulations are modified, the assumptions we made underlying our plans and strategic initiatives may be inaccurate, and we may incur additional costs to adapt our planned business, if we are able to adapt at all, to such regulations.
New legislation and increased regulation regarding climate change could impose significant costs on us and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting, and other costs to comply with such regulations. Further, any future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations.
Given the political significance and uncertainty around the impact of climate change and how it should be addressed, and energy disclosure and use regulations, we cannot predict how legislation and regulation will affect our financial condition and results of operations in the future. Further, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change or energy use by us or other companies in our industry could harm our reputation. Any of the foregoing could result in a material adverse effect on our business and financial condition.
Risks Related to Operating in Sweden and Europe
Our operations in Sweden, Europe, and internationally as a whole could expose us to substantial business, regulatory, political, financial, and economic risks.
As our currently planned data center and operations will be located in Europe, specifically Sweden, we may be exposed to substantial risks associated with doing business in Europe, such as risks associated with taxation, inflation, AI legislation, environmental regulations, foreign currency exchange rates, the labor market, property and financial regulations, public health crises, and the outbreak of hostilities or war. Our ability to operate in Sweden and Europe may be adversely affected by changes in, or our failure to comply with, foreign laws and regulations. Recent U.S. trade policies and tariffs have created uncertainties affecting business operations in the U.K., EU, and a number of other countries, which could increase volatility in exchange rates, market instability, costs, and other risks.
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We may be susceptible to prolonged periods of inflationary pressure, including the risk of energy shortages and elevated electricity and energy prices throughout Europe.
In 2022, amid the war between Russia and Ukraine, the European energy crisis escalated as the costs of electricity and gas increased, along with fueling supply uncertainties, and the risk of an energy shortage across Europe due to the lack of gas from Russia. This resulted in decisive measures implemented by the European Union (“EU”) to help manage security of supply and establish new sources of gas. Our business will be heavily exposed to both gas and electricity prices used to power our data centers and operating equipment. Consequently, the rising energy costs may negatively affect our profitability and reduce our competitive position compared to competitors operating outside Europe where the energy crisis has been less pronounced.
Existing and new laws, rules, regulations, and orders may impose additional security requirements on our operations.
Existing and new laws, rules, regulations, and orders relating to the security of our networks and data processing may cause us to incur additional compliance costs or limit our ability to provide certain services in some locations. For example, we may incur additional costs relating to new cybersecurity requirements in the EU pursuant to the E.U. Network Information Security 2 Directive (“NIS2”), which has defined some data center providers as “essential” given their role in the European economy. The increase in incidents, such as ransomware attacks, data breaches, and denial-of-service (“DoS”) attacks, perpetrated against data center providers has led to enhanced audit and inspection measures with which we may have to comply in the future. As a result, we may have to expend significant resources ensuring that our security management frameworks and cybersecurity meet the requisite standards.
Fluctuations in currency exchange rates could negatively affect our earnings.
As our business operations are located outside of the United States, specifically in Sweden and throughout Europe, we anticipate that our business will be conducted in currencies other than the U.S. dollar. Any fluctuation in the value of the Swedish krona (“SEK”), or other European currencies relative to the U.S. dollar, could impact the financial result when converting foreign revenue, expenses, and profits into U.S. dollars. Although we will closely monitor potential exposures as a result of these fluctuations in currencies and, where cost-justified, we may adopt strategies that are designed to reduce the impact of these fluctuations on our financial performance, there can be no assurance that we will be successful in managing our foreign exchange risk. Any material fluctuations in currencies could have a material effect on our financial condition, results of operations, and cash flows.
Risks Related to Ownership of Our Common Stock
As of the year ended December 31, 2024, we were a shell company and as such shareholders cannot rely on the provisions of Rule 144 for the resale of their shares until certain conditions are met.
We have been a shell company as defined under Rule 405 of the Securities Act of 1933 (“Securities Act”). As securities issued by a former shell company, the securities issued by us can only be resold pursuant to an effective registration statement and not by utilizing the provisions of Rule 144 until certain conditions are met, including that: (i) we are subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, (ii) we have filed all required reports under the Exchange Act of the preceding 12 months and (iii) one year has elapsed since we filed “Form 10” information (e.g. audited financial statements, management information and compensation, shareholder information, etc.). Thus, a shareholder of ours will not be able to sell its shares until such time as a registration statement for those shares is filed or we become a reporting company, we have remained current on our Exchange Act filings for 12 months and we have filed the information as would be required by a “Form 10” filing.
MARKET FOR OUR COMMON STOCK
As of April 7, 2025, there were approximately 200 shareholders of record of the Company’s common stock. We believe that additional beneficial owners of our Common Stock hold shares in street name. Our Common Stock currently trades on the OTC Pink market under the symbol “EDGM”.
Shares Eligible for Future Sale
No restricted shares of our common stock can be sold under Rule 144 until 12 months have passed since this report and the other requirements of Rule 144(i)(1)(ii) have been satisfied, including the Company being current in its SEC periodic reporting obligations.
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Generally, pursuant to Rule 144, non-affiliate shareholders may sell freely after six months subject only to the current public information requirement, although because we are a former shell, we must be current in filing our Quarterly and Annual Reports. Affiliates may sell after six months subject to the Rule 144 volume, manner of sale (for equity securities), and current public information and notice requirements as well as the current reporting requirement. Because the Company was a shell as of the time of the Transaction, Rule 144 has two modifications to the above provisions. First for 12-months following the closing of the merger, shareholders will be subject to a 12-month holding period. Secondly, Rule 144 will only be available if the Company has filed all required Form 10-Qs and 10-Ks.
An officer, director, or other person in control of the Company may sell after 12 months with the following restrictions: (i) the Company is current in its SEC filings, (ii) certain manner of sale provisions, (iii) the filing of a Form 144, and (iv) volume limitations limiting the sale of shares within any three-month period to a number of shares that does not exceed 1% of the total number of outstanding shares. A person who has ceased to be an affiliate at least three months immediately preceding the applicable sale and who has owned such shares of common stock for at least one year may sell the shares under Rule 144 without regard to any of the limitations described above.
Such shares may be sold outside of the United States. Further, such shares may be sold to purchasers in the United States under Section 4(a)(1) of the Securities Act if paid for more than two years ago and if the seller is not an affiliate of the Company. However, some broker-dealers and transfer agents will not accept legal opinion relying on Section 4(a)(1).
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND
RELATED SHAREHOLDERS MATTERS
The following table sets forth certain information regarding beneficial ownership of the Company’s common stock as of April 8, 2025, by (i) each person who is known by the Company to own beneficially more than 5% of any classes of outstanding common stock, (ii) each director of the Company, (iii) each of the Named Executive Officers, and (iv) all directors and executive officers of the Company as a group. Based on 2,164,254,138 shares of common stock outstanding as of April 8, 2025. Beneficial ownership is determined in accordance with Rule 13d-3 and 13d-5 under the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under SEC rules, a person is considered a “beneficial owner” of a security if that person has or shares power to vote or direct the voting of such security or the power to dispose or direct the disposition of such security. A person is also considered to be a beneficial owner of any securities of which the person has a right to acquire beneficial ownership within 60 days. We believe that each individual or entity named has sole investment and voting power with respect to the securities indicated as beneficially owned by them, subject to community property laws, where applicable, except where otherwise noted in the footnotes to this table.
Unless otherwise specified in the notes to this table, the address for each person is: c/o Edgemode, Inc., 110 E. Broward Blvd., Suite 1700, Ft. Lauderdale, FL 33301, Attention: Corporate Secretary.
| Title of Class | Name of Beneficial Holder | Amount of Beneficial Ownership |
Percentage Beneficially Owned | |||||||
| 5% Shareholders: | ||||||||||
| Common Stock | Dmitry Strukov (1) | 135,558,759 | 5.9 | % | ||||||
| Directors and Named Executive Officers | ||||||||||
| Common Stock | Charlie Faulkner (2) | 754,518,284 | 28.9 | % | ||||||
| Common Stock | Simon Wajcenberg (3) | 767,704,683 | 29.4 | % | ||||||
| Common Stock | Niclas Adler (4) | 1,646,036,054 | 64.5 | % | ||||||
| All directors and officers as a group (3 persons) | 3,168,259,021 | 92.2 | % | |||||||
(1) Strukov. Mr. Strukov is a consultant of Edgemode. Includes 135,558,759 shares of common stock underlying vested stock options.
(2) Faulkner. Mr. Faulkner is an executive officer and director of the Company. Includes 442,792,088 shares of common stock underlying vested stock options. His ownership is included under “All directors and officers as a group.”
(3) Wajcenberg. Mr. Wajcenberg is an executive officer and director of the Company. Includes 442,792,088 shares of common stock underlying vested stock options. His ownership is included under “All directors and officers as a group.”
(4) Adler. Dr. Adler is an executive officer and director of the Company. Includes shares held by ACL, an entity beneficially owned and controlled by Adler. Includes 385,789,700 shares of common stock underlying vested stock options. His ownership is included under “All directors and officers as a group.”
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Changes in Control
Subsequent to the closing of the Share Exchange, we do not currently have any arrangements which if consummated may result in a change of control of our Company.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure in Item 2.01 is incorporated herein by reference.
In connection with the Share Exchange and the acquisition of our now-wholly owned subsidiary, SAPL, two direct financial obligations have been created: the Building Lease and the Note.
Through our acquisition of SAPL, we acquired the ten-year Building Lease, which includes the 1,074 sqm data center and 28 sqm office space, for a total annual fee of approximately $361,291.34.
Edgemode also assumed the Note in the principal amount of $1,750,000 and the Note bears an annual interest rate of 5%. SAPL issued the Note to Marviken Two on December 4, 2024, which represented part of the purchase price for the Property Purchase. The Note, together with accrued interest, shall be repaid in full on or before December 3, 2027. The Note is attached as Exhibit 10.9 to this report.
Item 3.02 Unregistered Sales of Equity Securities.
On April 7, 2025, the Company consummated the Share Exchange. The disclosure in Item 2.01 is incorporated herein by reference. The issuances of the foregoing securities were exempt from registration pursuant to Section 4(a)(2) of the Securities Act.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Pursuant to the Share Exchange, on the Closing, Date Dr. Adler was appointed as Chief Technology Officer and as a Board member of the Company and each of Messrs. Charlie Faulkner and Simon Wajcenberg remained as officers and directors of the Company. The employment terms for Dr. Adler are set forth in Item 2.01, which is incorporated herein by reference. Dr. Adler, age 53, is the founder and executive officer of SAPL and has served as chief executive officer of Synthesis Group AB, a technology and infrastructure investment company based in Sweden, since 2017. Dr. Adler has been engaged as co-founder, investor, executive, and board member in more than 40 different technology companies with its origin from Sweden, Finland, US, UK, France, Hong Kong, China, Estonia, Singapore, Pakistan, and Indonesia. Dr. Adler holds an MSc (1994) and PhD (1999) degree from Stockholm School of Economics with a focus on big data, machine learning, and AI, was appointed full professor in 2008, and has been an academic leader, fellow, and faculty member at Stockholm School of Economics, Chalmers University of Technology, Ecoles des Mines des Paris, Jönköping International Business School, Cambridge University, Babson College, and Royal College of Music. Dr. Adler was the founder of FENIX in 1997 and its director until 2005. FENIX was a strategic partnership between Ericsson, Volvo, AstraZeneca, Telia, Stockholm School of Economics, Chalmers University of Technology, and Ecoles des Mines de Paris to innovate and shape new digital, high-performance computing and AI-enabled solutions to transform telecommunication, transportation, and health-care industries. Dr. Adler served as Director for iDevelopment Group AB, an entity that filed for bankruptcy in 2024 in Sweden. Since 1994, Dr. Adler has been a Fellow at the Institute for Management of Innovation and Technology, was on the advisory board of Advanced Institute for Management at London Business School between 2002-2003, has advised the UK government on management and digitalization issues, was a Fellow at the Sunningdale Institute, was a part of UK Cabinet Office between 2002 and 2007, and was a Fellow at the International Entrepreneurship Academy in Dublin, Ireland between 2008-2015 where he advised the Irish government on Innovation and Digitalization policies. Between 2011-2017, Dr. Adler also acted as the co-project leader for World Economic Forums Annual Global Competitiveness Study in Sweden. Dr Adler has served both as Director and Chairman of the Board for Companies listed on Nasdaq Stockholm.
Pursuant to the Share Exchange, on the Closing Date, the Company entered into Executive Employment Amendments and issued Option Grants to its chief executive officer and chief financial officer. The terms are set forth in Item 2.01, which is incorporated herein by reference.
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Item 5.03 Amendments to Articles of or Bylaws; Change in Fiscal Year.
Effective April 7, 2025, the Company filed with the Nevada Secretary of State a Certificate of Amendment to the Company’s Certificate of Incorporation, as amended, increasing the Company’s authorized common stock to 7,000,000,000 shares. The foregoing description of the Certificate of Amendment does not purport to be complete and is qualified in its entirety by the Certificate of Amendment, which is filed as Exhibit 3.1 hereto and incorporated herein by reference.
Item 5.06 Change in Shell Company Status.
As a result of the closing of the Share Exchange described in Items 1.01 and 2.01 of this report, which description is incorporated by reference in this Item 5.06 of this report, the Company ceased being a shell company as such term is defined in Rule 12b-2 under the Exchange Act.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| * | Exhibits and/or Schedules have been omitted. The Company hereby agrees to furnish to the Staff of the Securities and Exchange Commission upon request any omitted information. |
| + | Indicates management contract or compensatory plan. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Edgemode, Inc. | ||
| Dated: April 8, 2025 | By: | /s/ Charlie Faulkner |
| Name: | Charlie Faulkner | |
| Title: | Chief Executive Officer | |
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Exhibit 2.1
SHARE EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT (this “Agreement”), dated as of April 7, 2025, is by and among Edgemode, Inc., a Nevada corporation (the “Parent”), Synthesis Analytics Production Ltd, an England and Wales private limited company (the “Company”), and Adler Capital Limited, a company registered in Hong Kong registered number 68827254, the sole shareholder of the Company (the “Shareholder”). Each of the parties to this Agreement is individually referred to herein as a “Party” and collectively as the “Parties.”
BACKGROUND
The Company has one (1) ordinary share issued and outstanding (the “Company Securities”), all of which are held by the Shareholder. The Shareholder has agreed to transfer the Company Securities in exchange for a number of shares equal to approximately 55% (the “Intended Percentage”) of the then outstanding shares of common stock (“Parent Common Stock”), par value $0.001 per share, of the Parent on the Closing Date (as defined below) (the “Parent Stock”).
The exchange of Company Securities for Parent Stock is intended to constitute a reorganization within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”), or such other tax free reorganization or restructuring provisions as may be available under the Code.
The Board of Directors of each of the Parent and the Company has determined that it is desirable to affect this plan of reorganization and share exchange.
AGREEMENT
NOW THEREFORE, for good and valuable consideration the receipt and sufficiency is hereby acknowledged, the Parties hereto intending to be legally bound hereby agree as follows:
ARTICLE
I
Exchange of Company Securities
SECTION 1.01 Exchange by the Shareholders. At the Closing (as defined in Section 1.02), the Shareholder shall sell, transfer, convey, assign and deliver to the Parent all of the Company Securities free and clear of all Liens in exchange for the number of shares of Parent Common Stock equaling the Intended Percentage, as set forth on Schedule 1.01, attached hereto.
SECTION 1.02 Closing. The closing (the “Closing”) of the transactions contemplated by this Agreement (the “Transactions”) shall take place at such location to be determined by the Company and Parent, commencing upon the satisfaction or waiver of all conditions and obligations of the Parties to consummate the Transactions contemplated hereby (other than conditions and obligations with respect to the actions that the respective Parties will take at Closing) or such other date and time as the Parties may mutually determine (the “Closing Date”).
ARTICLE
II
Representations and Warranties of the Shareholder
The Shareholder hereby represents and warrants to the Parent, as follows:
SECTION 2.01 Good Title. The Shareholder is the record and beneficial owner, and has good and marketable title to its Company Securities, with the right and authority to sell and deliver such Company Securities to Parent as provided herein. Upon registering of the Parent as the new owner of such Company Securities in the share register of the Company, the Parent will receive good title to such Company Securities, free and clear of all liens, security interests, pledges, equities and claims of any kind, voting trusts, shareholder agreements and other encumbrances (each an “Encumbrance” or “Lien”).
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SECTION 2.02 Power and Authority. All acts required to be taken by the Shareholder to enter into this Agreement and to carry out the Transactions have been properly taken. This Agreement constitutes a legal, valid and binding obligation of the Shareholder, enforceable against such Shareholder in accordance with the terms hereof.
SECTION 2.03 No Conflicts. The execution and delivery of this Agreement by the Shareholder and the performance by the Shareholder of his obligations hereunder in accordance with the terms hereof: (i) will not require the consent of any third party or any federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (“Governmental Entity”) under any statutes, laws, ordinances, rules, regulations, orders, writs, injunctions, judgments, or decrees (each a “Law” and collectively, “Laws”); (ii) will not violate any Laws applicable to such Shareholder; and (iii) will not violate or breach any contractual obligation to which such Shareholder is a party.
SECTION 2.04 No Finder’s Fee. The Shareholder has not created any obligation for any finder’s, investment banker’s or broker’s fee in connection with the Transactions that the Company or the Parent will be responsible for pursuant to this Agreement.
SECTION 2.05 Purchase Entirely for Own Account. The Parent Stock proposed to be acquired by the Shareholder hereunder will be acquired for investment for his own account, and not with a view to the resale or distribution of any part thereof, and the Shareholder has no present intention of selling or otherwise distributing the Parent Stock, except in compliance with applicable securities laws.
SECTION 2.06 Available Information. The Shareholder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Parent. The Shareholder understands that his investment in the Parent Stock involves a high degree of risk. The Shareholder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Parent Common Stock. The Shareholder has had the opportunity to review the reports Parent has filed with the Securities and Exchange Commission (“SEC”) at www.sec.gov/EDGAR. The Shareholder acknowledges that the Parent may be deemed a “Shell Company” as defined under Rule 144(i)(1) of the Securities Act of 1933, as amended (the “Securities Act”) prior to the Closing Date.
SECTION 2.07 Non-Registration. The Shareholder understands that the Parent Common Stock has not been registered under the Securities Act and, if issued in accordance with the provisions of this Agreement, will be issued 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 Shareholder’s representations as expressed herein.
SECTION 2.08 Restricted Securities. The Shareholder understands that the Parent Common Stock is characterized as “restricted securities” under the Securities Act inasmuch as this Agreement contemplates that, if acquired by the Shareholder pursuant hereto, the Parent Common Stock would be acquired in a transaction not involving a public offering. The Shareholder further acknowledges that if the Parent Common Stock is issued to the Shareholder in accordance with the provisions of this Agreement, such Parent Common Stock may not be resold without registration under the Securities Act or the existence of an exemption therefrom. The Shareholder represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
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SECTION 2.09 Legends. It is understood that the Parent Common Stock will bear the following legend or another legend that is similar to the following:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
and any legend required by the “blue sky” laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended.
SECTION 2.10 Accredited Investor. The Shareholder is an “accredited investor” within the meaning of Rule 501 under the Securities Act and the Shareholder was not organized for the specific purpose of acquiring the Parent Common Stock.
ARTICLE
III
Representations and Warranties of the Company and the Shareholder
The Company and the Shareholder each represents and warrants to the Parent, which representations and warranties and true and correct as of the date hereof and will be true and correct as of the Closing Date, except as set forth in the disclosure schedules provided in connection herewith (the “Company Disclosure Schedule”), as follows:
SECTION 3.01 Organization, Authority, and Qualification of the Company. The Company is a corporation duly organized, validly existing, and in good standing under the Laws of England and Wales and has full corporate power and authority to own, operate, or lease the properties and assets now owned, operated, or leased by it and to carry on its business as it has been and is currently conducted. Schedule 3.01 of the Company Disclosure Schedule sets forth each jurisdiction in which the Company is licensed or qualified to do business, and the Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary.
SECTION 3.02 Capitalization.
(a) The authorized Company Securities of the Company consist of one ordinary share, of which one share is issued and outstanding and constitute the Company Securities. All of the Company Securities have been duly authorized, are validly issued, fully paid and nonassessable, and are owned of record and beneficially by Company, free and clear of all Encumbrances. Upon the transfer, assignment, and delivery of the Company Securities and payment therefor in accordance with the terms of this Agreement, Parent shall own all of the Company Securities, free and clear of all Encumbrances.
(b) All of the Company Securities were issued in compliance with applicable Laws. None of the Company Securities were issued in violation of any agreement or commitment to which Company or the Company is a party or is subject to or in violation of any preemptive or similar rights of any individual, corporation, partnership, joint venture, limited liability Company, Governmental Entity, unincorporated organization, trust, association, or other entity (each, a “Person”).
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(c) There are no outstanding or authorized options, warrants, convertible securities, stock appreciation, phantom stock, profit participation, or other rights, agreements, or commitments relating to the Company Securities of the Company or obligating Company or the Company to issue or sell any Company Securities of, or any other interest in, the Company. There are no voting trusts, stockholder agreements, proxies, or other agreements in effect with respect to the voting or transfer of any of the Company Securities.
SECTION 3.03 No Subsidiaries. The Company does not have, or have the right to acquire, an ownership interest in any other Person.
SECTION 3.04 No Conflicts or Consents. The execution, delivery, and performance by Company of this Agreement and the other agreements executed in connection with this Agreement to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the certificate of incorporation, by-laws, or other applicable governing documents of Company or the Company; (b) violate or conflict with any Law or any order, writ, judgment, injunction, decree, determination, penalty, or award entered by or with any Governmental Entity (“Governmental Order”) applicable to the Company; (c) require the consent, notice, or filing with or other action by any Person or require any permit, license, or Governmental Order; (d) violate or conflict with, result in the acceleration of, or create in any party the right to accelerate, terminate, or modify any contract, lease, deed, mortgage, license, instrument, note, indenture, joint venture, or any other agreement, commitment, or legally binding arrangement, whether written or oral (collectively, “Contracts”), to which Shareholder or the Company is a party or by which Shareholder or the Company is bound or to which any of their respective properties and assets are subject; or (e) result in the creation or imposition of any Encumbrance on any properties or assets of the Company.
SECTION 3.05 Financial Statements. Complete copies of the Company’s financial statements consisting of the balance sheet of the Company as of September 30 in each of the years ended September 30, 2024 and September 30, 2023 and the related statements of income and retained earnings, stockholders’ equity, and cash flow for the years then ended (the “Financial Statements”) have been delivered to Parent on or before the Closing Date. The Financial Statements have been prepared in accordance with generally accepted accounting principles in effect in the United States from time to time (“GAAP”), applied on a consistent basis throughout the period involved. The Financial Statements are based on the books and records of the Company and fairly present in all material respects the financial condition of the Company as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated. The balance sheet of the Company as of September, 2024 is referred to herein as the “Balance Sheet” and the date thereof as the “Balance Sheet Date”. The Company maintains a standard system of accounting established and administered in accordance with GAAP.
SECTION 3.06 Undisclosed Liabilities. The Company has no liabilities, obligations, or commitments of any nature whatsoever, whether asserted, known, absolute, accrued, matured, or otherwise, except: (a) those which are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date; and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date and which are not, individually or in the aggregate, material in amount.
SECTION 3.07 Absence of Certain Changes, Events, and Conditions. Since the Balance Sheet Date, the Company has been operating in the ordinary course of business consistent with past practice and there has not been, with respect to the Company, any change, event, condition, or development that is, or could reasonably be expected to be, individually or in the aggregate, materially adverse to the business, results of operations, condition (financial or otherwise), or assets of the Company.
SECTION 3.08 Company Material Contracts.
