ZSTK 8-K
ZeroStack Corp. (ZSTK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b -2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01. Entry into a Material Definitive Agreement.
On August 19, 2026, ZeroStack Corp. (the "Company") entered into a Securities Purchase Agreement (the "Agreement") with certain investors (collectively, the "Investors"). Pursuant to the Agreement, the Company agreed to issue and sell to the Investors an aggregate of 3,500,000 shares of the Company's common shares (the "Shares") and pre-funded warrants to purchase up to 36,198,293 additional Shares (the "Warrants"), in exchange for 925,925,926 MemeCore (M) tokens (the "Digital Assets").
Under the Agreement, the Shares and Warrants were valued at $25.19 per Share or per Warrant, as applicable, and the Digital Assets were valued at their fair market value of $1.08 as of August 14, 2026, representing aggregate consideration of approximately $1 billion.
The Agreement contains customary representations, warranties, and covenants, including a covenant that the Digital Assets will not be made available for staking by the Company, any Investor, or any other person. Shares that would be issued in excess of 19.99% of the Company's pre-transaction outstanding common shares (the "Share Cap") will instead be issuable pursuant to Warrants, which will not be exercisable until the issuance of Shares in excess of the Share Cap is approved by the Company's shareholders in accordance with Nasdaq Listing Rule 5635. The Company intends to file a resale registration statement on Form S-3 registering the Shares and the shares issuable upon exercise of the Warrants following the required shareholder approval. Only the shares issuable upon exercise of the Warrants (and not the Shares issued within the initial Share Cap) will be subject to a lock-up of up to ten (10) years from the closing date, which lock-up may be waived, released, or renegotiated upon the mutual written consent of the Company and the applicable Investor.
Concurrently with the execution of the Agreement, the Company entered into a Voting Agreement and Irrevocable Proxy with each of Puple AI Inc. and Blockcat Pte. Ltd. (each, a "Voting Agreement"), pursuant to which each such Investor agreed, among other things, to vote its Shares and any Shares issuable upon exercise of its Warrant in accordance with the direction of a designated proxyholder on matters presented to the Company's shareholders, including the approval required under Nasdaq Listing Rule 5635 described above, subject to certain reserved matters set forth therein on which the Investor retains sole voting discretion. Each Voting Agreement is accompanied by an irrevocable proxy that will terminate on August 1, 2036. The foregoing description of the Voting Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Voting Agreements, a form copy of which is filed as Exhibits 10.3 hereto and incorporated herein by reference.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On August 19, 2026, the Company completed the transaction contemplated by the Agreement described in Item 1.01 above, which description is incorporated herein by reference. At closing, the Company acquired 925,925,926 M tokens having an aggregate fair market value of approximately $1 billion as of August 19, 2026, in consideration for the issuance of 3,500,000 Shares and/or Warrants to purchase up to 36,198,293 additional Shares.
The consideration for the acquisition was determined through arm's-length negotiation between the Company and the Investors. Prior to the closing of the transaction, the Investors were unaffiliated with the Company and did not participate in governance of the Company. Rudy Rong, who is being appointed as President of the Company as described in Item 5.02 below, is a significant source of the Digital Assets contributed to the Company in the transaction.
The Digital Assets are held by the Company in a multi-signature digital wallet requiring multiple authorized approvals for transactions. The Company retains sole authority to add, remove, or replace any authorized approver at any time. The Digital Assets will be accounted for as long-term digital assets in accordance with applicable accounting standards.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under Items 1.01 and 2.01 above is incorporated herein by reference.
The Shares and Warrants were issued and sold in a private transaction not involving any public offering, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506(b) of Regulation D thereunder. Each Investor represented that it is an "accredited investor" as defined in Rule 501(a) of Regulation D. The Shares and Warrants were issued without registration under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption. Shares in excess of the Share Cap will not be issued, with Warrants provided in lieu thereof, not to be exercised until following the required shareholder approval. Appropriate restrictive legends were placed on the book-entry positions representing the Shares and on the certificated Warrants.
No underwriters were involved and no underwriting discounts or commissions were paid.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with the transaction described in Items 1.01, 2.01, and 3.02 above, on August 19, 2026, the Board of Directors of the Company appointed Rudy Rong as President of the Company, effective as of the closing of the transaction described above.
Mr. Rong has over a decade of experience in blockchain infrastructure, digital-asset markets, and international business operations. He previously served as Chief Growth Officer of MemeCore and as a General Partner at Factorial Lab, an investment firm focused on digital-asset and blockchain-related ventures. Earlier in his career, Mr. Rong founded and served as an executive of a company operating in the international medical-device industry. His professional background includes corporate strategy, business development, capital formation, and international operations. Mr. Rong holds a B.S. in Business Administration from the University of Southern California. There is no family relationship between Mr. Rong and any director or executive officer of the Company required to be disclosed pursuant to Item 401(d) of Regulation S-K.
In connection with his appointment, the Company and Mr. Rong entered into an Employment Agreement, dated August 19, 2026 (the "Employment Agreement"), pursuant to which Mr. Rong will receive an annual base salary of $500,000 and a contractual entitlement, effective upon execution of the Employment Agreement, to receive a grant of 125,000 shares of restricted stock, which grant is subject to approval by the Company's Compensation Committee and the Company's shareholders at the next annual or special meeting of shareholders, and in any event no later than December 31, 2026, and which shares will vest immediately upon such shareholder approval. This entitlement, and the Company's obligation to seek such approvals, will survive any termination of Mr. Rong's employment for any reason. The Employment Agreement further provides that, in the event Mr. Rong's employment is terminated by the Company without cause or by Mr. Rong for good reason, Mr. Rong will be entitled to severance equal to twenty-four (24) months of base salary, provided that if such termination occurs within six (6) months before or twelve (12) months after a change in control of the Company (as defined in the Employment Agreement), Mr. Rong will be entitled to an additional six (6) months of base salary, for a total of thirty (30) months of severance.
Other than his role as a contributor of Digital Assets to the Company pursuant to the Agreement described in Items 1.01 and 2.01 above, Mr. Rong does not have any relationship with the Company that would require disclosure pursuant to Item 404(a) of Regulation S-K.
The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is filed as Exhibit 10.4 hereto and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
| Exhibit No. | Description |
| 10.1 | Form of Securities Purchase Agreement, dated August 19, 2026, by and among the Company and the Investors named therein |
| 10.2 | Form of Pre-Funded Warrant (Exhibit A to the Securities Purchase Agreement filed as Exhibit 10.1 above) |
| 10.3 | Form of Voting Agreement and Irrevocable Proxy, dated August 19, 2026 |
| 10.4 | Employment Agreement, dated August 19, 2026, by and between the Company and Rudy Rong |
| 99.1 | Press release |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ZEROSTACK CORP. | ||
| Date: August 19, 2026 | By: | /s/ Dany Vaiman |
| Name: | Dany Vaiman | |
| Title: | Chief Financial Officer | |
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of August [ ], 2026, between ZeroStack Corp., a Texas corporation (the "Company"), and each investor identified on the signature pages hereto (each, including its successors and assigns, an "Investor" and collectively, the "Investors"). Subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the "1933 Act"), and Rule 506(b) of Regulation D as promulgated by the U.S. Securities and Exchange Commission under the 1933 Act ("Regulation D"), the Company desires to issue and sell to each Investor, and each Investor, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of the Securities.
1.1 Sale and Issuance of the Securities.
(a) Prior to the Closing (as defined below), the Company shall have authorized (i) the sale and issuance to the Investors of the Company's common shares, no par value ("Common Shares", and the Common Shares to be purchased pursuant to this Agreement, the "Shares") and/or pre-funded warrants to purchase Common Shares in the form of Exhibit A (the "Pre-Funded Warrants") and (ii) the issuance of the Common Shares issuable upon exercise of the Pre-Funded Warrants (the "Warrant Shares"). The Shares, the Pre-Funded Warrants and the Warrant Shares are collectively referred to herein as the "Securities".
(b) Subject to the terms and conditions of this Agreement, the Investors agree to purchase at the Closing, and the Company agrees to sell and issue to the Investors at the Closing, the number of Shares and/or Pre-Funded Warrants set forth on the applicable signature page at a purchase price of US$25.19 per Share or US$25.19 per Pre-Funded Warrant. Each Pre-Funded Warrant shall have an exercise price of US$0.0001 per Warrant Share. For purposes of this Agreement, the "Share Cap" means the maximum number of Common Shares that may be issued, or deemed issued, before Shareholder Approval pursuant to this Agreement, the Other Subscription Agreements and any other transaction that the Principal Market requires to be aggregated, without violating Nasdaq Listing Rule 5635; in no event shall the Share Cap exceed 19.99% of either the Common Shares or the voting power outstanding immediately before execution of the applicable transaction documents, after reduction for all Common Shares issued or issuable before Shareholder Approval in the same or any aggregated transaction. The aggregate number of Shares issued at the Closing under this Agreement (the "Initial Shares") shall not exceed the lesser of (i) 3,500,000 Common Shares and (ii) the unused portion of the Share Cap allocated to the Investors under this Agreement after giving effect to the Other Subscription Agreements and any aggregated transaction, with 1,750,000 Initial Shares allocated to Puple AI and 1,750,000 Initial Shares allocated to Blockcat Pte, as stated on their respective signature pages. Any remaining portion of an Investor's agreed Securities shall be issued solely as Pre-Funded Warrants for the corresponding number of Warrant Shares. No Pre-Funded Warrant may be exercised, and no Warrant Share may be issued, before Shareholder Approval or otherwise in violation of the Share Cap. The Company shall reserve the allocation of Initial Shares stated on each completed signature page and shall not enter into or amend an Other Subscription Agreement in a manner that reduces that allocation; if the Share Cap is allocated among multiple Investors, the Company and all affected Investors shall sign a final allocation schedule before any Token transfer. For the avoidance of doubt, there is no limitation under this Agreement on the number of Common Shares that any Investor may beneficially own other than the Share Cap. To the extent that the number of Common Shares otherwise issuable to any Investor pursuant to this Agreement would exceed the Share Cap, the Company shall issue and sell to such Investor, in lieu of such excess Common Shares, Pre-Funded Warrants exercisable for a number of Warrant Shares equal to such excess. The Pre-Funded Warrants shall not be exercisable to the extent that the issuance of the Warrant Shares upon such exercise, when aggregated with all other Common Shares issued pursuant to this Agreement and the Other Subscription Agreements, would exceed the Share Cap, unless and until the Company has obtained the Shareholder Approval. "Other Subscription Agreements" means each other securities purchase agreement, of even date herewith, by and between the Company and each other investor party thereto in substantially the same form and on the terms set forth herein as this Agreement providing for the issuance of Common Shares and/or Pre-Funded Warrants in exchange for the transfer of Tokens. "Tokens" means MemeCore (M) digital tokens contributed by an Investor in the number set forth on its signature page and transferred using the token contract and blockchain network specified in the Delivery Instructions.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
1.2 Closing; Delivery.
(a) The Closing shall occur remotely. Concurrently with the execution of this Agreement by each Party and authorized delivery of the executed Agreement to the other Party each Party shall then deliver each of the closing deliverables (the "Closing Deliverables") specified in Section 1.3. The Closing will take place at such time as each Party has received or waived delivery of each Closing Deliverable to which they are entitled by this Agreement. Upon Investors receipt of this Agreement executed by Company and all Company deliverables other than the Initial Shares and Pre-Funded Warrant, Investor shall transmit to Company Tokens, in the full amount of the Investor's Aggregate Subscription Amount for the number of Securities being purchased by each Investor at the Closing as set forth on each such Investor's signature page to this Agreement. Immediately following the Company's receipt of all Tokens, Company shall cause the Transfer Agent to issue the Initial Shares in book-entry form in each Investor's name or nominee name, free of legends except as expressly required by this Agreement and applicable law, and shall deliver evidence of that issuance. The Company shall also deliver to each Investor or its designated securities custodian a duly executed Pre-Funded Warrant for the exact number of Warrant Shares stated on that Investor's signature page. The Closing shall occur upon the complete performance of all Party's obligations under this Section 1.2. Concurrently with or immediately following the Closing, the Company will submit each Listing of Additional Shares notification and supporting material required by Nasdaq Listing Rule 5250(e)(2);
Confirmed Delivery. At least one (1) Business Day before any transfer of Tokens, the Company shall deliver written instructions, signed by an authorized officer, specifying the applicable token contract, blockchain network, exact quantity and wallet address designated by the Company for delivery (the "Delivery Instructions"). The Investor's obligation to transfer the Tokens shall be fully and finally performed when the correct type and quantity of Tokens have been transferred over the specified network to that address and the transfer is recorded as successful and final on the applicable blockchain ("Confirmed Delivery"). Upon Confirmed Delivery, the Company shall be deemed to have received and accepted the Tokens irrespective of the internal custody architecture, approval requirements, permissions or accessibility of the designated wallet. The Company shall bear the risk of any error in or unauthorized alteration of its Delivery Instructions, except to the extent directly caused by the Investor's fraud or willful misconduct.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
1.3 Closing Deliverables.
(a) Prior to the Closing, Company shall have delivered:
(i) this Agreement duly authorized and validly executed by the Company;
(ii) to the Transfer Agent all required materials to reflect the issuance of the Shares at the Closing and to reserve the Warrant Shares for issuance upon exercise of the Pre-Funded Warrants;
(iii) the opinion of Zuber Lawler LLP (as to U.S. law), dated as of the Closing Date, in customary form and substance to be reasonably agreed upon with the Investors and addressing such legal matters as the Investors and the Company reasonably agree;
(iv) a certificate, executed by the Secretary of the Company, certifying (i) the Certificate of Formation (as defined below); (ii) the Bylaws (as defined below); and (iii) resolutions of the Company's Board of Directors (or an authorized committee thereof) approving this Agreement, the other Transaction Documents, the transactions contemplated by this Agreement and the issuance of the Securities;
(v) a certificate executed by the Company's Chief Financial Officer stating: (A) the exact number of Common Shares and voting power outstanding immediately before execution; (B) the calculation of the Share Cap; (C) every issuance or potential issuance included in any aggregated transaction; (D) the number of Initial Shares reserved for each Investor; and (E) the exact number of Pre-Funded Warrants and Warrant Shares allocated to each Investor; and
(vi) any other document as to which the Parties agree in good faith to be required prior to Closing.
(b) Prior to the Closing the Investors shall each have delivered:
(i) this Agreement duly authorized and validly executed by such Investor; and
(ii) any other document as to which the Parties agree in good faith to be required prior to Closing.
1.4 Use of Proceeds. The Company shall maintain and make use of the Tokens in accordance with general corporate strategy.
1.5 Post-Delivery Custody Administration. From and after Confirmed Delivery, the Company shall be solely responsible for the selection, configuration, administration, security, access, recovery and operational continuity of its custody arrangements, including the performance of any custodian or wallet provider; wallet policies, approval thresholds and user permissions; key and credential retention, rotation and recovery; and the appointment, suspension, removal, replacement and succession of administrators, signers, approvers and other authorized personnel. No subsequent change by or on behalf of the Company to any such personnel, authority, permission or configuration, and no resulting delay or inability to access, stake, transfer or otherwise use the Tokens, shall revive any obligation of the Investor with respect to the Tokens or constitute a breach by the Investor. If a person who is or was associated with the Investor is separately appointed, engaged or authorized by the Company to serve as a manager, administrator, signer, approver, keyholder or similar person with respect to the Company's custody arrangements (a "Company Custody Designee"), that person shall perform such function solely in such person's separate capacity for the Company and not as an agent or representative of the Investor. The Company shall be responsible for the appointment, direction, supervision, permissions, removal and replacement of each Company Custody Designee. Upon the Company's suspension, removal or termination of such person's authority or access, that person's related authority and operational duties shall cease, except for reasonable transition cooperation requested in writing by the Company to the extent lawful, technically feasible and within such person's then-existing authority. Neither the Investor nor a Company Custody Designee shall be responsible for any resulting loss of quorum, delay, inaccessibility or inability to initiate or complete a transaction.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2. Representations and Warranties of the Company. The Company represents and warrants to each of the Investors that, except as set forth in the disclosure schedules attached to this Agreement (the "Disclosure Schedules"), which disclosure schedules shall be deemed a part hereof and shall qualify any representation made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, as of the date of this Agreement and as of the Closing Date:
2.1 Organization, Good Standing and Qualification. The Company is a corporation duly incorporated or formed, validly existing and in good standing under the laws of the State of Texas and has all requisite corporate power and authority to carry on its business as now conducted and described in the SEC Documents. The Company is duly qualified to transact business and is in good standing in each jurisdiction, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect. Other than the Persons set forth in Section 2.1 of the Disclosure Schedules, the Company has no Subsidiaries. Each of the Subsidiaries is (i) duly incorporated and validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite power and authority to carry on its business as now conducted and to own or lease its properties and (ii) qualified to do business as a foreign corporation and in good standing in each jurisdiction in which such qualification is required, except in each case as would not reasonably be expected to have a Material Adverse Effect. "Subsidiaries" means any Person in which the Company, directly or indirectly, (i) owns any of the outstanding share capital or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually referred to herein as a "Subsidiary". "Person" means any individual, corporation, partnership, limited liability company, trust, unincorporated organization, government or agency or political subdivision thereof or any other entity. "Material Adverse Effect" means any change, event, circumstance, development, condition, occurrence or effect that, individually or in the aggregate, (a) was, is, or would reasonably be expected to be, materially adverse to the business, financial condition, properties, assets, liabilities, stockholders' equity or results of operations of the Company and its Subsidiaries, taken as a whole, or (b) materially delays or materially impairs the ability of the Company to comply, or prevents the Company from complying, with its obligations under this Agreement, the other Transaction Documents, or with respect to the Closing, or would reasonably be expected to do so.
