UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 Entry into a Material Definitive Agreement.
Securities Purchase Agreements
As previously disclosed, on August 25, 2025, Sharps Technology, Inc. (the “Company”) entered into securities purchase agreements (the “Cash Securities Purchase Agreements”) with certain accredited investors (the “Cash Purchasers”) pursuant to which the Company agreed to sell and issue to the Cash Purchasers in a private placement offering (the “Cash Offering”) an aggregate offering of (i) 24,338,649 shares (the “Cash Shares”) of common stock of the Company, par value $0.0001 per share (the “Common Stock”), at an offering price of $6.50 per share, (ii) pre-funded warrants (the “Cash Pre-Funded Warrants”) to purchase 16,715,385 shares of Common Stock (the “Cash Pre-Funded Warrant Shares,”) at an offering price of $6.4999 per Pre-Funded Warrant, and (iii) stapled warrants (the “Cash Stapled Warrants,” and together with the Common Stock and Cash Pre-Funded Warrants, the “Cash Securities”) to purchase 41,054,034 shares of Common Stock (the “Cash Stapled Warrant Shares,”) at an exercise price of $9.75 per Cash Stapled Warrant.
Each of the Cash Pre-Funded Warrants are immediately exercisable for one share of Common Stock at the exercise price of $0.0001 per Cash Pre-Funded Warrant Share, and may be exercised at any time until all of the Cash Pre-Funded Warrants issued in the Offerings (as defined below) are exercised in full. Each Cash Purchaser’s ability to exercise its Cash Pre-Funded Warrants in exchange for shares of Common Stock is subject to certain beneficial ownership limitations set forth therein. Each of the Cash Stapled Warrants are immediately exercisable for one share of Common Stock at the exercise price of $9.75 per Cash Stapled Warrant Share, and may be exercised at any time until the earlier of (i) 36 months after the closing of the Offerings or (ii) all of the Cash Stapled Warrants issued in the Offerings are exercised in full.
On August 25, 2025, the Company also entered into securities purchase agreements (the “Cryptocurrency Securities Purchase Agreements,” and together with the Cash Securities Purchase Agreements, the “Securities Purchase Agreements”) with certain accredited investors (the “Cryptocurrency Purchasers,” and together with the Cash Purchasers, the “Purchasers”) pursuant to which the Company agreed to sell and issue to the Cryptocurrency Purchasers in a private placement offering (the “Cryptocurrency Offering” and together with the Cash Offering, the “Offerings”) (i) pre-funded warrants (the “Cryptocurrency Pre-Funded Warrants” and together with the Cash Pre-Funded Warrants, the “Pre-Funded Warrants”) to purchase 22,159,638 shares of Common Stock (the “Cryptocurrency Pre-Funded Warrant Shares,” and together with the Cash Pre-Funded Warrant Share, the “Pre-Funded Warrant Shares”) at an offering price of $6.4999 per Pre-Funded Warrant, and (ii) stapled warrants (the “Cryptocurrency Stapled Warrants,” and together with the Cash Stapled Warrants, the “Stapled Warrants” to purchase 22,159,638 shares of Common Stock (the “Cryptocurrency Stapled Warrant Shares,” and together with the Cash Stapled Warrant Share, the “Stapled Warrant Shares”) at an exercise price of $9.75 per Cryptocurrency Stapled Warrant.
The exercise of the Cryptocurrency Pre-Funded Warrants and Cryptocurrency Stapled Warrants into Cryptocurrency Pre-Funded Warrant Shares and Cryptocurrency Stapled Warrant Shares, respectively, is subject to stockholder approval (“Stockholder Approval”) and such warrants will not be exercisable for Common Stock until such Shareholder Approval is received. Pursuant to the Cryptocurrency Securities Purchase Agreement, the Company will hold a special meeting of stockholders to obtain Stockholder Approval as soon as practicable after the closing date of this Offering. Each of the Cryptocurrency Pre-Funded Warrants is exercisable for one share of Common Stock at the exercise price of $0.0001 per Cryptocurrency Pre-Funded Warrant Share, immediately exercisable following Stockholder Approval (the “Effective Date”), and may be exercised at any time on or after the Effective Date until all of the Cryptocurrency Pre-Funded Warrants issued in the Offerings are exercised in full. Each Cryptocurrency Purchaser’s ability to exercise its Cryptocurrency Pre-Funded Warrants in exchange for shares of Common Stock is subject to certain beneficial ownership limitations set forth therein. Each of the Cryptocurrency Stapled Warrants is exercisable for one share of Common Stock at the exercise price of $9.75 per Cryptocurrency Stapled Warrant Share, immediately exercisable on or after the Effective Date, and may be exercised at any time on or after the Effective Date until the earlier of (i) 36 months after the closing of the Offerings or (ii) all of the Cryptocurrency Stapled Warrants issued in the Offerings are exercised in full.
The Company raised proceeds of approximately $410,880,000 in the Offerings. In connection with the Offerings, the Company adopted a digital asset treasury strategy under which the principal holding will be SOL, the native digital asset of the Solana blockchain (the “Treasury Strategy”).
Cantor Fitzgerald & Co. acted as the lead placement agent to the Company in connection with the Offerings and Aegis Capital Corp. acted as the co-placement agent to the Company in connection with the Offerings. Madison Global Partners, LLC acted as a non-exclusive financial advisor to the Company.
The Cash Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Stapled Warrants, and the Stapled Warrant Shares were offered in reliance upon the exemption from the registration requirement of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof and/or Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws. The issuance of the Cash Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Stapled Warrants, and the Stapled Warrant Shares have not been registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.
The Company intends to use the net cash proceeds from the Offerings to fund the acquisition of SOL through open market purchases only and the establishment of the Company’s Solana treasury operations, as well as for working capital, general corporate purposes and to pay all transaction fees and expenses related thereto. The Company will not use the net proceeds from the Offering: (a) for the redemption of any outstanding Common Stock or Common Stock equivalents of the Company, (b) for the settlement of any outstanding litigation or (c) in violation of the Foreign Corrupt Practices Act of 1977, as amended or the Office of Foreign Assets Control of the U.S. Treasury Department regulations. Further, the Company will maintain the net proceeds of the Offering in a separate account and shall not commingle such net proceeds with any other proceeds received by the Company from any other financing or capital raising activities.
Registration Rights Agreement
In connection with entering into the Securities Purchase Agreements, on August 25, 2025, the Company and the Purchasers entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to use commercially reasonable efforts to file a registration statement with the U.S. Securities and Exchange Commission, within 30 days of the closing of the Offerings registering the resale of the Cash Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Stapled Warrants, the Stapled Warrant Shares, the Strategic Advisor Warrants (as defined below) and the shares of Common Stock issuable upon exercise of the Strategic Advisor Warrants (the “Strategic Advisor Warrant Shares”).
Strategic Advisor Agreements
On August 28, 2025, the Company entered into a Strategic Advisor Agreement (the “Strategic Advisor Agreement”) with Sol Markets, a Cayman Islands exempt company (the “Strategic Advisor”), pursuant to which the Company engaged the Strategic Advisor to provide strategic advice and guidance relating to the Company’s business, operations, growth initiatives and industry trends in the crypto technology sector for an initial term of two (2) years, which may be extended by mutual written agreement of the Company and the Strategic Advisor. Either the Company or the Strategic Advisor may terminate the Strategic Advisor Agreement upon one hundred eighty (180) days’ prior written notice or for cause, as such term is defined in the Strategic Advisor Agreement. Pursuant to the terms of the Strategic Advisor Agreement, the Company issued to the Strategic Advisor, the Strategic Advisor warrants (the “Strategic Advisor Warrants”) to purchase 6,321,367 shares of the Company’s Common Stock (the “Strategic Advisor Warrants”) which is equal to 10% of the aggregate number of shares of Cash Shares and the Pre-Funded Warrant Shares. Upon the exercise of each Stapled Warrant, the Strategic Advisor shall receive an additional grant of Strategic Advisor Warrants to purchase an amount of shares of Common Stock equal to 10% of the Stapled Warrant Shares underlying such exercised Stapled Warrant (such shares of Common Stock underlying the Strategic Advisor Warrants, the “Strategic Advisor Warrant Shares”). Sol Markets is controlled by James Zhang who is the brother of Alice Zhang, the Company’s new Chief Investment Officer and a Director of the Company.
The exercise price per share of the Strategic Advisor Warrants shall be equal to the par value of the Common Stock. The Strategic Advisor Warrants shall be exercisable, in whole or in part, at any time and from time to time, for a period of seven (7) years from the date of issuance. The Strategic Advisor Agreements also contain customary representations and warranties, confidentiality provisions and limitations on liability.
The Strategic Advisor Warrants and the Strategic Advisor Warrant Shares are being offered in reliance upon the exemption from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) thereof and/or Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws. The issuance of the Strategic Advisor Warrants and the Strategic Advisor Warrant Shares have not been registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.
The foregoing description of the Strategic Advisor Agreements and Strategic Advisor Warrants do not purport to be complete and are qualified in their entirety by reference to the full texts of the Strategic Advisor Agreements and the Form of Strategic Advisor Warrants, copies of which are attached hereto as Exhibits, 10.4 and 4.6, respectively, and incorporated herein by reference.
Consulting Agreement
On August 28, 2025, the Company entered into consulting agreement (the “Consulting Agreement”) with Sol Edge Limited (the “Consultant”) pursuant to which the Company appointed the Consultant to provide asset management and related services with respect to the Company’s digital assets in accordance with the Company’s Treasury Strategy.
The assets subject to the Consultant Agreement consist of the net proceeds from the Offering as well as any other cash or digital assets designated by the Company as part of its treasury (the “Treasury Assets”). The Treasury Assets are held in cryptocurrency wallets established and controlled by the Company’s Consultant (or an affiliate), with custody maintained by a custodian acceptable to the Company’s strategic committee.
The Consultant is compensated according to a management fee schedule set forth in the Consultant Agreement The Company is responsible for all reasonable and documented expenses related to the operation of the Treasury Strategy, including custodial, banking, brokerage, transaction, and other related fees. The Consultant does not provide advice regarding securities, and the arrangement is structured to avoid the inclusion of securities as defined under the Investment Advisers Act of 1940.
The Consultant Agreement has a term of twenty (20) years. If the Company terminates the Consultant Agreement prior to the end of the term, or if the Consultant terminates due to a material breach by the Company, the Company is required to pay the Consultant all fees and other compensation that would have accrued through the end of the term as liquidated damages, paid monthly. The Consultant may terminate the agreement at any time for any reason with at least one hundred twenty 120 days’ prior written notice.
This arrangement is intended to provide the Company with professional management of its digital asset treasury, with a focus on maximizing return and value accretion, while maintaining robust controls and oversight over the Company’s digital assets.
Sol Edge Limited is also controlled by James Zhang.
In connection with both the Strategic Advisor Agreement and Consultant Agreement, the Board formally established the Strategic Committee, composed of Paul K. Danner and Alice Zhang, to oversee the development and execution of key strategic initiatives. The Consultant reports directly to this Committee and operates under its guidance and direction.
The foregoing descriptions of the Consultant Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Consultant Agreement, copies of which are attached hereto as Exhibits 10.5, and incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure required by this Item is included in Item 1.01 of this Current Report on Form 8-K and is incorporated herein by reference. Based in part upon the representations of the Purchasers in the Securities Purchase Agreement, the offering and sale of the Cash Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Stapled Warrants, the Stapled Warrant Shares, the Strategic Advisor Warrants and the Strategic Advisor Warrant Shares was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
Item 7.01. Regulation FD Disclosure.
Press Release on Announcing the Offering
On August 25, 2025, the Company issued a press release announcing the signing of the Securities Purchase Agreements, pricing of the Offerings and estimated aggregate gross proceeds of approximately $400 million in cash, before deducting placement agent fees and other offering expenses, to implement a Solana treasury strategy. A copy of the press release is included as Exhibit 99.1 here and is incorporated herein by reference.
On August 28, 2025, the Company issued a press release announcing the closing of the Offerings. A copy of the press release is included as Exhibit 99.2 here and is incorporated herein by reference.
Corporate Presentation
In connection with the Offering, the Company delivered an investor presentation to potential investors on a confidential basis, a copy of which is furnished as Exhibit 99.3 to this Current Report on Form 8-K. The presentation is available on the Company’s investor relations website at https://sharpstechnology.com/.
The information under this Item 7.01, including Exhibits 99.1, 99.2 and 99.3, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 8.01 Other Events
On September 1, 2025, the Board formally established the Strategic Committee, composed of Paul K. Danner and Alice Zhang, to oversee the development and execution of key strategic initiatives.