(a) Schedule 3.08(a) of the Company Disclosure Schedule lists each Contract that is material to the Company (such Contracts, together with all Contracts concerning the occupancy, management, or operation of any Real Property (as defined in Section 3.09(a), being “Company Material Contracts”), including the following:
(i) each Contract of the Company involving aggregate consideration in excess of $50,000 and which, in each case, cannot be cancelled by the Company without penalty or without more than 90 days’ notice;
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(ii) all Contracts that provide for the indemnification by the Company of any Person or the assumption of any Tax (as defined in Section 3.18(a), environmental, or other Liability of any Person;
(iii) all Contracts relating to Intellectual Property (as defined in Section 3.10(a), including all licenses, sublicenses, settlements, coexistence agreements, covenants not to sue, and permissions;
(iv) except for Contracts relating to trade payables, all Contracts relating to indebtedness (including, without limitation, guarantees) of the Company; and
(v) all Contracts that limit or purport to limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time.
(b) Each Company Material Contract is valid and binding on the Company in accordance with its terms and is in full force and effect. None of the Company or, to Company’s knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) any material respect, or has provided or received any notice of any intention to terminate, any Company Material Contract. Complete and correct copies of each Company Material Contract (including all modifications, amendments, and supplements thereto and waivers thereunder) have been made available to Parent.
SECTION 3.09 Real Property; Title to Assets.
(a) Schedule 3.09(a) of the Company Disclosure Schedule lists all real property in which the Company has an ownership or leasehold (or sub leasehold) interest (together with all buildings, structures, and improvements located thereon, the “Real Property”), including: (i) the street address of each parcel of Real Property; (ii) for Real Property that is leased or subleased by the Company, the landlord under the lease, the rental amount currently being paid, and the expiration of the term of such lease or sublease, and any termination or renewal rights of any party to the lease; and (iii) the current use of each parcel of Real Property. Company has delivered or made available to Parent true, correct, and complete copies of all Contracts, title insurance policies, and surveys relating to the Real Property. Schedule 3.09(a) of the Company Disclosure Schedule lists all material encumbrances, zoning restrictions and any outstanding violations or disputes regarding the Real Property, any of which may cause a Material Adverse Effect. “Material Adverse Effect” means any change, event, occurrence, or development that, individually or in the aggregate, has or would reasonably be expected to have a material adverse effect on the business, operations, assets, liabilities, financial condition, or prospects of the Company.
(b) The Company has good, valid, and marketable (and, in the case of owned Real Property, good and indefeasible fee simple) title to, or a valid leasehold interest in, all Real Property and personal property and other assets reflected in the Financial Statements or acquired after the Balance Sheet Date (other than properties and assets sold or otherwise disposed of in the ordinary course of business consistent with past practice since the Balance Sheet Date). All Real Property and such personal property and other assets (including leasehold interests) are free and clear of Encumbrances except for those items set forth in Schedule 3.09(b) of the Company Disclosure Schedule.
(c) The Company is not a sublessor or grantor under any sublease or other instrument granting to any other Person any right to possess, lease, occupy, or use any leased Real Property. The use of the Real Property in the conduct of the Company’s business does not violate in any material respect any Law, covenant, condition, restriction, easement, license, permit, or Contract and no material improvements constituting a part of the Real Property encroach on real property owned or leased by a Person other than the Company.
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SECTION 3.10 Intellectual Property.
(a) The term “Intellectual Property” means any and all of the following in any jurisdiction throughout the world: (i) issued patents and patent applications; (ii) trademarks, service marks, trade names, and other similar indicia of source or origin, together with the goodwill connected with the use of and symbolized by, and all registrations, applications for registration, and renewals of, any of the foregoing; (iii) copyrights, including all applications and registrations; (iv) trade secrets, know-how, inventions (whether or not patentable), technology, and other confidential and proprietary information and all rights therein; (v) internet domain names and social media accounts and pages; and (vi) other intellectual or industrial property and related proprietary rights, interests, and protections.
(b) Schedule 3.10(b) of the Company Disclosure Schedule lists all issued patents, registered trademarks, domain names and copyrights, and pending applications for any of the foregoing and all material unregistered Intellectual Property that are owned by the Company (the “Company IP Registrations”). The Company owns or has the valid and enforceable right to use all Intellectual Property used or held for use in or necessary for the conduct of the Company’s business as currently conducted or as proposed to be conducted (the “Company Intellectual Property”), free and clear of all Encumbrances. All of the Company Intellectual Property is valid and enforceable, and all Company IP Registrations are subsisting and in full force and effect. The Company has taken all reasonable and necessary steps to maintain and enforce the Company Intellectual Property.
(c) The conduct of the Company’s business as currently and formerly conducted and as proposed to be conducted has not infringed, misappropriated, or otherwise violated and will not infringe, misappropriate, or otherwise violate the Intellectual Property or other rights of any Person. No Person has infringed, misappropriated, or otherwise violated any Company Intellectual Property.
SECTION 3.11 Material Customers and Suppliers.
(a) Schedule 3.11(a) of the Company Disclosure Schedule sets forth each customer who has paid aggregate consideration to the Company for goods or services rendered in an amount greater than or equal to $100,000 for each of the two most recent fiscal years (collectively, the “Material Customers”). The Company has not received any notice, and has no reason to believe, that any of its Material Customers has ceased, or intends to cease after the Closing, to purchase or use its goods or services or to otherwise terminate or materially reduce its relationship with the Company.
(b) Schedule 3.11(b) of the Company Disclosure Schedule sets forth each supplier to whom the Company has paid consideration for goods or services rendered in an amount greater than or equal to $100,000 for each of the two most recent fiscal years (collectively, the “Material Suppliers”). The Company has not received any notice, and has no reason to believe, that any of its Material Suppliers has ceased, or intends to cease, to supply goods or services to the Company or to otherwise terminate or materially reduce its relationship with the Company.
SECTION 3.12 Insurance. Schedule 3.12 of the Company Disclosure Schedule sets forth a true and complete list of all current policies or binders of insurance maintained by Company or its Affiliates (including the Company) and relating to the assets, business, operations, employees, officers, and directors of the Company (collectively, the “Insurance Policies”). Such Insurance Policies: (a) are in full force and effect; (b) are valid and binding in accordance with their terms; (c) are provided by carriers who are financially solvent; and (d) have not been subject to any lapse in coverage. Neither Company nor any of its Affiliates (including the Company) has received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such Insurance Policies. All premiums due on such Insurance Policies have been paid. None of Company or any of its Affiliates (including the Company) is in default under, or has otherwise failed to comply with, in any material respect, any provision contained in any Insurance Policy. The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar to the Company and are sufficient for compliance with all applicable Laws and Contracts to which the Company is a party or by which it is bound. For purposes of this Agreement: (x) “Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person; and (y) the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or other ownership interests, by contract, or otherwise.
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SECTION 3.13 Legal Proceedings; Governmental Orders.
(a) There are no claims, actions, causes of action, demands, lawsuits, arbitrations, inquiries, audits, notices of violation, proceedings, litigation, citations, summons, subpoenas, or investigations of any nature, whether at law or in equity (each an “Action” and collectively, “Actions”) pending or, to Company’s knowledge after reasonable inquiry, threatened against or by the Company, or any Affiliate of Company: (i) relating to or affecting the Company or any of the Company’s properties or assets; or (ii) that challenge or seek to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.
(b) There are no outstanding, and the Company is in compliance with all, Governmental Orders against, relating to, or affecting the Company or any of its properties or assets.
SECTION 3.14 Compliance with Laws; Permits.
(a) The Company has complied, and is now complying, with all Laws applicable to it or its business, properties, or assets.
(b) All permits, licenses, franchises, approvals, registrations, certificates, variances, and similar rights obtained, or required to be obtained, from Governmental Entity (collectively, “Permits”) in order for the Company to conduct its business, including, without limitation, owning or operating any of the Real Property, have been obtained and are valid and in full force and effect. Schedule 3.14(b) of the Company Disclosure Schedule lists all current Permits issued to the Company and no event has occurred that would reasonably be expected to result in the revocation or lapse of any such Permit.
SECTION 3.15 Environmental Matters.
(a) The terms: (i) “Environmental Laws” means all Laws, now or hereafter in effect, in each case as amended or supplemented from time to time, relating to the regulation and protection of human health, safety, the environment, and natural resources, including any federal, state, or local transfer of ownership notification or approval statutes; and (ii) “Hazardous Substances” means: (A) “hazardous materials,” “hazardous wastes,” “hazardous substances,” “industrial wastes,” or “toxic pollutants,” as such terms are defined under any Environmental Laws; (B) any other hazardous or radioactive substance, contaminant, or waste; and (C) any other substance with respect to which any Environmental Law or Governmental Entity requires environmental investigation, regulation, monitoring, or remediation.
(b) The Company has complied, and is now complying, with all Environmental Laws. Neither the Company nor Company has received notice from any Person that the Company, its business or assets, or any real property currently or formerly owned, leased, or used by the Company is or may be in violation of any Environmental Law or any applicable Law regarding Hazardous Substances.
(c) There has not been any spill, leak, discharge, injection, escape, leaching, dumping, disposal, or release of any kind of any Hazardous Substances in violation of any Environmental Law: (i) with respect to the business or assets of the Company; or (ii) at, from, in, adjacent to, or on any real property currently or formerly owned, leased, or used by the Company. There are no Hazardous Substances in, on, about, or migrating to any real property currently or formerly owned, leased, or used by the Company, and such real property is not affected in any way by any Hazardous Substances.
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SECTION 3.16 Employee Benefit Matters. The Company does not maintain any employee benefit plans.
SECTION 3.17 Employment Matters.
(a) Schedule 3.17(a) of the Company Disclosure Schedule lists: (i) all employees, independent contractors, and consultants of the Company; and (ii) for each individual described in clause (i), (A) the individual’s title or position, hire date, and compensation, (B) any Contracts entered into between the Company and such individual, and (C) the fringe benefits provided to each such individual. All compensation payable to all employees, independent contractors, or consultants of the Company for services performed on or prior to the Closing Date have been paid in full.
(b) The Company is not, and has not been, a party to or bound by any collective bargaining agreement or other Contract with a union or similar labor organization (collectively, “Union”), and no Union has represented or purported to represent any employee of the Company. There has never been, nor has there been any threat of, any strike, work stoppage, slowdown, picketing, or other similar labor disruption or dispute affecting the Company or any of its employees.
(c) The Company is and has been in compliance with: (i) all applicable employment Laws and agreements regarding hiring, employment, termination of employment, plant closings and mass layoffs, employment discrimination, harassment, retaliation, and reasonable accommodation, leaves of absence, terms and conditions of employment, wages and hours of work, employee classification, employee health and safety, engagement and classification of independent contractors, payroll taxes, and immigration with respect to all employees, independent contractors, and contingent workers; and (ii) all applicable Laws relating to the relations between it and any labor organization, trade union, work council, or other body representing employees of the Company.
SECTION 3.18 Taxes.
(a) All returns, declarations, reports, information returns and statements, and other documents relating to Taxes (including amended returns and claims for refund) (collectively, “Tax Returns”) required to be filed by the Company on or before the Closing Date have been timely filed. Such Tax Returns are true, correct, and complete in all respects. All Taxes due and owing by the Company (whether or not shown on any Tax Return) have been timely paid. No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of the Company. Company has delivered to Parent copies of all Tax Returns and examination reports of the Company and statements of deficiencies assessed against, or agreed to by, the Company, for all Tax periods ending after January 1, 2022. The term “Taxes” means all federal, state, local, foreign, and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties, or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest, additions, or penalties with respect thereto.
(b) There are no liens for Taxes (other than for current Taxes not yet due and payable) upon the assets of the Company.
SECTION 3.19 Books and Records. The minute books and share record and transfer books of the Company, all of which are in the possession of the Company and have been made available to Parent, are complete and correct.
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SECTION 3.20 Related Party Transactions. Except as set forth on Schedule 3.20 of the Company Disclosure Schedule, there are no Contracts or other arrangements involving the Company in which Company, its Affiliates, or any of its or their respective directors, officers, or employees is a party, has a financial interest, or otherwise owns or leases any material asset, property, or right which is used by the Company.
SECTION 3.21 Brokers. No broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction document based upon arrangements made by or on behalf of Company.
SECTION 3.22 Full Disclosure. No representation or warranty by Company in this Agreement and no statement contained in the Company Disclosure Schedule to this Agreement or any certificate or other document furnished or to be furnished to Parent pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
ARTICLE
IV
Representations and Warranties of the Parent
The Parent represents and warrants as follows to the Shareholder and the Company, which representations and warranties are true and correct as of the date hereof and will be true and correct on the Closing Date, except as set forth in the reports, schedules, forms, statements and other documents filed by the Parent with the SEC and publicly available prior to the date of the Agreement (the “Parent SEC Documents”) or specifically referenced on a disclosure schedule of the Parent (“Parent Disclosure Schedule”) which Parent Disclosure Schedule shall be deemed a part hereof and shall qualify any representation made herein only to the extent of the disclosure contained in the corresponding section of the Parent Disclosure Schedule or to the extent that such qualification is reasonably apparent:
SECTION 4.01 Organization, Standing and Power. The Parent is duly organized, validly existing and in good standing under the laws of the State of Nevada and has full corporate power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its businesses as presently conducted, other than such franchises, licenses, permits, authorizations and approvals the lack of which, individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect on the Parent, a material adverse effect on the ability of the Parent to perform its obligations under this Agreement or on the ability of the Parent to consummate the Transactions (a “Parent Material Adverse Effect”). The Parent is duly qualified to do business in each jurisdiction where the nature of its business or their ownership or leasing of its properties make such qualification necessary and where the failure to so qualify would reasonably be expected to have a Parent Material Adverse Effect. The Parent has delivered to the Company true and complete copies of the articles of incorporation of the Parent, as amended to the date of this Agreement (as so amended, the “Parent Charter”), and the Bylaws of the Parent, as amended to the date of this Agreement (as so amended, the “Parent Bylaws”).
SECTION 4.02 Subsidiaries; Equity Interests. Except as set forth in the Parent SEC Documents, the Parent does not own, directly or indirectly, any capital stock, membership interest, partnership interest, joint venture interest or other equity interest in any person.
SECTION 4.03 Capital Structure. The authorized capital stock of the Parent consists of such shares of capital stock as set forth in the Parent SEC Documents. Except as set forth in the Parent SEC Documents and on Schedule 4.03 of the Parent Disclosure Schedule, no other Company Securities of capital stock or other voting securities of the Parent are reserved for issuance or outstanding. All outstanding Company Securities of the capital stock of the Parent are, and all such Company Securities that may be issued prior to the date hereof will be when issued, duly authorized, validly issued, fully paid and non-assessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Nevada Revised Statutes, the Parent Charter, the Parent Bylaws or any Contract to which the Parent is a party or otherwise bound.
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SECTION 4.04 Authority; Execution and Delivery; Enforceability. The execution and delivery by the Parent of this Agreement and the consummation by the Parent of the Transactions have been duly authorized and approved by the Board of Directors of the Parent and no other corporate proceedings on the part of the Parent are necessary to authorize this Agreement and the Transactions. This Agreement constitutes a legal, valid and binding obligation of the Parent, enforceable against the Parent in accordance with the terms hereof.
SECTION 4.05 No Conflicts; Consents.
(a) The execution and delivery by the Parent of this Agreement, does not, and the consummation of Transactions and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any person under, or result in the creation of any Lien upon any of the properties or assets of the Parent under, any provision of (i) the Parent Charter or Parent Bylaws, (ii) any material Contract to which the Parent is a party or by which any of its properties or assets is bound or (iii) subject to the filings and other matters referred to in Section 4.05(b), any material judgment or material Law applicable to the Parent or its properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect.
(b) No Consent of, or registration, declaration or filing with, or permit from, any Governmental Entity is required to be obtained or made by or with respect to the Parent in connection with the execution, delivery and performance of this Agreement or the consummation of the Transactions, other than the (A) filing with the SEC of a Current Report on Form 8-K disclosing the transactions contemplated hereby, including all required exhibits thereto; (B) filings under state “blue sky” laws, as each may be required in connection with this Agreement and the Transactions; and (C) filings with the Nevada Secretary of State.
SECTION 4.06 SEC Documents; Undisclosed and Liabilities.
(a) The Parent has filed all Parent SEC Documents for the prior 12 months, pursuant to Sections 13 and 15 of the Exchange Act, as applicable, except as disclosed on Schedule 4.06 of the Parent Disclosure Schedule.
(b) The financial statements of the Parent included in the Parent SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by the rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the financial position of Parent as of the dates thereof and the results of its operations and cash flows for the periods shown (subject, in the case of unaudited statements, to normal year-end audit adjustments).
(c) Except as set forth in the Parent SEC Documents, the Parent has no liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a balance sheet of the Parent or in the notes thereto. The Parent SEC Documents sets forth all financial and contractual obligations and liabilities (including any obligations to issue capital stock or other securities of the Parent) due after the date hereof. No representation is made as to any liability to any Governmental Entity for penalties arising under the Code or state Laws.
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SECTION 4.07 Absence of Certain Changes or Events. Except as disclosed in the filed Parent SEC Documents or on Schedule 4.07 of the Parent Disclosure Schedule, from the date of the most recent audited financial statements included in the filed Parent SEC Documents to the date of this Agreement, the Parent has conducted its business only in the ordinary course, and during such period there has not been any material change in the assets, liabilities, prospects, financial condition or operating results of the Parent from that reflected in the Parent SEC Documents, except changes in the ordinary course of business that have not caused, in the aggregate, a Parent Material Adverse Effect.
SECTION 4.08 Taxes.
(a) Except as disclosed on Schedule 4.08(a) of the Parent Disclosure Schedule, the Parent has timely filed, or has caused to be timely filed on its behalf, all Tax Returns required to be filed by it, and all such Tax Returns are true, complete and accurate, except to the extent any failure to file, any delinquency in filing or any inaccuracies in any filed Tax Returns, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect. All Taxes shown to be due on such Tax Returns, or otherwise owed, has been timely paid, except to the extent that any failure to pay, individually or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect. The Parent shall, prior to the Closing, file, or cause to be filed on its behalf, all Tax Returns required to be filed by it under applicable Laws.
(b) The most recent financial statements contained in the Parent SEC Documents reflected adequate reserves for all Taxes payable by the Parent (in addition to any reserve for deferred Taxes to reflect timing differences between book and Tax items) for all Taxable periods and portions thereof through the date of such financial statements. No deficiency with respect to any Taxes has been proposed, asserted or assessed against the Parent, and no requests for waivers of the time to assess any such Taxes are pending, except to the extent any such deficiency or request for waiver, individually or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect.
(c) There are no Liens for Taxes (other than for current Taxes not yet due and payable) on the assets of the Parent. The Parent is not bound by any agreement with respect to Taxes.
SECTION 4.09 Parent Material Contracts.
(a) Schedule 4.09(a) of the Parent Disclosure Schedule lists each Contract that is material to the Parent (“Parent Material Contracts”), including the following:
(i) each Contract of the Parent involving aggregate consideration in excess of $50,000 and which, in each case, cannot be cancelled by the Parent without penalty or without more than 90 days’ notice;
(ii) all Contracts that provide for the indemnification by the Parent of any Person or the assumption of any Tax (as defined in Section 4.08(a), environmental, or other Liability of any Person;
(iii) all Contracts relating to Intellectual Property (as defined in Section 3.10(a), including all licenses, sublicenses, settlements, coexistence agreements, covenants not to sue, and permissions;
(iv) except for Contracts relating to trade payables, all Contracts relating to indebtedness (including, without limitation, guarantees) of the Parent; and
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(v) all Contracts that limit or purport to limit the ability of the Parent to compete in any line of business or with any Person or in any geographic area or during any period of time.
(b) Each Parent Material Contract is valid and binding on the Parent in accordance with its terms and is in full force and effect. None of the Parent or, to Parent’s knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) any material respect, or has provided or received any notice of any intention to terminate, any Parent Material Contract. Complete and correct copies of each Parent Material Contract (including all modifications, amendments, and supplements thereto and waivers thereunder) have been made available to Company.
SECTION 4.10 Absence of Changes in Benefit Plans. From the date of the most recent audited financial statements included in the Parent SEC Documents to the date of this Agreement, there has not been any adoption or amendment in any material respect by Parent of any collective bargaining agreement or any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, arrangement or understanding (whether or not legally binding) providing benefits to any current or former employee, officer or director of Parent. Except as set forth in the Parent SEC Documents, as of the date of this Agreement there are not any employment, consulting, indemnification, severance or termination agreements or arrangements between the Parent and any current or former employee, officer or director of the Parent, nor does the Parent have any general severance plan or policy.
SECTION 4.11 Litigation. Except as disclosed in the Parent SEC Documents, there is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of this Agreement or the Parent Stock or (ii) could, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a Parent Material Adverse Effect. Neither the Parent nor any director or officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a claim or violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty which relates to the Parent.
SECTION 4.12 Legal Proceedings; Governmental Orders.
(a) There are no Actions pending or, to Parent’s knowledge after reasonable inquiry, threatened against or by the Parent or any Affiliate of Parent: (i) relating to or affecting the Parent or any of the Parent’s properties or assets; or (ii) that challenge or seek to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.
(b) There are no outstanding, and the Parent is in compliance with all, Governmental Orders against, relating to, or affecting the Parent or any of its properties or assets.
SECTION 4.13 Compliance with Applicable Laws. Except as disclosed in the Parent SEC Documents, the Parent is in compliance with all applicable Laws, including those relating to occupational health and safety, the environment, export controls, trade sanctions and embargoes, except for instances of noncompliance that, individually and in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect. Except as set forth in the Parent SEC Documents, the Parent has not received any written communication during the past two years from a Governmental Entity that alleges that the Parent is not in compliance in any material respect with any applicable Law. The Parent is in compliance with all effective requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder, that are applicable to it, except where such noncompliance could not have or reasonably be expected to result in a Parent Material Adverse Effect or as disclosed in the Parent SEC Documents.
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SECTION 4.14 Compliance with Laws; Permits.
(a) The Parent has complied, and is now complying, with all Laws applicable to it or its business, properties, or assets.
(b) All Permits necessary for the Parent to conduct its business, including, without limitation, owning or operating any real property in which the Parent has an ownership or leasehold (or sub leasehold) interest (together with all buildings, structures, and improvements located thereon), have been obtained and are valid and in full force and effect. Schedule 4.14(b) of the Parent Disclosure Schedule lists all current Permits issued to the Parent and no event has occurred that would reasonably be expected to result in the revocation or lapse of any such Permit.
SECTION 4.15 Environmental Matters.
(a) The Parent has complied, and is now complying, with all Environmental Laws. Parent has not received notice from any Person that the Parent, its business or assets, or any real property currently or formerly owned, leased, or used by the Parent is or may be in violation of any Environmental Law or any applicable Law regarding Hazardous Substances.
(b) There has not been any spill, leak, discharge, injection, escape, leaching, dumping, disposal, or release of any kind of any Hazardous Substances in violation of any Environmental Law: (i) with respect to the business or assets of the Parent; or (ii) at, from, in, adjacent to, or on any real property currently or formerly owned, leased, or used by the Parent. There are no Hazardous Substances in, on, about, or migrating to any real property currently or formerly owned, leased, or used by the Parent, and such real property is not affected in any way by any Hazardous Substances.
SECTION 4.16 Employee Benefit Matters. The Parent does not maintain any employee benefit plan.
SECTION 4.17 Employment Matters.
(a) Schedule 4.17(a) of the Parent Disclosure Schedule lists: (i) all employees, independent contractors, and consultants of the Parent; and (ii) for each individual described in clause (i), (A) the individual’s title or position, hire date, and compensation, (B) any Contracts entered into between the Parent and such individual, and (C) the fringe benefits provided to each such individual. Except as disclosed in the Parent SEC Documents, all compensation payable to all employees, independent contractors, or consultants of the Parent for services performed on or prior to the Closing Date have been paid in full.
(b) The Parent is not, and has not been, a party to or bound by any collective bargaining agreement or other Contract with a union or similar labor organization (collectively, “Union”), and no Union has represented or purported to represent any employee of the Parent. There has never been, nor has there been any threat of, any strike, work stoppage, slowdown, picketing, or other similar labor disruption or dispute affecting the Parent or any of its employees.
