WiSA (WISA) DEF 14ADefinitive proxy

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

SCHEDULE 14A 

(RULE 14a-101)

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES 

EXCHANGE ACT OF 1934 

(AMENDMENT NO. __)

Filed by the Registrant x

Filed by a Party other than the Registrant ¨

Check the appropriate box:

WiSA Technologies, Inc. 

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

15268 NW Greenbrier Pkwy 

Beaverton, OR 97006 

(408) 627-4716

Important Notice Regarding the Availability of Proxy Materials 

for the Annual Meeting of Stockholders to Be Held on December 20, 2024

The Notice of Annual Meeting, Proxy Statement and Annual Report on Form 10-K 

are available at: 

https://ir.wisatechnologies.com/sec-filings

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS 

TO BE HELD ON DECEMBER 20, 2024

To the Stockholders of WiSA Technologies, Inc.:

NOTICE IS HEREBY GIVEN that an annual meeting of stockholders (“Annual Meeting”) of WiSA Technologies, Inc., a Delaware corporation (the “Company” or “our”), will be held on December 20, 2024 at 1:00 p.m., Pacific Time, at the Company’s offices at 15268 NW Greenbrier Pkwy, Beaverton, Oregon 97006 for the following purposes:

Each of the foregoing proposals is more fully described in the proxy statement that is attached and made a part of this notice of Annual Meeting (the “Proxy Statement”). Only stockholders of record of Common Stock at the close of business on November 5, 2024 (the “Record Date”) will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment thereof.

All stockholders who are record or beneficial owners of shares of Common Stock as of the Record Date are cordially invited to attend the Annual Meeting in person. Your vote is important regardless of the number of shares of Common Stock that you own. When you arrive at the Annual Meeting, you must present photo identification, such as a driver’s license. Beneficial owners of shares of Common Stock also must provide evidence of their holdings of such shares as of the Record Date, such as a recent brokerage account or bank statement.

Whether or not you expect to attend the Annual Meeting, it is important that your shares of Common Stock be represented and voted during the Annual Meeting. We urge you to promptly complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope in order to ensure representation of your shares of Common Stock. It will help in our preparations for the Annual Meeting if you would check the box on the form of proxy if you plan on attending the Annual Meeting. You may also vote by proxy (i) via the Internet or (ii) by telephone using the instructions provided in the enclosed proxy card. Your proxy is revocable in accordance with the procedures set forth in the Proxy Statement. Please be advised that if you are not a record or beneficial owner of shares of Common Stock on the Record Date, you are not entitled to vote and any proxies received from persons who are not record or beneficial owners of shares of Common Stock on the Record Date will be disregarded.

WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY VOTE VIA INTERNET OR BY TELEPHONE, OR BY COMPLETING, SIGNING, DATING AND RETURNING THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE. NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES.

TABLE OF CONTENTS 

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

In this proxy statement (“Proxy Statement”), WiSA Technologies, Inc., a Delaware corporation, is referred to as “WiSA,” the “Company,” “we,” “us” and “our.”

Information Concerning the Proxy Materials and the Annual Meeting

Proxies in the form enclosed with this Proxy Statement are being solicited by our board of directors (the “Board”) for use at our Annual Meeting of Stockholders (the “Annual Meeting”) to be held at 1:00 p.m., Pacific Time, on December 20, 2024 at the Company’s offices at 15268 NW Greenbrier Pkwy, Beaverton, Oregon 97006, and at any adjournment thereof. Your vote is very important. For this reason, our Board is requesting that you permit your shares of common stock, par value $0.0001 per share (the “Common Stock”), to be represented at the Annual Meeting by the proxies named on the enclosed proxy card. This Proxy Statement contains important information for you to consider when deciding how to vote on the matters brought before the Annual Meeting. Please read it carefully.

Voting materials, which include this Proxy Statement and the enclosed proxy card, will be first mailed to stockholders on or about November 26, 2024.

Only stockholders of record of our shares of Common Stock as of the close of business on November 5, 2024 (the “Record Date”) will be entitled to notice of, and to vote at, the Annual Meeting. As of the Record Date, 7,767,828 shares of Common Stock were issued and outstanding. Holders of Common Stock are entitled to one (1) vote per share of Common Stock held by them. Stockholders may vote in person or by proxy, by (i) using the instructions provided in the enclosed proxy card to vote online via the Internet or by telephone or (ii) completing, signing, dating and returning the enclosed proxy card in the enclosed postage-paid envelope; however, granting a proxy does not in any way affect a stockholder’s right to attend the Annual Meeting and vote in person. Any stockholder giving a proxy has the right to revoke that proxy by (i) filing a later-dated proxy or a written notice of revocation with us at our principal office at any time before the original proxy is exercised or (ii) attending the Annual Meeting and voting in person.