2.2 Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares and the Pre-Funded Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the Pre-Funded Warrants) have been duly authorized by the Company's board of directors (or a committee thereof), and (other than the notice and/or application(s) to the Principal Market and each applicable Trading Market for the issuance and sale of the Securities and the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, and the filing of Form D with the U.S. Securities and Exchange Commission (the "Commission" or "SEC"), if required, and such filings as are required to be made under applicable state securities laws (the "Required Approvals")) no further consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company or its Subsidiaries, their respective boards of directors or their shareholders or other governing body is required, except where the failure to obtain such consent, approval, order, authorization, registration, qualification, designation or declaration, as applicable, could not have or reasonably be expected to result in a Material Adverse Effect. This Agreement has been, and the other Transaction Documents to which it is a party will be prior to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. "Transaction Documents" means, collectively, this Agreement, the Pre-Funded Warrants and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.3 Valid Issuance of the Securities. The Shares being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and will be issued free and clear of any liens or other restrictions (other than those as provided in this Agreement or restrictions on transfer under applicable state and federal securities laws), and the holder of the Shares shall be entitled to all rights accorded to a holder of Common Shares. The Pre-Funded Warrants being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies. The Warrant Shares, when issued upon exercise of the Pre-Funded Warrants in accordance with the terms thereof, will be duly and validly issued, fully paid and nonassessable and will be issued free and clear of any liens or other restrictions (other than those as provided in this Agreement or restrictions on transfer under applicable state and federal securities laws), and the holder of the Warrant Shares shall be entitled to all rights accorded to a holder of Common Shares. The Company shall reserve and keep available at all times, free of preemptive rights, a sufficient number of Common Shares for the purpose of enabling the Company to issue the Warrant Shares upon exercise of the Pre-Funded Warrants. The issuance and delivery of the Shares and the Pre-Funded Warrants does not, and the exercise in full of the Pre-Funded Warrants and the issuance and delivery of the Warrant Shares thereupon will not, (a) obligate the Company to offer to issue, or issue, Common Shares or other securities to any Person (other than the Investors) pursuant to any preemptive rights, rights of first refusal, rights of participation or similar rights, or (b) result in any adjustment (automatic, at the election of any Person or otherwise) of the exercise, conversion, exchange or reset price under, or any other anti-dilution adjustment pursuant to, any outstanding securities of the Company. Subject to the accuracy of the representations and warranties made by the Investors in Section 3 of this Agreement, the offer and sale of the Securities to the Investors is, and will be, (i) exempt from the registration and prospectus delivery requirements of the 1933 Act and (ii) exempt from (or otherwise not subject to) the registration and qualification requirements of applicable securities laws of the states of the United States.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.4 No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares, the Pre-Funded Warrants and the Warrant Shares and the reservation for issuance of the Warrant Shares) will not (i) result in a violation of the certificate of formation of the Company, as amended to date (the "Certificate of Formation") (including, without limitation, any certificate of designation contained therein), bylaws of the Company, as amended to date (the "Bylaws") or other organizational documents of the Company or any of its Subsidiaries, or any share capital or other securities of the Company or any of its Subsidiaries, (ii) conflict with or result in a violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation, a change of control right or to a loss of a benefit under any agreement or instrument, credit facility, franchise, license, judgment, order, statute, law, ordinance, rule or regulations, applicable to the Company or any of its Subsidiaries or their respective properties or assets, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or any of its Subsidiaries is subject (including federal and state securities laws and regulations) and the rules and regulations of any self-regulatory organization to which the Company or its securities are subject (including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of the Principal Market and including all applicable foreign, federal and state laws, rules and regulations, including the laws, rules and regulations of the State of Texas), or by which any property or asset of the Company or any of its Subsidiaries is bound or affected.
2.5 Offering and Consents. Subject to the truth and accuracy of each Investor's representations and warranties set forth in Section 3 of this Agreement, the offer, sale and issuance of the Securities as contemplated by this Agreement is, and will be, (i) exempt from the registration and prospectus delivery requirements of the 1933 Act and (ii) exempt from (or otherwise not subject to) the registration and qualification requirements of applicable state and federal securities laws, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Principal Market or any other market or quotation system on which the Company's securities trade. Assuming the accuracy of the representations and warranties of each Investor set forth in Section 3 of this Agreement, no consent, approval, authorization, filing with or order of or registration with, any court or governmental agency or body is required in connection with the authorization, execution or delivery by the Company of the Transaction Documents, the issuance and sale of the Securities and the performance by the Company of its other obligations under the Transaction Documents, except (a) as have been or will be obtained or made under the 1933 Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"), (b) the filing of any requisite notices and/or application(s) to the Principal Market for the issuance and sale of the Securities and the listing of the Shares and the Warrant Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby, (c) customary post-closing filings with the SEC or pursuant to state securities laws in connection with the offer and sale of the Shares or the Warrant Shares by the Company in the manner contemplated herein, which will be filed on a timely basis, (d) the filing of the registration statement required to be filed pursuant to Section 4.8 of this Agreement, or (e) such that the failure of which to obtain would not have a Material Adverse Effect. All notices, consents, authorizations, orders, filings and registrations which the Company is required to deliver or obtain prior to the Closing pursuant to the preceding sentence have been obtained or made or will be delivered or obtained or effected, and shall remain in full force and effect, on or prior to the Closing.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.6 No Integrated Offering. None of the Company, its Subsidiaries or any of their Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings or otherwise, or cause this offering of the Securities to require approval of shareholders of the Company for purposes of the 1933 Act, the rules and regulations of the Principal Market or under any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their Affiliates nor any Person acting on their behalf will take any action or steps that would require registration of the issuance of any of the Securities under the 1933 Act (other than pursuant to the registration provisions of this Agreement) or cause the offering of any of the Securities to be integrated with other offerings of securities of the Company. "Affiliate" means, with respect to any specified Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of a Person, whether through ownership of voting securities, by contract, or otherwise.
2.7 SEC Documents; Financial Statements. The Company has filed all forms, statements, certifications, reports and documents required to be filed by it with the SEC under Section 13, 14(a) and 15(d) of the 1934 Act for the one (1) year preceding the date of this Agreement and is in compliance with General Instruction I.A.3 of Form S-3. "SEC Documents" means (a) the Company's most recently filed Annual Report on Form 10-K and (b) all Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed or furnished (as applicable) by the Company following the end of the most recent fiscal year for which an Annual Report on Form 10-K has been filed and prior to the execution of this Agreement, together in each case with any documents incorporated by reference therein or exhibits thereto. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. There are no outstanding or unresolved comments from the SEC staff with respect to the SEC Documents. To the Company's knowledge, none of the SEC Documents are the subject of an ongoing SEC review. The interactive data in eXtensible Business Reporting Language included in the SEC Documents fairly presents the information called for in all material respects and has been prepared in accordance with the SEC's rules and guidelines applicable thereto. The Company is not, and has never been, an issuer subject to Rule 144(i) under the 1933 Act. The consolidated financial statements of the Company included in the SEC Documents (collectively, the "Financial Statements") comply in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company and its Subsidiaries as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided for by the Company in its financial statements or otherwise. Except as set forth in the Financial Statements filed prior to the date of this Agreement, the Company has not incurred any liabilities, contingent or otherwise, except (i) those incurred in the ordinary course of business, consistent with past practices since the date of such financial statements or (ii) liabilities not required under GAAP to be reflected in the Financial Statements, in either case, none of which, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect. No other information provided by or on behalf of the Company to any of the Investors which is not included in the SEC Documents (including, without limitation, information in the Disclosure Schedules to this Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under which they are or were made. The Company is not currently contemplating to amend or restate any of the Financial Statements (including, without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the SEC Documents, nor is the Company currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financial Statements to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate any of the Financial Statements.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.8 Absence of Certain Changes. Since December 31, 2025, (a) the Company has conducted its business only in the ordinary course of business; (b) there have been no material transactions entered into by the Company or any of its Subsidiaries (except for the execution and performance of this Agreement and the discussions, negotiations and transactions related thereto) that have not been disclosed in the SEC Documents; (c) there has been no material adverse change and no material adverse development in the business, assets, liabilities, properties, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries that has not been disclosed in the SEC Documents; (d) there has been no material change to any material contract or arrangement by which the Company or any of its Subsidiaries is bound or to which any of its assets or properties is subject has been entered into that has not been disclosed in the SEC Documents; and (e) there has not been any other event or condition of any character that has had or would reasonably be expected to have a Material Adverse Effect. Since December 31, 2025, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary course of business. Except as disclosed in the Disclosure Schedules, neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section 2.8, "Insolvent" means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the Company's and its Subsidiaries' assets is less than the amount required to pay the Company's and its Subsidiaries' total Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company and its Subsidiaries intend to incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature; and (ii) with respect to the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company's or such Subsidiary's (as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the Company or such Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to incur or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor any of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction, for which the Company's or such Subsidiary's remaining assets constitute unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted. "Indebtedness" means, with respect to any Person, (i) all obligations for borrowed money, (ii) all obligations evidenced by bonds, debentures, notes or similar instruments, (iii) all capital lease obligations, and (iv) all obligations for the deferred purchase price of property or services.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.9 No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that (i) would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 or Form S-3 filed with the Commission relating to an issuance and sale by the Company of its Common Shares and which has not been publicly announced or (ii) could have a Material Adverse Effect.
2.10 Capitalization. The Company's disclosure of its authorized, issued and outstanding capital stock in the SEC Documents containing such disclosure was accurate in all material respects as of the date indicated in such SEC Documents. Except as disclosed in the SEC Documents, the Company has not issued any capital stock since its most recently filed periodic report under the 1934 Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. There are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Shares, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Common Shares or other securities. The issuance and sale of the Securities will not obligate the Company to issue Common Shares or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any mandatory redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement that is not otherwise disclosed in the SEC Documents. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, and have been issued in compliance with all applicable foreign, federal and state securities laws. None of the outstanding shares of capital stock of the Company were issued in violation of any preemptive or other similar rights of any securityholder of the Company which have not been waived, and such shares were issued in compliance in all material respects with applicable state and federal securities law and any rights of third parties.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.11 Litigation. Except as disclosed in the SEC Documents and as set forth in Section 2.11 of the Disclosure Schedules, there is no action, suit, proceeding or investigation pending or, to the Company's knowledge, currently threatened against the Company or its Subsidiaries that questions the validity of this Agreement or the right of the Company to enter into this Agreement, or to consummate the transactions completed hereunder, or which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect, nor are there any orders, writs, injunctions, judgments or decrees outstanding of any court or government agency or instrumentality and binding upon the Company or any of its Subsidiaries that have had or would reasonably be expected to have a Material Adverse Effect, nor is the Company or the Subsidiary aware that there is any basis for the foregoing. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened (or any basis therefor known to the Company) involving the prior employment of any of the Company's or the Subsidiary's employees, their use in connection with the Company's or the Subsidiary's business of any information or techniques allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers. Neither the Company nor the Subsidiary is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. Except as set forth in Section 2.11 of the Disclosure Schedules, there is no action, suit, proceeding or investigation by the Company or the Subsidiary currently pending or that the Company intends to initiate. Neither the Company nor any Subsidiary, nor to the knowledge of the Company, any director or officer of the Company or any Subsidiary, is, or within the last five (5) years has been, the subject of any action involving a claim of violation of or liability under federal or state securities laws relating to the Company or such Subsidiary or a claim of breach of fiduciary duty relating to the Company or such Subsidiary.
2.12 Transactions With Affiliates and Employees. Except as set forth in the SEC Documents and as set forth in Section 2.12 of the Disclosure Schedules, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of US$120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.13 Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are, and since January 1, 2025, have been in material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 and any and all applicable rules and regulations promulgated by the Commission. The Company and the Subsidiaries maintain internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the 1934 Act) that is designed to comply with the requirements of the 1934 Act applicable to the Company and effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including policies and procedures sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP or any other criteria applicable to such statements, and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established and maintained disclosure controls and procedures (as defined in 1934 Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information (both financial and non-financial) required to be disclosed by the Company in the reports it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. The Company's certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic annual report under the 1934 Act (such date, the "Evaluation Date"). The Company presented in its most recently filed periodic annual report under the 1934 Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the 1934 Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
2.14 Investment Company. The Company believes it is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, does not expect to be or be an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The Company will use best efforts to conduct its business in a manner so that it will not become an "investment company" subject to registration under the Investment Company Act of 1940, as amended.
2.15 Listing and Maintenance Requirements. The Common Shares are registered pursuant to Section 12(b) of the 1934 Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Shares under the 1934 Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The issued and outstanding Common Shares are listed for trading on the Principal Market under the symbol "ZSTK". Except as set forth in the SEC Documents or Section 2.15 of the Disclosure Schedules, the Company has not in the twelve (12) months preceding the date hereof received notice from the Principal Market or any other Trading Market on which Common Shares are or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Principal Market or other Trading Market. "Trading Market" means any of the following markets or exchanges on which the Common Shares is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing). Except as set forth in the SEC Documents or Section 2.15 of the Disclosure Schedules, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Shares are currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.16 Application of Takeover Protections. No control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti takeover provision under the Company's Certificate of Formation (or similar charter documents) or the laws of the State of Texas that is or could become applicable to the Investors as a result of the Investors and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company's issuance of the Securities and the Investors' ownership of the Securities, is applicable to the Company.
2.17 Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim. No audits, examinations, or other proceedings with respect to any material amounts of Taxes of the Company and its Subsidiaries are presently in progress or have been asserted or proposed in writing without subsequently being paid, settled or withdrawn. There are no liens on any of the assets of the Company. At all times since inception, the Company has been and continues to be classified as a corporation for U.S. federal income tax purposes. Neither the Company nor any of its Subsidiaries has been a United States real property holding corporation within the meaning of Code Section 897(c)-2 during the period specified in Code Section 897(c)(1)(A)(ii).
2.18 No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising (within the meaning of Regulation D). The Company has offered the Securities for sale only to the Investors. Assuming the accuracy of the representations and warranties of the Investors set forth in Section 3 of this Agreement, neither the Company nor any of its Affiliates, its Subsidiaries nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any Company security, under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) of the 1933 Act and/or Rule 506(b) of Regulation D for the exemption from registration for the transactions contemplated hereby.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.19 Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other Person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any Person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the FCPA.
2.20 No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company's ability to perform any of its obligations under any of the Transaction Documents.
2.21 Acknowledgment Regarding Investors' Purchase of Securities. The Company acknowledges and agrees that the Investors are acting solely in the capacity of an arm's length Investor with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Investor or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Investors' purchase of the Securities. The Company further represents to the Investors that the Company's decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
2.22 Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.
2.23 Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or Affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.
2.24 Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable U.S. and foreign financial record-keeping and reporting requirements, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "Money Laundering Laws"), and no Action (as defined below), suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
2.25 Registration Rights. Except as set forth in the Transaction Documents or as disclosed in the SEC Documents, the Company is presently not under any obligation, and has not granted any rights, to register under the 1933 Act any of the Company's presently outstanding securities or any of its securities that may hereafter be issued, other than such rights and obligations that have expired or been satisfied or waived.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.26 Price Stabilization of Common Shares. The Company has not taken, nor will it take, directly or indirectly, any action designed to stabilize or manipulate the price of the Common Shares to facilitate the sale or resale of the Shares.