(c) The Parent is and has been in compliance with: (i) all applicable employment Laws and agreements regarding hiring, employment, termination of employment, plant closings and mass layoffs, employment discrimination, harassment, retaliation, and reasonable accommodation, leaves of absence, terms and conditions of employment, wages and hours of work, employee classification, employee health and safety, engagement and classification of independent contractors, payroll taxes, and immigration with respect to all employees, independent contractors, and contingent workers; and (ii) all applicable Laws relating to the relations between it and any labor organization, trade union, work council, or other body representing employees of the Parent.
SECTION 4.18 Books and Records. The minute books and share record and transfer books of the Parent, all of which are in the possession of the Parent and have been made available to Company, are complete and correct.
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SECTION 4.19 Brokers. No broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction document based upon arrangements made by or on behalf of Parent.
SECTION 4.20 Contracts. Except as disclosed in the Parent SEC Documents, there are no Contracts that are material to the business, properties, assets, condition (financial or otherwise), results of operations or prospects of the Parent taken as a whole.
SECTION 4.21 Title to Properties. The Parent has good title to, or valid leasehold interests in, all of its properties and assets used in the conduct of its businesses. All such assets and properties, other than assets and properties in which the Parent has leasehold interests, are free and clear of all Liens and except for Liens that, in the aggregate, do not and will not materially interfere with the ability of the Parent to conduct business as currently conducted. Except as provided on Schedule 4.21 of the Parent Disclosure Schedule , the Parent has complied in all material respects with the terms of all material leases to which it is a party and under which it is in occupancy, and all such leases are in full force and effect. Except as provided on Schedule 4.21 of the Parent Disclosure Schedule, the Parent enjoys peaceful and undisturbed possession under all such material leases.
SECTION 4.22 Intellectual Property. The Parent has no Intellectual Property Rights which are material to the conduct of the business of the Parent taken as a whole. No claims are pending or, to the knowledge of the Parent, threatened that the Parent is infringing or otherwise adversely affecting the rights of any person with regard to any Intellectual Property Right. To the knowledge of the Parent, no person is infringing the rights of the Parent with respect to any Intellectual Property Right.
SECTION 4.23 Labor Matters. There are no collective bargaining or other labor union agreements to which the Parent is a party or by which it is bound. No material labor dispute exists or, to the knowledge of the Parent, is threatened or reasonably expected to be imminent with respect to any of the employees of the Parent.
SECTION 4.24 Transactions With Affiliates and Employees. Except as set forth in the Parent SEC Documents or on Schedule 4.24 of the Parent Disclosure Schedule, none of the officers or directors of the Parent and, to the knowledge of the Parent, none of the employees of the Parent is presently a party to any transaction with the Parent or any subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Parent, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.
SECTION 4.25 Application of Takeover Protections. The Parent has taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Parent’s charter documents or the laws of its state of incorporation that is or could become applicable to the Shareholders as a result of the Shareholders and the Parent fulfilling their obligations or exercising their rights under this Agreement, including, without limitation, the issuance of the Parent Stock and the Shareholders’ ownership of the Parent Stock.
SECTION 4.26 No Additional Agreements. The Parent does not have any agreement or understanding with the Shareholder with respect to the Transactions other than as specified in this Agreement.
SECTION 4.27 Disclosure. The Parent represents and warrants that neither it nor any person acting on its behalf has provided any Shareholder or its respective agents or counsel with any information that the Parent believes constitutes material, non-public information except insofar as the existence and terms of the proposed Transactions hereunder may constitute such information and except for information that will be disclosed by the Parent under a Current Report on Form 8-K filed after the Closing.
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SECTION 4.28 Certain Registration Matters. Except as specified in the Parent SEC Documents or on Schedule 4.28 of the Parent Disclosure Schedule, the Parent has not granted or agreed to grant to any person any rights (including “piggy-back” registration rights) to have any securities of the Parent registered with the SEC or any other governmental authority that have not been satisfied.
SECTION 4.29 Listing and Maintenance Requirements. The Parent Stock is quoted on the OTC Expert Market and is not eligible for proprietary broker-dealer quotations. The issuance and sale of the Company Securities of Parent Stock under this Agreement does not contravene the rules and regulations of the trading market on which the Parent Stock are currently listed or quoted.
SECTION 4.30 Parent Stock. Upon issuance to the Shareholder, the Parent Common Stock will be duly and validly issued, fully paid and non-assessable.
SECTION 4.31 Brokers. No broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction document based upon arrangements made by or on behalf of Parent.
SECTION 4.32 Full Disclosure. No representation or warranty by Parent in this Agreement and no statement contained in the Parent Disclosure Schedule to this Agreement or any certificate or other document furnished or to be furnished to Company pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
ARTICLE
V
Deliveries
SECTION 5.01 Deliveries of the Shareholder.
(a) Concurrently herewith the Shareholder is delivering to the Parent this Agreement executed by the Shareholder.
(b) At or prior to the Closing, the Shareholder shall deliver to the Parent:
(i) This Agreement, executed by the Shareholder.
(ii) This Agreement shall constitute a duly executed share transfer power for transfer by the Shareholder of its Company Securities to the Parent (which Agreement shall constitute a limited power of attorney in the Parent or any officer thereof to effectuate any share transfers as may be required under applicable law, including, without limitation, recording such transfer in the share registry maintained by the Company for such purpose).
SECTION 5.02 Deliveries of the Parent.
(a) Concurrently herewith, the Parent is delivering to the Shareholder and to the Company, a copy of this Agreement executed by the Parent.
(b) Promptly following the Closing, the Parent shall deliver to the Shareholder certificates representing the Parent Common Stock for the Intended Percentage issued to the Shareholder set forth on Company Disclosure Schedule 1.01 or evidence that such securities were issued in book entry form.
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SECTION 5.03 Deliveries of the Company.
(a) Concurrently herewith, the Company is delivering to the Parent this Agreement executed by the Company.
(b) At or prior to the Closing, the Company shall deliver to the Parent:
(i) a certificate from the Company, signed by its Secretary or Assistant Secretary certifying that the attached copies of the Company’s Charter Documents and resolutions of the Board of Directors of the Company approving this Agreement and the Transactions, are all true, complete and correct and remain in full force and effect; and
(ii) A shareholder list of holders of the Company’s Securities reflecting the Parent as the sole shareholder of the Company authenticated by the Registrar of Companies of England and Wales under section 1115 of the Companies Act 2006, certified by the Company’s Chief Executive Officer.
ARTICLE
VI
Conditions to Closing
SECTION 6.01 Shareholders and Company Conditions Precedent. The obligations of the Shareholders and the Company to enter into and complete the Closing is subject, at the option of the Shareholders and the Company, to the fulfillment on or prior to the Closing Date of the following conditions.
(a) Representations and Covenants. The representations and warranties of the Parent contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date. The Parent shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by the Parent on or prior to the Closing Date. The Parent shall have delivered to the Shareholder and the Company, a certificate, dated the Closing Date, to the foregoing effect.
(b) Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the Transactions or to seek damages or a discovery order in connection with such Transactions, or which has or may have, in the reasonable opinion of the Company or the Shareholders, a materially adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of the Parent.
(c) No Material Adverse Change. There shall not have been any occurrence, event, incident, action, failure to act, or transaction since the date of the Parent’s most recently filed Quarterly Report on Form 10-Q or Annual Report on Form 10-K which has had or is reasonably likely to cause a Parent Material Adverse Effect, except as disclosed in the Parent SEC Documents or in this Agreement.
(d) Post-Closing Capitalization. At, and immediately after, the Closing, the authorized capitalization, and the number of issued and outstanding capital stock of the Parent, on a fully-diluted basis, shall be as described in the Parent SEC Documents, and as contemplated by this Agreement.
(e) Deliveries. The deliveries specified in Section 5.02 and in the preliminary paragraphs hereto shall have been made by the Parent.
(f) Satisfactory Completion of Due Diligence. The Company and the Shareholders shall have completed their legal, accounting and business due diligence of the Parent and the results thereof shall be satisfactory to the Company and the Shareholders in their sole and absolute discretion.
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SECTION 6.02 Parent Conditions Precedent. The obligations of the Parent to enter into and complete the Closing are subject, at the option of the Parent, to the fulfillment on or prior to the Closing Date of the following conditions, any one or more of which may be waived by the Parent in writing.
(a) Representations and Covenants. The representations and warranties of the Shareholder and the Company contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date. The Shareholder and the Company shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by the Shareholder and the Company on or prior to the Closing Date. The Company shall have delivered to the Parent a certificate, dated the Closing Date, to the foregoing effect.
(b) Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body or instituted or threatened by any governmental or regulatory body to restrain, modify or prevent the carrying out of the Transactions or to seek damages or a discovery order in connection with such Transactions, or which has or may have, in the reasonable opinion of the Parent, an adverse effect on the assets, properties, business, operations or condition (financial or otherwise) of the Company.
(c) No Material Adverse Change. There shall not have been any occurrence, event, incident, action, failure to act, or transaction since the date hereof which has had or is reasonably likely to cause a Material Adverse Effect.
(d) Deliveries. The deliveries specified in Section 5.01 and Section 5.03 shall have been made by the Shareholder and the Company, respectively and the Company shall have delivered the financial information specified under Section 7.08.
(e) Satisfactory Completion of Due Diligence. The Parent shall have completed its legal, accounting and business due diligence of the Company and the results thereof shall be satisfactory to the Parent in its sole and absolute discretion.
ARTICLE
VII
Covenants
SECTION 7.01 Public Announcements. The Parent and the Company will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press releases or other public statements with respect to the Agreement and the Transactions and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law, court process or by obligations pursuant to any listing agreement with any national securities exchanges.
SECTION 7.02 Fees and Expenses. All fees and expenses incurred in connection with this Agreement shall be paid by the Party incurring such fees or expenses, whether or not this Agreement is consummated.
SECTION 7.03 Continued Efforts. Each Party shall use commercially reasonable efforts to (a) take all action reasonably necessary to consummate the Transactions, and (b) take such steps and do such acts as may be necessary to keep all of its representations and warranties true and correct as of the Closing Date with the same effect as if the same had been made, and this Agreement had been dated, as of the Closing Date.
SECTION 7.04 Exclusivity. Each of the Parent and the Company shall not (and shall not cause or permit any of their affiliates to) engage in any discussions or negotiations with any person or take any action that would be inconsistent with the Transactions and that has the effect of avoiding the Closing contemplated hereby. Each of the Parent and the Company shall notify each other immediately if any person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.
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SECTION 7.05 Filing of 8-K and Press Release. The Parent shall file, no later than four (4) business days after the Closing Date, a Current Report on Form 8-K with the SEC disclosing the terms of this Agreement and other requisite disclosure regarding the Transactions.
SECTION 7.06 Access. Each Party shall permit representatives of any other Party to have full access to all premises, properties, personnel, books, records (including Tax records), contracts, and documents of or pertaining to such Party.
SECTION 7.07 Preservation of Business. From the date of this Agreement until the Closing Date, the Company shall operate only in the ordinary and usual course of business consistent with their respective past practices, and shall use reasonable commercial efforts to (a) preserve intact their respective business organizations, (b) preserve the goodwill and advantageous relationships with customers, suppliers, independent contractors, employees and other persons material to the operation of their respective businesses, and (c) not permit any action or omission that would cause any of their respective representations or warranties contained herein to become inaccurate or any of their respective covenants to be breached in any material respect.
SECTION 7.08 Company Financial Statements. The Company shall, prior to the Closing, deliver to the Parent the Financial Statements audited by a PCAOB firm if required by the SEC, as well as and Company interim financial information if required by the SEC, and such additional information as is required by the SEC for the Parent’s Current Report on Form 8-K required in connection with the Closing.
SECTION 7.09 Officers and Additional Engagements. On the Closing Date the Parent shall (a) appoint Niclas Adler to serve as Chief Technology Officer of the Parent and as a member of the Parent’s board of directors and the Parent and Niclas Adler shall enter into an employment agreement upon standard terms and conditions agreed to by and between the Parent and Niclas Adler, including, but not limited to an annual salary, bonus and restrictive covenants and (b) amend the Executive Employment Agreements of each of the Parent’s Chief Executive Officer and Chief Financial Officer to increase the annual base salary to $400,000 per annum and provide for a quarterly bonus of up to $150,000.
SECTION 7.10 Common Stock Warrants and Options. On the Closing Date, the Company shall issue the warrants and options to purchase shares of Parent Common Stock to such individuals in the amounts and exercise prices as set forth on Schedule 7.10 of the Company Disclosure Schedule and Schedule 7.10 of the Parent Disclosure Schedule.
ARTICLE
VIII
Miscellaneous
SECTION 8.01 Indemnification. Each Party shall indemnify, defend, and hold harmless the other Party from and against any and all losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or related to: (a) any breach of representations, warranties, or covenants made by such Party in this Agreement; (b) any third-party claims resulting from such Party's actions or omissions; and (c) any negligent or willful misconduct by such Party in connection with the transactions contemplated by this Agreement. The Party seeking indemnification shall provide prompt written notice to the indemnifying Party of any claim, specifying the nature of the claim and the potential damages, and shall cooperate in the defense of such claim.
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SECTION 8.02 Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given upon receipt by the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):
If to the Parent, to:
Edgemode, Inc.
110 E. Broward Blvd., Suite 1700
Fort Lauderdale, FL 33301
Email: simon@edgemode.io
Attn: Chief Financial Officer
With a copy to (which shall not constitute notice):
Nason Yeager Gerson Harris & Fumero, P.A.
3001 PGA Boulevard, Suite 305
Palm Beach Gardens, FL 33410
Email: [ ]
Attn: [ ]
If to the Company, to:
Synthesis Analytics Production Ltd
20-22 Wenlock Road
London, England
N1 7GU
Email: [ ]
Attn: [ ]
With a copy to (which shall not constitute notice):
[ ]
[ ]
[ ]
Email: [ ]
Attn: [ ]
If to the Shareholder, to:
Adler Capital Limited
Room 3208, Central Plaza
18 Harbour
Road
Wanchai, Hong Kong
Email: [ ]
Attn: [ ]
With a copy to (which shall not constitute notice):
[ ]
[ ]
[ ]
Email: [ ]
Attn: [ ]
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SECTION 8.03 Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived, amended or modified except in a written instrument signed by all Parties to this Agreement. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any Party to exercise any right hereunder in any manner impair the exercise of any such right.
SECTION 8.04 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each Party will be entitled to specific performance under this Agreement and temporary and permanent injunctive relief without the necessity of proving actual damages or posting a bond. The Parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
SECTION 8.05 Interpretation. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”
SECTION 8.06 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that Transactions contemplated hereby are fulfilled to the extent possible.
SECTION 8.07 Counterparts; .PDF Execution. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. .PDF DocuSign or electronic execution and delivery of this Agreement is legal, valid and binding for all purposes.
SECTION 8.08 Entire Agreement; Third Party Beneficiaries. This Agreement, taken together with the Company Disclosure Schedule and the Parent Disclosure Schedule, (a) constitutes the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the Transactions and (b) are not intended to confer upon any person other than the Parties any rights or remedies.
SECTION 8.09 Governing Law; Exclusive Jurisdiction. This Agreement, the legal relations between the parties and any Action, whether contractual or non-contractual, instituted by any party with respect to any matter arising between the parties, including but not limited to matters arising under or in connection with this Agreement, such as the negotiation, execution, interpretation, coverage, scope, performance, breach, termination, validity, or enforceability of this Agreement, shall be governed by and construed in accordance with the internal laws of the State of Nevada without reference to principles of conflicts of laws. The parties hereto hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of Florida and the Federal Courts of the United States of America located within Broward County, Florida with respect to any matter arising between the parties, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or thereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a Florida State or Federal court. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in any manner as may be permitted by applicable Law, shall be valid and sufficient service thereof. With respect to any particular action, suit or proceeding arising between the parties, including but not limited to matters arising under or in connection with this Agreement, venue shall lie solely in Broward County or any Federal Court of the United States of America sitting in the Broward County, Florida.
SECTION 8.10 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Parties. Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.
[signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Share Exchange Agreement as of the date first above written.
The Parent:
EDGEMODE, INC.
By: __________________________
Name:
Title:
The Company:
SYNTHESIS ANALYTICS PRODUCTION LTD
By: __________________________
Name:
Title:
The Shareholder:
ADLER CAPITAL LIMITED
By: __________________________
Name:
Title:
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Exhibit 3.1
Business Entity - Filing Acknowledgement 04/03/2025 Work Order Item Number: Filing Number: Filing Type: Filing Date/Time: Filing Page(s): W2025040302533 - 4365554 20254798033 Amendment After Issuance of Stock 4/3/2025 1:14:00 PM 3 Indexed Entity Information: Entity ID: E0034092011 - 6 Entity Status: Active Entity Name: EdgeMode, Inc. Expiration Date: None Commercial Registered Agent CORPORATE CREATIONS NETWORK INC. 8275 SOUTH EASTERN AVENUE #200, Las Vegas, NV 89123, USA FRANCISCO V. AGUILAR Secretary of State RUBEN J. RODRIGUEZ Deputy Secretary for Southern Nevada 2250 Las Vegas Blvd North, Suite 400 North Las Vegas, NV 89030 Telephone (702) 486 - 2880 Fax (702) 486 - 2452 STATE OF NEVADA OFFICE OF THE SECRETARY OF STATE GABRIEL DI CHIARA Chief Deputy Secretary of State DEANNA L. REYNOLDS Deputy Secretary for Commercial Recordings 401 N. Carson Street Carson City, NV 89701 Telephone (775) 684 - 5708 Fax (775) 684 - 7141 The attached document(s) were filed with the Nevada Secretary of State, Commercial Recording Division. The filing date and time have been affixed to each document, indicating the date and time of filing. A filing number is also affixed and can be used to reference this document in the future. Respectfully, FRANCISCO V. AGUILAR Secretary of State Page 1 of 1 Commercial Recording 2250 Las Vegas Blvd North North Las Vegas, NV 89030 401 N. Carson Street Carson City, NV 89701 1 State of Nevada Way Las Vegas, NV 89119
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Business Number E0034092011 - 6 Filed in the Office of Secretary of State State Of Nevada Filing Number 20254798033 Filed On 4/3/2025 1:14:00 PM Number of Pages 3
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Docusign Envelope ID : B09399B3 - BBE1 - 4D3B - 92 09 - 0686A0760BEO FRANCISCO V. AGUILAR Secretary of State 401 North Carson Street Carson City, Nevada 89701 - 4201 (775) 684 - 5708 Website: www.nvsos.gov Profit Corporation: Certificate of Amendment (PURSUANT TO NRs 78 . 380 & 78.385/78 . 390) Certificate to Accompany Restated Articles or Amended and Restated Articles (PuRsuANT TO NRs 78.403) Officer's Statement (PURSUANT TO NRs 80 . 030) Date : 1 04/07/2025 I Time: s j :OO AM I (must not be later than 90 days after the certificate is filed) 4. Effective Date and Time: (Optional) Changes to takes the following effect: D The entity name has been amended . D The registered agent has been changed. (attach Certificate of Acceptance from new registered agent) D The purpose of the entity has been amended . IR] The authorized shares have been amended. D The directors, managers or general partners have been amended. D IRS tax language has been added. D Articles have been added. D Articles have been deleted. D Other. The articles have been amended as follows : (provide article numbers, if available) Article Ill is hereby amended in its entirety (continued below) J 5. Information Being Changed: (Domestic corporations only) - (attach additional page(s) if necessary) X f I Chief Executiv e Officer I 6. Signature: (Required) Signature of Officer or Authorized Signer Title X I I Signature of Officer or Authorized Signer Title *If any proposed amendment would alter or change any preference or any relative or other r i ght given to any class or ser i es of outstanding shares, then the amendment must be approved by the vote , in add iti on to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless to limitations or restrictions on the voting power thereof. Please include any required or optional information in space below: (attach addit i onal page(s) if necessary) as indicated on Exhibit A attached hereto. This form must be accompanied by appropriate fees. Page 2 of 2 Rev ise d : 9/1/2023
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Docusign Envelope ID : B09399B3 - BBE1 - 4D3B - 9209 - 0686A0760BEO Exhibit A Certificate of Amendment to the Articles oflncorporation I . Name of corporation: EdgeMode, Inc . 2. The Articles have been amended as follows (provide article numbers, if ava il able) : Article III is hereby amended in its entirety to read as follows : 3. The Corporation shall have the authority to issue: (a) 7,000,000,000 shares of common stock, par value of $0 . 001 per share; and (b) 5 , 000 , 000 shares of preferred stock, par value $0.00 I per share, with such rights, preferences, series and designations shall be determined by the board of directors. 3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of th e voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation have voted in favor of the amendment is : 4. Effective date of filing (optional) : April 7 , 2025 5. Signature (required) : Charles Faulkner, Chief Executive Officer
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NEVADA STATE BUSINESS LICENSE EdgeMode, Inc. Nevada Business Identification # NV20111048323 Expiration Date: 01/31/2026 In accordance with Title 7 of Nevada Revised Statutes, pursuant to proper application duly filed and payment of appropriate prescribed fees, the above named is hereby granted a Nevada State Business License for business activities conducted within the State of Nevada . Valid until the expiration date listed unless suspended, revoked or cancelled in accordance with the provisions in Nevada Revised Statutes. License is not transferable and is not in lieu of any local business license, permit or registration. License must be cancelled on or before its expiration date if business activity ceases. Failure to do so will result in late fees or penalties which, by law, cannot be waived . Certificate Number: B202504035598091 You may verify this certificate online at https://www.nvsilverflume.gov/home IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Great Seal of State, at my office on 04/03/2025. FRANCISCO V. AGUILAR Secretary of State
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Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered this 7th day of April 2025 (the “Effective Date”) between Edgemode, Inc., a Nevada corporation (the “Corporation”) and Niclas Adler (the “Executive”).
RECITALS
WHEREAS, the Corporation, Synthesis Analytics Production Ltd, an England and Wales private limited company, and Adler Capital Limited, a company registered in Hong Kong, have entered into a Share Exchange Agreement dated 17th March, 2025 (the “Share Exchange Agreement”).
WHEREAS, pursuant to the term of the Share Exchange Agreement, the Executive was appointed Chief Technology Officer of the Corporation and the Corporation desires to employ the Executive and the Executive desires to be employed by the Corporation pursuant to the terms of this Agreement.
WHEREAS, the Executive, by virtue of the Executive's employment with the Corporation, has and will become familiar with and possessed with the manner, methods, trade secrets and other confidential information pertaining to the Corporation's business, including the Corporation's client base.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the Corporation and the Executive do hereby agree as follows:
1. Recitals. The above recitals are true, correct, and are herein incorporated by reference.
2. Employment. The Corporation hereby employs the Executive, and the Executive hereby accepts employment, upon the terms and conditions hereinafter set forth.
3. Authority and Power During Employment Period.
(a) Duties and Responsibilities. During the term of this Agreement, the Executive will serve as Chief Technology Officer and shall have the responsibilities as set forth by the Corporation’s Chief Executive Officer, subject to the guidelines and direction of the Board of Directors of the Corporation.
(b) Time Devoted. Throughout the first 90 days of the Agreement, the Executive shall devote 50 percent of the Executive's business time and attention to the business and affairs of the Corporation consistent with the Executive's executive position with the Corporation, except for reasonable vacations and except for illness or incapacity, but nothing in the Agreement shall preclude the Executive from engaging in personal business, including as a member of the board of directors of affiliated companies, charitable and community affairs, provided that such activities do not interfere with the regular performance of the Executive's duties and responsibilities under this Agreement. For each following 90 days of the Agreement, the Corporation and the Executive shall agree upon the time devoted by the Executive.
4. Term. The Term of employment hereunder will commence on the Effective Date and end on the 1st anniversary of the Effective Date and may be extended for additional one (1) year periods (each a “Renewal Term”) by written consent of the Corporation and the Executive at least sixty (60) days before the expiration of the Term or the Renewal Term, as the case may be, unless this Agreement shall have been terminated pursuant to Section 6 of this Agreement.
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5. Compensation and Benefits.