Current SOL Position
The Company’s current position in Solana is over 2 million SOL, representing its commitment within its broader digital asset strategy.
Sharps Technology intends to provide regular updates on its SOL holdings and performance metrics to ensure maximum transparency for investors.
Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. This Current Report on Form 8-K also includes express and implied forward-looking statements regarding the Company’s current expectations, estimates, opinions and beliefs that are not historical facts. Such forward-looking statements may be identified by words such as “believes,” “expects,” “endeavors,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “should” and “objective” and the negative and variations of such words and similar words. These statements are made on the basis of current knowledge and, by their nature, involve numerous assumptions and uncertainties. Nothing set forth herein should be regarded as a representation, warranty or prediction that we will achieve or are likely to achieve any particular future result. Actual results may differ materially from those indicated in the forward-looking statements because the realization of those results is subject to many risks and uncertainties, including the risk that the proposed transactions described herein may not be completed in a timely manner or at all, the failure to realize the anticipated benefits of the Offerings and related transactions, including the proposed digital asset treasury strategy, economic conditions, fluctuations in the market price of SOL, the impact on the Company’s business of the evolving regulatory environment, the ability of the Company to execute on its digital asset treasury strategy, risks relating to significant legal, commercial, regulatory and technical uncertainty regarding digital assets generally as well as those risks and uncertainties identified under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and other information the Company has or may file with the SEC, including those disclosed under Item 8.01 of this Current Report on Form 8-K. Forward-looking statements contained in this Current Report on Form 8-K are made as of the date of this Current Report on Form 8-K, and the Company undertakes no duty to update such information except as required under applicable law.
Item 9.01 Financial Statements and Exhibits
(a) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: September 2, 2025
| SHARPS TECHNOLOGY, INC. | |
| /s/ Paul K. Danner | |
| Paul K. Danner | |
| Executive Chairman (Principal Executive Officer) |
Exhibit 4.6
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
FORM OF STRATEGIC ADVISORY WARRANT
SHARPS TECHNOLOGY, INC.
| Warrant Shares: 6,321,367 | Issue Date: August 28, 2025 |
THIS STRATEGIC ADVISORY WARRANT (the “Warrant”) certifies that, for value received, Sol Markets, a Cayman Islands exempt company or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the effective date of Shareholder Approval (the “Initial Exercise Date”) until this Warrant is exercised in full (the “Termination Date”), to subscribe for and purchase from Sharps Technology, Inc., a Nevada corporation (the “Company”), up to 6,321,367 shares of common stock, par value $0.0001 per share (the “Common Stock”), of the Company (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated August 25, 2025, among the Company and the Holder and the other Purchasers named therein.
| (a) | Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and, on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF or DocuSign copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto as Exhibit A (the “Notice of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice and only for the purpose avoiding violation of the Beneficial Holder Limitation. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof. |
For the avoidance of doubt, there is no circumstance that would require the Company to net cash settle the Warrants.
b) Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever. The remaining unpaid exercise price per Warrant Share shall be $0.0001, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
| (B) | = | the Exercise Price of this Warrant, as adjusted hereunder, in effect on the date of exercise; and |
| (X) | = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrants being exercised and any holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. For the avoidance of doubt, in the absence of an effective registration statement registering the issuance of the Warrant Shares, the Company shall issue, and the Holder agrees to receive, unregistered Warrant Shares upon a cashless exercise of this Warrant pursuant to this Section 2(c). The Company agrees not to take any position contrary to this Section 2(c).
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted for trading on a Trading Market and if the Common Stock is then listed or quoted on OTCQB or OTCQX, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Trading Day” means any day on which the Trading Market is open for trading, including any day on which the Trading Market is open for trading for a period of time less than the customary time. If the Common Stock is not then listed or quoted on a Trading Market, Trading Day means a Business Day.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted for trading on a Trading Market and if the Common Stock is then listed or quoted on OTCQB or OTCQX, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c), subject to the limitations in Section 2(e) hereof.
d) Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise) is received by the Company by such date, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise) is received by the Company by such date (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise) is received by the Company by such date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or the Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to deliver, or cause to be delivered, the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date.
ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (other than any such failure that is solely due to any action or inaction by the Holder with respect to such exercise), and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Warrant Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share of Common Stock.
vi. Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form, attached hereto as Exhibit B, duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates, (ii) any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial ownership of the shares of Common Stock would or could be aggregated with the Holder’s for purposes of Section 13(d) (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Warrant Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Warrant Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrants that are not in compliance with the Beneficial Ownership Limitation, except to the extent the Holder relies on the number of outstanding shares of Common Stock that was provided by the Company. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrants that are not in compliance with the Beneficial Ownership Limitation, except to the extent the Holder relies on the number of outstanding shares of Common Stock that was provided by the Company. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% (or, upon election by a Holder prior to the issuance of any Warrants, 4.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 19.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply, provided further that an Affiliate of the Company may suspend the Beneficial Ownership Limitation in its entirety if, and for so long as, such Beneficial Ownership Limitation is not required to be in effect to ensure compliance with applicable Nasdaq listing requirements with respect to stockholder approval. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall not be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. If the Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternative consideration is owing to the Holder.
f) Trading Market Limitation. Notwithstanding any other provision herein, this Warrant may not be exercised, and the Company may not issue any shares of Common Stock upon submission of a Notice of Exercise, until receipt of Shareholder Approval. Until receipt of Shareholder Approval, no Holder of this Warrant shall be issued shares of Common Stock upon an attempted exercise of this Warrant.
Section 3. Certain Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person in which the Company is not the surviving entity (other than a reincorporation in a different state), (ii) the Company or any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of more than 50% of the outstanding shares of the aggregate voting power of all classes of equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of the aggregate voting power of all classes of equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
e) [Reserved].
f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
g) Notice to Holder.
i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow Exercise by Holder. If, while the Warrant is outstanding, (A) the Company declares a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company declares a special nonrecurring cash dividend on, or a redemption of, the shares of Common Stock, (C) the Company authorizes the granting to all holders of the shares of Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company is required in connection with a Fundamental Transaction, or (E) the Company authorizes the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 10 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The issuance of a press release or the filing of a Form 8-K or other suitable filing with the Commission shall satisfy this notice requirement. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
h) Voluntary Adjustment by the Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
Section 4. Transfer of Warrant.
a) Transferability. Subject to compliance with any applicable securities laws, the conditions set forth in Section 4(d) hereof, and the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants. Subject to compliance with applicable securities laws, this Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 5.7 of the Purchase Agreement.
e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
d) Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued and delivered as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued and delivered upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any shares of Common Stock above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof that would require the application of the laws of any other jurisdiction. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws, and in such case, by the acceptance hereof, represents and warrants that the Holder will acquire such Warrant Shares issuable upon such exercise for its own account and not with a view to or for distributing or reselling Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law.
g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.
i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| Sharps technology, inc. | ||
| By: | /s/ Paul K. Danner | |
| Name: | Paul K. Danner | |
| Title: | Executive Chairman | |
NOTICE OF EXERCISE
TO: SHARPS TECHNOLOGY, INC.
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
☐ in lawful money of the United States; or
☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the following DWAC Account Number:
(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
| Name of Investing Entity: | |
| Signature of Authorized Signatory of Investing Entity: | |
| Name of Authorized Signatory: | |
| Title of Authorized Signatory: | |
| Date: |
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | |
| (Please Print) | |
| Address: | |
| (Please Print) | |
| Phone Number: | |
| Email Address: |
| Dated: _______________ __, ______ |
| Holder’s Signature: _______________ |
| Holder’s Address:_______________ |
Exhibit 10.4
STRATEGIC ADVISOR AGREEMENT
THIS STRATEGIC ADVISOR AGREEMENT (this “Agreement”) is made and entered into as of the Closing Date (as defined in the Securities Purchase Agreements, dated August 25, 2025) (the “Effective Date”) by and between Sharps Technology Inc., a Nevada corporation (the “Company”), and Sol Markets, a Cayman Islands exempt company (the “Strategic Advisor”).
WHEREAS, the Strategic Advisor has been vital to the success of the Company’s recent private offering transaction (the “PIPE Transaction”), and the Company wishes to secure the continued commitment of Strategic Advisor to offer consulting services to the Company, and Strategic Advisor wishes to offer such a commitment.
NOW, THEREFORE, in consideration of the premises and of the covenants and undertakings specified herein, the Company and the Strategic Advisor hereby agree as follows:
1. Engagement and Services.
1.1 Engagement. The Company hereby engages Strategic Advisor, and Strategic Advisor hereby accepts such engagement, to serve as a strategic advisor to the Company on the terms and conditions set forth in this Agreement.
1.2 Services. Strategic Advisor shall provide the Company with strategic advice and guidance relating to the Company’s business, operations and growth initiatives, and industry trends in the crypto technology sector (the “Services”). Strategic Advisor shall perform the Services at such times and places as are mutually agreed upon by the Company and Strategic Advisor, with no specific minimum time commitment required
2. Term. The initial term of this Agreement shall commence on the date hereof and continue for a period of two (2) years unless earlier terminated in accordance with Section 6. The term may be extended by mutual written agreement of the parties hereto (the “Parties”).
3. Compensation.
3.1 In consideration of Strategic Advisor’s provision of the Services, immediately following the PIPE Transaction, the Company will compensate the Strategic Advisor with warrants to purchase an amount of shares of the Company’s common stock, par value $0.0001 per share (the “Strategic Advisor Warrants”) equal to 10% of the aggregate number of shares of common stock of the Company and Pre-Funded Warrants issued pursuant to those certain Cash Securities Purchase Agreements and Cryptocurrency Securities Purchase Agreements, each dated August 25, 2025, between the Company and each of the Purchasers (as defined therein), to be issued to the Strategic Advisor as of the Effective Date. Following the Effective Date and upon the exercise of a Cash Stapled Warrant or Cryptocurrency Stapled Warrant (as defined in Cash Securities Purchase Agreements and the Cryptocurrency Securities Purchase Agreements, respectively), the Strategic Advisor shall receive an additional grant of Strategic Advisor Warrants to purchase an amount of shares of Common Stock equal to 10% of the Cash Stapled Warrant Shares underlying such exercised Cash Stapled Warrant and 10% of the Cryptocurrency Stapled Warrant Shares underlying such exercised Cryptocurrency Stapled Warrant, as the case may be. The exercise price per share of the Strategic Advisor Warrants shall be set at a price equal to $0.0001. The Strategic Advisor Warrants shall be exercisable, in whole or in part, at any time and from time to time, for a period of seven (7) years from the date of issuance. The Strategic Advisor Warrants shall be subject to the terms and conditions set forth in the Common Stock Purchase Warrant to be entered into between the Company and Strategic Advisor, substantially in the form attached hereto as Exhibit A.
3.2 Immediately following the issuance of the Strategic Advisor Warrants, the Parties will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights in respect of the shares of common stock issuable upon exercise of the Strategic Advisor Warrants under the Securities Act, and the rules and regulations promulgated thereunder.
3.3 The Company will also reimburse reasonable expenses reasonably and necessarily incurred by Strategic Advisor in the course of providing the Services, including airfare, lodging and meals, subject to the Company’s receipt of documentation for such expenses reasonably satisfactory to the Company.
4. Status as an Independent Contractor. Strategic Advisor and the Company hereby specifically agree that, throughout the term of this Agreement, Strategic Advisor’s relationship with the Company hereunder will be solely and exclusively that of an independent contractor. Strategic Advisor shall not be deemed and shall not hold himself out to be an employee or agent of the Company, nor shall the parties be deemed to be engaged in any partnership, joint venture, or other business relationship other than that of principal and independent contractor. Nothing contained in this Agreement shall be construed so as to make Strategic Advisor an employee of the Company or any of its parents, subsidiaries or affiliates (collectively, the “Company Entities”), or to entitle Strategic Advisor to any rights or fringe benefits offered to employees of the Company or the Company Entities, including, but not limited to, any retirement, savings, health, medical, welfare, life insurance, disability, vacation, stock purchase, stock option, incentive, or other benefit plans or programs maintained for employees by or on behalf of the Company or the Company Entities.
5. Termination.
5.1 Termination. Either Party may terminate this Agreement upon 180 days’ written notice of termination to the other Party. Notwithstanding Section 2 hereof, either Party may terminate this Agreement at any time, effective immediately upon notice, if it has good cause for termination. Without limiting applicable law, good cause for termination includes a situation in which the other Party is in material breach of any of its obligations under this Agreement and has failed to cure such breach within ten (10) days, after receiving written notice from the other Party of the existence of such breach. The Strategic Advisor Warrants shall be deemed fully earned as of the Effective Date and are not subject to revocation or clawback in the event of termination by the Company.