2.27 Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, "Hazardous Materials") into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder ("Environmental Laws"); (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
2.28 Title. Each of the Company and its Subsidiaries has good and marketable title to all personal property owned by it that is material to the business of the Company, free and clear of all liens, encumbrances and defects except such as do not materially and adversely affect the value of such property and do not materially and adversely interfere with the use made and proposed to be made of such property by the Company or its Subsidiaries, as the case may be. Any real property and buildings held under lease by the Company or its Subsidiaries is held under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company or its Subsidiaries, as the case may be. The Company does not own any real property.
2.29 Insurance. The Company carries or is entitled to the benefits of insurance in such amounts and covering such risks that is customary for comparably situated companies and is adequate for the conduct of its business and the value of its real and personal properties (owned or leased) and tangible assets, and each of such insurance policies is in full force and effect and the Company is in compliance in all material respects with the terms of such insurance policies. Other than customary end-of-policy notifications from insurance carriers, since January 1, 2026, the Company has not received any notice or other communication regarding any actual or possible: (i) cancellation or invalidation of any material insurance policy or (ii) refusal or denial of any coverage, reservation of rights or rejection of any material claim under any insurance policy.
2.30 [Reserved.]
2.31 Cybersecurity. (i) (a) There has been no security breach or other compromise of or relating to any of the Company's or any Subsidiary's information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, "IT Systems and Data") and (b) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except, in the case of clauses (i) and (ii) herein, as would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
2.32 Compliance with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in material compliance with all applicable state, federal and foreign data privacy and security laws and regulations regarding the collection, use, storage, retention, disclosure, transfer, disposal, or any other processing (collectively "Process" or "Processing") of Personal Data, including without limitation HIPAA, the EU General Data Protection Regulation ("GDPR") (Regulation (EU) No. 2016/679), all other local, state, federal, national, supranational and foreign laws relating to the regulation of the Company or its Subsidiaries, and the regulations promulgated pursuant to such statutes and any state or non-U.S. counterpart thereof (collectively, the "Privacy Laws"). To ensure material compliance with the Privacy Laws, the Company and its Subsidiaries have in place, comply with, and take all appropriate steps necessary to ensure compliance in all material respects with their policies and procedures relating to data privacy and security, and the Processing of Personal Data and Confidential Data (the "Privacy Statements"). The Company and its Subsidiaries have, except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, at all times since inception provided accurate notice of their Privacy Statements then in effect to its customers, employees, third party vendors and representatives. None of such disclosures made or contained in any Privacy Statements have been materially inaccurate, misleading, incomplete, or in material violation of any Privacy Laws.
2.33 No Disqualification Events. With respect to any Securities offered and sold hereunder in reliance on Rule 506(b) under the 1933 Act, if any, none of the Company, any of its predecessors, any Affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of twenty percent (20%) or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an "Issuer Covered Person" and, together, "Issuer Covered Persons") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a "Disqualification Event"), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Investors a copy of any disclosures provided thereunder.
2.34 Disclosure; No Additional Agreements. All of the disclosure furnished by or on behalf of the Company to the Investors regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that no Investor makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3 hereof. There are no agreements or understandings between the Company and any Investor with respect to the transactions contemplated by the Transaction Documents other than (i) as specified in the Transaction Documents and (ii) any side letter agreements with any of the Investors, which side letters the Company has shared with all Investors.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
3. Representations and Warranties of the Investors. Each Investor hereby represents and warrants to the Company on the date hereof and on the Closing Date that:
3.1 Authorization. Such Investor is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. Such Investor has full power and authority to enter into this Agreement, and the Agreement constitutes its valid and legally binding obligation, enforceable against such Investor in accordance with its terms except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. The execution, delivery and performance of this Agreement by such Investor and the consummation by it of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate, partnership, limited liability company or similar legal action, as applicable, and no further consent or authorization of such Investor is required.
3.2 No Conflict. The execution, delivery and performance of this Agreement by such Investor and the consummation by such Investor of the transactions contemplated thereby will not (a) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any material agreement to which such Investor is a party or by which such Investor is bound or to which any of the property or assets of such Investor is subject, (b) conflict with or result in any violation of the provisions of the organizational documents of such Investor, or (c) violate any statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over such Investor or the property or assets of such Investor, except in the case of clauses (a) and (c), for such conflicts, breaches, violations or defaults as would not prevent the consummation of the transactions contemplated by this Agreement.
3.3 Purchase Entirely for Own Account. The Investor is purchasing the Securities solely for the Investor's own account and not for the account of others, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to the Investor's right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws. Notwithstanding the foregoing, if the Investor is purchasing the Securities as a fiduciary or agent for one or more investor accounts, the Investor has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account. The Investor has no present arrangement to sell the Securities to or through any person or entity. The Investor understands that the Securities must be held indefinitely unless such Securities are resold pursuant to a registration statement under the 1933 Act or an exemption from registration is available. Nothing contained herein shall be deemed a representation or warranty by the Investor to hold the Securities for any period of time.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
3.4 Disclosure of Information. Such Investor believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Securities. Such Investor further represents that it has had an opportunity to ask questions and received answers from the Company regarding the terms and conditions of the offering of the Securities, the merits and risks of investing in the Securities and the business, properties, prospects and financial condition of the Company. Such Investor has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities. Neither such inquiries nor any other due diligence investigation conducted by the Investor shall modify, limit or otherwise affect the Investor's right to rely on the Company's representations and warranties contained in this Agreement.
3.5 Experience. Such Investor is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge, sophistication and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Securities and has so evaluated the merits and risks of such investment. The Investor has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as the Investor has considered necessary to make an informed investment decision. If other than an individual, Investor also represents it has not been organized for the purpose of acquiring the Securities. The Investor acknowledges that the Investor (i) is a sophisticated investor, experienced in investing in private placements of equity securities and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities and (ii) has exercised independent judgment in evaluating its participation in the purchase of the Securities. The Investor acknowledges that the Investor is aware that there are substantial risks incident to the purchase and ownership of the Securities, including those set forth in the Company's filings with the SEC. Alone, or together with any professional advisor(s), the Investor has adequately analyzed and fully considered the risks of an investment in the Securities and determined that the Securities are a suitable investment for the Investor. The Investor is, at this time and in the foreseeable future, able to afford the loss of the Investor's entire investment in the Securities and the Investor acknowledges specifically that a possibility of total loss exists.
3.6 Investor Status. Such Investor is an "accredited investor" as defined in Rule 501(a) of Regulation D and has completed and delivered to the Company an investor questionnaire in form and substance reasonably satisfactory to the Company confirming such Investor's status as an "accredited investor", and the information contained in such questionnaire is true, complete and correct as of the date hereof and will be true, complete and correct as of the Closing. The Investor further represents and warrants that (x) it is capable of evaluating the merits and risk of such investment, and (y) that it has not been organized for the purpose of acquiring the Securities and is an "institutional account" as defined by FINRA Rule 4512(c).
3.7 No Disqualification Events. To the extent the Investor is one of the covered persons identified in Rule 506(d)(1), the Investor represents that no Disqualification Event is applicable to the Investor or any of its Rule 506(d) Related Parties (as defined below), except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. The Investor hereby agrees that it shall notify the Company promptly in writing in the event a Disqualification Event becomes applicable to the Investor or any of its Rule 506(d) Related Parties, except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. For purposes of this Section, "Rule 506(d) Related Party" means a person or entity that is a beneficial owner of the Investor's securities for purposes of Rule 506(d) of the 1933 Act.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
3.8 Restricted Securities. Such Investor understands that the Securities will be characterized as "restricted securities" under the federal securities laws of the United States inasmuch as the Securities have not been registered under the 1933 Act or under the "blue sky" laws of any jurisdiction and that under such laws and applicable regulations such securities may be resold only if registered pursuant to the 1933 Act or without registration under the 1933 Act, if eligible, pursuant to the provisions of Rule 144 promulgated by the Commission pursuant to the 1933 Act ("Rule 144") or pursuant to another available exemption from the registration requirement of the 1933 Act. Such Investor represents that it is familiar with Rule 144, and understands the resale limitations imposed thereby and by the 1933 Act. Such Investor has been advised and understands that the Company, in issuing the Securities, is relying upon, among other things, the representations and warranties of such Investor contained in this Section 3 in concluding that such issuance is a "private offering" and is exempt from the registration provisions of the 1933 Act. Such Investor is aware that the Company is under no obligation to effect any such registration with respect to the Securities, or to file for or comply with any exemption from registration, except as expressly required by Section 4.8 of this Agreement.
3.9 Exculpation Among Investors. The Investor acknowledges that it is not relying upon any Person, firm or corporation in making its investment or decision to invest in the Company. Neither the Investor nor any of its controlling persons, officers, directors, partners, agents or employees shall be liable to any other equity holder in the Company for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Securities.
3.10 Foreign Investors. If the Investor is not a United States person (as defined by Section 7701(a)(30) of the U.S. Internal Revenue Code), the Investor hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Securities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities. The Investor's subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Investor's jurisdiction.
3.11 No General Solicitation. Such Investor is not, to such Investor's knowledge, purchasing the Securities as a result of any form of general solicitation or general advertising (within the meaning of Regulation D) including an advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio presented at any seminar.
3.12 Residence. If the Investor is an individual, then the Investor resides in the state or province identified in the address of the Investor set forth on the signature page hereto; if the Investor is a partnership, corporation, limited liability company or other entity, then the office or offices of the Investor in which its principal place of business is identified in the address or addresses of the Investor set forth on the signature page hereto.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
3.13 Certain Fees. No fees or commissions are or will be payable by such Investor to brokers, finders or investment bankers with respect to the purchase of any of the Securities or the consummation of the transactions contemplated by this Agreement. The Investor agrees that it will indemnify and hold harmless the Company from and against any and all claims, demands or liabilities for broker's, finder's, placement, or other similar fees or commissions incurred by such Investor or alleged to have been incurred by such Investor in connection with the purchase of the Securities or the consummation of the transactions contemplated by this Agreement.
3.14 Information. Such Investor shall cooperate reasonably with the Company to provide any information necessary for the Company to make any applicable filings, including but not limited to, filings with the Commission and pursuant to applicable state securities laws.
3.15 Independent Investment Decision. The Investor understands that nothing in the Transaction Documents or any other materials presented by or on behalf of the Company to the Investor in connection with the purchase of the Securities constitutes legal, tax or investment advice. The Investor has consulted such legal, tax and investment advisors as it, in such Investor's sole discretion, has deemed necessary or appropriate in connection with its purchase of the Securities.
3.16 Reliance by the Company. Such Investor understands that the Securities are being offered and sold in reliance on a transactional exemption from the registration requirements of federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of such Investor set forth herein in order to determine the applicability of such exemptions and the suitability of such Investor to acquire the Securities.
3.17 Marketable Title to Tokens. With respect to any Tokens delivered as consideration, Investor is the sole owner of the entire right, title and interest in and to, or has a valid exclusive license or other sufficient exclusive legal right under, the Tokens. The Investor has made no prior transfer of the Tokens or of any interest therein. Investor has, and Company will have, on the Closing Date, good and marketable title to the Tokens, free and clear of all liens, claims, charges and encumbrances of any kind whatsoever. As of the Closing Date, the Tokens will be fully vested and are not subject to any restrictions on transfer by Investor that may otherwise bind the Investor.
4. Other Agreements.
4.1 Transfer Restrictions.
(a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of an Investor or in connection with a pledge as contemplated in Section 4.1(c), the Company may require the transferor thereof to provide to the Company an opinion of counsel of recognized standing selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the 1933 Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of an Investor under this Agreement.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
(b) The Investors agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities that are certificated in substantially the following form:
> THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND THIS SECURITY WAS ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND SIMILAR EXEMPTIONS UNDER APPLICABLE STATE SECURITIES LAWS, 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 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.
(c) Subject in all respects to Section 4.16, The Company acknowledges and agrees that an Investor may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an "accredited investor" as defined in Rule 501(a) under the 1933 Act and, if required under the terms of such arrangement, such Investor may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Investor's expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the 1933 Act.
(d) If an Investor has resold all or a portion of the Securities in a manner described under the caption "Plan of Distribution" in a then-effective and available Registration Statement or pursuant to Rule 144 or other available exemption from registration under the 1933 Act, such Investor shall promptly (a) send a confirmation to the Company's transfer agent setting forth the number of such Securities that have been so resold and the date of such resale (such confirmation, the "Transfer Agent Confirmation") and (b) deliver to the Company, the transfer agent and legal counsel to the Company a customary seller's representation letter and broker's representation letter confirming the resale of such Securities in the manner described above, together with any other documentation reasonably required by the transfer agent and/or the Depository Trust Company and, if applicable and requested by the Company in the event of a sale of Securities by the Investor pursuant to an exemption from the registration requirements under the 1933 Act, other than in reliance on Rule 144, a legal opinion of recognized counsel that the sale of such shares did not require registration under the 1933 Act, in a form and substance reasonably satisfactory to the Company and its legal counsel (the "Resale Deliverables"). The Company and the Investor hereby acknowledge that, if and when such Investor has (i) resold Securities in a manner described under the caption "Plan of Distribution" in a then-effective and available Registration Statement or pursuant to Rule 144 or other available exemption from registration under the 1933 Act and (ii) delivered the Resale Deliverables, the Company shall instruct the transfer agent to cause such shares to be credited to accounts designated by the Investor for the persons who purchased such Securities from the Investor no later than two (2) Trading Days following the delivery by such Investor of the Resale Deliverables (the "Share Delivery Deadline"). Upon the written request by the Investor to the Company if, at the time of such request, regardless of whether such Investor has resold all or any portion of the Securities, such Investor (i) is not, and has not been during the preceding three months, an affiliate of the Company, and (ii) has held the portion of the Securities subject to such request for at least six months as determined in accordance with Rule 144, and at such time no other requirements would need to be satisfied in order for the Investor to sell the Securities under Rule 144, the Company shall, no later than two (2) Trading Days following the delivery by such Investor to the Company's transfer agent of one or more legended certificates or book-entry statements representing such Securities issued to such Investor together with such other documentation from such Investor and its designated broker as the transfer agent or the Company deems necessary and appropriate to authorize the transfer agent to remove the 1933 Act restrictive legend (and any stop transfer instructions placed against transfer of any such Securities) affixed to the portion of such Securities for which all conditions to such Investor's ability to resell under Rule 144 have then been satisfied (such date, the "Legend Removal Date"). At the time the Company authorizes the removal of the 1933 Act restrictive legend (and any stop transfer instructions placed against transfer of any such Securities) pursuant to this Section 4.1(d), upon delivery of the Resale Deliverables, the Company shall also use its commercially reasonable efforts, at its sole expense, to cause its legal counsel to issue to the transfer agent a legal opinion or direction letter instructing the transfer agent that it is authorized to remove the 1933 Act restrictive legend affixed to such Securities as contemplated by this Section 4.1(d). The Company shall be responsible for the fees of its transfer agent and any Depository Trust Company fees associated with such issuance.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
(e) In addition to such Investor's other available remedies, the Company shall pay to an Investor, in cash, (i) as partial liquidated damages and not as a penalty, for each US$1,000 of Shares delivered for removal of the restrictive legend and subject to Section 4.1(d), US$5 per Trading Day (increasing to US$10 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date or Share Delivery Deadline until such certificate is delivered without a legend or such Shares are credited to accounts designated by the Investor for the persons who purchased such Securities from the Investor, as applicable, and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered) to an Investor by the Legend Removal Date a certificate representing the Shares so delivered to the Company by such Investor that is free from all restrictive and other legends or to cause Shares to be credited to accounts designated by the Investor for the persons who purchased such Securities from the Investor, as applicable, and (b) if after the Legend Removal Date such Investor purchases (in an open market transaction or otherwise) Common Shares to deliver in satisfaction of a sale by such Investor of all or any portion of the number of Shares, or a sale of a number of Common Shares equal to all or any portion of the number of Shares that such Investor anticipated receiving from the Company without any restrictive legend, then, an amount equal to the excess of such Investor's total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the Common Shares so purchased (the "Buy-In Price") over the product of (A) such number of Shares that the Company was required to deliver to such Investor by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Shares on any Trading Day during the period commencing on the date of delivery by such Investor to the Company of the applicable Shares and ending on the date of such delivery and payment under this clause (ii).
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
(f) Each Investor, severally and not jointly with the other Investors, agrees with the Company that such Investor will sell any Securities pursuant to either the registration requirements of the 1933 Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company's reliance upon this understanding.