(a) Salary. The Executive shall be paid a base salary (“Base Salary”), payable in accordance with the Corporation's policies from time to time for senior executives, at an annual rate of $400,000 (US) for a full time employment
(b) Stock Option. The Executive shall also receive a five (5) year non-qualified Stock Option to purchase up to 385,789,700 shares of the Company’s common stock at an exercise price of $0.005 (US) per share (the “Stock Option”), vesting on the Effective Date, the form of Stock Option attached hereto.
(c) Discretionary Bonus. In addition to the Base Salary and Stock Option, the Executive shall be entitled to such bonus compensation (in the form of cash, stock options, capital stock or any combination thereof) as the Board of Directors may determine from time to time in its sole discretion. An initial quarterly bonus of $150,000 has been agreed for 100 percent time devoted, thus $ 75 000 for 50 percent time devoted.
(d) Executive Benefits. The Executive shall be entitled to participate in all benefit programs of the Corporation currently existing or hereafter made available to executive and/or salaried employees including, but not limited to, stock option plans, pension and other retirement plans, group life insurance, hospitalization, surgical and major medical coverage, sick leave, salary continuation, vacation and holidays, long-term disability, and other fringe benefits.
(e) Vacation. During each fiscal year of the Corporation, the Executive shall be entitled to such amount of vacation consistent with the Executive's position and length of service to the Corporation.
(f) Business Expense Reimbursement. During the Term of employment, the Executive shall be entitled to receive proper reimbursement for all reasonable, out of-pocket expenses incurred by the Executive approved in advance by the Corporation.
6. Termination.
(a) Death. This Agreement will terminate upon the death of the Executive; however, the Executive's Base Salary shall be paid to the Executive's designated beneficiary, or, in the absence of such designation, to the estate or other legal representative of the Executive, for a period of 6 months after the date of death at the annual rate in effect immediately prior to his death in addition to any Performance Bonus which shall have been earned at the time of the death of the Executive. Other death benefits will be determined in accordance with the terms of the Corporation's benefit programs and plans.
(b) Disability.
(1) The Executive’s employment will terminate in the event of his disability, upon the first (1st) day of the month following the determination of disability as provided below. Following such a termination, the Executive shall be entitled to compensation in accordance with the Corporation's disability compensation practice for senior executives, including any separate arrangement or policy covering the Executive, but in all events the Executive shall continue to receive his Base Salary, at the annual rate in effect immediately prior to the commencement of disability, for 6 months after the date of termination.
(2) For the purposes of this Agreement, “Disability” shall be deemed to have occurred if (A) the Executive is unable, by reason of a physical or mental condition, to perform his duties under this Agreement for an aggregate of one hundred eighty (180) days in any 12-month period or (B) the Executive has a guardian of the person or estate appointed by a court of competent jurisdiction.
Anything herein to the contrary notwithstanding, if, following a termination of employment due to disability, the Executive becomes re-employed, whether as an executive or a consultant, any compensation, annual incentive payments or other benefits earned by the Executive from such employment shall be offset against any compensation continuation due to the Executive hereunder.
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(c) Termination by the Corporation For Cause.
(1) Nothing herein shall prevent the Corporation from terminating Executive for Cause, as hereinafter defined. The Executive shall continue to receive compensation only for the period ending with the date of such termination as provided in this Section 6(c). Any rights and benefits the Executive may have in respect of any other compensation shall be determined in accordance with the terms of such other compensation arrangements or such plans or programs.
(2) “Cause” shall mean: (A) committing or participating in an injurious act of fraud, gross neglect, misrepresentation, embezzlement or dishonesty against the Corporation; (B) committing or participating in any other injurious act or omission wantonly, willfully, recklessly or in a manner which was grossly negligent against the Corporation; (C) engaging in a criminal enterprise involving moral turpitude, financial or securities fraud; (D) conviction for a felony under the laws of the United States or any state thereof; (E) material breach of this Agreement or failure to follow the directives of the Corporation’s Board of Directors; or (F) any assignment of this Agreement in violation of Section 14 of this Agreement.
(3) Notwithstanding anything else contained in this Agreement, this Agreement will not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive a notice of termination stating that the Executive committed one of the types of conduct set forth in Section 6(c)(2) of this Agreement and specifying the particulars thereof and the Executive shall be given a fifteen (15) day period to cure such conduct set forth in Section 6(c)(2).
(d) Termination by the Corporation Other Than For Cause.
(1) The foregoing notwithstanding, the Corporation may terminate the Executive's employment for whatever reason it deems appropriate; provided, however, that in the event such termination is not based on Cause, as provided in Section 6(c) above, the Corporation may terminate this Agreement upon giving the Executive thirty (30) days' prior written notice. During such thirty (30) day period, the Executive shall continue to perform the Executive's duties pursuant to this Agreement. Notwithstanding any such termination, the Corporation shall continue to pay to the Executive the Base Salary and Executive Benefits he would be entitled to receive under this Agreement for the lesser of: (i) the balance of the Term of this Agreement or (ii) twelve (12) months from the date of termination, together with any Performance Bonus which may have been earned as of the date of termination.
(2) In the event that the Executive's employment with the Corporation is terminated pursuant to this Section 6(d), Section 6(f) or Section 7(a) of this Agreement and all references thereto shall be voidable as to the Executive and the Corporation.
(e) Voluntary Termination. If the Executive terminates the Executive's employment on the Executive's own volition (except as provided in Section 6(f) prior to the expiration of the Term of this Agreement, including any renewals thereof, such termination shall constitute a voluntary termination and in such event the Executive shall be limited to the same rights and benefits as provided in connection with a termination for Cause as provided in Section 6(c).
(f) Constructive Termination of Employment. A termination by the Corporation without Cause under Section 6(d) shall be deemed to have occurred upon the occurrence of one or more of the following events without the express written consent of the Executive:
(1) a material breach of the Agreement by the Corporation; or
(2) failure by a successor company to assume the obligations under the Agreement.
Anything herein to the contrary notwithstanding, the Executive shall give written notice to the Board of Directors of the Corporation that the Executive believes an event has occurred which would result in a Constructive Termination of the Executive's employment under this Section 6(f), which written notice shall specify the particular act or acts, on the basis of which the Executive intends to so terminate the Executive's employment, and the Corporation shall then be given the opportunity, within thirty (30) days of its receipt of such notice, to cure said event; provided, however, there shall be no period permitted to cure a second occurrence of the same event and in no event will there be any period to cure following the occurrence of two events described in this Section 6(f).
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7. Covenant Not To Compete and Non-Disclosure of Information.
(a) Covenant Not To Compete. The Executive acknowledges and recognizes the highly competitive nature of the Corporation's business and the goodwill, continued patronage, and the names and addresses of the Corporation's Clients (as hereinafter defined) constitute a substantial asset of the Corporation having been acquired through considerable time, money and effort. Accordingly, in consideration of the execution of this Agreement, and as except as may specifically otherwise approved by the Corporation’s Board of Directors, the Executive agrees to the following:
(1) That during the Restricted Period (as hereinafter defined) and within the Restricted Area (as hereinafter defined), the Executive will not, individually or in conjunction with others, directly or indirectly, engage in any directly Competing Business Activities (as hereinafter defined), whether as an officer, director, proprietor, employer, partner, independent contractor, investor (other than as a holder solely as an investment of less than one percent (1%) of the outstanding capital stock of a publicly traded corporation), consultant, advisor, agent or otherwise.
(2) That during the Restricted Period and within the Restricted Area, the Executive will not, directly or indirectly, compete with the Corporation by soliciting, inducing or influencing any of the Corporation's Clients which have a business relationship with the Corporation at the time during the Restricted Period to discontinue or reduce the extent of such relationship with the Corporation.
(3) That during the Restricted Period and within the Restricted Area, the Executive will not (A) directly or indirectly recruit, solicit or otherwise influence any employee or agent of the Corporation to discontinue such employment or agency relationship with the Corporation, or (B) employ or seek to employ, or cause or permit any business which competes directly or indirectly with the Business Activities of the Corporation (the “Competitive Business”) to employ or seek to employ for any Competitive Business any person who is then (or was at any time within two (2) years prior to the date Executive or the Competitive Business employs or seeks to employ such person) employed by the Corporation.
(b) Approved Activities. The Corporation recognize that the Executive is working part-time and agrees to the following:
(1) The Executive is engaged in multiple other businesses many of them related to the business of the Corporation, where important synergies can be captured.
(2) The Executive will regularly engage team members from other of the Executives businesses in the business of the Corporation as well as engage team members from the Corporation in other of the Executives businesses.
(3) The Executive will regularly engage partners, suppliers and customers from other of the Executives businesses in the business of the Corporation as well as engage partners, suppliers and customers from the Corporation in other of the Executives businesses.
(c) Non-Disclosure of Information. The Executive acknowledges that the Corporation's trade secrets, private or secret processes, methods and ideas, as they exist from time to time, customer lists and information concerning the Corporation's sources, products, services, pricing, training methods, development, technical information, marketing activities and procedures, credit and financial data concerning the Corporation and/or the Corporation's Clients including, but not limited to, all original written, recorded, or graphic matters whatsoever, and any and all copies thereof, pertaining to: (i) business plans, joint venture agreements, licensing agreements, financial information, contracts, customers, products, specifications, plans, drawings, prototypes, processes, methods, research, development or other information relating to the business activities and operations of the Corporation and its affiliates; (ii) patents, patent applications, patent disclosures and inventions; (iii) trademarks, service marks, trade dress, trade names, URL's, designs, artwork, logos and corporate names and registrations and applications for registration thereof, together with all of the goodwill associated therewith; (iv) copyrights (registered or unregistered) and copyrightable works and registrations and applications for registration thereof; (v) mask works and registrations and applications for registration thereof; (vi) computer software, data, data bases and documentation thereof; (vii) trade secrets and other confidential information (including ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial and marketing plans and customer and supplier lists and information); (vii) other intellectual property rights; and (ix) copies and tangible embodiments thereof (in whatever form or medium) (collectively, the “Proprietary Information”) are valuable, special and unique assets of the Corporation, access to and knowledge of which are essential to the performance of the Executive hereunder. In light of the highly competitive nature of the industry in which the Corporation's business is conducted, the Executive agrees that all Proprietary Information, heretofore or in the future obtained by the Executive as a result of the Executive's association with the Corporation shall be considered confidential.
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In recognition of this fact, the Executive agrees that the Executive, during the Restricted Period, will not use or disclose any of such Proprietary Information for the Executive's own purposes or for the benefit of any person or other entity or organization (except the Corporation) under any circumstances unless such Proprietary Information has been publicly disclosed generally or, unless upon written advice of legal counsel reasonably satisfactory to the Corporation, the Executive is legally required to disclose such Proprietary Information. Documents (as hereinafter defined) prepared by the Executive or that come into the Executive's possession during the Executive's association with the Corporation are and remain the property of the Corporation, and when this Agreement terminates, such Documents shall be returned to the Corporation at the Corporation's principal place of business, as provided in the Notice provision (Section 10) of this Agreement. The Executive also agrees to comply with the Corporation’s insider trading guidelines and restrictions.
(d) Documents. “Documents” shall mean all original written, recorded, or graphic matters whatsoever, and any and all copies thereof, including, but not limited to: papers; books; records; tangible things; correspondence; communications; telex messages; memoranda; work-papers; reports; affidavits; statements; summaries; analyses; evaluations; client records and information; agreements; agendas; advertisements; instructions; charges; manuals; brochures; publications; directories; industry lists; schedules; price lists; client lists; statistical records; training manuals; computer printouts; books of account, records and invoices reflecting business operations; all things similar to any of the foregoing however denominated. In all cases where originals are not available, the term “Documents” shall also mean identical copies of original documents or non-identical copies thereof.
(e) Corporation's Clients. The “Corporation's Clients” shall be deemed to be any persons, partnerships, corporations, professional associations or other organizations for or with whom the Corporation has performed Business Activities, including, but not limited to, suppliers or vendors with whom the Corporation has done or is endeavoring to do business.
(f) Restrictive Period. The “Restrictive Period” shall be deemed to be two (2) years following termination of this Agreement.
(g) Restricted Area. The Restricted Area shall be deemed to mean the direct competing services to same customers as served by the Corporation ______________________.
(h) Business Activities. “Business Activities” shall be deemed to any business activities that are in direct competition to the Corporations ongoing business activities during the time of the Agreement.
(i) Covenants as Essential Elements of this Agreement. It is understood by and between the parties hereto that the foregoing covenants contained in Sections 7(a) and (b) are essential elements of this Agreement, and that but for the agreement by the Executive to comply with such covenants, the Corporation would not have agreed to enter into this Agreement. Such covenants by the Executive shall be construed to be agreements independent of any other provisions of this Agreement. The existence of any other claim or cause of action, whether predicated on any other provision in this Agreement, or otherwise, as a result of the relationship between the parties shall not constitute a defense to the enforcement of such covenants against the Executive. To the extent that the covenants contained in this Section 7 may later be deemed by a court to be too broad to be enforced with respect to their duration or with respect to any particular activity or geographic area, the court making such determination shall have the power to reduce the duration or scope of the provision, and to add or delete specific words or phrases to or from the provision. The provision as modified shall then be enforced.
(j) Survival After Termination of Agreement. Notwithstanding anything to the contrary contained in this Agreement, the covenants in Sections 7(a) and (b) shall survive the termination of this Agreement and the Executive's employment with the Corporation.
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(k) Remedies.
(1) The Executive acknowledges and agrees that the Corporation's remedy at law for a breach or threatened breach of any of the provisions of Section 7(a) or (b) herein would be inadequate and the breach shall be per se deemed as causing irreparable harm to the Corporation. In recognition of this fact, in the event of a breach by the Executive of any of the provisions of Section 7(a) or (b), the Executive agrees that, in addition to any remedy at law available to the Corporation, including, but not limited to monetary damages, all rights of the Executive to payment or otherwise under this Agreement and all amounts then or thereafter due to the Executive from the Corporation under this Agreement may be terminated and the Corporation, without posting any bond, shall be entitled to obtain, and the Executive agrees not to oppose the Corporation's request for equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available to the Corporation.
(2) The Executive acknowledges that the granting of a temporary injunction, temporary restraining order or permanent injunction merely prohibiting the use of Proprietary Information would not be an adequate remedy upon breach or threatened breach of Section 7(a) or (b) and consequently agrees, upon proof of any such breach, to the granting of injunctive relief prohibiting any form of competition with the Corporation. Nothing herein contained shall be construed as prohibiting the Corporation from pursuing any other remedies available to it for such breach or threatened breach.
8. Indemnification. The Executive shall continue to be covered by the Articles of Incorporation and By-Laws of the Corporation with respect to matters occurring on or prior to the date of termination of the Executive's employment with the Corporation, subject to all the provisions of Nevada and Federal law, the Articles of Incorporation of the Corporation and the By-Laws of the Corporation then in effect. Such reasonable expenses, including attorneys' fees, that may be covered by these indemnification provisions shall be paid by the Corporation on a current basis in accordance with such provision, the Corporation's Articles of Organization, By-Laws and Nevada law. To the extent that any such payments by the Corporation pursuant to these provisions may be subject to repayment by the Executive pursuant to the provisions of the Corporation's Articles of Incorporation and/or By-Laws, or pursuant to Nevada or Federal law, such repayment shall be due and payable by the Executive to the Corporation within twelve (12) months after the termination of all proceedings, if any, which relate to such repayment and to the Corporation's affairs for the period prior to the date of termination of the Executive's employment with the Corporation and as to which Executive has been covered by such applicable provisions. Further, the Corporation agrees to maintain directors’ and officers’ indemnification and errors and omission insurance policies during all periods of Executive’s employment.
9. Withholding. Anything to the contrary notwithstanding, all payments required to be made by the Corporation hereunder to the Executive or the Executive's estate or beneficiaries shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Corporation may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, the Corporation may accept other arrangements pursuant to which it is satisfied that such tax and other payroll obligations will be satisfied in a manner complying with applicable law or regulation.
10. Notices. Any notice required or permitted to be given under the terms of this Agreement shall be sufficient if in writing and if sent postage prepaid by registered or certified mail, return receipt requested; by overnight delivery; by courier; or by confirmed telecopy, in the case of the Executive to the Executive's last place of business or residence as shown on the records of the Corporation, or in the case of the Corporation to its principal office as set forth in the first paragraph of this Agreement, or at such other place as it may designate.
11. Waiver. Unless agreed in writing, the failure of either party, at any time, to require performance by the other of any provisions hereunder shall not affect its right thereafter to enforce the same, nor shall a waiver by either party of any breach of any provision hereof be taken or held to be a waiver of any other preceding or succeeding breach of any term or provision of this Agreement. No extension of time for the performance of any obligation or act shall be deemed to be an extension of time for the performance of any other obligation or act hereunder.
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12. Completeness and Modification. This Agreement constitutes the entire understanding between the parties hereto superseding all prior and contemporaneous agreements or understandings among the parties hereto concerning the Agreement. This Agreement may be amended, modified, superseded or canceled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties or, in the case of a waiver, by the party to be charged.
13. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute but one agreement. .PDF DocuSign or electronic execution and delivery of this Agreement is legal, valid and binding for all purposes.
14. Binding Effect/Assignment. This Agreement shall be binding upon the parties hereto, their heirs, legal representatives, successors and assigns. This Agreement shall not be assignable by the Executive but shall be assignable by the Corporation in connection with the sale, transfer or other disposition of its business or to any of the Corporation's affiliates controlled by or under common control with the Corporation.
15. Governing Law. This Agreement shall become valid when executed and accepted by Corporation. The parties agree that it shall be deemed made and entered into in the State of Nevada and shall be governed and construed under and in accordance with the laws of the State of Nevada. Anything in this Agreement to the contrary notwithstanding, the Executive shall conduct the Executive's business in a lawful manner and faithfully comply with applicable laws or regulations of the state, city or other political subdivision in which the Executive is located.
16. Further Assurances. All parties hereto shall execute and deliver such other instruments and do such other acts as may be necessary to carry out the intent and purposes of this Agreement.
17. Headings. The headings of the sections are for convenience only and shall not control or affect the meaning or construction or limit the scope or intent of any of the provisions of this Agreement.
18. Survival. Any termination of this Agreement shall not, however, affect the ongoing provisions of this Agreement which shall survive such termination in accordance with their terms.
19. Severability. The invalidity or unenforceability, in whole or in part, of any covenant, promise or undertaking, or any section, subsection, paragraph, sentence, clause, phrase or word or of any provision of this Agreement shall not affect the validity or enforceability of the remaining portions thereof.
20. Arbitration. In the event of any dispute over the interpretation or operation of this Agreement, the parties agree to submit the dispute to arbitration in __________________ County, State of pursuant to the Commercial Arbitration Rules of the American Arbitration Association and to accept the award of the arbitrators as final and binding. The successful party will be awarded reasonable attorneys' fees, expenses and costs.
21. Construction. This Agreement shall be construed within the fair meaning of each of its terms and not against the party drafting the document.
22. Role of Counsel. The Executive acknowledges his understanding that this Agreement was prepared at the request of the Corporation by its counsel, and that such firm did not represent the Executive in conjunction with this Agreement or any of the related transactions. The Executive, as further evidenced by his signature below, acknowledges that he has had the opportunity to obtain the advice of independent counsel of his choosing prior to his execution of this Agreement and that he has availed himself of this opportunity to the extent he deemed necessary and advisable.
23. Conversion of contract. The Corporation and the Executive agree to, in good faith consider a conversion of the Employment Agreement to a Company Consultancy Agreement on the request of the Executive. The conversion should be cost neutral for the Corporation.
THE EXECUTIVE ACKNOWLEDGES THAT THE EXECUTIVE HAS READ ALL OF THE TERMS OF THIS AGREEMENT, UNDERSTANDS THE AGREEMENT, AND AGREES TO ABIDE BY ITS TERMS AND CONDITIONS.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of date set forth in the first paragraph of this Agreement.
| THE CORPORATION: | |
| EDGEMODE, INC. | |
| By: /s/ Simon Wajcenberg | |
| Name: Simon Wajcenberg | |
| Its: CFO | |
| THE EXECUTIVE | |
| /s/ Niclas Adler | |
| Niclas Adler |
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Exhibit 10.2
CONSULTANCY AGREEMENT
This Consultancy Agreement (the “Agreement”) is made and entered into as of September 1, 2024, by and between:
| 1. | AI Capital Mineco Limited, (a company organised under the laws of England and Wales with registered number 14322662) and having its registered address at Wenlock Road, London, England, N1 7GU (the “Consultant”); and | |
| 2. | EdgeMode Inc (a company registered in Nevada) with its principal office location at 110 East Broward Blvd, Fort Lauderdale, Florida 33301, USA (the “Client”). |
Each referred to individually as a “Party” and collectively as the “Parties”.
1. SCOPE OF SERVICES
1.1 The Consultant agrees to provide advisory and consultancy services (the “Services”) to the Client in connection with facilitating the Client’s acquisition of all shares in Synthesis Analytics Production Limited (a company organised under the laws of England and Wales with registered number 14342669) (the “Transaction”).
1.2 The Services shall include but not be limited to:
| · | Providing strategic and financial advisory related to the acquisition. | |
| · | Assisting in the negotiation process. | |
| · | Coordinating with relevant third parties, including legal and financial advisors. | |
| · | Conducting due diligence support as needed. | |
| · | Providing guidance on regulatory and compliance matters related to the acquisition. |
2. TERM OF AGREEMENT
2.1 This Agreement shall commence on September 1, 2024 and shall remain in effect until the earlier of:
| · | The completion of the Transaction and payment of the consultancy fee; or | |
| · | Termination by either Party in accordance with this Agreement. |
3. CONSULTANCY FEES AND PAYMENT
3.1 The Client agrees to pay the Consultant a fixed consultancy fee of USD 300,000 (the “Consultancy Fee”).
3.2 The Consultancy Fee shall be payable in full upon the execution of the acquisition agreement between the Client and the shareholders of Synthesis Analytics Production Limited.
3.3 The Consultant shall issue an invoice to the Client upon the signing of the acquisition agreement, and the Client shall pay the invoice on completion of a $2,000,000 USD capital raise by the Client.
3.4 All payments shall be made by wire transfer to the Consultant’s designated bank account as follows:
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Ai Capital Mineco Ltd
Account no: 515867620914719
Routing no: 084009519 Swift/BIC: TRWIUS35XXX
Bank: Wise US Inc, 30 W. 26th Street, Sixth Floor, New York, NY, 10010, United States
3.5 The Consultancy Fee is inclusive of any applicable Value Added Tax (VAT) or other sales taxes, which shall be borne by the Client as required under applicable law.
4. TERMINATION
4.1 Either Party may terminate this Agreement with written notice if:
| · | The Transaction is abandoned or not completed within 12 months from the Effective Date. | |
| · | The other Party breaches a material provision of this Agreement and fails to remedy such breach within 20 business days after receiving written notice. |
4.2 In the event of termination, the Consultant shall not be entitled to any payment unless the acquisition agreement has been signed before termination.
5. CONFIDENTIALITY
5.1 Both Parties agree to keep all non-public information received from the other Party confidential and not to disclose such information to any third party without prior written consent, except where required by law.
5.2 This confidentiality obligation shall survive for two (2) years following the termination or expiration of this Agreement.
6. INDEPENDENT CONTRACTOR STATUS
6.1 The Consultant shall perform the Services as an independent contractor, and nothing in this Agreement shall create an employer-employee relationship, partnership, or joint venture between the Parties.
6.2 The Consultant shall be responsible for all taxes, national insurance contributions, and other statutory payments related to its fees.
7. GOVERNING LAW AND DISPUTE RESOLUTION
7.1 This Agreement shall be governed by and construed in accordance with the laws of England and Wales.
7.2 Any dispute arising out of or in connection with this Agreement shall first be resolved through good-faith negotiations. If the dispute is not resolved within 30 days, it shall be referred to arbitration under the rules of the London Court of International Arbitration (LCIA), and the arbitration proceedings shall be held in London, England.
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8. GENERAL PROVISIONS
8.1 Entire Agreement: This Agreement constitutes the entire agreement between the Parties regarding the subject matter and supersedes all prior agreements, whether written or oral.