5.2 Survival of Accrued Obligations. Termination of this Agreement will not relieve either Party of its obligations hereunder accruing prior to such termination. Each Party will diligently continue to perform its obligations hereunder through the date of termination even if it has received notice of the other Party’s election to terminate.
6. Confidentiality and Non-Disclosure.
6.1 Obligations of Confidentiality. Strategic Advisor hereby acknowledges that all of the Proprietary Information (as hereinafter defined) now or hereafter known to Strategic Advisor is of substantial value to the Company and is and has been maintained in confidence as trade secrets of the Company. Strategic Advisor hereby covenants and agrees:
(i) to keep such Proprietary Information confidential as herein provided.
(ii) not to disclose, divulge or furnish such Proprietary Information to any third party except as authorized by the Company, and then only on the understanding that such third party is made aware of and undertakes to observe the provisions of this Section 6.
(iii) not to copy or reduce Proprietary Information to writing, except as may be strictly necessary for purposes of performing the Services; and
(iv) upon termination of this Agreement for any reason, to return to the Company within twenty (20) business days of receipt of written demand from the Company, all copies of Proprietary Information reduced to writing or other permanent form, or to otherwise delete all copies of Proprietary Information in electronic form and to destroy all notes and any other written or electronic reports or documents which may have been made by Strategic Advisor in performance of the Services to the extent they contain any Proprietary Information in whole or part, except as authorized by the Company or as is strictly necessary to complete any outstanding obligations relating to this Agreement, after which such Proprietary Information will be returned or destroyed as aforesaid
6.2 Definition. For purposes of this Agreement, “Proprietary Information” means any strategic, technical, business, commercial, legal, financial or other information provided to Strategic Advisor by the Company (or by a third party on the Company’s behalf); provided, however, that Proprietary Information will not include any information which: (i) is in or comes into the public domain otherwise than through a breach of this Agreement or through any act or omission of Strategic Advisor; or (ii) has been lawfully received by Strategic Advisor from a third party without restriction as to its use or disclosure; or (iii) was already in Strategic Advisor’s possession free of any such restriction prior to receipt from or on behalf of the Company; or (iv) was independently developed by Strategic Advisor without making use of the Proprietary Information; or (v) has been approved for unconditional release or use by written authorization of the Company.
7. Representations and Warranties.
7.1 Mutual Representations. Each Party represents and warrants to each other that: (a) it has the full right, power, and authority to enter into and perform its obligations under this Agreement; and (b) its performance under this Agreement will not violate any applicable laws or regulations.
7.2 Disclaimer. Except as expressly set forth in this Agreement, Strategic Advisor makes no warranties, express or implied, including any warranties of merchantability, fitness for a particular purpose, or non-infringement.
7.3 No Fiduciary Role. The Strategic Advisor is not, and shall not be deemed to be, acting as a fiduciary or investment adviser to the Company, or any of their respective affiliates, shareholders, or partners in connection with this Agreement or any matter contemplated herein. The Company acknowledges that it is not relying on the Strategic Advisor as a fiduciary or for investment advice, and that all decisions made by the Company are based on its own independent evaluation and judgment.
7.4 No Investment Advice. The Company acknowledges and agrees that the Strategic Advisor is not registered or licensed as an investment adviser, broker-dealer, or other regulated financial institution under the U.S. Investment Advisers Act of 1940 (the “Advisers Act”), the U.S. Securities Exchange Act of 1934, or any other applicable securities laws. The Strategic Advisor does not, and shall not, provide investment advice to the Company, nor shall any of the Services rendered under this Agreement be construed as investment advice, investment management, or a solicitation to buy or sell any security or financial instrument. The Company further acknowledges and agrees that it shall not be considered an “advisory client” of the Strategic Advisor for purposes of the Advisers Act or any other applicable securities law, and shall not be entitled to the protections afforded to advisory clients thereunder. The Strategic Advisor’s role under this Agreement is strictly limited to providing strategic advice and guidance relating to the Company’s business, operations and growth initiatives, and industry trends in the crypto technology sector.
7.5 Regulatory Status; No Securities Activities. The Strategic Advisor shall not, and is not expected or authorized to: (i) solicit investors, (ii) participate in the negotiation or execution of securities transactions, or (iii) receive any transaction-based compensation related to the purchase or sale of securities. The Strategic Advisor is not required and shall not engage in the purchase, sale, or trading of securities, including securities of the Company or its affiliates, whether for its own account or on behalf of any third party, in connection with this Agreement. The Strategic Advisor shall not provide recommendations, strategies, or advice concerning the purchase or sale of any securities. The Company shall not request, and the Strategic Advisor shall not be required to provide, any services that would require registration as an investment adviser, broker-dealer, or similar regulated role.
7.6 Company Acknowledgements. The Company acknowledges that the Strategic Advisor will not, in connection with the Services or otherwise:
(a) provide investment advice, price forecasts, trading recommendations, or any other form of guidance relating to the valuation, market performance, or expected returns of ENE or any other digital asset;
(b) act in the capacity of, or hold itself out as, an investment adviser, broker- dealer, fiduciary, or any other person or entity subject to registration or licensing under applicable securities, commodities, or financial services laws and regulations; or
(c) utilize, rely upon, or disseminate any material non-public information, trade secrets, or other confidential or proprietary information concerning SOL, S o l a n a , t h e S o l a n a F o u n d a t i o n or any of their respective affiliates, operations, or business plans.
The S t r a t e g i c Advisor’s role is limited to providing non-fiduciary, non- discretionary strategic support based solely on publicly available information and general industry knowledge.
8. Limitation of Liability.
8.1 Each Party’s total liability under this Agreement, whether in contract, tort, or otherwise, shall be limited to the total compensation paid under this Agreement. For the avoidance of doubt, this limitation shall not apply to the Company’s liability for fraud, willful misconduct, bad faith, or gross negligence.
8.2 Except in the cases of willful misconduct or fraud (each, a “Disqualifying Action”), none of the Strategic Advisor, its affiliates or their respective officers, directors, agents and employees (collectively, the “Covered Persons”) shall have any liability (whether direct or indirect, in contract or tort or otherwise) for any claims, liabilities, losses, damages, penalties, obligations or expenses of any kind whatsoever, including reasonable and documented attorneys’ fees and court costs (“Losses”) suffered by the Company as the result of any act or omission by the Strategic Advisor in connection with, arising out of or relating to the performance of its services hereunder. The Company further agrees that no Covered Person shall be liable for any Losses caused, directly or indirectly, by any act or omission of the Company or by any other non- party. Under no circumstances shall the Strategic Advisor or any Covered Person be liable for any special, incidental, exemplary, consequential, punitive, lost profits or indirect damages.
9. Indemnification. The Company shall indemnify and hold harmless the Covered Persons from and against any and all Losses (including reasonable attorneys’ fees) arising out of or in connection with the performance of the Services, including without limitation, arising out, directly or indirectly, with (i) the operations, business or affairs of the Company, or any actions taken by the Advisor or failure by it to act (even if negligent) in connection with this Agreement, (ii) a Disqualifying Action by the Company, (iii) any regulatory, governmental, or law enforcement inquiry, investigation, examination, proceeding, or enforcement action relating to or arising from the Company’s operations, business, or affairs, or (iv) the Company’s breach of this Agreement or the Strategic Advisor Warrant, in each case except to the extent that such Losses are determined by a court of competent jurisdiction, upon entry of a final judgment, to be attributable to a Disqualifying Action of such Covered Person.
10. Miscellaneous.
10.1 Notices. Any notice or approval required or permitted under this Agreement will be in writing and will be sent by registered or certified mail, postage prepaid, or by email, to the addresses designated by prior written notice. Any notice sent by mail will be deemed received three (3) business days after its mailing.
10.2 Entire Agreement. This Agreement contains the entire understanding of the Parties regarding all matters contained herein, and supersedes all prior oral or written agreements, arrangements and understandings relating thereto.
10.3 Amendment. This Agreement may be amended only in writing signed by both Parties. The failure by either Party to enforce compliance with any provision of this Agreement by the other Party will not operate or be construed as a waiver of such provision or of any other provision of this Agreement, or of any subsequent breach by such Party of a provision of this Agreement.
10.4 Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable in any respect, all other provisions hereof will continue in full force and effect.
11. Applicable Law; Dispute Resolution. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law principles. Any dispute arising between the parties out of or in connection with this Agreement will be finally resolved in state or federal court in New York, New York.
[Signature pages follow]
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written.
| Sharps Technology Inc. | ||
| By: | /s/ Paul Danner | |
| Name: | Paul Danner | |
| Title: | C E O | |
| Sol Markets | ||
| By: | /s/ James Zhang | |
| Name: | James Zhang | |
| Title: | Authorized Signatory | |
[Strategic Advisor Agreement Signature Page]
Exhibit A
Form of Common Stock Purchase Warrant
[see attached]
Exhibit B
Registration Rights Agreement
[see attached]
Exhibit 10.5
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (this “Agreement”), effective as of the final closing of the Capital Raise (as defined below) (the “Effective Date”), is entered into by and between Sharps Technology Inc., a Nevada corporation (the “Client” or the “Company”) and Sol Edge Limited, a Cayman Islands exempt company or its designated affiliate (the “Consultant” and, with the Client, the “Parties”).
WHEREAS, as required by the transaction documents for the Capital Raise (as defined below), the Client wishes to appoint the Consultant to provide asset management and related services regarding the digital assets of the Client under commercially reasonable terms;
WHEREAS, the Board of Directors of the Client (the “Board”) has determined to appoint the Consultant to provide such services, as of the date of the closing of the Capital Raise; and
WHEREAS, the Consultant wish.es to be appointed by the Board for such purposes in accordance with the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein, and for such other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree to be bound on the terms and conditions set forth below:
1. Appointment of the Consultant. The Board hereby appoints the Consultant to provide certain asset management and related services with respect to the Treasury Strategy (as defined below) to the accounts or cryptocurrency wallets identified in Schedule A attached hereto (as may be amended from time to time by the Consultant) and maintained with a custodian acceptable to the Client (the “Custodian”) and held in the name as designated by the Consultant, for the benefit of the Company’s wholly-owned subsidiary, Sol Equity Limited. The Consultant hereby accepts this appointment and agrees to provide such services on behalf of the digital assets within the Treasury Strategy (as defined below) of the Client upon the terms and conditions set forth herein. The Client agrees that affiliates of the Consultant (“Consultant’s Affiliates”), or other service providers as selected and engaged by the Consultant, may provide services hereunder as needed to further the Treasury Strategy.
2. Treasury Assets. The “Treasury Assets” shall consist of (a) the net proceeds of the offering of the Client’s securities in accordance with Section 4.7 of one or more certain Securities Purchase Agreements, dated as of August 25, 2025, between the Client and each purchaser identified on the signature pages thereto (the “Capital Raise”) and (b) any additional cash and crypto proceeds designated as “Treasury Assets” in accordance with this Section 2, in each case which the Client agrees it has placed or will place into the Treasury, as well as all activities thereof, proceeds of, income on and additions or accretions to same, including all assets which are or were in the Treasury, but which are staked from time to time in accordance with this Agreement. The (x) cash and crypto proceeds of the Capital Raise, (y) cash and crypto proceeds the Client receives in connection with additional capital raises, the stated use of which is to farther the Treasury Strategy and (z) additional available assets placed in the Treasury (collectively, the “Available Capital”) shall be contributed to the Treasury. The Client shall notify the Consultant of its intention to contribute Available Capital to be designated and maintained as Treasury Assets held in the Treasury one business day in advance of such contribution. With the approval of the Strategic Committee (as defined below), liquidation of Treasury Assets may be required for any withdrawal by the Client during the term of this Agreement and notice to the Consultant shall be given as soon as possible and, in any event, at least five business days in advance of such event. The Client acknowledges that (a) the Treasury Assets constitute only a part of the assets of the Client; (b) the Treasury Assets include any amounts needed for the Treasury operations budget in accordance with the applicable Investment Guidelines as defined herein; and (c) the Consultant may act without regard to or consideration of any other assets that may from time to time be held by the Client and shall have no responsibility, duty or liability with respect to any assets not Treasury Assets.