Brett Moyer is named as attorney-in-fact in the proxy. Mr. Moyer is our Chairman of the Board, President and Chief Executive Officer. Mr. Moyer will vote all shares represented by properly executed proxies returned in time to be counted at the Annual Meeting, as described below under “Voting Procedures and Vote Required.” Where a vote has been specified in the proxy with respect to the matters identified in the Notice of the Annual Meeting, the shares represented by the proxy will be voted in accordance with those voting specifications. If no voting instructions are indicated, your shares will be voted as recommended by our Board on all matters, and as the proxy holder may determine in his discretion with respect to any other matters properly presented for a vote before the Annual Meeting.

The stockholders will consider and vote upon (i) a proposal to elect eight (8) members of the Board, each to serve until the next annual meeting of the Company’s stockholders and until each of their respective successors are elected and qualified or until each of their earlier resignation or removal (“Proposal No. 1”); (ii) a proposal to ratify the Board’s selection of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024 (“Proposal No. 2”); (iii) a non-binding advisory proposal to approve the compensation paid to the Company’s named executive officers (the “Say-on-Pay Proposal” or “Proposal No. 3”); (iv) a non-binding advisory proposal on the frequency of the stockholder advisory vote on executive compensation (the “Say-on-Pay Frequency Proposal” or “Proposal No. 4”); (v) a proposal to approve, for purposes of Rule 5635(d) of The Nasdaq Stock Market LLC (“Nasdaq”), the issuance of 20% or more of our outstanding shares of Common Stock, issuable upon the “alternative cashless exercise” of certain common stock purchase warrants, dated April 19, 2024, as amended (the “1st April 2024 Warrants”), issued to the holders of such warrants (the “Holders”) (such proposal, “Proposal No. 5”); (vi) a proposal to approve, for purposes of Nasdaq Rule 5635(d), the issuance of 20% or more of our outstanding shares of Common Stock, issuable upon the “alternative cashless exercise” of certain common stock purchase warrants, dated April 23, 2024, as amended (the “2nd April 2024 Warrants”), issued to the Holders (“Proposal No. 6”); (vii) a proposal to approve, for purposes of Nasdaq Rule 5635(d), the issuance of 20% or more of our outstanding shares of Common Stock, issuable upon the “alternative cashless exercise” of certain common stock purchase warrants, dated April 30, 2024, as amended (the “3rd April 2024 Warrants”), issued to the Holders (“Proposal No. 7”); (viii) a proposal to approve, for purposes of Nasdaq Rule 5635(d), the issuance of 20% or more of our outstanding shares of Common Stock, issuable upon the “alternative cashless exercise” of certain common stock purchase warrants, dated May 15, 2024, as amended (the “1st May 2024 Warrants”), issued to the Holders (“Proposal No. 8”); (ix) a proposal to approve, for purposes of Nasdaq Rule 5635(d), the issuance of 20% or more of our outstanding shares of Common Stock, issuable upon the “alternative cashless exercise” of certain common stock purchase warrants, dated May 17, 2024, as amended (the “2nd May 2024 Warrants”), issued to the Holders (“Proposal No. 9”); (x) a proposal to approve, for purposes of Nasdaq Rule 5635(d), the issuance of 20% or more of our outstanding shares of Common Stock, issuable upon exercise of certain common stock purchase warrants (the “Inducement Warrants”) issued pursuant to certain inducement agreements (the “Inducement Agreements”) by and between the Company and each Holder, entered into as of September 10, 2024 and as amended as of October 31, 2024 (“Proposal No. 10”); (xi) a proposal to approve, for purposes of Nasdaq Rule 5635(d), the issuance of 20% or more of our outstanding shares of Common Stock, issuable upon exercise of certain common stock purchase warrants to be issued immediately upon stockholder approval of this proposal (the “New Warrants”, and together with the 1st April 2024 Warrants, 2nd April 2024 Warrants, 3rd April 2024 Warrants, 1st May 2024 Warrants, 2nd May 2024 Warrants and the Inducement Warrants, the “Warrants”), pursuant to certain side letter agreements (the “Side Letter Agreements”) by and between the Company and each Holder, entered into as of September 10, 2024 (“Proposal No. 11”); (xii) a proposal to approve an amendment to the Company’s 2018 Long-Term Stock Incentive Plan (the “LTIP”) to remove the annual share limit of Common Stock that may be issued for a certain fiscal year under the LTIP (“Proposal No. 12”); (xiii) to approve an amendment to the Company’s certificate of incorporation, as amended (the “Certificate of Incorporation”), to permit the Board to amend the Company’s bylaws, as amended (the “Bylaws”) (“Proposal No. 13”); and (xiv) a proposal to approve the transactions contemplated by the Asset Purchase Agreement (as defined below), entered into as of September 4, 2024, by and between the Company and Data Vault Holdings Inc. (“Data Vault”), including, the issuance of 20% or more of our outstanding shares of Common Stock upon consummation of the asset purchase (the “Asset Purchase”) (such proposal, “Proposal No. 14”).