8.2 Amendments: Any amendments to this Agreement must be made in writing and signed by both Parties.
8.3 No Waiver: A Party’s failure to enforce any provision of this Agreement shall not be deemed a waiver of its rights.
8.4 Severability: If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
8.5 Assignment: Neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party.
9. NOTICES
9.1 Any notices under this Agreement shall be delivered to the addresses provided below:
| · | Consultant: |
AI Capital Mineco Limited
Wenlock Road, London, England, N1 7GU
niclas@ai-capital.se
| · | Client: |
EdgeMode Inc
110 East Broward Blvd, Fort Lauderdale, Florida 33301, USA
simon@edgemode.io
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
Signed for and on behalf of AI Capital Mineco Limited:
Authorized Signatory: /s/ Niclas Adler
Name: Dr. Niclas Adler
Title: Director
Date: September 1, 2024
Signed for and on behalf of EdgeMode Inc.:
Authorized Signatory: /s/ Simon Wajcenberg
Name: Simon Wajcenberg
Title: Director
Date: September 1, 2024
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Exhibit 10.3
AMENDMENT NO. 1
TO THE
EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment No. 1 (the “Amendment”) to the Executive Employment Agreement (the “Agreement”) is entered into 7th April 2025 by and between Edgemode, Inc., a Nevada corporation (the “Company”) and Charles Faulkner, an individual (the “Employee”). All terms not otherwise defined herein shall have the same meaning as in the Agreement.
WHEREAS, the Company has entered into a Share Exchange Agreement by and among the Company, Synthesis Analytics Production Ltd and Adler Capital Limited (the “Share Exchange”).
WHEREAS, the parties wish to amend the Agreement effective on the closing of the Share Exchange.
NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree that the Agreement is amended as follows:
1. Effective on the closing date of the Share Exchange, the Base Salary under Section 5(a) of the Agreement is at an annual rate of $400,000 (US).
2. Effective on the closing date of the Share Exchange the Executive shall be entitled to a quarterly Discretionary Bonus under Section 5(c) of the Agreement of up to $150,000 (US) as determined by the Board of Directors.
3. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. A signed copy of this Amendment delivered by facsimile or electronically scanned signatures shall constitute original signatures.
4. Except as otherwise set forth herein, all other terms and conditions of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the day and date first above written.
| Edgemode, Inc. | ||
| By: | /s/ Simon Wajcenberg | |
| Name: | Simon Wajcenberg | |
| Its: | CFO | |
| /s/ Charles Faulkner | ||
| Charles Faulkner | ||
Exhibit 10.4
STOCK OPTION GRANT
This STOCK OPTION GRANT dated as of 7th April, 2025 (the “Grant”) is delivered by Edgemode, Inc., a Nevada corporation (the “Company”) to _____________, an ______________ (the “____________”).
RECITALS
| A. | The Board of Directors of the Company (the “Board”) has decided to make a stock option grant to __________ as part of the consideration payable to ________ pursuant to a ______________ (the “_________ Agreement”). |
| B. | The Board has approved the grant of the options. |
NOW, THEREFORE, the parties to this Grant, intending to be legally bound hereby, agree as follows:
| 1. | Grant of Option. Subject to the terms and conditions set forth in this Grant, the Company hereby grants to the Employee an option (“Option”) to purchase ___________ shares of common stock of the Company (“Option Shares”) at an exercise price of $0.005 per Share (the “Option Price”). The Option shall become exercisable according to Paragraph 2 below. |
| 2. | Exercisability of Option. The option shall be a non-qualified option and shall become vested and exercisable immediately. |
| 3. | Term of Option. The stated expiration date of the option shall be the five (5) year anniversary of the date hereof, subject to expiration on the termination date of the Employment Agreement in the event the Executive is terminated for “Cause” as defined under the Employment Agreement. Upon the termination or expiration of the Employment Agreement for any other reason this Option shall expire on the five (5) year anniversary of the date hereof. |
| 4. | Exercise Procedures. |
(a) Subject to the provisions of Paragraphs 2 and 3 above, the Employee may exercise part or all of the exercisable Option by giving the Board written notice of intent to exercise in the manner provided in this Stock Option Grant, specifying the number of Shares as to which the Option is to be exercised. On the delivery date, the Employee shall pay the exercise price (i) in cash, or (ii) in the event the Company’s common stock is publicly traded, with the approval of the Board, by delivering shares of the Company’s common stock which shall be valued at their Fair Market Value (as defined below) on the date of delivery, or (iii) with the approval of the Board, by a combination of (i) and (ii). Fair Market Value of a share of Common stock as of a particular date (the “Determination Date”) shall mean if the Company's common stock is traded on an exchange or is quoted on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the NYSE American Stock Exchange or the OTC Markets, then the average of the closing sale prices of the common stock for the five (5) trading days immediately prior to (but not including) the Determination Date.
(b) The obligation of the Company to deliver Option Shares upon exercise of the Option shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate by the Board, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations. The Company may require that the Employee represent that the Employee is purchasing Option Shares for the Employee’s own account and not with a view to or for sale in connection with any distribution of the Shares, or such other representation as the Board deems appropriate. The Company shall withhold amounts required to be withheld for any taxes, if applicable. Subject to Board approval, the Employee may elect to satisfy any income tax withholding obligation of the Company with respect to the Option by having Option Shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.
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5. Reservation of Common stock. The Company hereby represents and warrants that there have been reserved, and the Company shall at all applicable times keep reserved until issued (if necessary) as contemplated by this Section 5, out of the authorized and unissued shares of common stock, sufficient shares to provide for the exercise of the rights of purchase represented by this Option. The Company agrees that all Option Shares issued upon due exercise of the Option shall be, at the time of delivery of the certificates for such Option Shares, duly authorized, validly issued, fully paid and non-assessable shares of common stock of the Company.
6. Adjustments. Subject and pursuant to the provisions of this Section 6, the Option Price and number of Option Shares subject to this Option shall be subject to adjustment from time to time as set forth hereinafter.
(a) If the Company shall, at any time or from time to time while this Option is outstanding, pay a dividend or make a distribution on its common stock in shares of common stock, subdivide its outstanding shares of common stock into a greater number of shares or combine its outstanding shares of common stock into a smaller number of shares or issue by reclassification of its outstanding shares of common stock any shares of its capital stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then (i) the Option Price in effect immediately prior to the date on which such change shall become effective shall be adjusted by multiplying such Option Price by a fraction, the numerator of which shall be the number of shares of common stock outstanding immediately prior to such change and the denominator of which shall be the number of shares of Common stock outstanding immediately after giving effect to such change and (ii) the number of Option Shares purchasable upon exercise of this Option shall be adjusted by multiplying the number of Option Shares purchasable upon exercise of this Option immediately prior to the date on which such change shall become effective by a fraction, the numerator of which is shall be the Option Price in effect immediately prior to the date on which such change shall become effective and the denominator of which shall be the Option Price in effect immediately after giving effect to such change, calculated in accordance with clause (i) above. Such adjustments shall be made successively whenever any event listed above shall occur.
(b) In case the Company shall do any of the following (each, a “Triggering Event”): (i) consolidate or merge with or into any other Person (as defined below) and the Company shall not be the continuing or surviving corporation of such consolidation or merger, or (ii) permit any other Person to consolidate with or merge into the Company and the Company shall be the continuing or surviving Person but, in connection with such consolidation or merger, any capital stock of the Company shall be changed into or exchanged for securities of any other Person or cash or any other property, or (iii) transfer all or substantially all of its properties or assets to any other Person, or (iv) effect a capital reorganization or reclassification of its capital stock, then, and in the case of each such Triggering Event, proper provision shall be made to the Option Price and the number of Option Shares that may be purchased upon exercise of this Option so that, upon the basis and the terms and in the manner provided in this Option, the Option holder of this Option shall be entitled upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this Option is not exercised prior to such Triggering Event, to receive at the Option Price as adjusted to take into account the consummation of such Triggering Event, in lieu of the common stock issuable upon such exercise of this Option prior to such Triggering Event, the securities, cash and property to which such Option holder would have been entitled upon the consummation of such Triggering Event if such Option holder had exercised the rights represented by this Option immediately prior thereto (including the right of a shareholder to elect the type of consideration it will receive upon a Triggering Event), subject to adjustments (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for elsewhere in this Section 6, and the Option Price shall be adjusted to equal the product of (A) the closing price of the common stock of the continuing or surviving corporation as a result of such Triggering Event as of the date immediately preceding the date of the consummation of such Triggering Event multiplied by (B) the quotient of (i) the Option Price divided by (ii) the Fair Market Value per share of common stock as of the date immediately preceding the issuance date of this Option. Immediately upon the occurrence of a Triggering Event, the Company shall notify the Option holder in writing of such Triggering Event and provide the calculations in determining the number of Option Shares issuable upon exercise of the new Option and the adjusted Option Price. Upon the Option holder’s request, the continuing or surviving corporation as a result of such Triggering Event shall issue to the Option holder a new Option of like tenor evidencing the right to purchase the adjusted number of Option Shares and the adjusted Option Price pursuant to the terms and provisions of this Section 6(b). For purposes of this Section 6(b), “Person” means any individual, corporation, partnership, joint venture, limited liability company, association or any other entity.
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7. No Employment or Other Rights. The grant of the Option shall not confer upon the Employee any right to be retained by or in the employ or service of the Company and shall not interfere in any way with the right of the Company to terminate the Employment Agreement.
8. No Shareholder Rights. Neither the Employee, nor any person entitled to exercise the Employee’s rights in the event of Employee’s death, shall have any of the rights and privileges of a shareholder with respect to the Shares subject to the Option, until certificates for Shares have been issued upon the exercise of the Option.
9. Assignment and Transfers. The rights and interests of the Employee under this Grant may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Employee, by will or by the laws of descent and distribution. In the event of any attempt by the Employee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided for in this Grant, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Employee, and the Option and all rights hereunder shall thereupon become null and void.
10. Applicable Law. The validity, construction, interpretation and effect of this instrument shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to the conflicts of laws provisions thereof.
11. Notice. Any notice to the Company provided for in this instrument shall be addressed to the Company in care of the Chief Financial Officer at the at the address provided under the Employment Agreement, and any notice to the Employee shall be addressed to Employee at the address provided under the Employment Agreement, or to such other address as either party may designate to the other party in writing. Any notice shall be delivered by hand, sent by e-mail or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.
IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute this Agreement effective as of the date above.
| EdgeMode, Inc. | |
| By: | |
| Name: | |
| Its: |
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Exhibit 10.5
AGREEMENT – POWER PURCHASE AND LEASE OF ACCESS TO GRID CONNECTION FOR DATA CENTER PURPOSES
THIS AGREEMENT is made and entered into December 27, 2024 by and between Marviken ONE AB (a company organised under the laws of Sweden with registered number 559223-1509) and having its registrered address at Kungsportsavenyen 26, Box 19055, 400 12 Göteborg, Sweden (hereinafter referred to as "Provider"), and Synthesis Analytics Production Limited, (a company organised under the laws of England and Wales with registered number 14342669) and having its registered address at Wenlock Road, London, England, N1 7GU (hereinafter referred to as "User").
ARTICLE I – AGREEMENT SCOPE
The Provider, in consideration of the lease fees to be paid and the covenants and agreements to be performed and observed by the User, does hereby provide access to the User and the User does hereby lease the grid access with agreed capacity and performance features as described in Article V and by reference made a part hereof (the "Leased Capacity").
The Provider, in consideration of the fees to be paid and the covenants and agreements to be performed and observed by the User, does hereby provide the User with Electricity and the User does hereby buy the Electricity as described in this Agreement (the "Power Purchase").
ARTICLE II - LEASE TERM
Section l. Total Term of Lease and Power Purchase. The term of this Lease and Power Purchase shall begin on the commencement date, as defined in Section 2 of this Article II, and shall terminate on December 31, 2034.
Section 2. Commencement Date. The "Commencement Date" is agreed to be January 1, 2025.
ARTICLE III - EXTENSIONS OF THE AGREEMENT AND EXPANSIONS OF CAPACITY
Section 1. Extensions. The parties hereto may elect to extend this Agreement upon such terms and conditions as may be agreed upon in writing and signed by the parties at the time of any such extension.
Section 2. Expansions. The parties may agree to expand the Leased Capacity.
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ARTICLE IV - DETERMINATION OF FEES FOR LEASED CAPACITY AND POWER PURCHASE
The User agrees to pay the Provider and the Provider agrees to accept, during the term hereof, at such place as the Provider shall from time to time direct by notice to the User, at the following rates and times:
Section 1. Lease of Grid Access Capacity, fixed fee. The User agrees to rent up to 20 MW Grid Access Capacity. The performance features are defined in Article V. The agreed fixed fee is SEK 454 000 per month and SEK 25,50 per KW and month up to 10 MW usage and SEK 817 200 per month and SEK 20,40 per KW and month with a usage between 10 and 20 MW. The User agree that the Grid access point is used together with other projects in the Providers Smart Energy Cluster in Marviken.
Section 2. Transmission fee. The transmission fee is agreed to SEK 0,054 per KWh with a usage up to 7 200 MWh per month and SEK 0,048 per KWh with a usage between 7 200 and 14 400 MWh per month.
Section 3. Fee for Power Purchase. The Provider buy electricity on NordPool. The Provider will provide the User with available options regarding portfolio strategy and type of electricity for the User to decide. The Provider will use its best efforts to achieve best possible price on electricity for the User. The Provider guarantees to buy up to the full Leased Capacity for the User and charge the User SEK 0,02 per purchased KWh.
Section 4. Costs for Infrastructure. The Costs for necessary infrastructure including any needed redundancy of infrastructure to Access the Grid is paid by the User. Sourcing and deployment are organized by the Provider based on demand from the User.
Section 5. Payment of Fees for Leased Capacity. The Lease Fee shall be payable in Monthly installments against invoice starting on Commencement Date January 1, 2025.
Section 6. Adjustment of Lease Fees. The Lease Fee shall be pegged to the annual regional grid tariffs set by Vattenfall as the regional grid operator and adjusted annually on January 1 during the Agreement.
Section 7. Payment of Fee for Power Purchase. The User will pay the Provider for the actual costs for purchasing the needed electricity at Nord Pool plus the agreed SEK 0,02 per KWh. The Fee for Power Purchase shall be payable in Monthly installments against invoice starting on Commencement Date January 1, 2025. The User will pay a deposit to cover the expected coming 30 days of electricity purchase costs. The Provider will send a proforma invoice for the deposit.
ARTICLE V – DEPICTION OF THE GRID ACCESS
| Nominal | Grid | |||
| Access Points | Current | Municipality | Area | Facility ID |
| Marviken outgoing | 10 kV | Norrköping | VFO | 735 999 100 015 982 691 |
| Marviken incoming | 10 kV | Norrköping | VFO | 735 999 100 015 983 704 |
The Grid Access is provided to the space on site rented by the User, or any other point agreed by the Parties.
The Provider have the right to introduce additional access points and other nominal current within the same grid area as the total capacity of the grid access expands.
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ARTICLE VI - USER'S COVENANTS
Section 1. User Covenants. User covenants and agrees as follows:
| A) | To procure any licenses and permits required for any use made of the Leased Capacity by User, and upon the expiration or termination of this Lease, to remove its management of the Leased Capacity; | |
| B) | To permit Provider and its agents to examine the Leased Capacity at reasonable times, provided that Provider shall not thereby unreasonably interfere with the conduct of User's business; | |
| C) | To permit Provider to enter the Leased Capacity to inspect such repairs, improvements, alterations or additions thereto as may be required under the provisions of this Lease. If, as a result of such repairs, improvements, alterations, or additions, User is deprived of the use of the Leased Capacity, the Rental fee shall be abated or adjusted, as the case may be, in proportion to that time during which, and to that portion of the Leased Capacity of which, User shall be deprived as a result thereof. |
ARTICLE VII - INDEMNITY BY USER
Section l. Indemnity and Public Liability. The User shall save Provider harmless and indemnify Provider from all injury, loss, claims or damage to any person or property while utilizing the Leased Capacity, unless caused by the willful acts or omissions or gross negligence of Provider, its employees, agents, licensees or contractors.
ARTICLE VIII - INSURANCE
Section 1. Insurance Proceeds. In the event of any damage to or destruction of the Leased Capacity, User shall adjust the loss and settle all claims with the insurance companies issuing such policies. The parties hereto do irrevocably assign the proceeds from such insurance policies for the purposes hereinafter stated to any institutional first mortgagee or to Provider and User jointly, if no institutional first mortgagee then holds an interest in the Leased Capacity. All proceeds of said insurance shall be paid into a trust fund under the control of any institutional first mortgagee, or of Provider and User if no institutional first mortgagee then holds an interest in the Leased Capacity, for repair, restoration, rebuilding or replacement, or any combination thereof, of the Leased Capacity or of the improvements in the Leased Capacity. In case of such damage or destruction, Provider shall be entitled to make withdrawals from such trust fund, from time to time, upon presentation of:
a. bills for labor and materials expended in repair, restoration, rebuilding or replacement, or any combination thereof;
b. Provider's sworn statement that such labor and materials for which payment is being made have been furnished or delivered on site; and
Any insurance proceeds in excess of such proceeds as shall be necessary for such repair, restoration, rebuilding, replacement or any combination thereof shall be the sole property of Provider subject to any rights therein of Provider's mortgagee, and if the proceeds necessary for such repair, restoration, rebuilding or replacement, or any combination thereof shall be inadequate to pay the cost thereof, User shall suffer the deficiency.
Section 2. Subrogation. Provider and User hereby release each other, to the extent of the insurance coverage provided hereunder, from any and all liability or responsibility (to the other or anyone claiming through or under the other by way of subrogation or otherwise) for any loss to or damage of property covered by the fire and extended coverage insurance policies insuring the Leased Capacity and any of Provider's property, even if such loss or damage shall have been caused by the fault or negligence of the other party.
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ARTICLE IX - DAMAGE TO THE LEASED CAPACITY
Section 1. Abatement or Adjustment of Rental fee. If the whole or any part of the Leased Capacity shall be damaged or destroyed by fire or other casualty after the execution of this Lease and before the termination hereof, then in every case the Rental fee reserved in Article IV herein and other charges, if any, shall be abated or adjusted, as the case may be, in proportion to that portion of the Leased Capacity of which User shall be deprived on account of such damage or destruction and the work of repair, restoration, rebuilding, or replacement or any combination thereof, of the improvements so damaged or destroyed, shall in no way be construed by any person to effect any reduction of sums or proceeds payable under any Rental fee insurance policy.
Section 2. Repairs and Restoration. Provider agrees that in the event of the damage or destruction of the Leased Capacity, Provider forthwith shall proceed to repair, restore, replace or rebuild the Leased Capacity, to substantially the condition in which the same were immediately prior to such damage or destruction. The Provider thereafter shall diligently prosecute said work to completion without delay or interruption except for events beyond the reasonable control of Provider. Notwithstanding the foregoing, if Provider does not either obtain necessary permits within ninety (90) days of the date of such damage or destruction, or complete such repairs, rebuilding or restoration and comply with conditions (a), (b) and (c) in Section 1 of Article X within nine (9) months of such damage or destruction, then User may at any time thereafter cancel and terminate this Lease by sending ninety (90) days written notice thereof to Provider, or, in the alternative, User may, during said ninety (90) day period, apply for the same and Provider shall cooperate with User in User's application. Notwithstanding the foregoing, if such damage or destruction shall occur during the last year of the term of this Lease, or during any renewal term, and shall amount to twenty-five (25%) percent or more of the replacement cost, this Lease, except as hereinafter provided in Section 3 of Article XII, may be terminated at the election of either Provider or User, provided that notice of such election shall be sent by the party so electing to the other within thirty (30) days after the occurrence of such damage or destruction. Upon termination, as aforesaid, by either party hereto, this Lease and the term thereof shall cease and come to an end, any unearned Rental fee or other charges paid in advance by User shall be refunded to User, and the parties shall be released hereunder, each to the other, from all liability and obligations hereunder thereafter arising.
ARTICLE X - DEFAULT
Section 1. Providers Remedies. In the event that:
a. User shall on three or more occasions be in default in the payment of Lease fee or other charges herein required to be paid by User (default herein being defined as payment received by Provider ten or more days subsequent to the due date), regardless of whether or not such default has occurred on consecutive or non-consecutive months; or
b. User has caused a lien to be filed against the Provider's Capacity and said lien is not removed within thirty (30) days of recordation thereof; or
c. User shall default in the observance or performance of any of the covenants and agreements required to be performed and observed by User hereunder for a period of thirty (30) days after notice to User in writing of such default (or if such default shall reasonably take more than thirty (30) days to cure, User shall not have commenced the same within the thirty (30) days and diligently prosecuted the same to completion); or
d. Sixty (60) days have elapsed after the commencement of any proceeding by or against User, whether by the filing of a petition or otherwise, seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or future Federal Bankruptcy Act or any other present or future applicable federal, state or other statute or law, whereby such proceeding shall not have been dismissed (provided, however, that the non-dismissal of any such proceeding shall not be a default hereunder so long as all of User's covenants and obligations hereunder are being performed by or on behalf of User); then Provider shall be entitled to its election (unless User shall cure such default prior to such election), to exercise concurrently or successively, any one or more of the following rights:
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i. Terminate this Lease by giving User notice of termination, in which event this Lease shall expire and terminate on the date specified in such notice of termination, with the same force and effect as though the date so specified were the date herein originally fixed as the termination date of the term of this Lease, and all rights of User under this Lease and in and to the Capacity shall expire and terminate, and User shall remain liable for all obligations under this Lease arising up to the date of such termination, and User shall surrender the Capacity to Provider on the date specified in such notice; or
ii. Terminate this Lease as provided herein and recover from User all damages Provider may incur by reason of User's default, including, without limitation, a sum which, at the date of such termination, represents the then value of the excess, if any, of (a) the Minimum Rental fee, Percentage Rental fee, Taxes and all other sums which would have been payable hereunder by User for the period commencing with the day following the date of such termination and ending with the date herein before set for the expiration of the full term hereby granted, over (b) the aggregate reasonable value of the Capacity for the same period, all of which excess sum shall be deemed immediately due and payable; or
iii. Without terminating this Lease, declare immediately due and payable all Minimum Rental fee, Taxes, and other Rental fees and amounts due and coming due under this Lease for the entire remaining term hereof, together with all other amounts previously due, at once; provided, however, that such payment shall not be deemed a penalty or liquidated damages but shall merely constitute payment in advance of Rental fee for the remainder of said term. Upon making such payment, User shall be entitled to receive from Provider all Rental fees received by Provider from other assignees, Users, and sub- users on account of said Capacity during the term of this Lease, provided that the compensation to which User shall so become entitled shall in no event exceed the entire amount actually paid by User to Provider pursuant to the preceding sentence less all costs, expenses and attorney's fees of Provider incurred in connection with the reletting of the Capacity; or
iv. Without terminating this Lease, and with or without notice to User, Provider may in its own name but as agent for User enter into and upon and take possession of the Premises or any part thereof, and, at Provider's option, remove persons and property therefrom, and such property, if any, may be removed and stored in a warehouse or elsewhere at the cost of, and for the account of User, all without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby, and Provider may provide the Capacity or any portion thereof as the agent of User with or without advertisement, and by private negotiations and for any term upon such terms and conditions as Provider may deem necessary or desirable in order to relet the Capacity. Provider shall in no way be responsible or liable for any Rental fee concessions or any failure to provide the Capacity or any part thereof, or for any failure to collect any Rental fee due upon such reletting. Upon such reletting, all Rental fee received by Provider from such reletting shall be applied: first, to the payment of any indebtedness (other than any Rental fee due hereunder) from User to Provider; second, to the payment of any costs and expenses of such reletting, including, without limitation, brokerage fees and attorney's fees and costs of alterations and repairs; third, to the payment of Rental fee and other charges then due and unpaid hereunder; and the residue, if any shall be held by Provider to the extent of and for application in payment of future Rental fee as the same may become due and payable hereunder. In reletting the Premises as aforesaid, Provider may grant Rental fee concessions and User shall not be credited therefor. If such Rental fee received from such reletting shall at any time or from time to time be less than sufficient to pay to Provider the entire sums then due from User hereunder, User shall pay any such deficiency to Provider. Such deficiency shall, at Provider's option, be calculated and paid monthly. No such reletting shall be construed as an election by Provider to terminate this Lease unless a written notice of such election has been given to User by Provider. Notwithstanding any such reletting without termination, Provider may at any time thereafter elect to terminate this Lease for any such previous default provided same has not been cured; or
v. Without liability to User or any other party and without constituting a constructive or actual eviction, suspend or discontinue furnishing or rendering to User any property, material, labor, Utilities or other service, whether Provider is obligated to furnish or render the same, so long as User is in default under this Lease; or
vi. Allow the Premises to remain unoccupied and collect Rental fee from User as it comes due; or
vii. Foreclose the security interest described herein, including the immediate taking of possession of all property on or in the Premises; or
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viii. Pursue such other remedies as are available at law or equity.
e. Provider's pursuit of any remedy of remedies, including without limitation, any one or more of the remedies stated herein shall not (1) constitute an election of remedies or preclude pursuit of any other remedy or remedies provided in this Lease or any other remedy or remedies provided by law or in equity, separately or concurrently or in any combination, or (2) sever as the basis for any claim of constructive eviction, or allow User to withhold any payments under this Lease.