For the purposes of the above, the “Treasury Strategy” means the digital assets treasury strategy overseen by the Strategic Committee, focused on Solana (“SOL”) and SOL equivalents, including long and short strategies, hedging, staking, restaking and liquid staking, primarily in the SOL ecosystem, but also including Bitcoin and other digital assets in the discretion of the Strategic Committee to improve returns. The Parties agree that the Treasury Strategy shall not include “securities” as defined in the Investment Advisers Act of 1940, as amended (the “Advisers Act”), unless otherwise agreed in writing. The Client understands and agrees that (i) it is not engaging the Consultant to provide advice about securities and (ii) for so long as the Treasury Assets do not include securities and the Consultant’s services hereunder are confined to non-securities, the Client is not an “advisory client” for purposes of the Advisers Act, and to the fullest extent permitted by applicable law, shall not be afforded the protections of advisory clients under the Advisers Act. For the avoidance of doubt, nothing in this Section 2 shall be construed to limit or restrict the Consultant’s ability to manage the Treasury Assets in accordance with the Investment Guidelines set forth in Schedule B.
3. Authority of Consultant.
(a) Generally. The Consultant (and, where applicable, any Consultant Affiliate) shall have responsibility and authority regarding the digital assets of the Treasury in coordination with the Client and its Chief Investment Officer and, as herein provided, shall from time to time direct the activity of such digital assets. Subject to the Investment Guidelines set forth in Schedule B, the Consultant (and, where applicable, any Consultant Affiliate) shall have power and authority to:
(i) with the approval of the majority of the Strategic Committee, request that the net proceeds raised in the Capital Raise are contributed to the Treasury as Treasury Assets.
(ii) direct the Chief Investment Officer of the Client to enter into transactions and other undertakings that, subject to the Investment Guidelines set forth in Schedule B, the Consultant or any of the Consultant’s Affiliates may deem necessary or advisable to carry out its investment decisions, including but not limited to the ability to buy, sell, exchange, convert, swap, stake, redeem, and otherwise trade in digital assets in accordance with the Treasury Strategy;
(iii) make allocation decisions in respect of the Treasury Assets in accordance with the Investment Guidelines set forth in Schedule B;
(iv) direct the Chief Investment Officer of the Client to purchase, acquire, hold, invest, reinvest, sell, stake, redeem or dispose of, or otherwise trade in any assets which constitute or will constitute all or any portion of, the Treasury Assets, and place orders with respect to, and arrange for any of the foregoing;
(v) select brokers, dealers, cryptocurrency wallet providers, staking, restaking and liquid staking service providers and other intermediaries, exchanges and counterparties, which may or may not be a Consultant Affiliate, as may be necessary to execute transactions as described above and any other transactions contemplated herein, and to instruct the Custodian as necessary to open accounts in the name, or for the benefit, of the Client with such selected brokers, dealers, cryptocurrency wallet providers, staking, restaking and liquid staking service providers and other intermediaries, exchanges and counterparties and to pay all reasonable fees and expenses applicable to such transactions from Treasury Assets;
(vi) instruct the Custodian to deliver an asset sold, exchanged or otherwise disposed of by the Treasury in exchange for cash and to deliver cash to pay for assets delivered to the Custodian that were acquired by the Treasury;
(vii) instruct the Custodian to exercise or abstain from exercising any option, privilege or right held in the Treasury;
(viii) monitor the correct collection of income on the Treasury Assets by the Custodian;
(ix) execute, in the name and on behalf of the Client, all such documents and take all such other actions which the Consultant shall deem requisite, appropriate or advisable to carry out its duties hereunder; provided that any actions authorized by this Agreement and executed by the Consultant pursuant to the authority herein granted shall not cause any Treasury Assets to be custodied by any party other than the Custodian;
(x) engage such independent agents, administrators, subadvisors, attorneys and accountants as the Consultant may deem necessary or advisable to implement the Treasury Strategy for the Treasury Assets and to instruct the Custodian as necessary to pay on behalf of the Client all reasonable and documented fees incurred thereby (including reasonable and documented legal and accounting fees and disbursements, commissions, banking, brokerage, registration and private placement fees, and transfer, capital and other taxes, duties and costs incurred in connection with the making of investments by the Client in Treasury transactions); and
(xi) take any other action with respect to property in the Treasury as necessary or desirable to carry out its obligations under this Agreement (except that the Consultant is not authorized to withdraw any money or other property from the Treasury either in the name of the Client or otherwise and shall under no circumstances act as custodian of the Treasury or take or have title to, or authority to take possession of the Treasury Assets, except as expressly described herein).
The foregoing authority shall remain in full force and effect until expressly revoked by a shareholders resolution that is duly adopted by the shareholders of the Client with a vote of at least 75% in accordance with the Client’s organizational documents and delivered to the Consultant.
Such a resolution may also terminate this Agreement and is required for any movement of Treasury Assets outside the digital assets ecosystem. Any such revocation shall not affect any transactions entered into prior to such revocation or the terms of any liquidated damages.
(b) Power of Attorney. In furtherance of the authority set forth in paragraph (a) above, the Client hereby irrevocably designates and appoints the Consultant as its agent and attorney-in- fact, with full power and authority and without further approval of the Client, in the Client’s name, place and stead, as required to (i) negotiate, make, execute, sign, acknowledge, swear to, deliver, record and file any agreements, documents or instruments which may be considered necessary or desirable by the Consultant or a Consultant Affiliate to carry out fully the provisions of this Agreement and (ii) to perform all other acts contemplated by this Agreement or necessary, advisable or convenient to carry out its duties hereunder (subject at all times, however, to each and all of the limitations and stipulations set forth herein and in the Investment Guidelines set forth in Schedule B). Notwithstanding the foregoing and for the avoidance of doubt, this power of attorney set forth in this Section 3(b) shall not permit the Consultant or a Consultant Affiliate to take any action that would cause the Consultant to take or have possession or “custody” of any cash, securities or any other assets of the Client, other than direct withdrawal of the fees due to the Consultant in accordance with the terms of this Agreement. Because this limited power of attorney shall be deemed to be coupled with an interest, it shall be irrevocable and survive and not be affected by the Client’s (or any of its subsidiaries’) insolvency or dissolution. However, this limited power of attorney will become revocable upon the expiration of such interest and, therefore, this limited power of attorney will terminate upon termination of this Agreement.
(c) Compliance with Investment Guidelines. The Client acknowledges and agrees that compliance with the Investment Guidelines set forth in Schedule B shall be determined in accordance with the Consultant’s internal systems. The Client understands and agrees that the Consultant does not guarantee or represent that any objectives will be achieved. The Client and the Consultant understand and agree that the Consultant may obtain the approval of the Client from time to time for exceptions to the Investment Guidelines in accordance with procedures mutually agreed between the Consultant and Client and approved by the Strategic Committee.
4. Custody of Assets.
(a) Assets held by Custodian. All Treasury Assets shall be held in cryptocurrency wallets established and controlled by the Client, to which the Consultant has access. Title of all Treasury Assets shall be held in the name of the Client or an affiliate thereof, provided that for convenience in buying, selling and exchanging assets, title to such assets may be held in the name of the Custodian, or its nominee, or the street name of the Client’s Custodian. The Consultant does not have any authority to, and shall not take any actions which would cause the Consultant to, take or have possession or “custody” (or be deemed to have “custody”) of any cash, securities or any other assets of the Client, except with the approval of the Strategic Committee or the Client’s Chief Investment Officer. Notwithstanding any transactions authorized by this Agreement and executed by the Consultant pursuant to authority granted herein, all Treasury Assets shall be custodied by the Custodian. Instructions by the Consultant to the Custodian with respect to the Treasury Assets shall be made telephonically, electronically (e.g., through an API feed), in writing, or by other documented means agreeable to both parties.
(b) Expenses of the Custodian; No Liability. The Client shall pay all charges, fees and expenses of the Custodian and any sub-custodian(s). The fees charged to the Client by the Custodian are exclusive of, and in addition to, any management fees and other charges of the Consultant discussed herein. The Consultant shall have no liability with respect to the choice of Custodian or loss of private keys or access to the Account, except for any recommendation made or such loss of access relating to the Consultant’s own conduct or credentials (which recommendation or loss of access is not otherwise exculpated or indemnified in accordance with Section 11).
5. Proper Instructions.
(a) All instructions communicated hereunder to the Consultant from the Client shall be made in writing and transmitted to the Consultant by persons properly authorized by the Strategic Committee. Any such communication appropriately indicating that it reflects action or instruction by the Client may be so accepted by the Consultant and the Consultant shall have no obligation to inquire further with respect thereto and shall be fully protected in relying and acting upon the writing so indicating the action or instruction of the Client.
(b) The Strategic Committee shall provide the Consultant with a list of authorized persons and their specimen signatures from whom the Consultant may accept written day to day instructions, confirmations or authority under this Agreement (“Proper Instructions”) and the Consultant shall be fully protected in relying on such list until notified in writing by the Client to the contrary. Proper Instructions may be sent via email, Adobe’s Portable Document Format (“PDF”) or other electronic transmission.
6. Management Fees: Account Expenses.
(a) As compensation for the Consultant’s services rendered hereunder, the Client will compensate the Consultant in the form of payment of the management fees described in Schedule C attached hereto and as may be amended from time to time by written agreement of the Consultant and the Client (the “Fee Schedule”). The Fee Schedule shall be deemed to have been adopted and made a part of this Agreement as if fully rewritten herein. The Client hereby acknowledges that it is the Client’s responsibility to verify the accuracy of the calculation of the Consultant’s fees.
(b) The Consultant will be responsible for all of its overhead costs. The Client shall pay or reimburse the Consultant for all reasonable and documented expenses related to the operation of the Treasury, which shall be paid or reimbursed by the Client out of the Treasury Assets. The amount of such expenses may vary from time to time and shall include, without limitation: (i) custodial fees; (ii) bank service fees; (iii) brokerage commissions and all other brokerage transaction costs; (iv) clearing and settlement fees; (v) interest and withholding or transfer taxes incurred in connection with trading for the Treasury; and (vi) any other reasonable and documented fees and expenses related to the activity of the Treasury as determined by the Consultant in good faith.
(c) In addition, the Client may incur an expense which forms part of a larger aggregate expense relating to a number of other managed accounts or pooled investment vehicles for which the Consultant or its affiliates provide services. If any such expenses are incurred for the account of any persons in addition to the Client, the Consultant will allocate the total expense among the Client and such other persons and will determine the portion reimbursable to the Client, if any, in a fair and reasonable manner.
7. Representations of the Consultant. The Consultant represents to the Client as follows:
(a) the Consultant is validly existing and in good standing under the laws of its jurisdiction of organization, with power and authority to own its own properties and conduct its business as currently conducted;
(b) this Agreement constitutes a binding obligation of the Consultant, enforceable against the Consultant in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights or by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law; and
(c) the execution, delivery and performance of this Agreement do not conflict with any obligation by which the Consultant is bound, whether arising by contract, operation of law or otherwise, or any applicable law, in each case in a manner that would result in a material adverse effect on the Consultant or the Client or that would materially impede the Consultant’s ability to perform its obligations hereunder.
The foregoing representations and warranties shall be continuing during the term of the Agreement, and if at any time during the term of this Agreement any event has occurred which would make any of the foregoing representations and warranties untrue or inaccurate in any material respect, the Consultant shall promptly notify the Client of such event.