4.2 Furnishing of Information; Public Information. While any Investor holds Securities, the Company covenants to maintain the registration of the Common Shares under Section 12(b) or 12(g) of the 1934 Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the 1934 Act. At any time during the period commencing from the six (6) month anniversary of the date of this Agreement and ending at such time that all of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a "Public Information Failure") then, in addition to such Investor's other available remedies, the Company shall pay to an Investor, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to one percent (1.0%) of the aggregate Subscription Amount of such Investor's Securities on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty (30) days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required for the Investors to transfer the Shares pursuant to Rule 144. The payments to which an Investor shall be entitled pursuant to this Section 4.2 are referred to herein as "Public Information Failure Payments." Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Trading Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of one percent (1.0%) per month (prorated for partial months) until paid in full. Nothing herein shall limit such Investor's right to pursue actual damages for the Public Information Failure, and such Investor shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933 Act) that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4 Securities Laws Disclosure; Publicity. The Company shall, by 9:00 a.m., New York City time, on the first (1st) Business Day immediately following the date of this Agreement, issue a press release and/or file with the SEC a Current Report on Form 8-K (including, in the case of a Current Report on Form 8-K, all required exhibits thereto, the "Disclosure Document") disclosing (i) all material terms of the transactions contemplated hereby and by the other Transaction Documents and, if the Disclosure Document is a Current Report on Form 8-K, attaching this Agreement and the other Transaction Documents as exhibits to such Disclosure Document, and (ii) all material non-public information concerning the Company disclosed to the Investors. Following the issuance or filing of the Disclosure Document, no Investor shall be in possession of any material non-public information concerning the Company disclosed to the Investors by the Company or its representatives. The Company understands and confirms that the Investors will rely on the foregoing representation in effecting securities transactions. In addition, unless it has already done so by filing the Disclosure Document, on or before the fourth (4th) Business Day following the date of this Agreement, the Company shall file with the SEC a Current Report on Form 8-K disclosing all material terms of the transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, the Company shall not publicly disclose the name of any Investor or any of its Affiliates or advisors, or include the name of any Investor or any of its Affiliates or advisors in any press release or filing with the SEC (other than any registration statement contemplated by this Agreement) or any regulatory agency, without the prior written consent of the Investor, except (i) as required by the federal securities law in connection with (A) any registration statement contemplated by this Agreement and (B) the filing of final Transaction Documents with the SEC or pursuant to other routine proceedings of regulatory authorities, or (ii) to the extent such disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of the Nasdaq Capital Market.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
4.5-4.7 Reserved.
4.8 Registration Rights.
(a) Definitions. "Registrable Securities" means the (i) Initial Shares, (ii) to the extent no longer subject to Section 4.16, the Pre-Funded Warrants, the Warrant Shares issued or issuable under the Pre-Funded Warrants, and (iii) any Common Shares or other securities issued or issuable upon a stock split, dividend, recapitalization or similar event with respect to them (provided such Shares will only be Registrable Securities to the extent that the Securities in respect of which such new Shares are issued are also Registrable Securities). A security ceases to be a Registrable Security when it has been sold under an effective registration statement or may be sold under Rule 144 without volume or manner-of-sale limitations and without the Company's current-public-information requirement, or is no longer outstanding. "Registration Statement" means one or more resale registration statements on Form S-3, if the Company is eligible to use that form, or otherwise Form S-1 or another form then available to the Company that register the resale by the Investors of all Registrable Securities.
(b) Filing. As promptly as possible, but no later than two days following transfer by the Company to the Investor of the Initial Shares, the Company shall file the Registration Statement with the SEC and furnish each Investor the EDGAR accession number and acceptance evidence. The Registration Statement shall include each Investor as a selling shareholder, cover the maximum number of Registrable Securities stated in the executed Transaction Documents and include a commercially customary plan of distribution permitting brokered sales, block trades, pledges and other lawful dispositions, in each case subject to Section 4.16. The Company shall provide a substantially complete draft to each Investor at least one (1) Business Day before filing, and the Investor shall timely provide customary selling-shareholder information requested in writing.
(c) Effectiveness and Maintenance. The Company shall use commercially reasonable best efforts to cause the Registration Statement to be declared effective by the SEC as soon as practicable and no later than (i) forty-five (45) calendar days after filing if the SEC does not review it or (ii) One hundred twenty (120) calendar days after filing if the SEC reviews it. The Company shall keep the Registration Statement continuously effective, current and available until all Initial Shares have ceased to be Registrable Securities, and shall promptly respond to SEC comments and file all amendments and supplements required to keep the prospectus usable. No provision of this Agreement represents that the SEC will declare the Registration Statement effective by a particular date.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
(d) Registration Procedures. At its expense, the Company shall: (i) notify each Investor promptly of effectiveness, any stop order, suspension, material misstatement or period when the prospectus may not be used; (ii) prepare and file required amendments, prospectus supplements and post-effective amendments; (iii) cause the Registrable Securities to be eligible for DTC, DWAC and book-entry settlement to the extent available; (iv) instruct the Transfer Agent and Company counsel to remove restrictive legends when permitted by Section 4.1 and applicable law; (v) provide customary copies, confirmations and selling-shareholder updates reasonably requested by an Investor; and (vi) avoid furnishing material non-public information to an Investor without its prior written consent, provided that Company shall not be obligated to provide any materials under this Section 4.8(d) without having first received such consent. Registration expenses of the Company, the Transfer Agent, Company counsel and the filing process shall be borne by the Company, while each Investor shall bear its own selling commissions and the fees of its separate counsel except as otherwise stated in this Agreement.
(e) Indemnification. The Company shall indemnify and hold harmless each Investor and its controlling persons, officers, directors, members, partners, employees and agents from losses, claims, damages and liabilities arising from any untrue statement of a material fact in, or material omission from, the Registration Statement or prospectus, except to the extent caused by written information furnished by that Investor expressly for inclusion. Each Investor shall severally, and not jointly, indemnify the Company only for such losses caused by its own expressly furnished written information, and that Investor's aggregate liability under this sentence shall not exceed the net proceeds it actually receives from the sale of Registrable Securities giving rise to the claim. The indemnified party shall provide prompt notice and reasonable cooperation, and the indemnifying party may control the defense with counsel reasonably acceptable to the indemnified party, subject to customary conflict protections.
(g) Enforcement; No Liquidity Guarantee. The Company's obligations under this Section 4.8 are material covenants for the benefit of each Investor. Each Investor may seek specific performance, injunctive relief and actual damages for breach of this Section 4.8. Filing or effectiveness of the Registration Statement does not waive the Share Cap, Shareholder Approval requirement, Lock-Up Period, applicable securities laws or the terms of the Pre-Funded Warrants, and does not guarantee immediate exercisability, resale liquidity, market price or availability of any loan secured by the Securities.
4.9 Certain Transactions and Confidentiality. Each of the Investors covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including short sales of any of the Company's securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the Form 8-K as described in Section 4.4. Each of the Investors covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the Form 8-K as described in Section 4.4, the Investor will maintain the confidentiality of the existence and terms of this transaction and the information included herein. Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) none of the Investors makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the Form 8-K as described in Section 4.4, (ii) no Investor shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the Form 8-K as described in Section 4.4 and (iii) no Investor shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the Form 8-K as described in Section 4.4. Notwithstanding the foregoing, in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of the Investor's assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of the Investor's assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
4.10 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities, to the extent required under Regulation D, and to provide a copy thereof, promptly upon request of any Investor. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Investors at the Closing under applicable securities or "Blue Sky" laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Investor.
4.11 Pledge of Securities. The Company acknowledges that subject in all respects to Section 4.16, but notwithstanding anything to the contrary contained in this Agreement, the Securities may be pledged by the Investors in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and Investor effecting a pledge of Securities shall not be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by an Investor.
4.12 Shareholder Approval Requirement. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not issue to any Investor, and no Investor shall purchase, any Warrant Shares upon exercise of the Pre-Funded Warrants to the extent that such issuance, when aggregated with all other Common Shares issued pursuant to this Agreement and the Other Subscription Agreements, would exceed the Share Cap, unless and until the Company has obtained the Shareholder Approval referred to in Section 4.17. For the avoidance of doubt, there is no limitation on the number of Common Shares that any Investor may beneficially own under this Agreement or the Pre-Funded Warrants other than the Share Cap and the requirement of Shareholder Approval set forth in Section 4.17.
4.13 Restructure of Terms. In the event any changes in the terms of this Agreement or the Securities are required by a Trading Market, the Investors, in their sole discretion, may opt to terminate this Agreement or proceed with such terms as necessary to obtain all required approvals.
4.14 Subsequent Support. Following the Closing, the Company shall use every reasonable effort to connect the Investors with, and to assist the Investors in establishing arrangements with, one or more brokers, dealers, financial institutions or other lenders pursuant to which the Investors may borrow against the Shares, with such arrangements to be available as promptly as practicable following the effectiveness of the Registration Statement; provided that nothing in this Section 4.14 shall require the Company to incur any financial obligation, to act as a lender or to guarantee, or otherwise become liable in respect of, any obligation of any Investor in connection with any such arrangement.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
For the avoidance of doubt, after the Registration Statement becomes effective, Puple AI and Blockcat Pte may sell their respective Initial Shares pursuant to their share purchase agreements with Vienna Capital Partners, LLC in VWAP-priced tranches, with aggregate cash purchase-price proceeds under both agreements not to exceed US$100,000,000, subject to applicable securities laws.
4.15 Treatment of Tokens. Each of the Company and the Investor agrees that it shall not treat the Tokens as stock or securities for purposes of Section 351(e) of the U.S. Internal Revenue Code, or take an inconsistent position on its tax returns.
4.16 Lock-Up of Warrant and Warrant Shares. Each Investor agrees that, from the Closing Date until the date that is ten (10) years after the Closing Date (the "Lock-Up Period"), it shall not, and shall cause its Affiliates not to, offer, pledge, sell, contract to sell, lend or otherwise transfer or dispose of, directly or indirectly, any Pre-Funded Warrant, Warrant Share or security or consideration received in respect thereof, or enter into any swap, hedge or other arrangement transferring any economic consequence of ownership, whether settled in securities, cash or otherwise. The restrictions do not apply to the Initial Shares issued at the Closing pursuant to Section 1.1(b), which remain subject to applicable securities laws and Section 4.1. The restrictions may be waived, removed or modified only by a written instrument signed by the Company and the affected Investor. Registration does not release or modify the Lock-Up Period. Each Pre-Funded Warrant remains categorically non-exercisable, and no Warrant Share may be issued, before Shareholder Approval in accordance with Sections 4.12 and 4.17.
4.17 Shareholder Approval; Conditions to Exercise.
(a) Approval Requirement. "Shareholder Approval" means the approval required under Nasdaq Listing Rule 5635 and applicable law for issuance of all Warrant Shares and any other Common Shares in excess of the Share Cap. Before Shareholder Approval, no Pre-Funded Warrant is exercisable and no Warrant Share may be issued, even if unused capacity remains under the Share Cap. No Initial Share or other security issued under the Share Cap may be voted on the proposal to obtain Shareholder Approval; the Company shall instruct its proxy solicitor and inspector of elections to exclude all such votes.
(b) Approval Timetable. The Company shall use reasonable best efforts to obtain Shareholder Approval. It shall prepare and file a preliminary proxy statement with the SEC no later than forty-five (45) calendar days after the Closing Date (the "Approval Initiation Deadline"), file the definitive proxy statement promptly after completion of SEC review, retain a nationally recognized proxy solicitor, solicit proxies with the Board's recommendation in favor of approval (subject to the directors' fiduciary duties under applicable law), and call and hold the initial shareholder meeting no later than one hundred twenty (120) calendar days after the Closing Date. That meeting deadline may be extended to no later than one hundred eighty (180) calendar days after the Closing Date only to address active SEC comments or a documented failure to obtain quorum despite diligent solicitation.
(c) Continued Solicitation. If Shareholder Approval is not obtained at the initial meeting, the Company shall resubmit the proposal at subsequent annual or special meetings no less frequently than every ninety (90) calendar days, to the extent legally permissible, and shall continue reasonable best efforts until approval is obtained. The registration obligations in Section 4.8 continue independently while Shareholder Approval is pending.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
(d) Approval Initiation Failure; Procedural Remedy. If the Company misses the Approval Initiation Deadline and does not cure within ten (10) Business Days after an Investor's written notice, the failure constitutes a material breach of this procedural covenant. The affected Investor may seek specific performance and injunctive relief under Section 5.1, and the Company shall: (i) designate a senior executive responsible for cure; (ii) provide the Investors a written status report and copies or summaries of material SEC correspondence every seven (7) calendar days until cure; (iii) call the meeting for the earliest date legally practicable; and (iv) reimburse reasonable, documented out-of-pocket enforcement expenses caused by the uncured procedural breach. No delay in, failure to initiate, or outcome of the shareholder vote shall, by itself, trigger rescission, return of Tokens, a fixed or percentage cash penalty, a price or exercise-ratio change, or additional securities unless the Company first obtains written confirmation from Nasdaq that the proposed remedy will not require prior shareholder approval, invalidate the Share Cap or otherwise violate Nasdaq rules.
4.18 Resale Registration Statement; Filing Deadline. The Company shall prepare and file with the SEC a registration statement on Form S-3 (or, if Form S-3 is not then available to the Company, on such other form as is then available) covering the resale of the Shares as Registrable Securities (the "Resale Registration Statement," which shall also constitute the "Registration Statement" for all purposes of this Agreement, including Sections 4.1(d) and 4.14) on or before the earlier of (i) the deadline required by Section 4.8(b) and (ii) August 31, 2026 (the "Filing Deadline"). The Company shall use its reasonable best efforts to cause the Resale Registration Statement to be declared effective as promptly as practicable after filing and to keep it continuously effective and available for the resale of the Shares until the earlier of the date on which all such securities have been sold and the date on which all such securities may be sold without restriction or limitation pursuant to Rule 144. The Company shall file a post-effective amendment, or an additional registration statement, to cover resale of any Securities upon such Securities becoming Registrable Securities no later than thirty (30) days following such Security becoming a Registrable Security. If the Resale Registration Statement is not filed with the SEC on or before the Filing Deadline, the Company shall pay to each Investor, as partial liquidated damages and not as a penalty, an amount in cash equal to US$5,000 per day for each day following the Filing Deadline that the Resale Registration Statement has not been filed, until the Resale Registration Statement is filed. Such payments shall accrue on a daily basis and shall be payable on the earlier of (i) the last day of the calendar month during which they are incurred and (ii) the third (3rd) Trading Day after the Resale Registration Statement is filed. To the extent that Warrant Shares are registered notwithstanding not being Registrable Securities, the registration of the Warrant Shares, for resale pursuant to this Section 4.18 shall not waive, shorten or otherwise modify the Lock-Up Period or the transfer restrictions set forth in Section 4.16. Nothing in this Section 4.18 shall limit any other remedies available to the Investors under this Agreement or applicable law.
5. Miscellaneous.
(a) The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto shall be entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the courts described in this Section 5.1, without proof of damages or otherwise (in each case, subject to the terms and conditions of this Section 5.1) (and each party hereto acknowledges and agrees that any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 5.1 shall not be required to provide any bond or other security in connection with any such order or injunction), this being in addition to any other remedy to which they are entitled at law or in equity. The parties hereto agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, or that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at law. Notwithstanding the foregoing, neither specific performance nor other equitable relief may be used to impose any post-delivery custody, administration, access-restoration or transaction-approval obligation that Sections 1.2, 1.5 or 5.15 expressly provide does not exist.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
(b) Each of the parties hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the Supreme Court of the State of New York, New York County, and the United States District Court for the Southern District of New York, for the purposes of any demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any governmental entity or any arbitration or mediation tribunal ("Action") or other proceeding arising out of this Agreement and the rights and obligations arising hereunder, and irrevocably and unconditionally waives any objection to the laying of venue of any such Action or proceeding in any such court, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Action or proceeding has been brought in an inconvenient forum. Each party hereto agrees that service of any process, summons, notice or document by registered mail to such party's respective address set forth on the signature pages attached hereto shall be effective service of process for any such Action or proceeding.
(c) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, CLAIM OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, CLAIM OR OTHER PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (iii) IT MAKES SUCH WAIVER VOLUNTARILY AND (iv) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.1.
5.2 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one (1) and the same instrument. In the event that any signature is delivered by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such ".pdf" signature page were an original thereof.
5.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
5.4 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by e-mail or facsimile, (c) five (5) calendar days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth on the signature pages attached hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 5.4).
5.5 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
5.6 Aggregation of Stock. All Shares held or acquired by Affiliated entities or Persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.
5.7 Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.
5.8 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Investors or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts an Investor (or group of Investors), the consent of at least 50.1% in interest of the Securities of such disproportionately impacted Investor (or group of Investors) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of the Investor relative to the comparable rights and obligations of the other Investors shall require the prior written consent of such adversely affected Investor. Any amendment effected in accordance with this Section 5.8 shall be binding upon each Investor and holder of Securities and the Company.