Section 2. Providers Self Help. If in the performance or observance of any agreement or condition in this Lease contained on its part to be performed or observed and shall not cure such default within thirty (30) days after notice from Provider specifying the default (or if such default shall reasonably take more than thirty (30) days to cure, shall diligently prosecuted the same to completion), Provider may, at its option, without waiving any claim for damages for breach of agreement, at any time thereafter cure such default for the account of User, and any amount paid or contractual liability incurred by Provider in so doing shall be deemed paid or incurred for the account of User and User agrees to reimburse Provider therefor and save Provider harmless therefrom. Provided, however, that Provider may cure any such default as aforesaid prior to the expiration of said waiting period, without notice to User if any emergency situation exists, or after notice to User, if the curing of such default prior to the expiration of said waiting period is reasonably necessary to protect the Leased Premises or Provider's interest therein, or to prevent injury or damage to persons or property. If User shall fail to reimburse Provider upon demand for any amount paid for the account of User hereunder, said amount shall be added to and become due as a part of the next payment of Rental fee due and shall for all purposes be deemed and treated as Rental fee hereunder.
Section 3. Users Self Help. If Provider shall default in the performance or observance of any agreement or condition in this Lease contained on its part to be performed or observed, and if Provider shall not cure such default within thirty (30) days after notice from User specifying the default (or, if such default shall reasonably take more than thirty (30) days to cure, and Provider shall not have commenced the same within the thirty (30) days and diligently prosecuted the same to completion), User may, at its option, without waiving any claim for damages for breach of agreement, at any time thereafter cure such default for the account of Provider and any amount paid or any contractual liability incurred by User in so doing shall be deemed paid or incurred for the account of Provider and Provider shall reimburse User therefor and save User harmless therefrom. Provided, however, that User may cure any such default as aforesaid prior to the expiration of said waiting period, without notice to Provider if an emergency situation exists, or after notice to Provider, if the curing of such default prior to the expiration of said waiting period is reasonably necessary to protect the Leased Capacity or User's interest therein or to prevent injury or damage to persons or property. If Provider shall fail to reimburse User upon demand for any amount paid or liability incurred for the account of Provider hereunder, said amount or liability may be deducted by User from the next or any succeeding payments of Rental fee due hereunder; provided, however, that should said amount or the liability therefor be disputed by Provider, Provider may contest its liability or the amount thereof, through arbitration or through a declaratory judgment action and Provider shall bear the cost of the filing fees therefor.
ARTICLE XI - EXTENSIONS/WAIVERS/DISPUTES
Section l. Extension Period. Any extension hereof shall be subject to the provisions of Article III hereof.
Section 2. Holding Over. In the event that User or anyone claiming under User shall continue occupancy of the Leased Premises after the expiration of the term of this Lease or any renewal or extension thereof without any agreement in writing between Provider and User with respect thereto, such occupancy shall not be deemed to extend or renew the term of the Lease, but such occupancy shall continue as a tenancy at will, from month to month, upon the covenants, provisions and conditions herein contained. The Rental fee shall be the Rental fee in effect during the term of this Lease as extended or renewed, prorated and payable for the period of such occupancy.
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Section 3. Waivers. Failure of either party to complain of any act or omission on the part of the other party, no matter how long the same may continue, shall not be deemed to be a waiver by said party of any of its rights hereunder. No waiver by either party at any time, express or implied, of any breach of any provision of this Lease shall be deemed a waiver of a breach of any other provision of this Lease or a consent to any subsequent breach of the same or any other provision. If any action by either party shall require the consent or approval of the other party, the other party's consent to or approval of such action on any one occasion shall not be deemed a consent to or approval of said action on any subsequent occasion or a consent to or approval of any other action on the same or any subsequent occasion. Any and all rights and remedies which either party may have under this Lease or by operation of law, either at law or in equity, upon any breach, shall be distinct, separate and cumulative and shall not be deemed inconsistent with each other, and no one of them, whether exercised by said party or not, shall be deemed to be an exclusion of any other; and any two or more or all of such rights and remedies may be exercised at the same time.
Section 4. Disputes. It is agreed that, if at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of the said party to institute suit for the recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease. If at any time a dispute shall arise between the parties hereto as to any work to be performed by either of them under the provisions hereof, the party against whom the obligation to perform the work is asserted may perform such work and pay the costs thereof "under protest" and the performance of such work shall in no event be regarded as a voluntary performance and shall survive the right on the part of the said party to institute suit for the recovery of the costs of such work. If it shall be adjudged that there was no legal obligation on the part of the said party to perform the same or any part thereof, said party shall be entitled to recover the costs of such work or the cost of so much thereof as said party was not legally required to perform under the provisions of this Lease and the amount so paid by User may be withheld or deducted by User from any Rental fees herein reserved.
Section 5. Users Right to cure Providers Default. In the event that Provider shall fail, refuse or neglect to pay any mortgages, liens or encumbrances, the judicial sale of which might affect the interest of User hereunder, or shall fail, refuse or neglect to pay any interest due or payable on any such mortgage, lien or encumbrance, User may pay said mortgages, liens or encumbrances, or interest or perform said conditions and charge to Provider the amount so paid and withhold and deduct from any Rental fees herein reserved such amounts so paid, and any excess over and above the amounts of said Rental fees shall be paid by Provider to User.
Section 6. Notices. All notices and other communications authorized or required hereunder shall be in writing and shall be given by mailing the same by certified mail, return receipt requested, postage prepaid, and any such notice or other communication shall be deemed to have been given when received by the party to whom such notice or other communication shall be addressed. If intended for the Provider the same will be mailed to the address herein above set forth or such other address as Provider may hereafter designate by notice to User, and if intended for User, the same shall be mailed to User at the address herein above set forth, or such other address or addresses as User may hereafter designate by notice to Provider.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first above written or have caused this Lease to be executed by their respective officers thereunto duly authorized.
Signed, sealed and delivered in the presence of:
| /s/ Dr. Niclas Adler | /s/ Dr. Niclas Adler | |
| Dr. Niclas Adler | Dr. Niclas Adler | |
| Marviken ONE AB | Synthesis Analytics Production Limited |
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ADDENDUM TO AGREEMENT – POWER PURCHASE AND LEASE OF ACCESS TO GRID CONNECTION FOR DATA CENTER PURPOSES
THIS ADDENDUM is made and entered into February 20, 2025 by and between Marviken ONE AB (a company organised under the laws of Sweden with registered number 559223- 1509) and having its registrered address at Kungsportsavenyen 26, Box 19055, 400 12 Göteborg, Sweden (hereinafter referred to as "Provider"), and Synthesis Analytics Production Limited, (a company organised under the laws of England and Wales with registered number 14342669) and having its registered address at Wenlock Road, London, England, N1 7GU (hereinafter referred to as "User").
ARTICLE I – ADDENDUM SCOPE
In the Agreement – Power Purchase and Lease of Access to Grid Connection for Data Center Purposes the Parties agree to a capacity up to 20 MW and further expansions is to be agreed according to Article II, Section 2.
The Parties hereby, agree to expand the full capacity to maximum 95 MW.
ARTICLE II – TERMS FOR THE EXPANSION OF CAPACITY
Section l. Fees. The Fees for the Expanded Capacity will follow the Fees in the Agreement – Power Purchase and Lease of Access to Grid Connection for Data Center Purposes.
Section 2. Timeline. The timeline for access to the Expanded Capacity will follow from the timelines provided by the regional grid owner Vattenfall.
Section 3. Costs for the Expansion of Capacity. The Costs for Expansion of Capacity will be carried by the User with an addition of 15% for the Provider to lead the work with securing the Expansion of Capacity.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first above written or have caused this Lease to be executed by their respective officers thereunto duly authorized.
Signed, sealed and delivered in the presence of:
| /s/ Dr. Niclas Adler | /s/ Dr. Niclas Adler | |
| Dr. Niclas Adler | Dr. Niclas Adler | |
| Marviken ONE AB | Synthesis Analytics Production Limited | |
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Exhibit 10.6
AGREEMENT – LEASE OF DATACENTER AND OFFICE SPACE, MARVIKEN, SWEDEN
THIS AGREEMENT is made and entered into December 27, 2024 by and between Marviken ONE AB (Company reg number 559223-1509) whose address is Kungsportsavenyen 26, Box 19055, 400 12 Göteborg, Sweden (hereinafter referred to as "Provider"), Synthesis Analytics Production Limited, (a company organised under the laws of England and Wales with registered number 14342669) and having its registered address at Wenlock Road, London, England, N1 7GU (hereinafter referred to as "User").
ARTICLE I - GRANT OF LEASE
The Provider, in consideration of the rental fees to be paid and the covenants and agreements to be performed and observed by the User, does hereby lease to the User and the User does hereby lease the space with access to agreed data center as described in Article V and by reference made a part hereof (the "Leased Space").
ARTICLE II - LEASE TERM
Section l. Total Term of Lease. The term of this Lease shall begin on the commencement date, as defined in Section 2 of this Article II, and shall terminate on December 31, 2034.
Section 2. Commencement Date. The "Commencement Date" is agreed to be January 1, 2025.
ARTICLE III - EXTENSIONS OF THE AGREEMENT AND EXPANSIONS OF SPACE
Section 1. Extensions. The parties hereto may elect to extend this Agreement upon such terms and conditions as may be agreed upon in writing and signed by the parties at the time of any such extension.
Section 2. Expansions. The parties may agree to expand the Leased Space and that should be done with three-month notice.
ARTICLE IV - DETERMINATION OF RENTAL FEE
The User agrees to pay the Provider and the Provider agrees to accept, during the term hereof, at such place as the Provider shall from time to time direct by notice to the User, at the following rates and times:
Section 1. Rental of Office Space. The User agrees to rent 28 sqm office space based on a sqm price of SEK 1,100 representing an annual fee of SEK 30,800.
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Section 2. Rental of Data Center. The User agrees to rent 1,074 sqm data center on a sqm price of SEK 3,390 representing an annual fee of SEK 3,640,860.
Section 3. Sourcing of services for monitoring, service and support to Data Center Operation. The Provider will for the User needs source and provide services for monitoring, service and support for the actual fee plus 10%.
Section 4. Payment of Rental fees. The Rental fee shall be payable in advance in Monthly installments starting on Commencement Date 1 2025. The Monthly total Fee will be SEK 305,972.
Section 5. Payment of fees for services for monitoring, service and support to Data Center Operation. The agreed fee shall be payable Monthly installments against invoice from the Provider.
If applicable VAT will be added to the agreed fees.
A late fee in the amount of 2% of the Monthly Rental fee shall be assessed if payment is not postmarked or received by Provider on or before the tenth day of each month.
ARTICLE V – RENTED SPACE AND AGREED INFRASTRUCTURE
Section 1. Office Space. The User will rent office space on 28 sqm next to the data center. The rent includes costs for heating, water and sewage. The office space is served with internet access included in the rent.
Section 2. Data Center. The User will rent the Data Center as depicted in Appendix 1. The Data Center is served with power access, four dark fibers internet access as well as cooling water infrastructure. The rent includes costs for heating, water and sewage.
Section 3. Permits. The Provider guarantee that all necessary permits to provide the Leased Space is in place at Commencement Day.
Section 4. Additional Infrastructure. The User may freely use the parking lots outside the power plant and have access to the fenced park area. Basic site security is provided by Securitas for the building complex and covered by the Provider.
Section 5. Cooling Water. The User will have access to up to 2m3/second of cooling water from the Baltic Sea. The access point will be agreed between the Parties. The User need to construct the connectivity to the cooling water on the Users own expense. The drawing for the connectivity needs to be approved by the Provider before work is commenced.
Section 6. Electricity Grid. The Provider have access to 10kV connectivity to the National electricity grid, and an inter-locking plant MT20. This access is regulated in a separate Grid Access Lease Agreement between the Parties. The location of the access point or access points will be agreed between the Parties. The Provider also have agreements with Solar Power and Off-shore Wind Power suppliers ensuring supply of renewable electricity to the site.
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ARTICLE VI - USER'S COVENANTS
Section 1. User Covenants. User covenants and agrees as follows:
a. To procure any licenses and permits required for any use made of the Leased Space by User, and upon the expiration or termination of this Lease, to remove its management of the Leased Space;
b. To permit Provider and its agents to examine the Leased Space at reasonable times, provided that Provider shall not thereby unreasonably interfere with the conduct of User's business;
c. To permit Provider to enter the Leased Space to inspect such repairs, improvements, alterations or additions thereto as may be required under the provisions of this Lease. If, as a result of such repairs, improvements, alterations, or additions, User is deprived of the use of the Leased Space, the Rental fee shall be abated or adjusted, as the case may be, in proportion to that time during which, and to that portion of the Leased Space of which, User shall be deprived as a result thereof.
ARTICLE VII - INDEMNITY BY USER
Section 1. Indemnity and Public Liability. The User shall save Provider harmless and indemnify Provider from all injury, loss, claims or damage to any person or property while utilizing the Leased Space, unless caused by the willful acts or omissions or gross negligence of Provider, its employees, agents, licensees or contractors.
ARTICLE VIII - INSURANCE
Section 1. Insurance Proceeds. In the event of any damage to or destruction of the Leased Space, User shall adjust the loss and settle all claims with the insurance companies issuing such policies. The parties hereto do irrevocably assign the proceeds from such insurance policies for the purposes hereinafter stated to any institutional first mortgagee or to Provider and User jointly, if no institutional first mortgagee then holds an interest in the Leased Space. All proceeds of said insurance shall be paid into a trust fund under the control of any institutional first mortgagee, or of Provider and User if no institutional first mortgagee then holds an interest in the Leased Space, for repair, restoration, rebuilding or replacement, or any combination thereof, of the Leased Space or of the improvements in the Leased Space. In case of such damage or destruction, Provider shall be entitled to make withdrawals from such trust fund, from time to time, upon presentation of:
a. bills for labor and materials expended in repair, restoration, rebuilding or replacement, or any combination thereof;
b. Provider's sworn statement that such labor and materials for which payment is being made have been furnished or delivered on site; and
c. the certificate of a supervising computer architect (selected by Provider and User and approved by an institutional first mortgagee, if any, whose fees will be paid out of said insurance proceeds) certifying that the work being paid for has been completed in accordance with the Plans and Specifications previously approved by Provider, User and any institutional first mortgagee in a first class, good and workmanlike manner and in accordance with all pertinent governmental requirements.
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Any insurance proceeds in excess of such proceeds as shall be necessary for such repair, restoration, rebuilding, replacement or any combination thereof shall be the sole property of Provider subject to any rights therein of Provider's mortgagee, and if the proceeds necessary for such repair, restoration, rebuilding or replacement, or any combination thereof shall be inadequate to pay the cost thereof, User shall suffer the deficiency.
Section 2. Subrogation. Provider and User hereby release each other, to the extent of the insurance coverage provided hereunder, from any and all liability or responsibility (to the other or anyone claiming through or under the other by way of subrogation or otherwise) for any loss to or damage of property covered by the fire and extended coverage insurance policies insuring the Leased Space and any of Provider's property, even if such loss or damage shall have been caused by the fault or negligence of the other party.
ARTICLE IX - DAMAGE TO DEMISED SPACE
Section 1. Abatement or Adjustment of Rental fee. If the whole or any part of the Leased Space shall be damaged or destroyed by fire or other casualty after the execution of this Lease and before the termination hereof, then in every case the Rental fee reserved in Article IV herein and other charges, if any, shall be abated or adjusted, as the case may be, in proportion
to that portion of the Leased Space of which User shall be deprived on account of such damage or destruction and the work of repair, restoration, rebuilding, or replacement or any combination thereof, of the improvements so damaged or destroyed, shall in no way be construed by any person to effect any reduction of sums or proceeds payable under any Rental fee insurance policy.
Section 2. Repairs and Restoration. Provider agrees that in the event of the damage or destruction of the Leased Space, Provider forthwith shall proceed to repair, restore, replace or rebuild the Leased Space, to substantially the condition in which the same were immediately prior to such damage or destruction. The Provider thereafter shall diligently prosecute said work to completion without delay or interruption except for events beyond the reasonable control of Provider. Notwithstanding the foregoing, if Provider does not either obtain necessary permits within ninety (90) days of the date of such damage or destruction, or complete such repairs, rebuilding or restoration and comply with conditions (a), (b) and (c) in Section 1 of Article X within nine (9) months of such damage or destruction, then User may at any time thereafter cancel and terminate this Lease by sending ninety (90) days written notice thereof to Provider, or, in the alternative, User may, during said ninety (90) day period, apply for the same and Provider shall cooperate with User in User's application. Notwithstanding the foregoing, if such damage or destruction shall occur during the last year of the term of this Lease, or during any renewal term, and shall amount to twenty-five (25%) percent or more of the replacement cost, this Lease, except as hereinafter provided in Section 3 of Article XII, may be terminated at the election of either Provider or User, provided that notice of such election shall be sent by the party so electing to the other within thirty (30) days after the occurrence of such damage or destruction. Upon termination, as aforesaid, by either party hereto, this Lease and the term thereof shall cease and come to an end, any unearned Rental fee or other charges paid in advance by User shall be refunded to User, and the parties shall be released hereunder, each to the other, from all liability and obligations hereunder thereafter arising.
ARTICLE X - CONDEMNATION
Section 1. Total Taking. If, after the execution of this Lease and prior to the expiration of the term hereof, the whole of the Leased Space shall be taken under power of eminent domain by any public or private authority, or conveyed by Provider to said authority in lieu of such taking, then this Lease and the term hereof shall cease and terminate as of the date when possession of the Leased Space shall be taken by the taking authority and any unearned Rental fee or other charges, if any, paid in advance, shall be refunded to User.
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Section 2. Partial Taking. If, after the execution of this Lease and prior to the expiration of the term hereof, any public or private authority shall, under the power of eminent domain, take, or Provider shall convey to said authority in lieu of such taking, Space which results in a reduction by fifteen (15%) percent or more of the Leased Space, or of a portion of the Leased Space that substantially interrupts or substantially obstructs the conducting of business on the Leased Space; then User may, at its election, terminate this Lease by giving Provider notice of the exercise of User's election within thirty (30) days after User shall receive notice of such taking. In the event of termination by User under the provisions of Section 1 of this Article XV, this Lease and the term hereof shall cease and terminate as of the date when possession shall be taken by the appropriate authority of that portion of the Entire Space that results in one of the above takings, and any unearned Rental fee or other charges, if any, paid in advance by User shall be refunded to User.
Section 3. Restoration. In the event of a taking in respect of which User shall not have the right to elect to terminate this Lease or, having such right, shall not elect to terminate this Lease, this Lease and the term thereof shall continue in full force and effect and Provider, at Provider's sole cost and expense, forthwith shall restore the remaining portions of the Leased Space, in substantially the same condition that the same were in prior to such taking. A just proportion of the Rental fee reserved herein and any other charges payable by User hereunder, according to the nature and extent of the injury to the Leased Space and to User's business, shall be suspended or abated until the completion of such restoration and thereafter the Rental fee and any other charges shall be reduced in proportion to the Leased Space remaining after such taking.
Section 4. The Award. All compensation awarded for any taking, whether for the whole or a portion of the Leased Space, shall be the sole property of the Provider whether such compensation shall be awarded for diminution in the value of, or loss of, the lease or for diminution in the value of, or loss of, the fee from the Leased Space, or otherwise. The User hereby assigns to Provider all of User's right to and interest in any and all such compensation. However, the Provider shall not be entitled to and User shall have the sole right to make its independent claim for and retain any portion of any award made by the appropriating authority directly to User for loss of business, or damage to or depreciation of, and cost of removal of fixtures, personality and improvements installed in the Leased Space by, or at the expense of User, and to any other award made by the appropriating authority directly to User.
Section 5. Release. In the event of any termination of this Lease as the result of the provisions of this Article XII, the parties, effective as of such termination, shall be released, each to the other, from all liability and obligations thereafter arising under this lease.
ARTICLE XI - DEFAULT
Section 1. Providers Remedies. In the event that:
a. User shall on three or more occasions be in default in the payment of Rental fee or other charges herein required to be paid by User (default herein being defined as payment received
by Provider ten or more days subsequent to the due date), regardless of whether or not such default has occurred on consecutive or non-consecutive months; or
b. User has caused a lien to be filed against the Provider's Space and said lien is not removed within thirty (30) days of recordation thereof; or
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c. User shall default in the observance or performance of any of the covenants and agreements required to be performed and observed by User hereunder for a period of thirty (30) days after notice to User in writing of such default (or if such default shall reasonably take more than thirty (30) days to cure, User shall not have commenced the same within the thirty (30) days and diligently prosecuted the same to completion); or
d. Sixty (60) days have elapsed after the commencement of any proceeding by or against User, whether by the filing of a petition or otherwise, seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or future Federal Bankruptcy Act or any other present or future applicable federal, state or other statute or law, whereby such proceeding shall not have been dismissed (provided, however, that the non-dismissal of any such proceeding shall not be a default hereunder so long as all of User's covenants and obligations hereunder are being performed by or on behalf of User); then Provider shall be entitled to its election (unless User shall cure such default prior to such election), to exercise concurrently or successively, any one or more of the following rights:
i. Terminate this Lease by giving User notice of termination, in which event this Lease shall expire and terminate on the date specified in such notice of termination, with the same force and effect as though the date so specified were the date herein originally fixed as the termination date of the term of this Lease, and all rights of User under this Lease and in and to the Space shall expire and terminate, and User shall remain liable for all obligations under this Lease arising up to the date of such termination, and User shall surrender the Space to Provider on the date specified in such notice; or
ii. Terminate this Lease as provided herein and recover from User all damages Provider may incur by reason of User's default, including, without limitation, a sum which, at the date of such termination, represents the then value of the excess, if any, of (a) the Minimum Rental fee, Percentage Rental fee, Taxes and all other sums which would have been payable hereunder by User for the period commencing with the day following the date of such termination and ending with the date herein before set for the expiration of the full term hereby granted, over (b) the aggregate reasonable value of the Space for the same period, all of which excess sum shall be deemed immediately due and payable; or
iii. Without terminating this Lease, declare immediately due and payable all Minimum Rental fee, Taxes, and other Rental fees and amounts due and coming due under this Lease for the entire remaining term hereof, together with all other amounts previously due, at once; provided, however, that such payment shall not be deemed a penalty or liquidated damages but shall merely constitute payment in advance of Rental fee for the remainder of said term. Upon making such payment, User shall be entitled to receive from Provider all Rental fees received by Provider from other assignees, Users, and sub-users on account of said Space during the term of this Lease, provided that the compensation to which User shall so become entitled shall in no event exceed the entire amount actually paid by User to Provider pursuant to the preceding sentence less all costs, expenses and attorney's fees of Provider incurred in connection with the reletting of the Space; or
iv. Without terminating this Lease, and with or without notice to User, Provider may in its own name but as agent for User enter into and upon and take possession of the Premises or any part thereof, and, at Provider's option, remove persons and property therefrom, and such property, if any, may be removed and stored in a warehouse or elsewhere at the cost of, and for the account of User, all without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby, and Provider may provide the Space or any portion thereof as the agent of User with or without advertisement, and by private negotiations and for any term upon such terms and conditions as Provider may deem necessary or desirable in order to relet the Space. Provider shall in no way be responsible or liable for any Rental fee concessions or any failure to provide the Space or any part thereof, or for any failure to collect any Rental fee due upon such reletting. Upon such reletting, all Rental fee received by Provider from such reletting shall be applied: first, to the payment of any indebtedness (other than any Rental fee due hereunder) from User to Provider; second, to the payment of any costs and expenses of such reletting, including, without limitation, brokerage fees and attorney's fees and costs of alterations and repairs; third, to the payment of Rental fee and other charges then due and unpaid hereunder; and the residue, if any shall be held by Provider to the extent of and for application in payment of future Rental fee as the same may become due and payable hereunder. In reletting the Premises as aforesaid, Provider may grant Rental fee concessions and User shall not be credited therefor. If such Rental fee received from such reletting shall at any time or from time to time be less than sufficient to pay to Provider the entire sums then due from User hereunder, User shall pay any such deficiency to Provider. Such deficiency shall, at Provider's option, be calculated and paid monthly. No such reletting shall be construed as an election by Provider to terminate this Lease unless a written notice of such election has been given to User by Provider. Notwithstanding any such reletting without termination, Provider may at any time thereafter elect to terminate this Lease for any such previous default provided same has not been cured; or
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v. Without liability to User or any other party and without constituting a constructive or actual eviction, suspend or discontinue furnishing or rendering to User any property, material, labor, Utilities or other service, whether Provider is obligated to furnish or render the same, so long as User is in default under this Lease; or
vi. Allow the Premises to remain unoccupied and collect Rental fee from User as it comes due; or
vii. Foreclose the security interest described herein, including the immediate taking of possession of all property on or in the Premises; or
viii. Pursue such other remedies as are available at law or equity.
e. Provider's pursuit of any remedy of remedies, including without limitation, any one or more of the remedies stated herein shall not (1) constitute an election of remedies or preclude pursuit of any other remedy or remedies provided in this Lease or any other remedy or remedies provided by law or in equity, separately or concurrently or in any combination, or (2) sever as the basis for any claim of constructive eviction, or allow User to withhold any payments under this Lease.