8. Representations of the Client. The Client represents and warrants to the Consultant as follows:
(a) the Client has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization, with power and authority to own its own properties and conduct its business as currently conducted;
(b) the Client and its Board of Directors have the authority to (i) appoint a Strategic Committee of the Board of Directors to oversee management of the assets held in the Treasury (the “Strategic Committee”), which Strategic Committee will be composed of two members appointed by the Board, with Paul K. Danner and Yuwen Zhang to be appointed and serve as the initial members, with Ms. Zhang serving as the initial chairperson the Strategic Committee, as of the closing of the Capital Raise; (ii) require that only the Strategic Committee, acting by unanimous consent, shall be approved to initiate the Treasury Strategy and access the Treasury Assets immediately after such closing; and (iii) require that the Strategic Committee, acting by unanimous consent, shall be able to add up to three additional members and, by appropriate action, has duly authorized such appointment and requirement and the execution and implementation of this Agreement;
(c) the Client and its Board of Directors, including the Strategic Committee, has the authority to (i) appoint the Consultant to manage the assets held in the Treasury and (ii) require that the net proceeds of the Capital Raise will be held by the Custodian until accessed by the Strategic Committee, and, by appropriate action, has duly authorized such appointment and requirement and the execution and implementation of this Agreement;
(d) the Client and its Board of Directors, including the Strategic Committee, has the authority to engage in the Treasury Strategy and has approved such strategy in accordance with its organizational documents;
(e) this Agreement constitutes a binding obligation of the Client, enforceable against the Client in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights or by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law;
(f) the execution, delivery and performance of this Agreement do not conflict with any obligation by which the Client is bound, whether arising by contract, operation of law or otherwise, or any applicable law, in each case in a manner that would result in a material adverse effect on the Consultant or the Client or that would materially impede the Client’s ability to perform its obligations hereunder;
(g) except in either case to the extent the Client has notified the Consultant in writing: (i) the Treasury Assets belong to the Client free and clear of any liens or encumbrances, and (ii) the Client will not pledge or encumber any Treasury Assets;
(h) the Client is not an investment company (as that term is defined in the Investment Company Act of 1940, as amended) (the “Investment Company Act”);
(i) the Client is experienced in engaging Consultants and is aware of the risks associated with such engagements in general, and that it understands the risks associated with the activities contemplated hereby, and the risk that the Treasury could suffer substantial diminution in value, including complete loss;
(j) the Client has reviewed all other materials and agreements provided by the Consultant relating to the Treasury and its activities contemplated hereby, understands such materials and agreements and has had the opportunity to ask questions regarding such materials and agreements;
(k) the Client is an “accredited investor” as that term is or may in the future be defined in Rule 501 under the Securities Act of 1933, as amended (the “Securities Act”);
(1) the Client is a “United States person” as defined in Section 770l(a)(30) of the U.S. Internal Revenue Code of 1986, as amended;
(m) the Client is a “qualified institutional buyer” as defined in paragraph (a) of Rule 144A promulgated under the Securities Act;
(n) the Treasury Assets held in the Account are not assets: of an “employee benefit plan” as defined in and subject to the fiduciary responsibility provisions of the U.S. Employee Retirement Security Act of 1974, as amended (“ERISA”); a “plan” as defined in and subject to Section 4975 of the Code; a government plan, foreign plan, or church plan subject to laws similar to ERISA or Section 4975 of the Code; or an entity that holds “plan assets” as defined in Section 3(42) of ERISA;
(o) the Client represents and warrants that (i) the monies being used by it to fund the Treasury and the Treasury Assets held in the Treasury as of the Effective Date are not (A) derived from or related to any illegal activities, including but not limited to money laundering activities, or (B) derived from, invested for the benefit of or related in any way to the governments of, or persons within, any country under a U.S. embargo enforced by the U.S. Treasury Department’s Office of Foreign Assets Control and (ii) the opening, operation and maintenance of the Treasury does not directly or indirectly contravene U.S. federal, state, international or other laws or regulations, including anti-money laundering laws;
(p) neither the Client, nor any person controlling, controlled by, or under common control with it, nor any shareholder or other person having a beneficial interest in the Client is a Prohibited Investor,1 and Treasury Assets are not being invested on behalf, or for the benefit, of any Prohibited Investor. Neither the Client nor any director, officer, partner, member, affiliate, nor, if the Client is an unlisted company, any shareholder or beneficial owner of the Client, is a Senior Foreign Political Figure,2 any member of a Senior Foreign Political Figure’s Immediate Family3 or any Close Associate4 of a Senior Foreign Political Figure unless the Client has notified the Consultant of such fact. The Client is not resident in, or organized or chartered under the laws of, a jurisdiction that has been designated by the Secretary of the Treasury under Section 311 of the USA PATRIOT Act as warranting special measures due to money laundering concerns.5 No Treasury Assets originate from, nor were they routed through, an account maintained at a Foreign Shell Bank,6 an offshore bank, a bank organized or chartered under the laws of a jurisdiction that has been designated by FATF as non-cooperative with international anti-money laundering principles or a financial institution subject to special measures under Section 311 of the USA PATRIOT Act. If the Client or any person controlling, controlled by, or under common control with the Client is organized under the laws of a country other than the United States to engage in the business of banking, the Client or such person, as the case may be, either: (i) has a Physical Presence 7 in a country in which the Client (or such person) is authorized to conduct banking activities, at which address the Client (or such person): (a) employs one or more persons on a full- time basis, (b) maintains operating records relating to its banking business, and (c) is subject to inspection by the banking authority from which it obtained its banking license; or (ii) is affiliated with a financial institution that maintains a Physical Presence in the United States or another country and is subject to supervision by a banking authority regulating such affiliated financial institution; and the Client understands, acknowledges, represents and agrees that (i) it is the Asset Manager’s policy to comply with anti-money laundering, embargo and trade, or similar laws, regulations, requirements (whether or not with force of law) or regulatory policies to which it is or may become subject (collectively “Requirements”) and to interpret them broadly in favor of disclosure, (ii) the Consultant could be requested or required to obtain certain assurances from the Client, disclose information pertaining to it to governmental, regulatory or other authorities or to financial intermediaries or engage in due diligence or take other related actions in the future, (iii) the Client will provide additional information or take such other actions as may be necessary or advisable for the Consultant to comply with any Requirements, related legal process or appropriate requests (whether formal or informal) or otherwise, and (iv) the Consultant and its agents may disclose to relevant third parties information pertaining to the Client in respect of Requirements or information requests related thereto.
1 “Prohibited Investors” include: (1) a person or entity whose name appears on the list of Specially Designated Nationals and Blocked Persons maintained by Office of Foreign Assets Control (“OFAC”) or prohibited under OFAC country sanctions, or any blocked persons list maintained by a governmental or regulatory body as may become applicable to the Trustee or Fund, (2) any Foreign Shell Bank, (as defined below), and (3) any person or entity resident in or whose funds are transferred from or through an account in a jurisdiction that has been designated as non- cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as Financial Action Task Force (“FATF”), of which the U.S. is a member and with which designation the U.S. representative to the group or organization continues to concur. See http://www.fatf-gafi.org for FATF’s list of Non-Cooperative Countries and Territories.
2 “Senior Foreign Political Figure” means a current or former senior official in the executive, legislative, administrative, military or judicial branches of a non-U.S. government (whether elected or not), a current or former senior official of a major non-U.S. political party, or a current or formr senior executive of a non-U.S. government- owned commercial enterprise. In addition, a Senior Foreign Political Figure includes any corporation, business or other entity that has been formed by, or for the benefit of, a Senior Foreign Political Figure. Senior executives are individuals with substantial authority over policy, operations, or the use of government-owned resources.
3 “Immediate Family” with respect to a Senior Foreign Political Figure, typically includes the figure’s parents, siblings, spouse, children and in-laws.
4 “Close Associate” means, with respect to a Senior Foreign Political Figure, a person who is widely and publicly known internationally to maintain an unusually close relationship with the Senior Foreign Political Figure, and includes a person who is in a position to conduct substantial U.S. and 11011-U.S. financial transactions on behalf of the Senior Foreign Political Figure.
5 Notice of jurisdictions that have been designated by the Treasury Department as a primary money laundering concern under Section 311 are published in the Federal Register and on the website of the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) at https://www.fincen.gov/resources/statutes-and-regulations/3l l-special- measures. FinCEN also issues advisories regarding jurisdictions that it deems to be deficient in their counter-money laundering regimes. Such advisories are posted at https://www.fincen.gov/resources/advisoriesbulletinsfact- sheets/advisories.
6 “Foreign Shell Bank” means a Foreign Bank without a Physical Presence (each as defined below) in any country but does not include a Regulated Affiliate (as defined below). “Regulated Affiliate” means a Foreign Shell Bank that: (i) is an affiliate of a depository institution, credit union, or Foreign Bank that maintains a Physical Presence in the U.S. or a foreign country, as applicable; and (ii) is subject to supervision by a banking authority in the country regulating such affiliated depository institution, credit union, or Foreign Bank. “Foreign Bank” means an organization that (i) is organized under the laws of a country outside the United States; (ii) engages in the business of banking; (iii) is recognized as a bank by the bank supervisory or monetary authority of the country of its organization or principal banking operations; (iv) receives deposits to a substantial extent in the regular course of its business; and (v) has the power to accept demand deposits, but does not include the U.S. branches or agencies of a foreign bank.
7 “Physical Presence” means a place of business that is maintained by a Foreign Bank and is located at a fixed address, other than solely a post office box or an electronic address, in a county in which the Foreign Bank is authorized to conduct banking activities, at which location the Foreign Bank: (i) employs one or more individuals on a full-time basis; (ii) maintains operating records related to its banking activities; and (iii) is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities.
(q) The Client represents that it has in place, and has uniformly applied, anti-money laundering policies and procedures reasonably designed to comply with the Requirements, including without limitation to verify the identity of any person controlling, controlled by, or under common control with it, its shareholders and other persons having a beneficial interest in the Client and their respective sources of funds.
The foregoing representations and warranties shall be continuing during the term of the Agreement, and if at any time during the term of this Agreement any event has occurred which would make any of the foregoing representations and warranties untrue or inaccurate in any material respect, the Client shall promptly notify the Consultant of such event.
9. Client Acknowledgements.
(a) Cooperation. The Client acknowledges that the information provided by the Client on any Treasury account opening forms, including without limitation, information pertaining to the Client’s legal or tax status, address or other contact information and the Investment Guidelines set forth in Schedule B, will be relied upon by the Consultant, and the Client agrees that if any such information shall hereafter change or become inaccurate, the Client shall notify the Consultant in writing of such change or inaccuracy as soon as reasonably practicable. The Client shall cooperate with the Consultant in the performance of its services under this Agreement and, upon the Consultant’s reasonable request, shall provide the Consultant with timely access to and use of personnel, facilities, equipment, data and information to the extent necessary to permit the Consultant to perform its services under this Agreement.
(b) Risk Factors: Conflicts of Interest: Non-Exclusive Management. The Client acknowledges that it understands the risks of managing the Treasury Assets in conjunction with the Treasury Strategy, and the risks and, if applicable, the risk factors set forth in the Consultant’s Form ADV Part 2A Brochure, the current form of which is incorporated by reference herein, and hereby acknowledges and consents to such risks and the associated conflicts of interest described therein. The Consultant shall devote such part of its time as the Consultant determines is reasonably needed for the services contemplated under this Agreement; provided, however, that this Agreement shall not prevent the Consultant from rendering similar services to other persons, trusts, corporations or other entities. Nothing in this Agreement shall limit or restrict the Consultant or any of its officers, affiliates or employees from, as permitted by law, buying, selling or trading in any asset for its own or their own accounts. The Client acknowledges that the Consultant and its officers, affiliates and employees, and the Consultant’s other clients may as permitted by law at any time have, acquire, increase, decrease, or dispose of positions which are at the same time being acquired for or disposed of from the Treasury. As permitted by law, the Consultant shall have no obligation to acquire for the Treasury a position which the Consultant, its officers, affiliates or employees may acquire for its or their own accounts or for the account of another client. The Client acknowledges that the Consultant is not a financial planner. Nothing contained herein or provided hereby shall be construed as legal, tax or accounting advice by the Consultant.
(c) Order Aggregation and Allocation. The Client acknowledges and agrees that the Consultant manages other portfolios, including some that may use strategies substantially similar to those of the Treasury, and expects that purchases or sales of the same assets will be made on behalf of the Treasury and the other portfolios managed by the Consultant. The Consultant may, but is not obligated to, aggregate orders for the purchase or sale of assets on behalf of the Account with orders on behalf of other portfolios the Consultant manages. The Client acknowledges that, while the Consultant will seek to allocate the opportunity to purchase or sell such assets among the Treasury and such other portfolios in a manner it deems equitable over time, the Consultant shall not be required to assure equality of treatment among all of its clients.
(d) Brokerage Practices. The Client acknowledges and agrees that the Consultant may select brokers or dealers to effect the purchase and sale of Treasury Assets and to execute and deliver brokerage and customer agreements with any such broker or dealer in the name and on behalf of the Client, which brokers or dealers may be Consultant Affiliates. The Consultant shall designate the broker or brokers through which transactions for the Account are executed at such prices and commissions that, in the Consultant’s good faith judgment, will be in the best interest of the Treasury. The Consultant shall have authority to and may consider such factors as price, transaction costs, a broker’s or dealer’s ability to effect the transactions, access to digital assets or other assets, reliability and financial responsibility, commitment of capital, and the provision or payment by the broker of the costs of research and research-related services which are of benefit to the Consultant or its clients, as well as other factors that the Consultant deems appropriate to consider under the circumstances. Accordingly, when the Consultant places orders for the purchase or sale of an asset for the Treasury, in selecting brokers or dealers to execute such orders, the Client expressly authorizes the Consultant to consider the fact that a broker or dealer has furnished statistical, research or other information or services for the benefit of the Treasury directly or indirectly. Without limiting the generality of the foregoing, the Consultant is authorized to cause the Treasury to pay brokerage commissions which may be in excess of the lowest rates available to brokers who execute transactions for the Treasury or who otherwise provide brokerage and research services utilized by the Consultant; provided that the Consultant determines in good faith that the amount of each such commission paid to a broker is reasonable in relation to the value of the brokerage and research services provided by such broker viewed in terms of either the particular transaction to which the commission relates or the Consultant’s overall responsibilities with respect to accounts as to which the Consultant exercises discretion.