5.9 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor (other than by merger). The Investor may assign any or all of its rights under this Agreement to any Person to whom the Investor assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of this Agreement that apply to the Investor.
5.10 Further Assurances. Each party agrees to cooperate with each other and their respective officers, employees, attorneys, accountants and other agents, and, generally, do such other reasonable acts and things in good faith as may be necessary to effectuate the intents and purposes of this Agreement, subject to the terms and conditions of this Agreement and compliance with applicable law, including taking reasonable action to facilitate the filing of any document or the taking of reasonable action to assist the other parties hereto in complying with the terms of this Agreement. For the avoidance of doubt, this Section does not impose any post-delivery custody, wallet-administration, transaction-approval or access-restoration obligation upon an Investor or require an Investor to cause a Company Custody Designee to act after such person's authority or access has been suspended or terminated by the Company.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
5.11 Fees. The Company shall be responsible for the payment of any placement agent's fees, financial advisory fees, transfer agent fees, DTC fees or broker's commissions (other than for Persons engaged by any Investor) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each Investor harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys' fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Investors. Notwithstanding the foregoing, if counsel for certain Investors is designated in connection with the transactions contemplated hereby, the Company shall pay the reasonable fees and expenses of one such counsel in an amount not to exceed US$150,000 in the aggregate.
5.12 Termination. The obligations of the Company, on the one hand, and the Investors, on the other hand, to effect the Closing shall terminate as follows:
(a) upon the mutual written consent of the Company and the Investors that agreed to purchase a majority of the Securities prior to the Closing;
(b) by the Company if any of the conditions set forth in Section 1.3(b) shall have become incapable of fulfillment, and shall not have been waived by the Company;
(c) by an Investor (with respect to itself only) if any of the conditions set forth in Section 1.3(a) shall have become incapable of fulfillment, and shall not have been waived by such Investor; or
(d) by either the Company or an Investor (with respect to itself only) if the Closing has not occurred on or before the date that is twenty (20) calendar days after the date of this Agreement (the "Outside Date"), unless the Company and the applicable Investor extend that date in a signed writing;
provided, however, that, in the case of clauses (b) and (c) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of its representations, warranties, covenants or agreements contained in the Transaction Documents if such breach has resulted in the circumstances giving rise to such party's seeking to terminate its obligation to effect the Closing. In the event of termination by the Company or the Investor of its obligations to effect the Closing pursuant to this Section 5.12, written notice thereof shall be given to the other Investors by the Company. Nothing in this Section 5.12 shall be deemed to release any party from any liability for any breach by such party of the other terms and provisions of the Transaction Documents or to impair the right of any party to compel specific performance by any other party of its other obligations under the Transaction Documents.
5.13 Contract Interpretation. This Agreement is the joint product of each Investor and the Company and each provision of this Agreement has been subject to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
5.14 Arm's Length Negotiations. For the avoidance of doubt, the parties acknowledge and confirm that the terms and conditions of the Securities were determined as a result of arm's-length negotiations.
5.15 Separate Capacities; Non-Recourse. All obligations and liabilities of an Investor under the Transaction Documents are solely obligations and liabilities of that Investor. No recourse shall be had against any past, present or future member, shareholder, manager, director, officer, employee, consultant, adviser, agent, representative or Affiliate of an Investor (each, an "Investor Related Person") solely by reason of such status for any obligation of the Investor or for any matter arising from the custody, configuration, administration, access to or use of the Tokens following Confirmed Delivery. The Company releases and covenants not to assert any claim against the Investor, any Investor Related Person or any Company Custody Designee based solely on the Company's suspension, removal or modification of a Company Custody Designee's authority or access, that person's resulting inability or lack of authority to act, or any resulting inability to access or transact with the Tokens. If the Company or any controlled Affiliate asserts a claim contrary to the foregoing release or covenant, the Company shall reimburse the applicable Investor, Investor Related Person or Company Custody Designee for the reasonable legal fees and costs incurred to obtain dismissal of that claim or enforce this Section and shall advance such reasonable defense and enforcement expenses within ten (10) Business Days after written request, subject only to an undertaking to repay amounts finally determined not recoverable under this Section. Nothing in this Section limits liability for a person's own fraud, willful misconduct, gross negligence, knowing violation of applicable law or intentional withholding or destruction of transferable Company property, in each case as established by a final, non-appealable judgment. Investor Related Persons and Company Custody Designees are intended third-party beneficiaries of this Section, which shall survive the Closing and any termination of this Agreement.
[Signature pages follow]
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
ZEROSTACK CORP.
| By: |
Name: Dany Vaiman
Title: Chief Financial Officer
Address for Notice:
Dany Vaiman, Chief Financial Officer
ZeroStack Corp.
2626 Cole Ave, Suite 300, Dallas, TX, 75204
Email: [email protected]
With a copy to (which shall not constitute notice):
Zuber Lawler LLP
2029 Century Park East, Suite 400
Los Angeles, CA 90067
Attention: Josh Lawler, Esq.
Email: [email protected]
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR INVESTORS FOLLOWS]
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
[INVESTOR NAME]
By: _____________________________
Name: _____________________________
Title: _____________________________
Address for Notice:
_____________________________
_____________________________
Email: _____________________________
With a copy to (which shall not constitute notice):
_____________________________
_____________________________
Attention: _____________________________
Email: _____________________________
Address for Delivery of Securities to Investor (if not same as address for notice):
_____________________________
Number of Tokens Contributed: _____________________________
Fair Market Value per Token: US$_____________________________
Aggregate Subscription Amount (reflecting Fair Market Value of Tokens): US$_____________________________
Number of Initial Shares Purchased (subject to Section 1.1(b)): _____________________________
Number of Pre-Funded Warrants Purchased / Warrant Shares: _____________________________
ZeroStack Corp. - PIPE 3 Securities Purchase Agreement
Exhibit A
Form of Pre-Funded Warrant
[See attached.]
EXHIBIT A
FORM OF PRE-FUNDED WARRANT
NEITHER THIS SECURITY NOR THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS SECURITY HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND THIS SECURITY WAS ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND SIMILAR EXEMPTIONS UNDER APPLICABLE STATE SECURITIES LAWS, 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. SUBJECT IN ALL RESPECTS TO THE TEN-YEAR LOCK-UP IN SECTION 4(d), 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.
PRE-FUNDED COMMON SHARE PURCHASE WARRANT
ZEROSTACK CORP.
Warrant No.
Warrant Shares:
This PRE-FUNDED COMMON SHARE PURCHASE WARRANT (this "Warrant"), dated [], 2026, certifies that, for value received, [] 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 first Trading Day following receipt of Shareholder Approval (the "Initial Exercise Date") and until this Warrant is exercised in full (the "Termination Date") but not thereafter, to subscribe for and purchase from ZeroStack Corp., a Texas corporation (the "Company"), up to [] common shares of the Company, no par value per share (the "Common Shares") (as subject to adjustment hereunder, the "Warrant Shares"). The purchase price of one Common Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(c).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein have the meanings set forth in the Securities Purchase Agreement (the "Securities Purchase Agreement"), dated as of August [ ], 2026, by and between the Company and each investor identified on its signature pages. Sections 4.8, 4.16 and 4.17 of the Securities Purchase Agreement are incorporated into this Warrant by reference for the benefit of the Holder and the Company as provided in Section 5(o).
Section 2. Exercise.
(a) Shareholder Approval. Notwithstanding anything to the contrary, this Warrant is not exercisable, in whole or in part, and the Company shall not issue any Warrant Share, unless and until the Company has obtained Shareholder Approval as defined in the Securities Purchase Agreement. Any Notice of Exercise delivered before Shareholder Approval is void and of no force or effect. For the avoidance of doubt, no unused capacity under the Share Cap permits exercise before Shareholder Approval. The Company shall comply with the approval timetable, voting exclusions, continued-solicitation covenant and procedural remedies in Section 4.17 of the Securities Purchase Agreement.
(b) 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 copy submitted by email (or email attachment) of the Notice of Exercise in the form annexed hereto (the "Notice of Exercise"). Within the earlier of
Form of Pre-Funded Common Share Purchase Warrant
(i) two (2) Trading Days and
(ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(e)(i) herein) following the date the Holder delivers the Notice of Exercise, the Holder shall deliver to the Company the aggregate Exercise Price for the 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(d) 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 to the Holder any objection to any Notice of Exercise within one (1) Trading Day of receipt of such notice.
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.
(c) Exercise Price. The aggregate purchase price of this Warrant, except for a nominal exercise price of US$0.0001 per Warrant Share, shall be pre-funded at the Closing under the Securities Purchase Agreement and, consequently, no additional consideration other than US$0.0001 per Warrant Share is required on exercise. After a completed Closing, the Holder is not entitled to a refund of the pre-funded amount solely because Shareholder Approval is delayed or not obtained. The remaining unpaid exercise price per Warrant Share is US$0.0001, subject to adjustment under this Warrant (the "Exercise Price").
(d) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder, then 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(b) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(b) 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 Shares 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(b) 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(b) hereof after the close of "regular trading hours" on such Trading Day;
Form of Pre-Funded Common Share Purchase Warrant
(B) = the Exercise Price of this Warrant, as adjusted hereunder; 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 registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(d).
"Bid Price" means, for any date, the price determined by the first of the following clauses that applies:
(i) if the Common Shares are then listed or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the nearest preceding date) on the Trading Market on which the Common Shares are 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)),
(ii) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(iii) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares 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 Shares so reported, or
(iv) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the Investors of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
"VWAP" means, for any date, the price determined by the first of the following clauses that applies:
(i) if the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares are 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)),
(ii) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(iii) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares 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 Common Share so reported, or
(iv) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the Investors of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
"Trading Market" means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date in question: the New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the OTCQX, or the OTCQB.
Form of Pre-Funded Common Share Purchase Warrant
(e) 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 Holder or
(B) this Warrant is being exercised via cashless exercise, 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,
(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 (such date, the "Warrant Share Delivery Date"); provided, however, that if payment of the aggregate Exercise Price is received after 12:00 P.M., New York City time on the Warrant Share Delivery Date, then the Warrant Share Delivery Date shall be extended by one (1) additional Trading Day.
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.
(f) 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.
(g) Registration Delay Payment. The sole and exclusive remedy of the Holder for the Company's failure to timely file or maintain the effectiveness of the Registration Statement is the liquidated damages payment set forth in Section 4.18 of the Securities Purchase Agreement (which is incorporated herein by reference pursuant to Section 1 of this Warrant), and the Holder shall have no right of rescission, buy-in compensation, or specific performance with respect to a delay addressed by Section 4.18 of the Securities Purchase Agreement.
(h) 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.
Form of Pre-Funded Common Share Purchase Warrant
(i) Charges, Taxes and Expenses. Issuance 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 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.
(j) Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
(k) Legend. Unless and until there is an effective registration statement under the Securities Act and under applicable state securities or blue sky laws registering the Warrant Shares, all Warrant Shares issued shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE AND THIS SECURITY WAS ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND SIMILAR EXEMPTIONS UNDER APPLICABLE STATE SECURITIES LAWS, 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. SUBJECT IN ALL RESPECTS TO THE TEN-YEAR LOCK-UP IN SECTION 4(d), 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.
Unless and until the Warrant Shares are not restricted by Section 4.16 of the Securities Purchase Agreement or Section 4(d), below, all Warrant Shares issued shall bear the following legend:
THIS SECURITY IS SUBJECT TO CONTRACTUAL TERMS THAT RESTRICT THE TRANSFER OF THIS SECURITY, INCLUDING ANY PLEDGE OR INDIRECT TRANSFER. ANY SUCH TRANSFER SHALL BE VOID AB INITIO AND OF NO EFFECT.
(l) No Individual Beneficial-Ownership Blocker. The parties intentionally have not included a 4.99% or 9.99% individual beneficial-ownership blocker. This does not waive the Shareholder Approval requirement, the Share Cap, any lock-up, Section 13(d) or Section 16 of the Exchange Act, control-person rules or any other applicable law.
(m) Issuance Limitation. Issuance of this Warrant at the Closing does not constitute issuance of any Warrant Share. Notwithstanding any remaining capacity under the Share Cap, no Warrant Share may be issued before Shareholder Approval as required by Section 2(a). After Shareholder Approval, the Company may issue Warrant Shares on exercise only up to the number authorized by that approval and permitted by applicable Trading Market rules. The Share Cap remains effective for the life of the transaction unless and until valid Shareholder Approval is obtained and does not automatically terminate if the Common Shares cease to be listed on Nasdaq. These limitations bind every successor Holder.
Form of Pre-Funded Common Share Purchase 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 its Common Shares or any other equity or equity equivalent securities payable in Common Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding Common Shares into a larger number of shares,
(iii) combines (including by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or
(iv) issues by reclassification of the Common Shares 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 Common Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares 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 shareholders 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, and without duplication of, adjustments under Section 3(a), if the Company grants, issues or sells to holders of Common Shares pro rata any Common Share Equivalents, rights, warrants, securities or other property (the "Purchase Rights"), the Holder shall be entitled to the Purchase Rights it would have received if it held all Warrant Shares immediately before the applicable record date; provided that the Purchase Rights and all related securities or property remain subject to Sections 2(a), 2(g) and 4(d). Any Purchase Right that cannot then be delivered or exercised without circumventing Shareholder Approval, the Share Cap or the Lock-Up shall be held in abeyance for the Holder until those restrictions permit delivery and exercise.
(c) Pro Rata Distributions. While this Warrant is outstanding, if the Company declares or makes a dividend or other distribution of assets, rights or property to holders of Common Shares (a "Distribution"), the Holder shall be entitled to the Distribution it would have received if it held all Warrant Shares immediately before the applicable record date; provided that the Distribution and all related securities or property remain subject to Sections 2(a), 2(g) and 4(d). Any Distribution that cannot then be delivered without circumventing Shareholder Approval, the Share Cap or the Lock-Up shall be held in abeyance for the Holder until those restrictions permit delivery.
(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,
(ii) the Company or any material subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions,
Form of Pre-Funded Common Share Purchase Warrant
(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 Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Shares,
(iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are 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 Common Shares or becomes the beneficial owner of 50% of the voting power represented by the outstanding Common Shares of the Company (not including any Common Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "Fundamental Transaction"), provided that, a primary issuance of securities by the Company in a financing transaction shall not constitute a Fundamental Transaction, and, for the avoidance of doubt, in no event shall a Fundamental Transaction be deemed to include
(A) this Agreement, the Securities Purchase Agreement, or the transactions contemplated thereby, or
(B) any private placement, PIPE transaction, or other primary issuance of Common Shares, preferred shares, convertible securities, warrants or similar securities by the Company to one or more investors in exchange for cash, digital assets, tokens, or other property, in each case for capital-raising or treasury-diversification purposes, regardless of the size of such issuance relative to the Company's then-outstanding Common Shares or voting power, 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 (subject to Sections 2(a) and 2(g)), the number of Common Shares 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 Common Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (subject to Sections 2(a) and 2(g)).
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 Common Share 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 Shares 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 and approved by the Holder (without unreasonable delay) 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 Common Shares acquirable and receivable upon exercise of this Warrant (subject to Sections 2(a) and 2(g)) 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 Common Shares 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. Any Alternate Consideration and any replacement or successor security issued with respect to this Warrant or the Warrant Shares shall remain subject to the Lock-Up in Section 4(d). Each Successor Entity shall also assume in writing the Company's registration and shareholder-approval obligations under Sections 4.8 and 4.17 of the Securities Purchase Agreement.
Form of Pre-Funded Common Share Purchase Warrant
(e) Calculations. All calculations under this Section 3 shall be made by the Company 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 Common Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.
(f) 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). No Advance Notice Required. Given the sign-and-close structure of the transactions contemplated by the Securities Purchase Agreement, the Company shall have no obligation to deliver advance notice to the Holder of any dividend, distribution, redemption, rights offering, reclassification, consolidation, merger, asset sale, compulsory share exchange, dissolution, liquidation or winding up, it being understood that any such corporate action occurring at or substantially concurrently with the Closing shall be addressed through the terms of this Warrant and the Securities Purchase Agreement then in effect.
(g) Voluntary Adjustment By Company. Subject to applicable securities laws and the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, 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 in all respects to the Lock-Up in Section 4(d), 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 office of the Company designated for such purpose, 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.