Section 2. Providers Self Help. If in the performance or observance of any agreement or condition in this Lease contained on its part to be performed or observed and shall not cure such default within thirty (30) days after notice from Provider specifying the default (or if such default shall reasonably take more than thirty (30) days to cure, shall diligently prosecuted the same to completion), Provider may, at its option, without waiving any claim for damages for breach of agreement, at any time thereafter cure such default for the account of User, and any amount paid or contractual liability incurred by Provider in so doing shall be deemed paid or incurred for the account of User and User agrees to reimburse Provider therefor and save Provider harmless therefrom. Provided, however, that Provider may cure any such default as aforesaid prior to the expiration of said waiting period, without notice to User if any emergency situation exists, or after notice to User, if the curing of such default prior to the expiration of said waiting period is reasonably necessary to protect the Leased Premises or Provider's interest therein, or to prevent injury or damage to persons or property. If User shall fail to reimburse Provider upon demand for any amount paid for the account of User hereunder, said amount shall be added to and become due as a part of the next payment of Rental fee due and shall for all purposes be deemed and treated as Rental fee hereunder.
Section 3. Users Self Help. If Provider shall default in the performance or observance of any agreement or condition in this Lease contained on its part to be performed or observed, and if Provider shall not cure such default within thirty (30) days after notice from User specifying the default (or, if such default shall reasonably take more than thirty (30) days to cure, and Provider shall not have commenced the same within the thirty (30) days and diligently prosecuted the same to completion), User may, at its option, without waiving any claim for damages for breach of agreement, at any time thereafter cure such default for the account of Provider and any amount paid or any contractual liability incurred by User in so doing shall be deemed paid or incurred for the account of Provider and Provider shall reimburse User therefor and save User harmless therefrom. Provided, however, that User may cure any such default as aforesaid prior to the expiration of said waiting period, without notice to Provider if an emergency situation exists, or after notice to Provider, if the curing of such default prior to the expiration of said waiting period is reasonably necessary to protect the Leased Space or User's interest therein or to prevent injury or damage to persons or property. If Provider shall fail to reimburse User upon demand for any amount paid or liability incurred for the account of Provider hereunder, said amount or liability may be deducted by User from the next or any succeeding payments of Rental fee due hereunder; provided, however, that should said amount or the liability therefor be disputed by Provider, Provider may contest its liability or the amount thereof, through arbitration or through a declaratory judgment action and Provider shall bear the cost of the filing fees therefor.
ARTICLE XII - TITLE
Section l. Subordination. User shall, upon the request of Provider in writing, subordinate this Lease to the lien of any present or future institutional mortgage upon the Leased Space irrespective of the time of execution or the time of recording of any such mortgage. Provided, however, that as a condition to such subordination, the holder of any such mortgage shall enter first into a written agreement with User in form suitable for recording to the effect that:
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a. in the event of foreclosure or other action taken under the mortgage by the holder thereof, this Lease and the rights of User hereunder shall not be disturbed but shall continue in full force and effect so long as User shall not be in default hereunder, and
b. such holder shall permit insurance proceeds and condemnation proceeds to be used for any restoration and repair required by the provisions of Articles XII, XIII or XIV, respectively. User agrees that if the mortgagee or any person claiming under the mortgagee shall succeed to the interest of Provider in this Lease, User will recognize said mortgagee or person as its Provider under the terms of this Lease, provided that said mortgagee or person for the period during which said mortgagee or person respectively shall be in possession of the Leased Space and thereafter their respective successors in interest shall assume all of the obligations of Provider hereunder. The word "mortgage", as used herein includes mortgages, deeds of trust or other similar instruments, and modifications, and extensions thereof. The term "institutional mortgage" as used in this Article XIV means a mortgage securing a loan from a bank (commercial or savings) or trust company, insurance company or pension trust or any other lender institutional in nature and constituting a lien upon the Leased Space.
Section 2. Quiet Enjoyment. Provider covenants and agrees that upon User paying the Rental fee and observing and performing all of the terms, covenants and conditions on User's part to be observed and performed hereunder, that User may peaceably and quietly have, hold, occupy and enjoy the Leased Space in accordance with the terms of this Lease without hindrance or molestation from Provider or any persons lawfully claiming through the Provider.
Section 3. Zoning and Good Title. Provider warrants and represents, upon which warranty and representation User has relied in the execution of this Lease, that Provider is the owner of the Leased Space, in fee simple absolute, free and clear of all encumbrances, except for the easements, covenants and restrictions of record as of the date of this Lease. Such exceptions shall not impede or interfere with the quiet use and enjoyment of the Leased Space by User. Provider further warrants and covenants that this Lease is and shall be a first lien on the Leased Space, subject only to any Mortgage to which this Lease is subordinate or may become subordinate pursuant to an agreement executed by User, and to such encumbrances as shall be caused by the acts or omissions of User; that Provider has full right and lawful authority to execute this Lease for the term, in the manner, and upon the conditions and provisions herein contained; that there is no legal impediment to the use of the Leased Space as set out herein; that the Leased Space are not subject to any easements, restrictions, zoning ordinances or similar governmental regulations which prevent their use as set out herein; that the Leased Space presently are zoned for the use contemplated herein and throughout the term of this lease may continue to be so used therefor by virtue of said zoning, under the doctrine of "non- conforming use", or valid and binding decision of appropriate authority, except, however, that said representation and warranty by Provider shall not be applicable in the event that User's act or omission shall invalidate the application of said zoning, the doctrine of "non-conforming use" or the valid and binding decision of the appropriate authority. Provider shall furnish without expense to User, within thirty (30) days after written request therefor by User, a title report covering the Leased Space showing the condition of title as of the date of such certificate, provided, however, that Provider's obligation hereunder shall be limited to the furnishing of only one such title report.
Section 4. Licenses. It shall be the User's responsibility to obtain any and all necessary licenses and the Provider shall bear no responsibility therefor; the User shall promptly notify Provider of the fact that it has obtained the necessary licenses in order to prevent any delay to Provider in commencing construction of the Leased Premises.
ARTICLE XIII - EXTENSIONS/WAIVERS/DISPUTES
Section l. Extension Period. Any extension hereof shall be subject to the provisions of Article III hereof.
Section 2. Holding Over. In the event that User or anyone claiming under User shall continue occupancy of the Leased Premises after the expiration of the term of this Lease or any renewal or extension thereof without any agreement in writing between Provider and User with respect thereto, such occupancy shall not be deemed to extend or renew the term of the Lease, but such occupancy shall continue as a tenancy at will, from month to month, upon the covenants, provisions and conditions herein contained. The Rental fee shall be the Rental fee in effect during the term of this Lease as extended or renewed, prorated and payable for the period of such occupancy.
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Section 3. Waivers. Failure of either party to complain of any act or omission on the part of the other party, no matter how long the same may continue, shall not be deemed to be a waiver by said party of any of its rights hereunder. No waiver by either party at any time, express or implied, of any breach of any provision of this Lease shall be deemed a waiver of a breach of any other provision of this Lease or a consent to any subsequent breach of the same or any other provision. If any action by either party shall require the consent or approval of the other party, the other party's consent to or approval of such action on any one occasion shall not be deemed a consent to or approval of said action on any subsequent occasion or a consent to or approval of any other action on the same or any subsequent occasion. Any and all rights and remedies which either party may have under this Lease or by operation of law, either at law or in equity, upon any breach, shall be distinct, separate and cumulative and shall not be deemed inconsistent with each other, and no one of them, whether exercised by said party or not, shall be deemed to be an exclusion of any other; and any two or more or all of such rights and remedies may be exercised at the same time.
Section 4. Disputes. It is agreed that, if at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of the said party to institute suit for the recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease. If at any time a dispute shall arise between the parties hereto as to any work to be performed by either of them under the provisions hereof, the party against whom the obligation to perform the work is asserted may perform such work and pay the costs thereof "under protest" and the performance of such work shall in no event be regarded as a voluntary performance and shall survive the right on the part of the said party to institute suit for the recovery of the costs of such work. If it shall be adjudged that there was no legal obligation on the part of the said party to perform the same or any part thereof, said party shall be entitled to recover the costs of such work or the cost of so much thereof as said party was not legally required to perform under the provisions of this Lease and the amount so paid by User may be withheld or deducted by User from any Rental fees herein reserved.
Section 5. Users Right to cure Providers Default. In the event that Provider shall fail, refuse or neglect to pay any mortgages, liens or encumbrances, the judicial sale of which might affect the interest of User hereunder, or shall fail, refuse or neglect to pay any interest due or payable on any such mortgage, lien or encumbrance, User may pay said mortgages, liens or encumbrances, or interest or perform said conditions and charge to Provider the amount so paid and withhold and deduct from any Rental fees herein reserved such amounts so paid, and any excess over and above the amounts of said Rental fees shall be paid by Provider to User.
Section 6. Notices. All notices and other communications authorized or required hereunder shall be in writing and shall be given by mailing the same by certified mail, return receipt requested, postage prepaid, and any such notice or other communication shall be deemed to have been given when received by the party to whom such notice or other communication shall be addressed. If intended for the Provider the same will be mailed to the address herein above set forth or such other address as Provider may hereafter designate by notice to User, and if intended for User, the same shall be mailed to User at the address herein above set forth, or such other address or addresses as User may hereafter designate by notice to Provider.
ARTICLE XIV - PROPERTY DAMAGE
Section l. Loss and Damage. Notwithstanding any contrary provisions of this Lease, Provider shall not be responsible for any loss of or damage to property of User or of others located on the Leased Space, except where caused by the willful act or omission or negligence of Provider, or Provider's agents, employees or contractors, provided, however, that if User shall notify Provider in writing of repairs which are the responsibility of Provider under Article VII hereof, and Provider shall fail to commence and diligently prosecute to completion said repairs promptly after such notice, and if after the giving of such notice and the occurrence of such failure, loss of or damage to User's property shall result from the condition as to which Provider has been notified, Provider shall indemnify and hold harmless User from any loss, cost or expense arising therefrom.
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Section 2. Force Majeure. In the event that Provider or User shall be delayed or hindered in or prevented from the performance of any act other than User's obligation to make payments of Rental Fee, additional Rental Fee, and other charges required hereunder, by reason of strikes, lockouts, unavailability of materials, failure of power, restrictive governmental laws or regulations, riots, insurrections, the act, failure to act, or default of the other party, war or other reason beyond its control, then performance of such act shall be excused for the period of the delay and the period for the performance of such act shall be extended for a period equivalent to the period of such delay. Notwithstanding the foregoing, lack of funds shall not be deemed to be a cause beyond control of either party.
ARTICLE XV - MISCELLANEOUS
Section 1. Assignment and Subletting. Under the terms and conditions hereunder, User shall have the absolute right to transfer and assign this lease or to sublet all or any portion of the Leased Space or to cease operating User's business on the Leased Space provided that at the time of such assignment or sublease User shall not be in default in the performance and observance of the obligations imposed upon User hereunder, and in the event that User assigns or sublets this property for an amount in excess of the Rental fee amount then being paid, then Provider shall require as further consideration for the granting of the right to assign or sublet, a sum equal to fifty (50%) percent of the difference between the amount of Rental fee to be charged by User to User's sublease or assignee and the amount provided for herein, payable in a manner consistent with the method of payment by the sublease or assignee to the User, and/or fifty (50%) percent of the consideration paid or to be paid to User by User's sublease or assignee. Provider must consent in writing to any such sublease or assignee, although such consent shall not be unreasonably withheld. The use of the Leased Space by such assignee or sublessee shall be expressly limited by and to the provisions of this lease.
Section 2. Fixtures. All personal property, furnishings and equipment presently and all other trade fixtures installed in or hereafter by or at the expense of User and all additions and/or improvements, exclusive of structural, mechanical, electrical, and plumbing, affixed to the Leased Space and used in the operation of the User's business made to, in or on the Leased Space by and at the expense of User and susceptible of being removed from the Leased Space without damage, unless such damage be repaired by User, shall remain the property of User and User may, but shall not be obligated to, remove the same or any part thereof at any time or times during the term hereof, provided that User, at its sole cost and expense, shall make any repairs occasioned by such removal.
Section 3. Estoppel Certificates. At any time and from time to time, Provider and User each agree, upon request in writing from the other, to execute, acknowledge and deliver to the other or to any person designated by the other a statement in writing certifying that the Lease is unmodified and is in full force and effect, or if there have been modifications, that the same is in full force and effect as modified (stating the modifications), that the other party is not in default in the performance of its covenants hereunder, or if there have been such defaults, specifying the same, and the dates to which the Rental fee and other charges have been paid.
Section 4. Invalidity of Particular Provision. If any term or provision of this Lease or the application hereof to any person or circumstance shall, to any extent, be held invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.
Section 5. Captions and Definitions of Parties. The captions of the Sections of this Lease are for convenience only and are not a part of this Lease and do not in any way limit or amplify the terms and provisions of this Lease. The word "Provider" and the pronouns referring thereto, shall mean, where the context so admits or requires, the persons, firm or corporation named herein as Provider or the mortgagee in possession at any time, of the land and building comprising the Leased Premises. If there is more than one Provider, the covenants of Provider shall be the joint and several obligations of each of them, and if Provider is a partnership, the covenants of Provider shall be the joint and several obligations of each of the partners and the obligations of the firm. Any pronoun shall be read in the singular or plural and in such gender as the context may require. Except as in this Lease otherwise provided, the terms and provisions of this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
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Nothing contained herein shall be deemed or construed by the parties hereto nor by any third party as creating the relationship of principal and agent or of partnership or of a joint venture between the parties hereto, it being understood and agreed that neither any provision contained herein, nor any acts of the parties hereto, shall be deemed to create any relationship between the parties hereto other than the relationship of Provider and User.
Section 6. Brokerage. No party has acted as, by or through a broker in the effectuation of this Agreement, except as set out hereinafter.
Section 7. Entire Agreement. This instrument contains the entire and only agreement between the parties, and no oral statements or representations or prior written matter not contained in this instrument shall have any force and effect. This Lease shall not be modified in any way except by a writing executed by both parties.
Section 8. Governing Law. All matters pertaining to this agreement (including its interpretation, application, validity, performance and breach) in whatever jurisdiction action may be brought, shall be governed by, construed and enforced in accordance with the laws of Sweden. The parties herein waive trial by jury and agree to submit to the personal jurisdiction and venue of a court of subject matter jurisdiction located in Sweden. In the event that litigation results from or arises out of this Agreement or the performance thereof, the parties agree to reimburse the prevailing party's reasonable attorney's fees, court costs, and all other expenses, whether or not taxable by the court as costs, in addition to any other relief to which the prevailing party may be entitled. In such event, no action shall be entertained by said court or any court of competent jurisdiction if filed more than one year subsequent to the date the cause(s) of action actually accrued regardless of whether damages were otherwise as of said time calculable.
Section 9. Contractual Procedures. Unless specifically disallowed by law, should litigation arise hereunder, service of process therefor may be obtained through certified mail, return receipt requested; the parties hereto waiving any and all rights they may have to object to the method by which service was perfected.
Section 10. Extraordinary Remedies. To the extent cognizable at law, the parties hereto, in the event of breach and in addition to any and all other remedies available thereto, may obtain injunctive relief, regardless of whether the injured party can demonstrate that no adequate remedy exists at law.
Section 11. Reliance on Financial Statement. User shall furnish concurrently with the execution of this lease, a financial statement of User prepared by an accountant. User, both in corporate space, if applicable, and individually, hereby represents and warrants that all the information contained therein is complete, true, and correct. User understands that Provider is relying upon the accuracy of the information contained therein. Should there be found to exist any inaccuracy within the financial statement which adversely affects User's financial standing, or should User's financial circumstances materially change, Provider may demand, as additional security, an amount equal to an additional two (2) months' Rental fee, which additional security shall be subject to all terms and conditions herein, require a fully executed guaranty by a third party acceptable to Provider, elect to terminate this Lease, or hold User personally and individually liable hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first above written or have caused this Lease to be executed by their respective officers thereunto duly authorized.
Signed, sealed and delivered in the presence of:
| /s/ Dr. Niclas Adler | /s/ Dr. Niclas Adler | |
| Dr. Niclas Adler | Dr. Niclas Adler | |
| Marviken ONE AB | Synthesis Analytics Production Limited | |
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Exhibit 10.7
Freehold Property Purchase Contract
Under Swedish Law
This Agreement is entered into on December 4, 2024, by and between:
| 1. | Seller: |
Marviken TWO AB, a company incorporated under the laws of Sweden, with registration number 559223-1491, and registered office at Kungsportsavenyen 26, Box 19055, 400 12 Gothenburg, Sweden hereinafter referred to as the "Seller."
| 2. | Buyer: |
Synthesis AnalyPcs ProducPon Limited, a company organised under the laws of England and Wales with registered number 14342669 and having its registered address at Wenlock Road, London, England, N1 7GU, hereinafter referred to as the "Buyer."
1. Object of Sale
The Seller agrees to sell, and the Buyer agrees to purchase, the freehold property located at:
| · | Address: Marviken Kraftverk, 610 27 Vikbolandet, Sweden. | |
| · | Property Designation: A sectioning off from Norrköping Ramnö 1:7 | |
| · | Land Area: 20 000 sqm, located next to the substaPon with direct access to the infrastructure allowing for further build out of DC capacity at the Marviken Site |
2. Purchase Price
The purchase price for the Property is agreed to be:
USD 1,75 Million USD
The purchase price shall be paid with a seller loan note on USD 1,75 Million. Interest will be payable on the note at 5% per annum. The note term will be 3 years.
3. Payment Terms
The purchase price shall be paid with a Seller Loan Note on USD 1,75 Million. Interest will be payable on the note at 5% per annum. The note term will be 3 years.
Minimum $0,75 Million of the Sellers Loan Note will be repaid from the proceeds of the capital raises during 2025.
The Buyer will cover all costs for the sectioning off of the real estate.
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4. Completion Date
The completion of the transaction (the "Completion Date") shall take place on or before December 4, 2024 at Marviken, Norrköping, Sweden.
On the Completion Date:
| · | The Buyer shall sign the Seller Loan Note. | |
| · | The Seller shall hand over the property and provide all necessary documentation. |
5. Conditions Precedent
This Agreement is conditional upon approval of the transfer by relevant authorities, if required.
If the conditions are not fulfilled by the agreed deadlines, either party may terminate this Agreement without penalty.
6. Representations and Warranties
| 1. | By the Seller: |
o The Seller represents and warrants that:
| a. | The Seller has full legal ownership of the Property and the right to sell it. |
| b. | The Property will be free from encumbrances, liens, or third-party claims. |
| c. | The Property complies with applicable Swedish laws and regulations. |
| 2. | By the Buyer: |
| o | The Buyer represents and warrants that it has the financial resources and legal authority to purchase the Property. |
7. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of Sweden. Disputes arising from this Agreement shall be resolved by Swedish courts, with the Stockholm District Court (Stockholms tingsrätt) as the court of first instance.
8. Entire Agreement
This Agreement constitutes the entire understanding between the parties and supersedes all prior agreements, representations, or discussions regarding the subject matter.
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9. Signatures
By signing below, the parties confirm their agreement to the terms of this Contract:
For the Seller:
Dr Niclas Adler
Director
/s/ Dr Niclas Adler
Date: 2024-12-04
For the Buyer:
Dr Niclas Adler
Director
/s/ Dr Niclas Adler
Date: 2024-12-04
Attachments
| 1. | Extract from Swedish Land Registry. | |
| 2. | Property Map and Boundaries. |
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Attachment 1. Extract from Swedish Land Registry
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Attachment 2. Property Map and Boundaries
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Exhibit 10.8
AGREEMENT – ACCESS TO COOLING CAPACITY FOR DATA CENTER PURPOSES
THIS AGREEMENT is made and entered into December 27, 2024 by and between Marviken ONE AB (a company organised under the laws of Sweden with registered number 559223-1509) and having its registrered address at Kungsportsavenyen 26, Box 19055, 400 12 Göteborg, Sweden (hereinafter referred to as "Provider"), and Synthesis Analytics Production Limited, (a company organised under the laws of England and Wales with registered number 14342669) and having its registered address at Wenlock Road, London, England, N1 7GU (hereinafter referred to as "User").
ARTICLE I – AGREEMENT SCOPE
The Provider, in consideration of the fees to be paid and the covenants and agreements to be performed and observed by the User, does hereby provide access to the User and the User does hereby lease the access to cooling with agreed capacity and performance features as described in Article V and by reference made a part hereof (the "Leased Cooling Capacity").
The Provider, in consideration of the fees to be paid and the covenants and agreements to be performed and observed by the User, does hereby provide the User with Cooling Capacity and the User does hereby buy the Cooling Capacity as described in this Agreement (the "Power Purchase").
ARTICLE II - LEASE TERM
Section l. Total Term of Lease and Power Purchase. The term of this Lease and Power Purchase shall begin on the commencement date, as defined in Section 2 of this Article II, and shall terminate on December 31, 2034.
Section 2. Commencement Date. The "Commencement Date" is agreed to be January 1, 2025.
ARTICLE III - EXTENSIONS OF THE AGREEMENT AND EXPANSIONS OF CAPACITY
Section 1. Extensions. The parties hereto may elect to extend this Agreement upon such terms and conditions as may be agreed upon in writing and signed by the parties at the time of any such extension.
Section 2. Expansions. The parties may agree to expand the Capacity.