(e) Controversies with Brokers. In the event of a controversy with any broker or other dealer regarding any transaction, the Consultant shall advise the Client of such controversy and the circumstances thereof and thereafter the Consultant shall act in accordance with any written instructions of the Client to the extent consistent with this Agreement. The Client shall, as shall be agreed upon by them, determine whether any proceedings or other actions shall be instituted with respect to such controversy; provided. however, that nothing herein shall be deemed to prohibit the Consultant from taking any action which it shall, under the circumstances then prevailing, reasonably determine to be necessary or desirable to protect the interests of the Treasury or otherwise to carry out its duties and responsibilities.
(f) Legal Proceedings. Unless otherwise agreed in writing by the Consultant, the Consultant shall have no obligations to take any action on behalf of the Client in any legal proceedings, including bankruptcies or class actions, involving any securities held, or formerly held, in the Treasury or issuers of such securities. At the Client’s request, the Consultant will endeavor to assist with administrative matters in respect of any settlement or judgment. Nonetheless, this provision shall not apply for any actions involving the Consultant’s conduct or the performance of its duties under this Agreement.
(g) Other Matters.
(i) Client hereby authorizes the Consultant to enter into “agency cross transactions” effected by a Consultant Affiliate acting as broker for both the Treasury and for the party on the other side of the transaction, in accordance with applicable law. The Client understands and agrees that the Consultant or such Consultant Affiliate may receive commissions from, and have a potentially conflicting division of loyalties and responsibilities regarding, both parties to such agency cross transactions. This consent, as to agency cross transactions effected on behalf of the Client, may be revoked at any time by written notice from the Strategic Committee to the Consultant.
(ii) The Client acknowledges and agrees that the Consultant may cause the Treasury to enter into transactions and other arrangements with the Consultant, Consultant Affiliates or other funds or managed accounts managed by the Consultant or the Consultant Affiliates that, to the extent that they involve securities, may be viewed as principal transactions (i.e., transactions between the Treasury and a Consultant Affiliate acting for its own account) under the Advisers Act. In connection with such transactions involving securities, the Consultant will obtain any necessary approvals or otherwise comply with the requirements of Section 206(3) or any other applicable provision of the Advisers Act. Client acknowledges and agrees that, unless otherwise determined by the Consultant in its discretion and in accordance with the terms and conditions set forth in the Investment Guidelines set forth in Schedule B, any transactions (including staking, restaking and liquid staking) with Consultant Affiliates shall not be considered principal transactions subject to such pre-clearance requirements.
(h) Procedure for Account Withdrawals. The Client hereby agrees to notify the Consultant at least five (5) business days prior to any withdrawals of Treasury Assets from the Treasury. The Client acknowledges and agrees that withdrawals will be funded first by accessing free cash balances and money market instruments; funds derived from the liquidation of all other assets will be deliverable upon final settlement of the trade(s) funding the withdrawal. Withdrawals will not affect: (a) the validity of any actions the Consultant has previously taken or (b) the Client’s liabilities or obligations for transactions started before withdrawal. Notwithstanding the foregoing, however, the Client understands and agrees that certain types of assets may only be liquidated at certain (sometimes infrequent) times and reasonable extensions to such 5-business days’ notice period shall be permitted by the Client in good faith to account for bona fide technical or business requirements. Client’s ability to withdraw assets from the Treasury is subject to any liquidity restrictions or withdrawal and unstaking times applicable to a particular asset, compliance with any internal corporate procedures and policies applicable to it and the terms of this Agreement.
10. Client Records, Reports and Transparency.
(a) The Consultant shall maintain the books and records pertaining to the management and oversight of the Client Assets throughout the term of this Agreement and for a period of five years after the end of the year in which this Agreement terminates. Such books and records shall be made available for inspection and copying at any time by the Client reasonably requested and upon Client’s expense, upon no less than three (3) business days’ prior written notice.
(b) The Consultant shall provide to the Client or shall arrange for the Custodian to provide to the Client, a real-time dashboard interface including, but not limited to, daily net asset value, weekly exposure and monthly risk and exposure. The Consultant shall add additional features and data points to such real-time dashboard interface on an ongoing basis consistent with best market practices provided by other Consultants from time-to-time, within a time frame to be mutually agreed between the Consultant and the Client.
11. Liability.
(a) Except in the cases of willful misconduct or gross negligence (each, a “Disqualifying Action”), none of the Consultant, its affiliates or their respective officers, directors, agents and employees (collectively, the “Covered Persons”) shall have any liability (whether direct or indirect, in contract or tort or otherwise) for any claims, liabilities, losses, damages, penalties, obligations or expenses of any kind whatsoever, including reasonable and documented attorneys’ fees and court costs (“Losses”) suffered by the Client as the result of any act or omission by the Consultant in connection with, arising out of or relating to the performance of its services hereunder. The Client further agrees that no Covered Person shall be liable for any Losses caused, directly or indirectly, by any act or omission of the Client or any act or omission by the Custodian, any broker dealer to which the Consultant or the Client directs transactions for the Treasury, any third party service provider selected by the Consultant with reasonable care to act on behalf of the Client, or by any other non-party, unless such acts, omissions or other conduct is at the direction of the Consultant and the Consultant’s direction constitutes a Disqualifying Action. Without limiting anything in this Section 11(a), in no case shall any Covered Persons be liable for any Losses caused, directly or indirectly, by the error, negligence or misconduct of a Custodian, broker, broker-dealer, exchange, staking validator, or other online platform or service (however described) (collectively, “Platform”), the bankruptcy, insolvency, receivership, administrative or similar proceeding involving a Platform, a pause in or suspension of withdrawals from a Platform (however described and for whatever reason), the hack of a Platform, or by any other cause that does not constitute a Covered Person’s Disqualifying Action.
(b) The Consultant and any person acting on its behalf shall be entitled to rely in good faith upon information, opinions, reports or statements of legal counsel (as to matters of law) and accountants (as to matters of accounting or tax) and, accordingly, such good faith reliance by a person shall not constitute a Disqualifying Action so long as such counsel or accountant is qualified and was selected and consulted with due care. Under no circumstances shall the Consultant or any Covered Person be liable for any special, incidental, exemplary, consequential, punitive, lost profits or indirect damages.
(c) The Client agrees to indemnify and hold harmless each of the Covered Persons against any Losses suffered or incurred by reason of, relating to, based upon, arising from or in connection with (directly or indirectly) (i) the operations, business or affairs of the Client, or any actions taken by the Consultant or failure by it to act (even if negligent) in connection with this Agreement (including, without limitation, any Losses arising as a result of any operational errors committed by or erroneous instructions provided by the Client), (ii) a Disqualifying Action by the Client, or (iii) the Client’s breach of this Agreement, in each case except to the extent that such Losses are determined by a court of competent jurisdiction, upon entry of a final judgment, to be attributable to a Disqualifying Action of such Covered Person.
(d) To the fullest extent permitted by law, the Client shall, upon the request of any Covered Person, advance or promptly reimburse such Covered Person’s out-of-pocket costs of investigation (whether internal or external), litigation or appeal, as incurred, including attorneys’ reasonable and documented fees and disbursements, reasonably incurred in responding to, litigating or endeavoring to settle any claim, action, suit, investigation or proceeding, whether or not pending or threatened, and whether or not any Covered Person is a party, arising out of or in connection with or relating to the operations, business or affairs of, or in furtherance of the interests of, the Client (a “Claim”); provided that the affected Covered Person shall, as a condition of such Covered Person’s right to receive such advances and reimbursements, undertake in writing to promptly repay the applicable funds for all such advancements or reimbursements if a final judgment of a court of competent jurisdiction has determined that such Covered Person is not then entitled to indemnification under this Section 11. If any Covered Person recovers any amounts in respect of any Claims from insurance coverage or any third-party source, then such Covered Person shall, to the extent that such recovery is duplicative, reimburse the Client for any amounts previously paid to it by the Client in respect of such Claims.
(e) Promptly after receipt by a Covered Person of notice of any Claim or of the commencement of any action or proceeding involving a Claim, such Covered Person shall, if a claim for indemnification in respect thereof is to be made against the Client, give written notice to the Client of the receipt of such Claim or the commencement of such action or proceeding; provided, that the failure of any Covered Person to give notice as provided herein shall not relieve the Client of its obligations hereunder, except to the extent that the Client is actually prejudiced by such failure to give notice.
(f) Each Covered Person shall cooperate with the Client and its counsel in responding to, defending and endeavoring to settle any proceedings or Losses that may be subject to indemnification by the Client pursuant to this Section 11. Without limiting the generality of the immediately preceding sentence, if any proceeding is commenced against a Covered Person, the Client shall be entitled to participate in and to assume the defense thereof to the extent that the Client may wish, with counsel reasonably satisfactory to such Covered Person. After notice from the Client to such Covered Person of the Client’s election to assume the defense thereof, the Client shall not be liable for expenses subsequently incurred by such Covered Person without the consent of the Client (which shall not be unreasonably withheld) in connection with the defense thereof. Without the Covered Person’s consent, the Client will not consent to entry of any judgment in or enter into any settlement of any such action or proceeding which does not include as an unconditional term thereof the giving by every claimant or plaintiff to such Covered Person of a release from all liability in respect of such claim or litigation.
(g) The right of any Covered Person to indemnification as provided herein shall be cumulative of, and in addition to, any and all rights to which such Covered Person may otherwise be entitled by contract or as a matter of law or equity and shall extend to such Covered Person’s successors, assigns and legal representatives.
(h) The federal laws may impose liabilities under certain circumstances on persons who act in good faith; therefore, nothing herein shall in any way constitute a waiver or limitation of any rights which the undersigned may have under any applicable federal law.
12. Confidentiality. The Consultant shall regard as confidential all information concerning the affairs of the Client, but shall be permitted to disclose the Client’s confidential information to: (a) the Covered Persons and their respective service providers, in each case, that have a bona fide need to know such confidential information, (b) third parties regarding the fact that the Consultant is performing management activities on the Client’s behalf, which specifically includes the Consultant’s inclusion of references to the Client in written marketing materials distributed by the Consultant to prospective management clients, (c) third parties regarding information regarding Treasury holdings and performance (without reference to the Client’s name) in connection with the establishment of a track record of the Consultant and (d) as otherwise required by any regulatory authority, law or regulation, or by legal process. The Client acknowledges that it may receive or have access to confidential proprietary information of the Consultant that is proprietary in nature and non-public, including, without limitation, information regarding the Consultant’s methodologies, systems and forms, trade secrets and the like (collectively, “Confidential Information”). The Client agrees not to disclose or cause to be disclosed any Confidential Information to any person or use any Confidential Information for its own purposes or its own account, except in connection with its assets in the Treasury and except as otherwise required by any regulatory authority, law or regulation, or by legal process; provided, however, that the Client shall provide the Consultant with prior notice of any such disclosure and the circumstances surrounding such request so that the Consultant may seek a protective order or other appropriate remedy. If, in the absence of a protective order or other remedy by the disclosing party, the Client, in the written opinion of legal counsel satisfactory to the Consultant, is nonetheless legally compelled to disclose Confidential Information or else stand liable for contempt or suffer other censure or penalty, the Client may, without liability hereunder, disclose only that portion of the Confidential information which such counsel advises the receiving party is legally required to be disclosed, provided that the receiving party exercise its best efforts to preserve the confidentiality of the Confidential information, including, without limitation, by cooperating with the Consultant to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential information.
13. Term and Survival; Exclusivity.
(a) This Agreement shall commence on the Effective Date and shall continue in full force and effect for a term of twenty (20) years (the “Term”), unless earlier terminated in accordance with Section 13(c). Thereafter, the Agreement may be renewed for additional periods as mutually agreed in writing by the Parties. If this Agreement is terminated by the Client for any reason during the Term, or if the Consultant terminates this Agreement due to a material breach by the Client, the Client shall pay to the Consultant, as liquidated damages and not as a penalty, an amount equal to all fees and other compensation that would have accrued to the Consultant under this Agreement from the date of termination through the end of the Term, paid monthly throughout the Term in accordance with the payment provisions herein. The Parties acknowledge and agree that the actual damages in such event would be difficult to ascertain and that this amount represents a reasonable estimate thereof and not a penalty. Upon any termination, all of the Consultant’s obligations hereunder shall cease, except for those that expressly survive under the terms of this Agreement.