Voting Procedures and Vote Required

Mr. Moyer will vote all shares represented by properly executed proxies returned in time to be counted at the Annual Meeting. The presence, in person or by proxy, of a majority of the issued and outstanding shares of Common Stock entitled to vote at the Annual Meeting is necessary to establish a quorum for the transaction of business. Your shares will be counted for purposes of determining if there is a quorum if (i) you are entitled to vote and you are present in person at the Annual Meeting; or (ii) you are entitled to vote and you have properly voted by proxy online, by telephone, or by submitting a proxy card by mail. Shares represented by proxies which contain an abstention and “broker non-vote” shares (described below) are counted as present for purposes of determining the presence of a quorum for the Annual Meeting.

All properly executed proxies delivered pursuant to this solicitation and not revoked will be voted at the Annual Meeting as specified in such proxies.

Vote Required for Election of Directors (Proposal No. 1). The Certificate of Incorporation does not authorize cumulative voting. The Bylaws provide that directors are to be elected by a plurality of the votes of the shares of Common Stock present at the Annual Meeting, in person or represented by proxy at the Annual Meeting and voting on the matter.

This means that the eight (8) candidates receiving the highest number of affirmative votes at the Annual Meeting will be elected as directors. Only shares that are voted in favor of a particular nominee will be counted toward that nominee’s achievement of a plurality. Shares present at the Annual Meeting that are not voted for a particular nominee or shares present by proxy where the stockholder properly withheld authority to vote for such nominee will not be counted toward that nominee’s achievement of a plurality.

Vote Required for Ratification of Independent Registered Public Accounting Firm (Proposal No. 2). Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to ratify the Board’s selection of BPM LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 2.

Vote Required for the Advisory Resolution on the Compensation of the Company’s Named Executive Officers (Proposal No. 3): Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the Say-On-Pay Proposal, which is non-binding on the Company. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 3.

Vote Required for the Advisory Resolution on the Frequency of the Stockholder Advisory Vote on Executive Compensation (Proposal No. 4): Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the Say-On-Frequency Proposal, which is non-binding on the Company. As to this proposal, a stockholder may: (i) vote in favor of every 1 YEAR as the frequency, (ii) vote in favor of every 2 YEARS as the frequency; (iii) vote in favor of every 3 YEARS as the frequency, or (iv) “ABSTAIN” with respect to the proposal. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 4.

Vote Required for Approval of the Issuance of Shares of Common Stock Issuable Upon “Alternative Exercise” of the 1st April 2024 Warrants (Proposal No. 5): Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the issuance of shares of Common Stock issuable upon “alternative cashless exercise” of the 1st April 2024 Warrants. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 5.

Vote Required for Approval of the Issuance of Shares of Common Stock Issuable Upon “Alternative Exercise” of the 2nd April 2024 Warrants (Proposal No. 6): Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the issuance of shares of Common Stock issuable upon “alternative cashless exercise” of the 2nd April 2024 Warrants. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 6.

Vote Required for Approval of the Issuance of Shares of Common Stock Issuable Upon “Alternative Exercise” of the 3rd April 2024 Warrants (Proposal No. 7): Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the issuance of shares of Common Stock issuable upon “alternative cashless exercise” of the 3rd April 2024 Warrants. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 7.

Vote Required for Approval of the Issuance of Shares of Common Stock Issuable Upon “Alternative Exercise” of the 1st May 2024 Warrants (Proposal No. 8): Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the issuance of shares of Common Stock issuable upon “alternative cashless exercise” of the 1st May 2024 Warrants. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 8.

Vote Required for Approval of the Issuance of Shares of Common Stock Issuable Upon “Alternative Exercise” of the 2nd May 2024 Warrants (Proposal No. 9): Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the issuance of shares of Common Stock issuable upon “alternative cashless exercise” of the 2nd May 2024 Warrants. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 9.

Vote Required for Approval of the Issuance of Shares of Common Stock Issuable Upon Exercise of the Inducement Warrants (Proposal No. 10): Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the issuance of shares of Common Stock issuable upon exercise of the Inducement Warrants. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 10.

Vote Required for Approval of the Issuance of Shares of Common Stock Issuable Upon Exercise of the New Warrants (Proposal No. 11): Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the issuance of shares of Common Stock issuable upon exercise of the New Warrants. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 11.

Vote Required for Approval of an Amendment to the LTIP (Proposal No. 12). Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the amendment of the LTIP. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 12.