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ARTICLE IV - DETERMINATION OF FEES FOR CAPACITY AND POWER PURCHASE
The User agrees to pay the Provider and the Provider agrees to accept, during the term hereof, at such place as the Provider shall from time to time direct by notice to the User, at the following rates and times:
Section 1. Lease of Cooling Capacity. The Provider has a Water Right that gives access to up to 21 m3 per second cooling water from the Baltic Sea. This equals a total Cooling Capacity of 700 MW. The Provider agrees to provide up to 100 MW of Cooling Capacity to the User. The agreed fee is SEK 50 per MWh.
Section 2. Costs for Infrastructure. The Costs for necessary infrastructure including any needed redundancy of infrastructure to Access the Cooling Infrastructure is paid by the User. Sourcing and deployment are organized by the Provider based on demand from the User.
Section 3. Payment of Fees for Cooling Capacity. The Fee shall be payable in Monthly installments against invoice starting on Commencement Date January 1, 2025.
ARTICLE VI - USER'S COVENANTS
Section 1. User Covenants. User covenants and agrees as follows:
| A) | To procure any licenses and permits required for any use made of the Capacity by User, and upon the expiration or termination of this Lease, to remove its management of the Capacity; | |
| B) | To permit Provider and its agents to examine the Capacity at reasonable times, provided that Provider shall not thereby unreasonably interfere with the conduct of User's business; | |
| C) | To permit Provider to enter the Capacity to inspect such repairs, improvements, alterations or additions thereto as may be required under the provisions of this Lease. If, as a result of such repairs, improvements, alterations, or additions, User is deprived of the use of the Capacity, the Rental fee shall be abated or adjusted, as the case may be, in proportion to that time during which, and to that portion of the Capacity of which, User shall be deprived as a result thereof. |
ARTICLE VII - INDEMNITY BY USER
Section l. Indemnity and Public Liability. The User shall save Provider harmless and indemnify Provider from all injury, loss, claims or damage to any person or property while utilizing the Capacity, unless caused by the willful acts or omissions or gross negligence of Provider, its employees, agents, licensees or contractors.
ARTICLE VIII - INSURANCE
Section 1. Insurance Proceeds. In the event of any damage to or destruction of the Capacity, User shall adjust the loss and settle all claims with the insurance companies issuing such policies. The parties hereto do irrevocably assign the proceeds from such insurance policies for the purposes hereinafter stated to any institutional first mortgagee or to Provider and User jointly, if no institutional first mortgagee then holds an interest in the Capacity. All proceeds of said insurance shall be paid into a trust fund under the control of any institutional first mortgagee, or of Provider and User if no institutional first mortgagee then holds an interest in the Capacity, for repair, restoration, rebuilding or replacement, or any combination thereof, of the Capacity or of the improvements in the Capacity. In case of such damage or destruction, Provider shall be entitled to make withdrawals from such trust fund, from time to time, upon presentation of:
a. bills for labor and materials expended in repair, restoration, rebuilding or replacement, or any combination thereof;
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b. Provider's sworn statement that such labor and materials for which payment is being made have been furnished or delivered on site; and
Any insurance proceeds in excess of such proceeds as shall be necessary for such repair, restoration, rebuilding, replacement or any combination thereof shall be the sole property of Provider subject to any rights therein of Provider's mortgagee, and if the proceeds necessary for such repair, restoration, rebuilding or replacement, or any combination thereof shall be inadequate to pay the cost thereof, User shall suffer the deficiency.
Section 2. Subrogation. Provider and User hereby release each other, to the extent of the insurance coverage provided hereunder, from any and all liability or responsibility (to the other or anyone claiming through or under the other by way of subrogation or otherwise) for any loss to or damage of property covered by the fire and extended coverage insurance policies insuring the Capacity and any of Provider's property, even if such loss or damage shall have been caused by the fault or negligence of the other party.
ARTICLE IX - DAMAGE TO THE CAPACITY
Section 1. Abatement or Adjustment of Rental fee. If the whole or any part of the Capacity shall be damaged or destroyed by fire or other casualty after the execution of this Lease and before the termination hereof, then in every case the Rental fee reserved in Article IV herein and other charges, if any, shall be abated or adjusted, as the case may be, in proportion to that portion of the Capacity of which User shall be deprived on account of such damage or destruction and the work of repair, restoration, rebuilding, or replacement or any combination thereof, of the improvements so damaged or destroyed, shall in no way be construed by any person to effect any reduction of sums or proceeds payable under any Rental fee insurance policy.
Section 2. Repairs and Restoration. Provider agrees that in the event of the damage or destruction of the Capacity, Provider forthwith shall proceed to repair, restore, replace or rebuild the Capacity, to substantially the condition in which the same were immediately prior to such damage or destruction. The Provider thereafter shall diligently prosecute said work to completion without delay or interruption except for events beyond the reasonable control of Provider. Notwithstanding the foregoing, if Provider does not either obtain necessary permits within ninety (90) days of the date of such damage or destruction, or complete such repairs, rebuilding or restoration and comply with conditions (a), (b) and (c) in Section 1 of Article X within nine (9) months of such damage or destruction, then User may at any time thereafter cancel and terminate this Lease by sending ninety (90) days written notice thereof to Provider, or, in the alternative, User may, during said ninety (90) day period, apply for the same and Provider shall cooperate with User in User's application. Notwithstanding the foregoing, if such damage or destruction shall occur during the last year of the term of this Lease, or during any renewal term, and shall amount to twenty-five (25%) percent or more of the replacement cost, this Lease, except as hereinafter provided in Section 3 of Article XII, may be terminated at the election of either Provider or User, provided that notice of such election shall be sent by the party so electing to the other within thirty (30) days after the occurrence of such damage or destruction. Upon termination, as aforesaid, by either party hereto, this Lease and the term thereof shall cease and come to an end, any unearned Rental fee or other charges paid in advance by User shall be refunded to User, and the parties shall be released hereunder, each to the other, from all liability and obligations hereunder thereafter arising.
ARTICLE X - DEFAULT
Section 1. Providers Remedies. In the event that:
a. User shall on three or more occasions be in default in the payment of the fee or other charges herein required to be paid by User (default herein being defined as payment received by Provider ten or more days subsequent to the due date), regardless of whether or not such default has occurred on consecutive or non-consecutive months; or
b. User has caused a lien to be filed against the Provider's Capacity and said lien is not removed within thirty (30) days of recordation thereof; or
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c. User shall default in the observance or performance of any of the covenants and agreements required to be performed and observed by User hereunder for a period of thirty (30) days after notice to User in writing of such default (or if such default shall reasonably take more than thirty (30) days to cure, User shall not have commenced the same within the thirty (30) days and diligently prosecuted the same to completion); or
d. Sixty (60) days have elapsed after the commencement of any proceeding by or against User, whether by the filing of a petition or otherwise, seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or future Federal Bankruptcy Act or any other present or future applicable federal, state or other statute or law, whereby such proceeding shall not have been dismissed (provided, however, that the non-dismissal of any such proceeding shall not be a default hereunder so long as all of User's covenants and obligations hereunder are being performed by or on behalf of User); then Provider shall be entitled to its election (unless User shall cure such default prior to such election), to exercise concurrently or successively, any one or more of the following rights:
i. Terminate this Lease by giving User notice of termination, in which event this Lease shall expire and terminate on the date specified in such notice of termination, with the same force and effect as though the date so specified were the date herein originally fixed as the termination date of the term of this Lease, and all rights of User under this Lease and in and to the Capacity shall expire and terminate, and User shall remain liable for all obligations under this Lease arising up to the date of such termination, and User shall surrender the Capacity to Provider on the date specified in such notice; or
ii. Terminate this Lease as provided herein and recover from User all damages Provider may incur by reason of User's default, including, without limitation, a sum which, at the date of such termination, represents the then value of the excess, if any, of (a) the Minimum Rental fee, Percentage Rental fee, Taxes and all other sums which would have been payable hereunder by User for the period commencing with the day following the date of such termination and ending with the date herein before set for the expiration of the full term hereby granted, over (b) the aggregate reasonable value of the Capacity for the same period, all of which excess sum shall be deemed immediately due and payable; or
iii. Without terminating this Lease, declare immediately due and payable all Minimum Rental fee, Taxes, and other Rental fees and amounts due and coming due under this Lease for the entire remaining term hereof, together with all other amounts previously due, at once; provided, however, that such payment shall not be deemed a penalty or liquidated damages but shall merely constitute payment in advance of Rental fee for the remainder of said term. Upon making such payment, User shall be entitled to receive from Provider all Rental fees received by Provider from other assignees, Users, and sub- users on account of said Capacity during the term of this Lease, provided that the compensation to which User shall so become entitled shall in no event exceed the entire amount actually paid by User to Provider pursuant to the preceding sentence less all costs, expenses and attorney's fees of Provider incurred in connection with the reletting of the Capacity; or
iv. Without terminating this Lease, and with or without notice to User, Provider may in its own name but as agent for User enter into and upon and take possession of the Premises or any part thereof, and, at Provider's option, remove persons and property therefrom, and such property, if any, may be removed and stored in a warehouse or elsewhere at the cost of, and for the account of User, all without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby, and Provider may provide the Capacity or any portion thereof as the agent of User with or without advertisement, and by private negotiations and for any term upon such terms and conditions as Provider may deem necessary or desirable in order to relet the Capacity. Provider shall in no way be responsible or liable for any Rental fee concessions or any failure to provide the Capacity or any part thereof, or for any failure to collect any Rental fee due upon such reletting. Upon such reletting, all Rental fee received by Provider from such reletting shall be applied: first, to the payment of any indebtedness (other than any Rental fee due hereunder) from User to Provider; second, to the payment of any costs and expenses of such reletting, including, without limitation, brokerage fees and attorney's fees and costs of alterations and repairs; third, to the payment of Rental fee and other charges then due and unpaid hereunder; and the residue, if any shall be held by Provider to the extent of and for application in payment of future Rental fee as the same may become due and payable hereunder. In reletting the Premises as aforesaid, Provider may grant Rental fee concessions and User shall not be credited therefor. If such Rental fee received from such reletting shall at any time or from time to time be less than sufficient to pay to Provider the entire sums then due from User hereunder, User shall pay any such deficiency to Provider. Such deficiency shall, at Provider's option, be calculated and paid monthly. No such reletting shall be construed as an election by Provider to terminate this Lease unless a written notice of such election has been given to User by Provider. Notwithstanding any such reletting without termination, Provider may at any time thereafter elect to terminate this Lease for any such previous default provided same has not been cured; or
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v. Without liability to User or any other party and without constituting a constructive or actual eviction, suspend or discontinue furnishing or rendering to User any property, material, labor, Utilities or other service, whether Provider is obligated to furnish or render the same, so long as User is in default under this Lease; or
vi. Allow the Premises to remain unoccupied and collect Rental fee from User as it comes due; or
vii. Foreclose the security interest described herein, including the immediate taking of possession of all property on or in the Premises; or
viii. Pursue such other remedies as are available at law or equity.
e. Provider's pursuit of any remedy of remedies, including without limitation, any one or more of the remedies stated herein shall not (1) constitute an election of remedies or preclude pursuit of any other remedy or remedies provided in this Lease or any other remedy or remedies provided by law or in equity, separately or concurrently or in any combination, or (2) sever as the basis for any claim of constructive eviction, or allow User to withhold any payments under this Lease.
Section 2. Providers Self Help. If in the performance or observance of any agreement or condition in this Lease contained on its part to be performed or observed and shall not cure such default within thirty (30) days after notice from Provider specifying the default (or if such default shall reasonably take more than thirty (30) days to cure, shall diligently prosecuted the same to completion), Provider may, at its option, without waiving any claim for damages for breach of agreement, at any time thereafter cure such default for the account of User, and any amount paid or contractual liability incurred by Provider in so doing shall be deemed paid or incurred for the account of User and User agrees to reimburse Provider therefor and save Provider harmless therefrom. Provided, however, that Provider may cure any such default as aforesaid prior to the expiration of said waiting period, without notice to User if any emergency situation exists, or after notice to User, if the curing of such default prior to the expiration of said waiting period is reasonably necessary to protect the Leased Premises or Provider's interest therein, or to prevent injury or damage to persons or property. If User shall fail to reimburse Provider upon demand for any amount paid for the account of User hereunder, said amount shall be added to and become due as a part of the next payment of Rental fee due and shall for all purposes be deemed and treated as Rental fee hereunder.
Section 3. Users Self Help. If Provider shall default in the performance or observance of any agreement or condition in this Lease contained on its part to be performed or observed, and if Provider shall not cure such default within thirty (30) days after notice from User specifying the default (or, if such default shall reasonably take more than thirty (30) days to cure, and Provider shall not have commenced the same within the thirty (30) days and diligently prosecuted the same to completion), User may, at its option, without waiving any claim for damages for breach of agreement, at any time thereafter cure such default for the account of Provider and any amount paid or any contractual liability incurred by User in so doing shall be deemed paid or incurred for the account of Provider and Provider shall reimburse User therefor and save User harmless therefrom. Provided, however, that User may cure any such default as aforesaid prior to the expiration of said waiting period, without notice to Provider if an emergency situation exists, or after notice to Provider, if the curing of such default prior to the expiration of said waiting period is reasonably necessary to protect the Capacity or User's interest therein or to prevent injury or damage to persons or property. If Provider shall fail to reimburse User upon demand for any amount paid or liability incurred for the account of Provider hereunder, said amount or liability may be deducted by User from the next or any succeeding payments of Rental fee due hereunder; provided, however, that should said amount or the liability therefor be disputed by Provider, Provider may contest its liability or the amount thereof, through arbitration or through a declaratory judgment action and Provider shall bear the cost of the filing fees therefor.
ARTICLE XI - EXTENSIONS/WAIVERS/DISPUTES
Section l. Extension Period. Any extension hereof shall be subject to the provisions of Article III hereof.
Section 2. Holding Over. In the event that User or anyone claiming under User shall continue occupancy of the Leased Premises after the expiration of the term of this Lease or any renewal or extension thereof without any agreement in writing between Provider and User with respect thereto, such occupancy shall not be deemed to extend or renew the term of the Lease, but such occupancy shall continue as a tenancy at will, from month to month, upon the covenants, provisions and conditions herein contained. The Rental fee shall be the Rental fee in effect during the term of this Lease as extended or renewed, prorated and payable for the period of such occupancy.
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Section 3. Waivers. Failure of either party to complain of any act or omission on the part of the other party, no matter how long the same may continue, shall not be deemed to be a waiver by said party of any of its rights hereunder. No waiver by either party at any time, express or implied, of any breach of any provision of this Lease shall be deemed a waiver of a breach of any other provision of this Lease or a consent to any subsequent breach of the same or any other provision. If any action by either party shall require the consent or approval of the other party, the other party's consent to or approval of such action on any one occasion shall not be deemed a consent to or approval of said action on any subsequent occasion or a consent to or approval of any other action on the same or any subsequent occasion. Any and all rights and remedies which either party may have under this Lease or by operation of law, either at law or in equity, upon any breach, shall be distinct, separate and cumulative and shall not be deemed inconsistent with each other, and no one of them, whether exercised by said party or not, shall be deemed to be an exclusion of any other; and any two or more or all of such rights and remedies may be exercised at the same time.
Section 4. Disputes. It is agreed that, if at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of the said party to institute suit for the recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease. If at any time a dispute shall arise between the parties hereto as to any work to be performed by either of them under the provisions hereof, the party against whom the obligation to perform the work is asserted may perform such work and pay the costs thereof "under protest" and the performance of such work shall in no event be regarded as a voluntary performance and shall survive the right on the part of the said party to institute suit for the recovery of the costs of such work. If it shall be adjudged that there was no legal obligation on the part of the said party to perform the same or any part thereof, said party shall be entitled to recover the costs of such work or the cost of so much thereof as said party was not legally required to perform under the provisions of this Lease and the amount so paid by User may be withheld or deducted by User from any Rental fees herein reserved.
Section 5. Users Right to cure Providers Default. In the event that Provider shall fail, refuse or neglect to pay any mortgages, liens or encumbrances, the judicial sale of which might affect the interest of User hereunder, or shall fail, refuse or neglect to pay any interest due or payable on any such mortgage, lien or encumbrance, User may pay said mortgages, liens or encumbrances, or interest or perform said conditions and charge to Provider the amount so paid and withhold and deduct from any Rental fees herein reserved such amounts so paid, and any excess over and above the amounts of said Rental fees shall be paid by Provider to User.
Section 6. Notices. All notices and other communications authorized or required hereunder shall be in writing and shall be given by mailing the same by certified mail, return receipt requested, postage prepaid, and any such notice or other communication shall be deemed to have been given when received by the party to whom such notice or other communication shall be addressed. If intended for the Provider the same will be mailed to the address herein above set forth or such other address as Provider may hereafter designate by notice to User, and if intended for User, the same shall be mailed to User at the address herein above set forth, or such other address or addresses as User may hereafter designate by notice to Provider.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first above written or have caused this Lease to be executed by their respective officers thereunto duly authorized.
Signed, sealed and delivered in the presence of:
| /s/ Dr. Niclas Adler | /s/ Dr. Niclas Adler | |
| Dr. Niclas Adler | Dr. Niclas Adler | |
| Marviken ONE AB | Synthesis Analytics Production Limited |
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Exhibit 10.9
PROMISSORY NOTE
Under Swedish Law
This Loan Note ("Note") is issued on December 4, 2024, by:
| 1. | Debtor (Buyer): | |
| Synthesis Analytics Production Limited, a company organised under the laws of England and Wales with registered number 14342669 and having its registered address at Wenlock Road, London, England, N1 7GU, hereinafter referred to as the "Debtor". | ||
| 2. | Creditor (Seller): | |
| Marviken TWO AB, a company incorporated under the laws of Sweden, with registration number 559223-1491, and registered office at Kungsportsavenyen 26, Box 19055, 400 12 Gothenburg, Sweden hereinafter referred to as the "Creditor". |
1. Amount and Purpose of the Loan
1.1 The Debtor hereby acknowledges owing the Creditor the principal amount of USD 1,75 million (the “Loan Amount”), which represents part of the purchase price for the property located at:
· Property Address: Marviken Kraftverk, 610 27 Vikbolandet, Sweden
· Property Designation: A sectioning off from Norrköping Ramnö 1:7
1.2 This Note is issued as part of the real estate purchase agreement dated December 4, 2024 (the “Purchase Agreement”).
2. Interest
2.1 The Loan Amount shall bear interest at a rate of 5% per annum, calculated on the basis of the actual number of days elapsed over a year of 365 days.
2.2 Interest shall accrue from the date of this Note until the Loan Amount is repaid in full.
3. Repayment Terms
3.1 The Loan Amount, together with accrued interest, shall be repaid in full on or before December 3, 2027 (the “Maturity Date”). Minimum $0,75 Million of the Sellers Loan Note will be repaid from the proceeds of the capital raises during 2025.
3.2 The Debtor may make early repayment of all or part of the Loan Amount at any time without penalty, provided that at least 10 days’ prior written notice is given to the Creditor.
4. Security
4.1 As security for the performance of its obligations under this Note, the Debtor hereby grants the Creditor a security over the property identified in Section 1.1.
4.2 The Debtor agrees to execute and register all necessary documents to perfect the Creditor’s security interest in the property.
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5. Events of Default
The following shall constitute events of default under this Note:
5.1 Failure by the Debtor to make payment of any amount due under this Note by the Maturity Date.
5.2 Breach by the Debtor of any obligations under the Purchase Agreement or this Note.
5.3 The initiation of bankruptcy or insolvency proceedings against the Debtor.
Upon the occurrence of any event of default, the Creditor shall have the right to demand immediate payment of all amounts outstanding under this Note, including interest.
6. Governing Law and Dispute Resolution
6.1 This Note shall be governed by and construed in accordance with the laws of Sweden.
6.2 Any disputes arising from or in connection with this Note shall be resolved by the courts of Sweden, with Stockholm District Court (Stockholms tingsrätt) as the court of first instance.
7. Miscellaneous
7.1 This Note may not be assigned or transferred by either party without the prior written consent of the other party.
7.2 Any amendments to this Note must be made in writing and signed by both parties.
7.3 Notices required under this Note shall be delivered to the addresses set out above or as otherwise notified in writing by the parties.
8. Signatures
By signing below, the parties acknowledge and agree to the terms of this Note:
For the Debtor:
Dr Niclas Adler
Director
/s/ Dr Niclas Adler
Date: 2024-12-04
For
the Creditor:
Dr Niclas Adler
Director
/s/ Dr Niclas Adler
Date: 2024-12-04
Attachments
1. Copy of the Purchase Agreement.
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Exhibit 10.10
INTELLECTUAL PROPERTY AND TRADE SECRETS PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of August 31, 2024, by and between:
1. Adler Capital Limited, a company incorporated and registered in Hong Kong with company number 68827254 and having its registered office at Room 3208, 32/F, Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong ("Seller"); and
2. Synthesis Analytics Production Limited a company incorporated and registered in the United Kingdom with company number 14342669 and having its registered office at 124 City Road, London, EC1V 2NX, United Kingdom ("Buyer").
WHEREAS:
(A) The Seller is a technology investor that has built up a portfolio of intellectual property rights and trade secrets (as defined below) and wishes to sell them to the Buyer.
(B) The Buyer desires to acquire the intellectual property and trade secrets from the Seller under the terms and conditions set out in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS
1.1 Intellectual Property: Includes all immersion cooling solutions, trademarks, trade names, domain names, websites, copyrights, designs, databases, and any other intellectual property rights that has been traded under Synthesis Analytics brand, whether registered or unregistered, and all applications for such rights.
1.2 Trade Secrets: Includes any and all confidential business information, know-how, formulas, designs, algorithms, processes, customer lists, business strategies, and other proprietary information that has been traded under Synthesis Analytics brand.
1.3 Effective Date: The date on which this Agreement is executed by both parties.
1.4 Purchase Price: The amount payable by the Buyer to the Seller for the IP and Trade Secrets, as specified in Clause 3.
2. TRANSFER OF RIGHTS
2.1 The Seller agrees to sell, assign, and transfer all rights, title, and interest in the Intellectual Property and Trade Secrets to the Buyer.
2.2 The Seller shall provide all necessary documents, including but not limited to, assignment agreements, certificates of registration, and other materials required to complete the transfer.
2.3 The Buyer shall own all rights to use, exploit, license, or transfer the acquired IP and Trade Secrets without restriction.
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3. PURCHASE PRICE AND PAYMENT TERMS
3.1 The Purchase Price for the Equipment shall be USD 500,000 payable by the Buyer to the Seller as follows:
(a) Payment Schedule: Full amount will be paid latest 30 days after Effective Date.
3.2 Payment shall be made via Bank Transfer to the Seller’s designated account.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Seller represents and warrants that:
(a) It is the sole and exclusive owner of the IP and Trade Secrets;
(b) The IP and Trade Secrets are free from encumbrances, claims, or disputes;
(c) It has full authority to enter into this Agreement and perform its obligations hereunder;
(d) The transfer of the IP and Trade Secrets will not infringe on any third-party rights.
4.2 The Buyer represents and warrants that:
(a) It has full authority to enter into this Agreement and perform its obligations;
(b) It shall make the payments as required under this Agreement.
5. CONFIDENTIALITY
5.1 Both parties agree to maintain the confidentiality of all information exchanged in relation to this Agreement.
5.2 The Seller shall not disclose or use any of the Trade Secrets following completion of the transfer.
6. GOVERNING LAW AND DISPUTE RESOLUTION
6.1 This Agreement shall be governed by and construed in accordance with the laws of England and Wales.
6.2 Any disputes arising out of or in connection with this Agreement shall be resolved by arbitration in London, in accordance with the rules of the London Court of International Arbitration (LCIA).
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7. GENERAL PROVISIONS
7.1 Entire Agreement: This Agreement constitutes the entire agreement between the parties and supersedes all prior discussions and agreements.
7.2 Amendments: Any amendments to this Agreement must be in writing and signed by both parties.
7.3 Severability: If any provision of this Agreement is found to be invalid, the remaining provisions shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
SELLER:
/s/ Dr Niclas Adler
Dr Niclas Adler, Director, Adler Capital
Limited
BUYER:
/s/ Dr Niclas Adler
Dr Niclas Adler, Director, Synthesis Analytics Production Limited
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