(b) This Agreement may be terminated upon at least one hundred twenty (120) days prior written notice to the other Party (A) by the Client at the good faith discretion of the Strategic Committee if the Consultant has significantly underperformed according to the Strategic Committee’s internal metrics, or (B) by the Consultant for any reason. Additionally, this Agreement may be terminated at any time for Cause (i) by the Client upon at least sixty (60) days prior written notice to the Consultant and (ii) by the Consultant upon at least thirty (30) days prior written notice to the Client (unless stated otherwise below). Each such notice set forth in this Section 13(b) shall be referred to as a “Termination Notice”. In the event that either Party asserts a right to terminate this Agreement for Cause, the Parties agree that, as a condition precedent to the effectiveness of any such termination, they shall first attempt in good faith to resolve the dispute through mediation. Within ten (10) business days following the delivery of written notice of termination for Cause, the Parties shall mutually select a mediator and commence mediation proceedings in New York under the then-current rules of the Judicial Arbitration and Mediation Service Inc. (or its successor, if applicable). If the Parties are unable to agree on a mediator within such period, either Party may request that the mediation organization appoint a mediator. The Parties shall participate in the mediation in good faith and shall share equally the costs of the mediation. The mediation shall be completed within thirty (30) days of the appointment of the mediator, unless otherwise agreed in writing by the Parties. If the dispute is not resolved through mediation within such period, either party may pursue any remedies available at law or in equity, including termination of this Agreement for cause.
(c) For the purposes hereof, the term “Cause” means (i) with respect to the Consultant, (A)(I) fraud, (II) bad faith resulting in a material breach of this Agreement, or (III) any action or omission constituting gross negligence or willful misconduct in performing its obligations under this Agreement, which in each case of (II) or (III) that results in an adverse effect on the Client that is both material and demonstrable: provided, that the Consultant shall have a cure period of fifteen (15) days following notice of an occurrence of (I) or (II) (if such breach, action or omission, as applicable is curable), (B) an Act of Insolvency occurring with respect to the Consultant; provided that an Act of Insolvency shall not be deemed to occur if the Consultant assigns its obligations under this Agreement to an affiliate that is not subject to an Act of Insolvency, and (C) is dissolved; provided that such dissolution shall not be deemed to occur if the Consultant assigns its obligations under this Agreement to an affiliate that is not subject to dissolution; and (ii) with respect to the Client (A) a material breach by the Client of its obligations under this Agreement (provided, that the Client shall have a cure period of thirty (30) days following notice of breach in the case of any such breach that is susceptible of cure) or (B) it becomes unlawful under any applicable law (as determined by the Consultant in its sole discretion) for the Consultant to perform its obligations under the Agreement, in which case the Consultant may immediately suspend its performance of all obligations under this Agreement and may terminate this Agreement with 3 days prior written notice.
(d) For the purposes hereof, “Act of lnsolvency” means the Consultant (i) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (ii)(A) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organization or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official, or (B) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and such proceeding or petition is instituted or presented by a person or entity not described in clause (A) above and either (I) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (II) is not dismissed, discharged, stayed or restrained in each case within 60 days of the institution or presentation thereof; (iii) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (iv) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; or (v) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 60 days thereafter.
(e) In the event that this Agreement is terminated pursuant to Section 13(b) for Cause by the Consultant, the Consultant shall be entitled to any and all damages and legal remedies arising from or in connection therewith including, but not limited to, direct, indirect, special, consequential, speculative and punitive damages, as well as lost future profits and business in the future.
(f) Termination shall not affect liabilities or obligations incurred or arrising from transactions initiated under this Agreement prior to such termination, including the provisions regarding arbitration, which shall survive any expiration or termination of this Agreement. Upon termination, it is the Client’s responsibility to monitor the Treasury Assets and it is understood and acknowledged that the Consultant will have no further obligation to act or advise with respect to those Treasury Assets.
14. Notice of Engagement. If the Client enters into any agreement with any other Consultant or similar service provider (a “Competing Consultant”) including any agreement with a Competing Consultant entered into on or prior to the date hereof, pursuant to which such Competing Consultant provides similar services for the Client as those provided by the Consultant, the Client shall notify the Consultant and provide a summary of the terms of such Agreement (which terms may be redacted in order to satisfy any confidentiality obligations to the Competing Consultant).
15. Electronic Delivery. The Client hereby agrees and provides its consent to have the Consultant electronically deliver Account Communications. “Account Communications” means all current and future account statements; privacy statements; audited financial information, if applicable; this Agreement (including all supplements and amendments hereto); the Consultant’s Privacy Notice and updates thereto; notices and other information, documents, data and records regarding the Treasury Assets. Electronic communications include e-mail delivery as well as electronically making available to the Client Account Communications on the Consultant’s Internet site, if applicable. By signing this Agreement, the Client consents to electronic delivery as described in the preceding three sentences. It is the Client’s affirmative obligation to notify the Consultant in writing if the Client’s email address changes. The Client may revoke or restrict its consent to electronic delivery of Account Communications at any time by notifying the Consultant, in writing, of the Client’s intention to do so. Neither the Consultant nor its affiliates will be liable for any interception of Account Communications. The Client should note that no additional charge for electronic delivery will be assessed, but the Client may incur charges from its Internet service provider or other Internet access provider. In addition, there are risks, such as systems outages, that are associated with electronic delivery.
16. General Provisions.
(a) Assignment. This Agreement shall be binding upon and inure to the benefit of the Client, the Consultant and their respective successors and permitted assigns. No Party to this Agreement may assign (as that term is defined and interpreted under the Advisers Act) all or any portion of its rights, obligations or liabilities under this Agreement without the consent of the other Party to this Agreement.
(b) Independent Contractor. It is understood and agreed that the Consultant shall be deemed to be an independent contractor of the Client and that the Consultant shall not have authority to act for or represent the Client in any way and shall not otherwise be deemed to be agent of the Client. Nothing contained herein shall create or constitute the Consultant and the Client as members of any partnership, joint venture, association, syndicate, unincorporated business, or other separate entity, nor shall be deemed to confer on any of them any express, implied, or apparent authority to incur any obligation or liability on behalf of any other such entity.
(c) Third Party Beneficiaries. This Agreement is not intended to and does not convey any rights to persons not a Party to this Agreement, except that a Covered Person may in its own right enforce Section 11 of this Agreement.
(d) Entire Agreement. This Agreement, including the Schedules attached hereto, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all prior agreements and understandings, oral or written, between them regarding such subject matter.
(e) Amendments. Except to the extent otherwise expressly provided herein, this Agreement may not be amended except in a writing signed by the Parties hereto.
(f) Waivers. Each Party may by written consent waive, either prospectively or retrospectively and either for a specified period of time or indefinitely, the operation or effect of any provision of this Agreement. No failure or delay by a Party in exercising any right hereunder shall operate as a waiver thereof, nor shall any waiver of any such right constitute any further waiver of such or any other right hereunder. No waiver of any right by any Party hereto shall be construed as a waiver of the same or any other right at any other time.
(g) Notices. Except as otherwise expressly provided in this Agreement, whenever any notice is required or permitted to be given under any provision of this Agreement, such notice shall be in writing, shall be signed by or on behalf of the Party giving the notice and shall be mailed by first class mail or sent by courier or by email (including email with an attached PDF) or other electronic transmission with confirmation of transmission to the other Party at the address set forth below or to such other address as a Party may from time to time specify to the other Party by such notice hereunder.
If to the Consultant:
Attn: Yucheng Zhang
Director/CEO
If to the Client:
Attn: Sharps Technology Inc.
Executive Chairman
Any such communications, notices, instructions or disclosures shall be deemed duly given when deposited by first class mail address as provided above, when delivered to such address by courier or when sent by email (including email with an attached PDF) or other electronic transmission (with the receipt confirmed).
(h) Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to its principles of conflicts of law.
(i) Arbitration. Notwithstanding anything herein to the contrary, including the Parties’ submission to jurisdiction of the courts of the State of New York pursuant to Section l 4(i) below, any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in the New York offices of the Judicial Arbitration and Mediation Service Inc. or its successor (“JAMS”) before three (3) qualified arbitrators, one (1) selected by each Party and one (1) selected by both Parties. The arbitration shall be administered by JAMS under its Comprehensive Arbitration Rules and Procedures (the “Rules”) in accordance with the expedited procedures in those Rules. Judgment on the arbitration award may be entered in any state or federal court sitting in New York, New York or in any other applicable court. This Section 14(i) shall not preclude the Parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. In the event that this Agreement is terminated pursuant to this Section 14(i), the Consultant shall be entitled to any and all damages and legal remedies arising from or in connection with such default, but limited to direct damages and lost profits and business in the future. Any arbitration arising out of or related to this Agreement shall be conducted in accordance with the expedited procedures set forth in the Rules as those Rules exist on the effective date of this Agreement. The Parties agree that they will give conclusive effect to the arbitrators’ determination and award and that judgment thereon may be entered in any court having jurisdiction. The arbitrators may issue awards for all damages and legal remedies arising from or in connection with such default including, but not limited to, direct, indirect, special, consequential, speculative and punitive damages, as well as lost profits and business in the future. Any Party may, without inconsistency with this arbitration provision, apply to any state or federal court sitting in New York and seek interim provisional, injunctive or other equitable relief until the arbitration award is rendered or the controversy is otherwise resolved. The arbitration will be conducted in the English language. The arbitrators shall decide the dispute in accordance with the law of New York. The arbitration provisions contained herein are self-executing and will remain in full force and effect after expiration or termination of this Agreement. The costs and expenses of the arbitration shall be funded fifty percent (50%) by the claimant and the remaining fifty percent (50%) shall be split equally among the respondent(s). All Parties shall bear their own attorneys’ fees during the arbitration. The prevailing Party on substantially all of its claims shall be repaid all of such costs and expenses by the non-prevailing Party within ten (10) days after receiving notice of the arbitrator’s decision.
(j) Submission to Jurisdiction: Consent to Service of Process. Subject to Section 16(i) above, the Parties hereto hereby irrevocably submit to the exclusive jurisdiction of and consent to service of process and venue in the state and federal courts in the State of New York in any dispute, claim, controversy, action, suit or proceeding between the Parties arising out of this Agreement which are permitted to be filed or determined in such court. The Parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. The Parties agree that process may be served in any action, suit or proceeding by mailing copies thereof by registered or certified mail (or its equivalent) postage prepaid, to the Party’s address set forth in Section 16(g) of this Agreement or to such other address to which the Party shall have given written notice to the other Party. The Parties agree that such service shall be deemed in every respect effective service of process upon such Party in any such action, suit or proceeding and shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon and personal delivery to such Party. Nothing in this Section 16(j) shall affect the right of the Parties to serve process in any manner permitted by law.
(k) Force Majeure. No Party to this Agreement shall be liable for damages resulting from delayed or defective performance when such delays or defects arise out of causes beyond the control and without the fault or negligence of the offending Party. Such causes may include, but are not restricted to, acts of God or of the public enemy, terrorism, acts of the state in its sovereign capacity, fires, floods, earthquakes, power failure, tariffs, government regulations or executive orders, disabling strikes, epidemics, pandemics, quarantine restrictions and freight embargoes.
(1) Headings. The headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the Parties to this Agreement.
(m) Severability. In the event any provision of this Agreement shall be held invalid or unenforceable, by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provisions hereof.
(n) Counterparts: Electronic Signature and Delivery. This Agreement may be executed in counterparts, including counterparts sent via PDF other electronic transmission, each of which, when taken together shall constitute one and the same instrument. This Agreement may also be executed and delivered by electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000) or other transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Page Follows]
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly executed as of the Effective Date.
| SOL EDGE LIMITED, | ||
| as Consultant | ||
| By: | /s/ Yucheng Zhang | |
| Name: | Yucheng Zhang | |
| Title: | Authorized Signatory | |
| Sharps Technology Inc., | ||
| as Client | ||
| By: | /s/ Paul Danner | |
| Name: | Paul Danner | |
| Title: | Executive Chairman (Principal Executive Officer) | |
[Signature Page to Consulting Agreement]
Exhibit 99.2
Privileged & Confidential
Prepared at the Direction of Counsel
Close Press Release
Sharps Technology, Inc. Closes Over $400 Million Private Placement, Launching Solana Digital Asset Treasury Strategy
Transaction could raise up to $1 billion in aggregate gross proceeds if all of the warrants are exercised, which would make Sharps Technology one of the largest Solana treasury companies
Subscribers included preeminent financial institutions and digital asset market leaders such as ParaFi, Pantera, Monarq, FalconX, Phoenix Digital, Bastion Trading, RockawayX, Syncracy, Borderless, Republic Digital, Arche Capital, Arrington Capital, Hypersphere, Quantstamp, FinTech Collective, CoinList Alpha, Primitive Ventures and Avenir Group, among others
NEW YORK – August 28, 2025 – Sharps Technology, Inc. (the “Company” or “Sharps Technology”) (Nasdaq: “STSS” and “STSSW”) today announced the closing of its previously announced private placement offering of common stock and stapled warrants to purchase shares of common stock at a purchase price of $6.50 per unit. The transaction generated gross proceeds of over $400 million, and an additional $600 million could be raised if all of the warrants are exercised, which could increase total proceeds to $1 billion.