Form of Pre-Funded Common Share Purchase Warrant
(b) New Warrants. 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) Lock-Up. From the Closing Date under the Securities Purchase Agreement until the date ten (10) years after that Closing Date (the "Lock-Up Period"), the Holder shall not, and shall cause its Affiliates not to, offer, pledge, sell, contract to sell, lend or otherwise transfer or dispose of, directly or indirectly, this Warrant, any Warrant Share, any adjustment security or any Alternate Consideration received with respect thereto, or enter into a swap, hedge or arrangement transferring any economic consequence of ownership, whether settled in securities, cash or otherwise. The restrictions may be waived, removed or modified only by a written instrument signed by the Company and the Holder. This Section survives any permitted transfer, and every transferee takes the Warrant and all related securities subject to this Section. Registration under the Securities Purchase Agreement does not release or modify the Lock-Up Period.
Section 5. Miscellaneous.
(a) No Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(e)(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(d) or to receive cash payments pursuant to Section 2(e)(i) and Section 2(e)(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, 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 Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
(d) Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Shares 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 as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants that all Warrant Shares which may be issued 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 non-assessable 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).
Form of Pre-Funded Common Share Purchase Warrant
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 formation 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 Warrant Shares 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 non-assessable Warrant Shares 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) Jurisdiction. 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. The Company and the Holder agree that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against the Company, the Holder or its 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, Borough of Manhattan. The Company and the Holder each irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Warrant), and hereby irrevocably waives, and agrees not to assert in any action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action or proceeding is improper or is an inconvenient venue for such proceeding. The Company and the Holder each irrevocably waives personal service of process and consents to process being served in any such 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 the Company or the Holder shall commence an action or proceeding to enforce any provisions of this Warrant, the prevailing party in such action or proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
Form of Pre-Funded Common Share Purchase Warrant
(f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.
(g) Non-waiver 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, 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 Securities 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 Shares or as a shareholder 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. Without limiting the foregoing, every successor to the Company shall assume the obligations incorporated under Section 5(o).
(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.
(o) Incorporated Registration and Approval Covenants. The Holder, this Warrant and the Warrant Shares are entitled to the benefits of Sections 4.8 and 4.17 of the Securities Purchase Agreement, which are incorporated herein by reference and are directly enforceable by the Holder. The Company's registration obligations continue while Shareholder Approval is pending, but registration does not make this Warrant exercisable before Shareholder Approval and does not release the Lock-Up. Any remedy for a missed shareholder-approval deadline is limited to the procedural and enforcement remedies in Section 4.17(d) of the Securities Purchase Agreement unless Nasdaq provides the written confirmation required thereunder. Holder acknowledges Section 4.16, which is incorporated herein by reference, of the Security Purchase Agreement and agrees to be bound thereof as if a signatory thereto.
Form of Pre-Funded Common Share Purchase Warrant
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.
ZEROSTACK CORP.
| By: | ||
| Name: Dany Vaiman | ||
| Title: Chief Financial Officer | ||
Form of Pre-Funded Common Share Purchase Warrant
NOTICE OF EXERCISE
TO: ZEROSTACK CORP.
(1) The undersigned hereby elects to purchase __________ Warrant Shares of the Company pursuant to the terms of the attached Warrant, 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(d), 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(d).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The undersigned certifies that Shareholder Approval, as defined in the Securities Purchase Agreement, has been obtained and remains effective for the Warrant Shares covered by this Notice of Exercise.
The Warrant Shares shall be delivered to the following DWAC Account Number:
[SIGNATURE OF HOLDER]
| Name of Investing Entity: |
| Signature of Authorized Signatory of Investing Entity: |
| Name of Authorized Signatory: |
| Title of Authorized Signatory: |
| Date: |
Form of Pre-Funded Common Share Purchase Warrant
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: ________________________________________________
Address: ______________________________________________
Phone Number: ________________________________________
Email Address: _________________________________________
Dated: ________________________________________________
Holder's Signature: ______________________________________
Holder's Address: _______________________________________
Assignee Acknowledgment: The undersigned assignee accepts the Warrant and all related securities subject to Sections 2(a), 2(g), 4(d) and 5(o), including the Shareholder Approval condition and the ten-year Lock-Up.
| Assignee Signature: | Date: |
VOTING AGREEMENT AND IRREVOCABLE PROXY
This VOTING AGREEMENT AND IRREVOCABLE PROXY (this "Agreement") is entered into as of August 19, 2026, by and among the undersigned proxyholder (the "Proxyholder"), the undersigned stockholder (the "Stockholder") of ZeroStack Corp., a Texas corporation (the "Company"), and the Company.
RECITALS
WHEREAS, the Stockholder understands and acknowledges that the Company and the Proxyholder are entitled to rely on (i) the truth and accuracy of the Stockholder's representations contained herein and (ii) the Stockholder's performance of its obligations set forth herein.
NOW, THEREFORE, in consideration of the promises and the covenants and agreements set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Restrictions on Shares.
(a) Except pursuant to the terms of this Agreement, the Stockholder shall not, directly or indirectly, grant any proxies or powers of attorney with respect to any of the Shares (as defined in Section 1(c)), deposit any of the Shares into a voting trust, or enter into a voting agreement or similar arrangement or commitment with respect to any of the Shares or make any public announcement that is in any manner inconsistent with this Agreement.
(b) Except as otherwise provided herein, the Stockholder shall not, directly or indirectly, take any action that would make any representation or warranty contained herein untrue or incorrect or be reasonably expected to have the effect of impairing the ability of the Stockholder to perform its obligations under this Agreement or preventing or delaying the consummation of any of the transactions contemplated hereby.
(c) As used herein, "Shares" means the voting securities of the Company which are owned beneficially or of record by the Stockholder, or over which the Stockholder otherwise exercises voting power, including (i) those Shares set forth on the signature page hereto and (ii) any Shares that the Stockholder purchases or with respect to which the Stockholder otherwise acquires beneficial ownership after the date of this Agreement and prior to the Expiration Time (as defined in the Proxy (as defined in Section 3)), including by reason of any stock split, stock dividend, reclassification, recapitalization or other similar transaction or pursuant to the exercise of Company options or other rights to acquire voting securities of the Company.
(d) Transaction Shares; Reserved Matters; Financing. Notwithstanding anything to the contrary in this Agreement or the Proxy: (i) "Shares" means only the Common Stock stated on the signature page, Common Stock issued to the Stockholder upon exercise of the Pre-Funded Warrants stated on the signature page, and securities issued or distributed with respect to those securities by reason of a stock split, stock dividend, reclassification, recapitalization or similar transaction (collectively, the "Transaction Shares"), and excludes any other voting securities acquired by the Stockholder in a separate or unrelated transaction; and (ii) the Stockholder retains the sole and exclusive right to vote the Transaction Shares, and the Proxyholder shall have no authority to vote them, with respect to any Reserved Matter; "Reserved Matter" means: (A) any amendment, waiver, termination or enforcement of the Securities Purchase Agreement, any Pre-Funded Warrant, or any registration-rights provision, in each case to the extent materially adverse to the Stockholder; (B) any amendment or action that disproportionately and materially adversely changes the rights, preferences, transferability or economic treatment of the Transaction Shares or Pre-Funded Warrants; (C) any authorization or approval of a sale, release, transfer, custody change, staking, use or other disposition of MemeCore tokens in violation of the applicable transaction documents; or (D) any related-party transaction involving the Proxyholder or Stockholder.
2. Agreement to Vote Shares. Prior to the Expiration Time, (a) at every meeting of the stockholders of the Company called with respect to any matter, and at every adjournment or postponement thereof, and (b) on every action or approval by written consent or resolution of the stockholders of the Company with respect to any matter, the Stockholder shall vote, to the extent not already voted by the Proxyholder pursuant to the Proxy, the Shares in the same manner as the Proxyholder.
3. Irrevocable Proxy. Concurrently with the execution and delivery of this Agreement, the Stockholder shall deliver to the Proxyholder and the Company a duly executed proxy in the form attached hereto as Exhibit A (the "Proxy"), which proxy is coupled with an interest sufficient in law to support an irrevocable proxy, and, until the Expiration Time, shall be irrevocable to the fullest extent permitted by law. The Stockholder (i) hereby revokes any and all prior proxies given by the Stockholder with respect to the Shares and (ii) shall not grant any subsequent proxies with respect to the Shares, or enter into any agreement or understanding to vote or give instructions with respect to the Shares in any manner inconsistent with the terms of this Agreement, until after the Expiration Time.
4. Representations, Warranties and Covenants of the Stockholder. The Stockholder hereby represents, warrants and covenants to the Proxyholder and the Company as follows:
(a) As of the date hereof, the Stockholder is the beneficial or record owner of, or exercises voting power over, that number of Shares set forth on the signature page hereto. As of the date hereof, such Shares constitute the Stockholder's entire interest in the outstanding shares of Company capital stock and the Stockholder is not the beneficial or record holder of, and does not exercise voting power over, any other outstanding shares of capital stock of the Company. No person who is not a signatory to this Agreement has a beneficial interest in or a right to acquire or vote any of the Shares. The Shares are and will be at all times up until the Expiration Time free and clear of any security interests, liens, claims, pledges, options, rights of first refusal, co-sale rights, agreements, limitations on the Stockholder's voting rights, charges and other encumbrances of any nature that would adversely affect the fulfillment of the rights and obligations of the Stockholder under this Agreement or of the parties hereto. The Stockholder's principal residence or place of business is set forth on the signature page hereto.
(b) If the Stockholder is a corporation, limited partnership or limited liability company, the Stockholder is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or constituted.
(c) The Stockholder has all requisite power, capacity and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Stockholder and the consummation by the Stockholder of the transactions contemplated hereby have been duly authorized by all necessary action, if any, on the part of the Stockholder (or its board of directors or similar governing body, as applicable), and no other actions or proceedings on the part of the Stockholder are necessary to authorize the execution and delivery by the Stockholder of this Agreement and the consummation by the Stockholder of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Stockholder and, assuming the due authorization, execution and delivery of this Agreement by the Proxyholder and the Company, constitutes a valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally and to general principles of equity.
(d) The execution and delivery of this Agreement does not, and the performance by the Stockholder of its agreements and obligations hereunder will not, conflict with, result in a breach or violation of or default under (with or without notice or lapse of time or both), or require notice to or the consent of any person under, any provisions of the organizational documents of the Stockholder (if applicable), or any agreement, commitment, law, rule, regulation, judgment, order or decree to which the Stockholder is a party or by which the Stockholder is, or any of its assets are, bound.
(e) The Stockholder agrees that the Stockholder will not bring, commence, institute, maintain, prosecute or voluntary aid any action, claim, suit or cause of action, in law or in equity, in any court or before any governmental entity, which challenges the validity or seeks to enjoin the operation of any provision of this Agreement.
5. Dissenters' or Appraisal Rights. The Stockholder agrees not to exercise any rights of appraisal or any dissenters' rights that the Stockholder may have (whether under applicable law or otherwise) or could potentially have in connection with any transaction for which appraisal or dissent rights may be available with respect to the Shares.
6. Miscellaneous.
(a) Notices. All notices and other communications hereunder shall be in writing and shall be deemed given on (i) the date of delivery, if delivered personally or by commercial delivery service, or (ii) on the date of confirmation of receipt (or the next business day, if the date of confirmation of receipt is not a business day), if sent via electronic mail, to the parties hereto at the respective addresses for such parties as set forth on the signature page hereto (or at such other address for a party hereto as shall be specified by like notice).
(b) Interpretation. When a reference is made in this Agreement to sections or exhibits, such reference shall be to a section of or an exhibit to this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The words "include," "includes" and "including" when used herein shall be deemed in each case to be followed by the words "without limitation." The phrases "the date of this Agreement", "the date hereof", and terms of similar import, unless the context otherwise requires, shall be deemed to refer to the date first above written. Unless the context of this Agreement otherwise requires: (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; and (iii) the terms "hereof," "herein," "hereunder" and derivative or similar words refer to this entire Agreement.
(c) Specific Performance; Injunctive Relief. The parties hereto acknowledge that the Proxyholder and the Company will be irreparably harmed and that there will be no adequate remedy at law for a violation of any of the covenants or agreements of the Stockholder set forth herein or in the Proxy. Therefore, it is agreed that, in addition to any other remedies that may be available to the Proxyholder and the Company upon any such violation of this Agreement or the Proxy, the Proxyholder and the Company shall have the right to enforce such covenants and agreements and the Proxy by specific performance, injunctive relief or by any other means available to the Proxyholder or the Company at law or in equity and the Stockholder hereby waives any and all defenses that could exist in its favor in connection with such enforcement and waives any requirement for the security or posting of any bond in connection with such enforcement.
(d) Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto; it being understood that all parties hereto need not sign the same counterpart. Delivery of an executed counterpart of a signature page to this Agreement by telecopy or by electronic delivery in Adobe Portable Document Format or other electronic format based on common standards will be effective as delivery of a manually executed counterpart of this Agreement.
(e) Entire Agreement; Nonassignability; Parties in Interest; Death or Incapacity.
(i) This Agreement and the documents and instruments and other agreements specifically referred to herein or delivered pursuant hereto (including, without limitation, the Proxy) (i) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof and (ii) are not intended to confer, and shall not be construed as conferring, upon any person other than the parties hereto any rights or remedies hereunder.
(ii) Neither this Agreement nor any of the rights, interests, or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by the Stockholder without the prior written consent of the Proxyholder and the Company, and any such assignment or delegation that is not consented to shall be null and void. Notwithstanding the foregoing, if the Stockholder transfers any Shares to an affiliate of the Stockholder (including any transfer by operation of law), then as a condition to such transfer, such affiliate shall execute a joinder to this Agreement and deliver a Proxy with respect to such Shares (and any such transfer shall be null and void absent such affiliate's delivery of such joinder and Proxy). For clarity, neither this Agreement nor the Proxy shall apply to any Shares that are sold by the Stockholder to a third party purchaser for value.
(iii) A replacement proxyholder may be appointed (i) by the Proxyholder at any time or (ii) by the Company at any time following the death or incapacity of the Proxyholder, in ether case upon written notice to the other parties hereto. In such case, the replacement proxyholder shall execute a joinder to this Agreement, and the Stockholder shall deliver a replacement Proxy naming the replacement proxyholder therein. The replacement proxyholder shall thereafter constitute the "Proxyholder" for all purposes under this Agreement and such replacement Proxy.
(iv) Notwithstanding Section 6(e)(iii), no replacement Proxyholder may be appointed without the Stockholder's prior written consent, which shall not be unreasonably withheld, conditioned or delayed.
(f) Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and the application of such provision to other persons or circumstances shall be interpreted so as reasonably to effect the intent of the parties hereto. The parties hereto further agree to use their commercially reasonable efforts to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that shall achieve, to the extent possible, the purposes of such void or unenforceable provision.
(g) Remedies Cumulative. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party hereto shall be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party hereto of any one remedy shall not preclude the exercise of any other remedy.
(h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas without reference to such state's principles of conflicts of law. The parties hereto hereby irrevocably submit to the exclusive jurisdiction of the State of Texas in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby and thereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or thereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action, suit or proceeding shall be heard and determined in the State of Texas.
(i) Termination. This Agreement shall terminate and shall have no further force or effect from and after the Expiration Time, and thereafter there shall be no liability or obligation on the part of the Stockholder, provided, that no such termination shall relieve any party hereto from liability for any material breach of this Agreement prior to such termination.
(j) Amendment. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by each of the parties hereto, or in the case of a waiver, by the party against which the waiver is to be effective. Notwithstanding the foregoing, no failure or delay by any party hereto in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any right hereunder.
(k) Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document shall be construed against the party drafting such agreement or document.
(l) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
IN WITNESS WHEREOF, each party hereto has caused this VOTING AGREEMENT AND IRREVOCABLE PROXY to be executed as of the date first above written.
| THE PROXYHOLDER: | ||
| Daniel Reis-Faria | ||
| 2626 Cole Ave, Suite 300 PMB 2007 | ||
| Dallas, Texas, 75204 | ||
| Attention: Daniel Reis-Faria | ||
| Email: [email protected] | ||
| THE STOCKHOLDER: | ||
| [THE STOCKHOLDER] | ||
| By: | ||
| Name: | ||
| Title: | ||
| (Address on File) | ||
| Shares as of the date hereof: | ||
| • Company Common Stock | ||
| • Company Prefunded Warrants | ||
| THE COMPANY: | ||
| ZeroStack Corp. | ||
| By: | ||
| Name: | Dany Vaiman | |
| Title: | Chief Financial Officer | |
EXHIBIT A
IRREVOCABLE PROXY
TO VOTE STOCK OF
ZEROSTACK CORP.