The Company will launch its digital asset treasury strategy under which the principal holding will be SOL, the native digital asset of the Solana blockchain. Solana is the fastest and most used public blockchain in the world, processing more transactions and generating more onchain fee revenue than all other blockchains combined.
The Company intends to use the net proceeds from the offering primarily to acquire SOL in the open market to establish its treasury operations, with additional funds allocated to working capital and general corporate purposes.
To support these efforts, Sharps Technology has signed a non-binding letter of intent (the “LOI”) with the Solana Foundation, a non-profit foundation based in Zug, Switzerland, dedicated to the decentralization, adoption, and security of the Solana ecosystem. Under the terms of the LOI, the Solana Foundation has committed to selling $50 million of SOL at a 15% discount to a 30-day time-weighted average price, which the Company would acquire solely from the proceeds of a public offering, subject to certain conditions being met.
The financing was supported by a broad syndicate of leading global financial institutions and digital asset investors, including ParaFi, Pantera, Monarq, FalconX, Phoenix Digital, Bastion Trading, RockawayX, Syncracy, Borderless, Republic Digital, Arche Capital, Arrington Capital, Hypersphere, Quantstamp, FinTech Collective, CoinList Alpha, Primitive Ventures, Avenir Group, and more.
“Solana is capable of handling any tradable asset, everywhere in the world, and demand is only increasing,” said Alice Zhang, Chief Investment Officer and Board Member of Sharps Technology. “With the backing of premier financial and digital asset investors, we believe we are well equipped to execute on our vision with our team’s extensive experience in the Solana ecosystem.”
“This transaction provides the foundation for what we see as a generational opportunity,” added Paul K. Danner, Executive Chairman of Sharps Technology. “Our capital base and experienced team enable us to execute a differentiated strategy designed to create meaningful, long-term value for our shareholders.”
To support the Company’s strategy, James Zhang will serve as Strategic Advisor to the Company, collaborating with top institutions including Monarq Asset Management, ParaFi and Pantera to scale the treasury initiative.
Privileged & Confidential
Prepared at the Direction of Counsel
Sharps Technology intends to provide regular updates on its SOL holdings and performance metrics to ensure maximum transparency for investors. The Company also plans to maintain and continue its business operations in medical device distribution.
Advisors
Cantor Fitzgerald & Co. served as lead placement agent to the Company, and Aegis Capital Corp. acted as co-placement agent to the Company.
Madison Global Partners, LLC served as a financial advisor to the Company.
Ellenoff Grossman & Schole LLP served as counsel to Sol Markets, the Company’s strategic advisor.
DLA Piper LLP (US) served as counsel to Cantor Fitzgerald & Co.
Kaufman & Canoles, P.C. served as counsel to Aegis Capital Corp.
Sichenzia Ross Ference Carmel LLP served as counsel to the Company.
Securities Act Disclaimer
The information provided in this press release is intended for informational purposes only and does not constitute investment advice, endorsement, analysis, or recommendations with respect to any financial instruments, investments, or issuers. Investment in cryptocurrency and DeFi projects involves substantial risk, including the risk of complete loss. This press release does not take into account the investment objectives, financial situation, or specific needs of any particular person and each individual is urged to consult their legal and financial advisors before making any investment decisions.
Forward Looking Statements
This press release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. This press release also includes express and implied forward-looking statements regarding the Company’s current expectations, estimates, opinions and beliefs that are not historical facts. Such forward-looking statements may be identified by words such as “believes,” “expects,” “endeavors,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “should” and “objective” and the negative and variations of such words and similar words. These statements are made on the basis of current knowledge and, by their nature, involve numerous assumptions and uncertainties. Nothing set forth herein should be regarded as a representation, warranty or prediction that we will achieve or are likely to achieve any particular future result. Actual results may differ materially from those indicated in the forward-looking statements because the realization of those results is subject to many risks and uncertainties, including the risk that we may fail to realize the anticipated benefits of the private placement and the transactions contemplated by the LOI, including the ability of the Company to execute on its digital asset treasury strategy, as well as risks related to economic conditions, fluctuations in the market price of SOL, and the evolving regulatory environment, as well as other factors. Forward-looking statements contained in this press release are made as of the date of this press release, and the Company undertakes no duty to update such information except as required under applicable law.
About Sharps Technology
Sharps Technology is an innovative medical device and pharmaceutical packaging company offering patented, best-in-class smart-safety syringe products to the healthcare industry. The Company’s product lines focus on providing ultra-low waste capabilities that incorporate syringe technologies that use both passive and active safety features. Sharps Technology also offers products that are designed with specialized copolymer technology to support the pre-fillable syringe market segment. For additional information, please visit www.sharpstechnology.com.
The Company has adopted a digital asset treasury strategy focused on accumulating SOL, the native digital asset of the Solana blockchain, leveraging capital markets raises that produce consistent on-chain yield generation. Sharps Technology will provide access to the Solana network, the fastest and most used blockchain in the world.
Media Contact
Prosek Partners for Sharps Technology
Sharps Technology, Inc.
Proforma Balance Sheet as of June 30, 2025 and Statement of Operations
for the Year Ended December 31, 2024 and the Six months ended June 30, 2025
(unaudited)
| Six Months Ended June 30, 2025 | ||||||||||||||
| As Reported | Adjustments | Notes | Pro Forma | |||||||||||
| Net Revenue | $ | 222,722 | $ | (86,642 | ) | $ | 136,080 | |||||||
| Cost of goods manufactured | 524,663 | (376,043 | ) | (a) | 148,620 | |||||||||
| Cost of goods - inventory reserve | 730,086 | (441,772 | ) | (a) | 288,314 | |||||||||
| Total cost of goods manufactured | 1,254,749 | (817,815 | ) | 436,934 | ||||||||||
| Gross Margin (Loss) | (1,032,027 | ) | 731,173 | (300,854 | ) | |||||||||
| Operating expenses: | ||||||||||||||
| Research and development | 143,471 | (41,070 | ) | (a) | 102,401 | |||||||||
| Selling, general and administrative | 3,852,653 | (777,091 | ) | (a) | 3,075,562 | |||||||||
| Total operating expenses | 3,996,124 | (818,161 | ) | 3,177,963 | ||||||||||
| Loss from operations | (5,028,151 | ) | 1,549,334 | (3,478,817 | ) | |||||||||
| Other income (expense): | ||||||||||||||
| Interest income (expense) | (530,038 | ) | - | (530,038 | ) | |||||||||
| FMV adjustment on warrants | 11,087,700 | - | 11,087,700 | |||||||||||
| Foreign currency and other | (41,370 | ) | 41,352 | (a) | (18 | ) | ||||||||
| Other income (expense): | - | - | - | |||||||||||
| Total Other income (expense) | 10,516,292 | 41,352 | 10,557,644 | |||||||||||
| Net Income (loss) Before Provision for Taxes | 5,488,141 | 1,590,686 | 7,078,827 | |||||||||||
| Deferred Tax Benefit | - | - | - | |||||||||||
| Net Income (Loss) | $ | 5,488,141 | $ | 1,590,686 | $ | 7,078,827 | ||||||||
| Net income (loss) per share, basic and diluted | $ | 10.45 | (g) | $ | 13.48 | |||||||||
| Weighted average shares used to compute net income (loss) per share, basic and diluted | 525,185 | - | (g) | 525,185 | ||||||||||
| Year Ended December 31, 2024 | ||||||||||||||
| As Reported | Adjustments | Notes | Pro Forma | |||||||||||
| Net Revenue | $ | - | $ | - | $ | - | ||||||||
| Operating expenses: | ||||||||||||||
| Research and development | 2,471,762 | (170,528 | ) | (a) | 2,301,234 | |||||||||
| Selling, general and administrative | 7,154,948 | (1,618,367 | ) | (a) | 5,536,581 | |||||||||
| Total operating expenses | 9,626,710 | (1,788,895 | ) | 7,837,815 | ||||||||||
| Loss from operations | (9,626,710 | ) | 1,788,895 | (7,837,815 | ) | |||||||||
| Other income (expense): | ||||||||||||||
| Interest income (expense) | (1,664,712 | ) | - | (1,664,712 | ) | |||||||||
| FMV adjustment on warrants | 3,016,936 | - | 3,016,936 | |||||||||||
| Foreign currency and other | (41,825 | ) | 41,894 | (a) | 69 | |||||||||
| Other income (expense): | (1,009,891 | ) | - | (1,009,891 | ) | |||||||||
| Total Other income (expense) | 300,508 | 41,894 | 342,402 | |||||||||||
| Net Income (loss) Before Provision for Taxes | (9,326,202 | ) | 1,830,789 | (7,495,413 | ) | |||||||||
| Deferred Tax Benefit | 30,000 | - | 30,000 | |||||||||||
| Net Income (Loss) | $ | (9,296,202 | ) | $ | 1,830,789 | $ | (7,465,413 | ) | ||||||
| Net income (loss) per share, basic and diluted | $ | (2,219.72 | ) | - | (g) | $ | (1,782.57 | ) | ||||||
| Weighted average shares used to compute net income (loss) per share, basic and diluted | 4,188 | - | (g) | 4,188 | ||||||||||
| June 30, 2025 Balance Sheet | ||||||||||||||
| As Reported | Adjustments | Notes | Pro Forma | |||||||||||
| Assets: | ||||||||||||||
| Cash | $ | 8,322,192 | $ | - | (b) | $ | 8,322,192 | |||||||
| Tax Receivable - VAT | 303,343 | (303,343 | ) | (b) | - | |||||||||
| Accounts Receivable | 136,080 | - | 136,080 | |||||||||||
| Prepaid expenses and other current assets | 101,524 | (12,047 | ) | (b) | 89,477 | |||||||||
| Inventories, Net | 1,631,794 | (889,654 | ) | (b) | 742,140 | |||||||||
| Total Current Assets | 10,494,933 | (1,205,044 | ) | 9,289,889 | ||||||||||
| Fixed Assets, net of accumulated depreciation | 4,423,256 | (4,299,642 | ) | (c) | 123,614 | |||||||||
| Other Assets | 2,167,008 | (2,076,945 | ) | (c) | 90,063 | |||||||||
| TOTAL ASSETS | 17,085,197 | (7,581,631 | ) | 9,503,566 | ||||||||||
| Liabilities: | ||||||||||||||
| Accounts payable | $ | 802,156 | $ | - | (d) | $ | 802,156 | |||||||
| Accrued expenses and other | 298,523 | (72,709 | ) | (d) | 225,814 | |||||||||
| Warrant liability | 1,312,848 | - | (d) | 1,312,848 | ||||||||||
| Total Current Liabilities | 2,413,527 | (72,709 | ) | 2,340,817 | ||||||||||
| Deferred Tax Liability | 132,000 | (132,000 | ) | (d) | - | |||||||||
| Total Liabilities | 2,545,527 | (204,709 | ) | 2,340,817 | ||||||||||
| Stockholders’ Equity: | ||||||||||||||
| Preferred stock, $.0001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding (2024: 0) | ||||||||||||||
| Common stock, $0.0001 par value; 1,666,667 shares authorized; 485,841 shares issued and outstanding in (2023: 6827) | 101 | - | (e) | 101 | ||||||||||
| Additional paid-in capital | 42,623,842 | - | 42,623,842 | |||||||||||
| Accumulated other comprehensive income | 872,792 | (872,792 | ) | - | ||||||||||
| Accumulated deficit | (28,957,065 | ) | (6,504,130 | ) | (35,461,195 | ) | ||||||||
| Total Stockholders’ Equity | $ | 14,539,670 | $ | (7,376,922 | ) | (f) | $ | 7,162,748 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 17,085,197 | (7,581,631 | ) | 9,503,566 | ||||||||||
| (a) | reduction in revenue and expenses for entity being divested |
| (b) | reduction in current assets being divested |
| (c) | reduction in fixed assets & other long term assets being divested |
| (d) | reduction in current liabilities and deferred tax assets being divested |
| (e) | common stock as reported at June 30, 2025, no effect for subsequent events |
| (f) | net impact of divestiture on stockholders equity |
| (g) | proforma earnings per share gives effect to the divestiture and for the reverse split of 1:300 effective April 2025, not reflected in previously filed 10K on March 27, 2025. |