The undersigned stockholder (the "Stockholder") of Zerostack Corp., a Texas corporation (the "Company"), hereby irrevocably (to the fullest extent permitted by applicable law) appoints Daniel Reis-Faria (the "Proxyholder"), as the sole and exclusive proxy of the Stockholder, with full power of substitution and resubstitution, to vote and exercise all voting and related rights (to the fullest extent that the Stockholder is entitled to do so) with respect to all Shares (as defined below) (a) at every meeting of the stockholders of the Company called with respect to any matter, and at every adjournment or postponement thereof, and (b) on every action or approval by written consent or resolution of the stockholders of the Company with respect to any matter.
As used herein, "Shares" means the voting securities of the Company which are owned beneficially or of record by the Stockholder, or over which the Stockholder otherwise exercises voting power, including (i) those Shares set forth on the signature page hereto and (ii) any Shares that the Stockholder purchases or with respect to which the Stockholder otherwise acquires beneficial ownership after the date of this Proxy and prior to the Expiration Time, including by reason of any stock split, stock dividend, reclassification, recapitalization or other similar transaction or pursuant to the exercise of Company options or other rights to acquire voting securities of the Company.
Notwithstanding anything to the contrary in this Irrevocable Proxy, (i) the term "Shares" is limited to the Transaction Shares and excludes other voting securities acquired by the Stockholder in a separate or unrelated transaction, and (ii) the Proxyholder has no authority to vote the Transaction Shares on any Reserved Matter.
Upon the Stockholder's execution of this Irrevocable Proxy, any and all prior proxies given by the Stockholder with respect to the Shares are hereby revoked, and the Stockholder agrees not to grant any subsequent proxies with respect to the Shares or enter into any agreement or understanding with any person to vote or give instructions with respect to the Shares in any manner inconsistent with the terms of this Irrevocable Proxy until after the Expiration Time (as defined below).
This Irrevocable Proxy is coupled with an interest sufficient in law to support an irrevocable proxy and is granted pursuant to that certain Voting Agreement and Irrevocable Proxy, dated as of even date herewith, by and among the Proxyholder, the Stockholder and the Company (the "Voting Agreement"). The terms of the Voting Agreement are incorporated herein and made a part of this Proxy.
This Irrevocable Proxy may not be amended or otherwise modified without the prior written consent of the Proxyholder and the Company. This Irrevocable Proxy shall terminate, and be of no further force and effect, automatically on August 1, 2036 (the "Expiration Time").
| Dated: | |||
| THE STOCKHOLDER: | ||
| [THE STOCKHOLDER] | ||
| By: | ||
| Name: | ||
| Title: | ||
| Shares as of the date hereof: | ||
| • Company Common Stock | ||
| • Company Prefunded Warrants | ||
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of August 19, 2026 (the "Effective Date"), by and between Zerostack Corp., a Texas corporation (the "Company" or "Employer") having its principal place of business at 2626 Cole Ave, Suite 300, Dallas, Texas, 75204 and Rudy Rong ("Executive"), and the Company and the Executive collectively referred to herein as the "Parties") having his office at such location of his choosing.
WITNESSETH:
WHEREAS, the Company desires to retain Executive as the Company's President ("President") commencing on the Effective Date, and the Parties desire to enter into this Agreement embodying the terms of such employment;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises of the Parties contained herein, the Parties, intending to be legally bound, hereby agree as follows:
1. Title and Job Duties.
(a) Subject to the terms and conditions set forth in this Agreement, the Company agrees to employ Executive as President.
(b) Executive accepts such employment and agrees, during the term of his employment, to devote such business and professional time and energy to the Company as he deems necessary in his reasonable discretion, and agrees faithfully to perform his duties and responsibilities in an efficient, trustworthy and business-like manner. Executive also agrees that the Board of Directors of the Company (the "Board") shall determine from time to time such other reasonable duties as may be assigned to him in good faith. Executive agrees to carry out and abide by such reasonable directions of the Board.
(c) The Company acknowledges and agrees that the Executive holds, and during the Term will continue to hold, one or more positions with other entities, and so long as Executive devotes such business and professional time and energy to the Company as he deems necessary in his reasonable discretion and such position with any other entity does not interfere with Executive's responsibilities, Executive's continuing role with any other entity will not violate this Agreement.
(d) Company Systems and Custody Accounts. Any access, approval or administrative authority made available to Executive with respect to any Company account, digital-asset wallet or custodial system (collectively, "Company Systems") shall be held and exercised solely in Executive's representative capacity for the Company and shall confer no personal or beneficial interest in any asset. Executive may rely in good faith, without independent investigation, on documented instructions, approvals, permissions, policies and system configurations furnished or authorized by the Company or its service providers, except where Executive has actual knowledge that an instruction is unlawful. The Company is solely responsible for selecting, approving, configuring, maintaining, securing and recovering Company Systems, including their users, signers, keys, permissions, policies, approval thresholds, quorum, business continuity and service providers. Before Executive first uses a Company System, an authorized officer other than Executive shall approve its material permissions and approval settings in writing, and Executive may rely conclusively on that approval unless and until the Company changes it in writing. No platform designation, including manager, administrator, user, approver, signer or keyholder, shall expand Executive's authority or duties beyond this Agreement or make Executive a guarantor, custodian, trustee or insurer of Company assets.
(e) Access Changes; Sole Transition Duty. The Company and its service providers retain responsibility for any provisioning, suspension, revocation, removal, replacement or modification of any user, signer, key, permission, policy, approval threshold or other access setting. No failure or delay caused by any such action, by any other signer or service provider, by loss of quorum, or by a system condition outside Executive's reasonable control shall constitute Cause, breach or default by Executive. Upon suspension, removal, replacement or termination of Executive's access or authority, Executive's related operational duties shall cease, except that Executive shall provide reasonable transition assistance expressly requested in writing by the Company, at the Company's expense, to the extent lawful, technically feasible and within Executive's then-existing access. Executive does not warrant uninterrupted access to, transferability of, or recovery of digital assets or completion of any transaction.
2. Salary and Additional Compensation.
(a) Base Salary. The Company shall pay to Executive an annual base salary ("Base Salary") of $500,000 in accordance with the Company's normal payroll procedures, effective as of the Effective Date. The Compensation Committee shall review the Executive's Base Salary no less than annually and may increase (but not decrease) such Base Salary.
(b) Restricted Share Award ("RSA") Grant. Provided that the Company's Compensation Committee and the shareholders of the Company vote in favor of such a proposal at the next annual general or special meeting, the Executiveshall be entitled to receive a grant of 125,000 shares of Restricted Stock on the date such shareholder approval is obtained. Such shares of Restricted Stock shall vest immediately upon such shareholder approval.The Company shall submit the grant of 125,000 shares of Restricted Stock for approval by the Compensation Committee and the shareholders at the next annual or special meeting and, in any event, no later than December 31, 2026. Upon execution of this Agreement by both Parties, Executive shall have a continuing contractual entitlement to receive the grant, subject only to the approvals required by applicable law and the rules of the applicable Trading Market. That entitlement, and the Company's obligations to seek such approvals and, once obtained, promptly issue and register the Restricted Stock for resale, shall survive any termination of Executive's employment for any reason, whether occurring before or after such approvals, and termination shall not constitute a basis to withdraw, cancel or deny the grant.
(c) Expenses. In accordance with Company policy, the Company shall reimburse Executive for all reasonable association fees, professional related expenses (certifications, licenses and continuing professional education) and business expenses properly and necessarily incurred and paid by Executive in the performance of his duties under this Agreement. Notwithstanding the foregoing, all expenses must be promptly submitted for reimbursement by the Executive, and in no event shall any reimbursement be paid by the Company after the end of the year following the year in which the expense is incurred by the Executive.
3. Benefits.
(a) Vacation and Sick Leave. Executive shall be entitled to four (4) weeks of vacation per year and ten (10) days of sick leave per year, which shall accrue at a pro rata rate per pay period. Executive's vacation and sick leave accrual shall be capped at six (6) weeks of vacation or ten (10) days of sick leave.
(b) Health Insurance and Other Plans. Executive shall be eligible to participate in the Company's medical, dental and other employee benefit programs, if any, that are provided by the Company for its employees at Executive's level in accordance with the provisions of any such plans, as the same may be in effect from time to time.
4. Term. The term of employment under this Agreement (the "Term") shall be of indefinite duration.
5. Termination.
(a) Termination at the Company's Election.
(i) For Cause. At the election of the Company, Executive's employment may be terminated at any time for Cause (as defined below) upon written notice to Executive given pursuant to Section 11 of this Agreement. For purposes of this Agreement, "Cause" for termination shall mean that Executive: (A) pleads "guilty" or "no contest" to, or is convicted of an act which is defined as a felony under federal or state law; (B) in carrying out his duties, engages in conduct that constitutes gross negligence or willful misconduct; (C) engages in substantiated fraud, misappropriation or embezzlement against the Company; or (D) materially breaches any term of this Agreement. With respect to subsections (B), (C), and (D) of this section, the Company shall provide Executive with written notice of the reason or reasons for a potential Cause determination no later than ninety (90) days after the initial existence of the condition leading to the potential Cause determination and Executive shall have thirty (30) days to cure such reasons or reasons, if such cure is possible, however Executive shall be entitled to only 1 notice and cure period per calendar year, regardless of whether the basis for the Company's notice of Cause is the same or different. If cured, Cause shall no longer apply to the reason or reasons set forth in the Company's notice. For clarity, no event described in Section 1(e) shall constitute Cause unless Executive's own conduct independently satisfies clause (B), (C) or (D) above.
(ii) Upon Disability, Death or Without Cause. At the election of the Company, Executive's employment may be terminated: (A) should Executive have a physical or mental impairment that substantially limits a major life activity and Executive is unable to perform the essential functions of his job with or without reasonable accommodation ("Disability"); (B) upon Executive's death; or (C) at any time Without Cause for any or no reason.
(b) Termination at Executive's Election; Good Reason Termination. Notwithstanding anything contained elsewhere in this Agreement to the contrary, Executive may terminate his employment hereunder at any time and for any reason, upon thirty (30) days' prior written notice given pursuant to Section 11 of this Agreement ("Voluntary Resignation"), provided that upon notice of resignation, the Company may terminate Executive's employment immediately and pay Executive thirty (30) days' Base Salary in lieu of notice. Furthermore, the Executive may terminate this Agreement for "Good Reason," which shall be deemed to exist: (i) if the Company's Board of Directors or that of any successor entity of Company, fails to appoint or reappoint the Executive or removes the Executive as the President of the Company; (ii) if Executive is assigned any duties materially inconsistent with the duties or responsibilities of the President of the Company as contemplated by this Agreement or any other action by the Company that results in a material diminution in such position, authority, duties, or responsibilities, excluding an isolated, insubstantial, and inadvertent action not taken in bad faith; or (iii) a material breach by the Company of this Agreement. Good Reason shall not exist hereunder unless the Executive provides notice in writing to the Company of the existence of a condition described above within a period not to exceed ninety (90) days of the initial existence of the condition, and the Company does not remedy the condition within thirty (30) days of receipt of such notice and Executive terminates employment for such notice within thirty (30) days after such cure period has expired if the breach was curable and has not been remedied.
(c) Termination in General. If Executive's employment with the Company terminates for any reason, the Company will pay or provide to Executive: (i) any unpaid Salary through the date of employment termination, (ii) any accrued but unused vacation or paid time off in accordance with the Company's policy, (iii) reimbursement for any unreimbursed business expenses incurred through the termination date, to the extent reimbursable in accordance with Section 2(c), and (iv) all other payments or benefits (if any) to which Executive is entitled under the terms of any benefit plan or arrangement.
6. Severance.
(a) Subject to Section 6(b) below, if Executive's employment is terminated by the Company without Cause or by Executive for Good Reason, Executive shall be entitled to receive a severance payment equal to 24 months of Executive's Base Salary, payable in a lump sum, but only if Execute first executes, and then does not revoke as may be allowed by law, a customary separation and release agreement that does not waive or diminish Executive's vested compensation, indemnification, advancement, exculpation, insurance or other rights that survive termination under this Agreement or applicable law.
(b) If Executive's employment is terminated by the Company without Cause or by Executive for Good Reason, and such termination occurs within six (6) months prior to a Change in Control (as defined under the Plan) or within twelve (12) months after the Change in Control, Executive shall be entitled to receive, in addition to any severance pursuant to Section 6(a) above, an additional 6 months of Executive's Base Salary (for a total of 30 months) in addition to the compensation of Section 2, but only if Execute first executes, and then does not revoke as may be allowed by law, a customary separation and release agreement that does not waive or diminish Executive's vested compensation, indemnification, advancement, exculpation, insurance or other rights that survive termination under this Agreement or applicable law.
(c) Notwithstanding the foregoing, (i) any payment(s) of "nonqualified deferred compensation" (within the meaning of Section 409A of the Code and the regulations and official guidance issued thereunder ("Section 409A")) that is/are required to be made to Executive hereunder as a "specified employee" (as defined under Section 409A) as a result of such employee's "separation from service" (within the meaning of Section 409A) shall be delayed for the first six (6) months following such separation from service (or, if earlier, the date of death of the specified employee) and shall instead be paid upon expiration of such six (6) month delay period; and (ii) for purposes of any such payment that is subject to Section 409A, if the Executive's termination of employment triggers the payment of "nonqualified deferred compensation" hereunder, then the Executive will not be deemed to have terminated employment until the Executive incurs a "separation from service" within the meaning of Section 409A.
7. Confidentiality Agreement.
(a) Executive understands that during the Term he may have access to unpublished and otherwise confidential information both of a technical and non-technical nature, relating to the business of the Company and any of its parents, subsidiaries, divisions, affiliates (collectively, "Affiliated Entities"), or clients, including without limitation any of their actual or anticipated business, research or development, any of their technology or the implementation or exploitation thereof, including without limitation information Executive and others have collected, obtained or created, information pertaining to patent formulations, vendors, prices, costs, materials, processes, codes, material results, technology, system designs, system specifications, materials of construction, trade secrets and equipment designs, including information disclosed to the Company by others under agreements to hold such information confidential (collectively, the "Confidential Information"). Executive agrees to observe all Company policies and procedures concerning such Confidential Information. Executive further agrees not to disclose or use, either during his employment or at any time thereafter, any Confidential Information for any purpose, including without limitation any competitive purpose, unless authorized to do so by the Company in writing, except that he may disclose and use such information when necessary in the performance of his duties for the Company. Executive's obligations under this Agreement will continue with respect to Confidential Information, whether or not his employment is terminated, until such information becomes generally available from public sources through no action of Executive.
(b) Nothing herein shall prohibit Executive from (i) reporting a suspected violation of law to any governmental or regulatory agency and cooperating with such agency, or from receiving a monetary recovery for information provided to such agency, (ii) testifying truthfully under oath pursuant to subpoena or other legal process or (iii) making disclosures that are otherwise protected under applicable law or regulation. However, if Executive is required by subpoena or other legal process to disclose Confidential Information, Executive first shall notify the Company promptly upon receipt of the subpoena or other notice and allow the Company the opportunity to obtain a protective order or other appropriate remedy, unless otherwise prohibited by law. Executive acknowledges that certain whistleblower laws permit Executive to communicate directly with governmental or regulatory authorities, including communications with the U.S. Securities and Exchange Commission about possible securities law violations, without the Company's permission or notification, and that the Company will not consider such communications to violate this or any other agreement between Executive and the Company or any Company policy. Executive acknowledges that under U.S. Defend Trade Secrets Act of 2016, Executive will not be held criminally or civilly liable under any U.S. federal, state, or territorial trade secret law for the disclosure of a trade secret that is made in confidence to government officials, either directly or indirectly, or to an attorney, in each case solely for the purpose of reporting or investigating a suspected violation of law, or in a complaint or other document filed in a lawsuit or other proceeding, provided such filing is made under seal. If Executive has any questions as to what comprises such confidential or proprietary information or trade secrets, or to whom if anyone it may be disclosed, Executive will consult with the Company. Executive understands that in the event it is determined that the disclosure of Company trade secrets was not done in good faith, Executive will be subject to substantial damages, including punitive damages and attorneys' fees.
(c) During Executive's employment, upon the Company's request, or upon the termination of his employment for any reason, Executive will promptly deliver to the Company all documents, records, files, notebooks, manuals, letters, notes, reports, customer and supplier lists, cost and profit data, e-mail, apparatus, computers, cell phones, tablets, hardware, software, drawings, and any other material of the Company or any of its Affiliated Entities or clients, including all materials pertaining to Confidential Information developed by Executive or others, and all copies of such materials, whether of a technical, business or fiscal nature, whether on the hard drive of a laptop or desktop computer, in hard copy, disk or any other format, which are in Executive's possession, custody or control.
8. Work Product and Copyrights. Executive agrees that all right, title and interest in and to the materials resulting from the performance of Executive's duties at Employer and all copies thereof, including works in progress, in whatever media, (the "Work"), will be and remain in Employer upon their creation. Executive will mark all Work with Employer's copyright or other proprietary notice as directed by Employer. Executive further agrees:
(a) To the extent that any portion of the Work constitutes a work protectable under the copyright laws of the United States (the "Copyright Law"), that all such Work will be considered a "work made for hire" as such term is used and defined in the Copyright Law, and that Employer will be considered the "author" of such portion of the Work and the sole and exclusive owner throughout the world of such copyright; and
(b) If any portion of the Work does not qualify as a "work made for hire" as such term is used and defined in the Copyright Law, that Executive hereby assigns and agrees to assign to Employer, without further consideration, all right, title and interest in and to such Work or in any such portion of such Work and any copyright in such Work and further agrees to execute and deliver to Employer, upon request, appropriate assignments of such Work and copyright in such Work and such other documents and instruments as Employer may request to fully and completely assign such Work and copyright in such Work to Employer, its successors or nominees, and that Executive appoints Employer as attorney-in-fact to execute and deliver any such documents on Executive's behalf in the event Executive should fail or refuse to do so within a reasonable period following Employer's request.
9. Inventions and Patents.
(a) For purposes of this Agreement, "Inventions" includes, without limitation, information, inventions, contributions, improvements, ideas, or discoveries, whether protectable or not, and whether or not conceived or made during work hours. Executive agrees that all Inventions conceived or made by Executive during the period of employment with Employer belong to Employer, provided they grow out of Executive's work with Employer or are related in some manner to the Business, including, without limitation, research and product development, and projected business of Employer or its affiliated companies. Accordingly, Executive:
(i) Will make adequate written records of such Inventions, which records will be Employer's property;
(ii) Does hereby assign to Employer any rights Executive may have to such Inventions for the U.S. and all foreign countries;
(iii) Will waive and agree not to assert any moral rights Executive may have or acquire in any Inventions and agree to provide written waivers from time to time as requested by Employer; and
(iv) Will assist Employer (at Employer's expense) in obtaining and maintaining patents or copyright registrations with respect to such Inventions.
(b) Executive understands and agrees that Employer or its designee will determine, in its sole and absolute discretion, whether an application for patent will be filed on any Invention that is the exclusive property of Employer, as set forth above, and whether such an application will be abandoned prior to issuance of a patent. Employer will pay to Executive, either during or after the term of this Agreement, the following amounts if Executive is sole inventor, or Executive's proportionate share if Executive is joint inventor: $750 upon filing of the initial application for patent on such Invention; and $1,500 upon issuance of a patent resulting from such initial patent application, provided Executive is named as an inventor in the patent.
(c) Executive further agrees that Executive will promptly disclose in writing to Employer during the term of Executive's employment and for one (1) year thereafter, all Inventions whether developed during the time of such employment or thereafter (whether or not Employer has rights in such Inventions) so that Executive's rights and Employer's rights in such Inventions can be determined. Except as set forth on the initialed Exhibit A (List of Inventions) to this Agreement, if any, Executive represents and warrants that Executive has no Inventions, software, writings or other works of authorship useful to Employer in the normal course of the Business, which were conceived, made or written prior to the date of this Agreement and which are excluded from the operation of this Agreement.
10. Non-solicitation. Executive agrees that, during the Term and until 12 months after the termination of his employment, Executive will not, directly or indirectly, including on behalf of any person, firm or other entity, employ or actively solicit for employment any employee of the Company or any of its Affiliated Entities, or anyone who was an employee of the Company or any of its Affiliated Entities, or induce any such employee to terminate his or his employment with the Company or any of its Affiliated Entities.
11. Representation and Warranty. The Executive hereby acknowledges and represents that he has had the opportunity to consult with legal counsel regarding his rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein. Executive represents and warrants that Executive has provided the Company a true and correct copy of any agreements that purport: (a) to limit Executive's right to be employed by the Company; (b) to prohibit Executive from engaging in any activities on behalf of the Company; or (c) to restrict Executive's right to use or disclose any information while employed by the Company; provided that the Company acknowledges and agrees that the Executive has, and will continue to have, and that the Executive shall continue to maintain the confidentiality of any and all such information. Executive further represents and warrants that Executive will not use on the Company's behalf any information, materials, data or documents belonging to a third party that are not generally available to the public, unless Executive has obtained written authorization to do so from the third party and provided such authorization to the Company. In the course of Executive's employment with the Company, Executive is not to breach any obligation of confidentiality that Executive has with third parties, and Executive agrees to fulfill all such obligations during Executive's employment with the Company. Executive further agrees not to disclose to the Company or use while working for the Company any trade secrets belonging to a third party.
12. Injunctive Relief. Without limiting the remedies available to the Company, Executive acknowledges that a breach of any of the covenants contained in Sections 7, 8, 9 and 10 above may result in material irreparable injury to the Company for which there is no adequate remedy at law, that it will not be possible to measure precisely damages for such injuries and that, in the event of such a breach or threat thereof, the Company shall be entitled, without the requirement to post bond or other security, to seek a temporary restraining order and/or injunction restraining Executive from engaging in activities prohibited by this Agreement or such other relief as may be required to specifically enforce any of the covenants in Sections 7 and 8 of this Agreement.
13. Notice. Any notice or other communication required or permitted to be given to the Parties shall be deemed to have been given if either personally delivered, or if sent for next-day delivery by nationally recognized overnight courier, and addressed as follows:
If to Executive, to:
Rudy Rong
Address on File
If to the Company, to:
Zerostack Corp.
2626 Cole Ave, Suite 300, Dallas, Texas, 75204
14.Severability. If any provision of this Agreement is declared void or unenforceable by a court of competent jurisdiction, all other provisions shall nonetheless remain in full force and effect.
15. Withholding. The Company may withhold from any payment that it is required to make under this Agreement amounts sufficient to satisfy applicable withholding requirements under any federal, state or local law.
16. Indemnification, Advancement, Release and Insurance.
(a) Company Claims and No Personal Undertaking. To the fullest extent permitted by law, the Company releases and covenants not to assert any claim against Executive, and Executive shall not be personally liable to the Company or any Affiliated Entity, for any act or omission undertaken in good faith within the authorized scope of Executive's employment or official capacity, including any delay, loss, inaccessibility, inability to transact or other consequence arising from a Company System or from the Company's or a service provider's provisioning, suspension, revocation, removal, replacement or modification of any user, signer, key, permission, policy or approval threshold. Executive has no personal guaranty or obligation for any liability of the Company or any Affiliated Entity merely by reason of serving as an officer, employee, manager, administrator, user, approver, signer or keyholder.
(b) Indemnification and Defense. To the fullest extent permitted by applicable law, the Company shall defend, indemnify and hold harmless Executive and his heirs, estate and legal representatives from and against all claims, demands, actions, investigations, proceedings, liabilities, judgments, penalties, settlements, losses, costs and expenses, including reasonable attorneys' fees and expert fees (collectively, "Losses"), arising from or relating to Executive's service or status as an officer, employee or authorized representative of the Company, including his authorized service with respect to Company Systems. This protection expressly applies to claims asserted by the Company or an Affiliated Entity and to third-party, governmental, regulatory, shareholder and derivative claims, in each case to the maximum extent indemnification is permitted by law. The Company shall not settle any matter in a manner that imposes non-monetary obligations, an admission of wrongdoing or unreimbursed liability on Executive without Executive's written consent.
(c) Advancement. The Company shall advance reasonable defense and enforcement expenses within ten (10) Business Days after receiving Executive's written request, subject only to Executive's unsecured undertaking to repay amounts to the extent a final, non-appealable judgment determines that Executive is not entitled to indemnification under this Section. Advancement shall not be conditioned on a preliminary determination regarding Executive's conduct, and the Company shall reimburse Executive for reasonable fees and costs incurred to enforce rights under this Section if Executive substantially prevails.
(d) Exclusions. The release, limitation of liability and indemnification in this Section shall not apply to Losses finally determined by a court of competent jurisdiction in a non-appealable judgment to have resulted from Executive's fraud, willful misconduct, gross negligence, knowing violation of applicable law, receipt of an improper personal benefit, or intentional withholding or destruction of transferable Company property. No allegation, investigation, interim finding, plea entered without an admission, settlement without Executive's written admission, or termination for Cause shall by itself establish an exclusion.
(e) D&O Insurance. The Company shall maintain directors' and officers' liability insurance covering Executive on terms no less favorable than those applicable to any other current or former senior officer or director, with commercially reasonable limits, Side A coverage and coverage for digital-asset custody and cyber-related claims to the extent commercially available on reasonable terms. Such coverage shall continue while Executive serves and, through an extended reporting period or runoff coverage, for at least six (6) years thereafter for acts occurring during Executive's service. The Company shall provide Executive, upon request, certificates of insurance and relevant policy terms, and shall give at least thirty (30) days' prior written notice of cancellation or material reduction where practicable. Within thirty (30) days after the Effective Date, the Company shall fund or otherwise secure the premium necessary to prevent lapse of the then-current coverage for at least twelve (12) months.
(f) Priority; No Setoff; Survival. The rights in this Section are contractual, cumulative and in addition to rights under the Company's governing documents, insurance policies and applicable law. No amendment to the Company's governing documents or indemnification arrangements adopted after the Effective Date may adversely affect Executive with respect to earlier acts or omissions. Amounts due under this Section shall not be subject to setoff against compensation or other amounts payable to Executive. This Section survives termination of employment, removal from office or any Company System, expiration or termination of this Agreement, and any change in control, merger, reorganization, dissolution or insolvency, and binds the Company's successors and assigns.
17. Clawback and Recoupment Policy. The Executive acknowledges and agrees that the compensation paid pursuant to this Agreement shall be subject to any reasonable clawback or recoupment policy, which the Company may put in force to comply with any regulations and exchange standards, that the Company may have in effect from time to time.
18. 409A Savings Clause. The parties intend that payments or benefits payable under this Agreement not be subject to the additional tax imposed pursuant to Section 409A of the Code ("Section 409A"), and the provisions of this Agreement shall be construed and administered in accordance with such intent. To the extent such potential payments or benefits could become subject to Section 409A, the parties shall cooperate to amend this Agreement with the goal of giving Executive the economic benefits described herein in a manner that does not result in such tax being imposed. If the parties are unable to agree on a mutually acceptable amendment, the Company may, without Executive's consent and in such manner as it deems appropriate or desirable, amend or modify this Agreement or delay the payment of any amounts hereunder to the minimum extent necessary to meet the requirements of Section 409A.
19. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of State of Texas, without regard to the conflict of laws provisions thereof.
20. Waiver. The waiver by either Party of a breach of any provision of this Agreement shall not be or be construed as a waiver of any subsequent breach. The failure of a Party to insist upon strict adherence to any provision of this Agreement on one or more occasions shall not be considered a waiver or deprive that Party of the right thereafter to insist upon strict adherence to that provision or any other provision of this Agreement. Any such waiver must be in writing, signed by the Party against whom such waiver is to be enforced.
21. Assignment. This Agreement is a personal contract and Executive may not sell, transfer, assign, pledge or hypothecate his rights, interests and obligations hereunder. Except as otherwise herein expressly provided, this Agreement shall be binding upon and shall inure to the benefit of Executive and his personal representatives and shall inure to the benefit of and be binding upon the Company and its successors and assigns, including without limitation, any corporation or other entity into which the Company is merged or which acquires all or substantially all of the assets of the Company.
22. Entire Agreement. This Agreement embodies all of the representations, warranties, covenants, understandings and agreements between the Parties relating to Executive's employment with the Company. No other representations, warranties, covenants, understandings, or agreements exist between the Parties relating to Executive's employment. This Agreement shall supersede all prior agreements, written or oral, relating to Executive's employment. This Agreement may not be amended or modified except by a writing signed by the Parties. For the avoidance of doubt, Section 16 constitutes a present and enforceable indemnification and advancement agreement and is not conditioned on execution of any later instrument.
[Signature page follows]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered on the date first written above.
Agreed to and Accepted:
| "Signed" |
| Daniel Reis-Faria, CEO |
| Date: August 19, 2026 |
| "Signed" |
| Rudy Rong |
| Date: August 19, 2026 |
Zerostack Announces US$1.0 Billion Strategic Contribution of Memecore ($M) Tokens at US$25.19 Per Share
Transaction Represents an Unprecedented Strategic Investment Premium
DALLAS, TEXAS - August 19, 2026 - Zerostack Corp. ("Zerostack" or the "Company") today announced that it has entered into a definitive transaction pursuant to which Puple AI Inc. and Blockcat Pte. Ltd. have agreed to contribute an aggregate of US$1.0 billion of Memecore tokens to the Company in exchange for 3,500,000 Zerostack common shares and pre-funded warrants to purchase up to 36,198,293 additional common shares (the "Warrants"), with the prefunded warrants issued at a price of US$25.19 per share. Shares issuable upon exercise of the Warrants will not be issued unless and until approved by Zerostack's shareholders in accordance with Nasdaq Listing Rule 5635, and such shares will be subject to a lock-up of up to ten years following closing.
The agreed share price represents a premium of more than twelve times Zerostack's recent market trading price, while the Memecore tokens contributed to the transaction, consisting of 925,925,926 $M tokens, were valued at their prevailing fair market trading price of $1.08 per token.
Management believes the transaction represents one of the most significant valuation premiums accepted by a strategic cryptocurrency investor in a public company and reflects the Memecore principals' conviction in Zerostack's long-term strategy, management team and unique positioning within the decentralized artificial intelligence ecosystem. The transaction fosters Zerostack's strategy of building a full-stack position in the consumer driven distributed artificial intelligence market segment, which Management expects to grow through MemeCore's creation of consumer-facing cultural economies.
The transaction also substantially expands Zerostack's strategic relationship with the Memecore ecosystem and creates what management believes to be significant opportunities for collaboration between Zerostack's existing 0G portfolio and the rapidly growing Memecore community. Management believes that the willingness of the Memecore principals to acquire Zerostack equity at a substantial premium while valuing the contributed Memecore tokens at prevailing market prices demonstrates a strong conviction that ownership of Zerostack shares provides unique strategic exposure to the Company's existing and future digital asset activities.
"This transaction represents a defining milestone not only for Zerostack, but for the broader digital asset industry," said Daniel Reis-Faria, Chief Executive Officer of Zerostack.
Mr. Reis-Faria continued:
"Our objective has always been to build the premier publicly traded gateway to next-generation digital infrastructure assets. We believe the combination of our existing 0G holdings with a strategic position in the Memecore ecosystem creates a compelling platform capable of generating long-term value for shareholders while positioning Zerostack at the intersection of decentralized AI, digital assets and institutional capital."
Rudy Rong, a principal of Memecore who is also being appointed President of Zerostack in connection with the transaction, commented:
"Memecore has always sought partners capable of creating lasting value across the broader blockchain ecosystem. We believe Zerostack represents the ideal public company through which to accelerate collaboration between our respective communities while creating meaningful opportunities for innovation, ecosystem development and institutional participation."
About ZeroStack Corp.
ZeroStack Corp. is the first Nasdaq-listed asset management company focused on providing exposure to decentralized AI. The Company also operates a global pharmaceutical distribution business through its wholly owned subsidiary, Phatebo GmbH. For more information, visit https://zerostack.ai/
About Memecore ($M)
MemeCore ($M) is a top 50 cryptocurrency and a dedicated Layer 1 blockchain built to change internet memes from short-term speculation into long-term cultural and economic assets. It provides infrastructure with low fees and high scalability for meme-driven communities.
Forward-Looking Statements
This press release contains "forward-looking statements," as defined by U.S. federal securities laws. Forward-looking statements reflect the Company's current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words "believe," "expect," "anticipate," "will," "could," "would," "should," "may," "plan," "estimate," "intend," "predict," "potential," "continue," and the negatives of these words and other similar words or expressions generally identify forward-looking statements. These forward-looking statements include, but are not limited to, express or implied statements regarding: the expected fulfillment of the Orders; the Company's ability to obtain inventory financing; the potential for future orders from existing or prospective customers; anticipated revenues and profitability; expected operating profit; procurement pricing; supplier availability; and commercial relationships.
Forward-looking statements are based on current expectations and assumptions that involve significant risks and uncertainties. Actual results may differ materially due to numerous factors, including, without limitation: business strategy risks and the other risks described under the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the "SEC") on February 27, 2026, as such factors may be updated from time to time in the Company's periodic filings with the SEC, including the Company's Quarterly Report on Form 10-Q filed with the SEC on July 31, 2026, which are accessible on the SEC's website at www.sec.gov/edgar.
Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company's filings with the SEC. While forward-looking statements reflect the Company's good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based on information currently available to the Company (or to third parties making the forward-looking statements).