Vote Required for Approval of Amendment to the Certificate of Incorporation to Permit the Board to Amend Our Bylaws (Proposal No. 13): Delaware law provides that the affirmative vote of the holders of a majority of the shares of Common Stock outstanding on the Record Date and entitled to vote on the matter is required to give effect to the amendment to the Certificate of Incorporation permitting the Board to amend our Bylaws. Abstentions from voting on this proposal and broker non-votes will have the same effect as votes against this proposal.

Vote Required for Approval of the Issuance of Shares of Common Stock Issuable Upon Consummation of the Asset Purchase (Proposal No. 14): Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to approve the issuance of shares of Common Stock issuable upon consummation of the Asset Purchase. Abstentions and broker non-votes, if any, will have no effect on the outcome of this Proposal No. 14.

If you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may constitute “broker non-votes.” Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. Brokers that have not received voting instructions from their clients cannot vote on their clients’ behalf on “non-routine” proposals.

Proposals No. 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14 are “non-routine” and thus a broker discretionary vote is not allowed. Proposal No. 2 is “routine” and thus a broker discretionary vote is allowed.

Abstentions are counted as “shares present” at the Annual Meeting for purposes of determining the presence of a quorum. Abstentions only have an effect on the outcome of any matter being voted on that requires a certain level of approval based on our total voting stock outstanding. Thus, abstentions by holders of Common Stock will have no effect on any of the proposals other than Proposal 13 as set forth above.

Votes at the Annual Meeting will be tabulated by one or more inspectors of election.

Stockholders will not be entitled to dissenter’s rights with respect to any matter to be considered at the Annual Meeting.

Delivery of Documents to Stockholders Sharing an Address

We will send only one set of Annual Meeting materials and other corporate mailings to stockholders who share a single address unless we received contrary instructions from any stockholder at that address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However, the Company will deliver promptly upon written or oral request a separate copy of the Annual Meeting or other corporate materials to a stockholder at a shared address to which a single copy of the Annual Meeting materials was delivered. Additionally, if current stockholders with a shared address received multiple copies of the Annual Meeting materials or other corporate mailings and would prefer the Company to mail one copy of future mailings to stockholders at the shared address, notification of such request may also be made by mail or by calling the Company’s principal executive offices. You may make such a written or oral request by sending a written notification stating (i) your name, (ii) your shared address and (iii) the address to which the Company should direct the additional copy of the Annual Meeting materials to the Company at Corporate Secretary, 15268 NW Greenbrier Pkwy, Beaverton, Oregon 97006, telephone: (408) 627-4716.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of November 25, 2024, information regarding beneficial ownership of our capital stock by:

The percentage ownership information shown in the table is based upon 8,312,618 shares of Common Stock outstanding as of November 25, 2024. The percentage ownership information shown in the table excludes the following as of such date: (a) up to an aggregate of 9,340,730 shares of Common Stock issuable upon exercise of our outstanding common stock purchase warrants, (b) up to an aggregate of 2,813 shares of Common Stock issuable upon conversion of all shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”) issuable upon exercise of 1,750 Series B Preferred Stock purchase warrants, (c) 22,105 shares of Common Stock reserved for future issuance under the LTIP, the 2020 Stock Incentive Plan (the “2020 Plan”) and the Technical Team Retention Plan of 2022 (the “2022 Plan” and collectively with the LTIP and the 2020 Plan, the “Plans”), and (d) an aggregate of 14 shares of Common Stock issuable upon vesting of restricted stock units (“RSUs”) that were issued pursuant to the 2020 Plan and 2022 Plan.

Beneficial ownership is determined according to the rules of the U.S. Securities and Exchange Commission (“SEC”) and generally means that a holder has beneficial ownership of a security if such holder possesses sole or shared voting or investment power of that security, including securities that are exercisable for shares of Common Stock within sixty (60) days of November 25, 2024. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the holders named in the table below have sole voting and investment power with respect to all shares of Common Stock shown that they beneficially own, subject to community property laws where applicable.

For purposes of computing the percentage of outstanding shares of our Common Stock held by each holder or group of holders named above, any shares of Common Stock that such holder or holders has the right to acquire within sixty (60) days of November 25, 2024 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other holder. The inclusion herein of any shares of Common Stock listed as beneficially owned does not constitute an admission of beneficial ownership. Unless otherwise identified, the address of each beneficial owner listed in the table is c/o WiSA Technologies, Inc., 15268 NW Greenbrier Pkwy, Beaverton, Oregon 97006.

* Less than 1.0%

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Proxy Statement and any amendment, including the sections entitled “Risk Factors”, contain “forward-looking statements” within the meaning of Section 21(E) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). These forward-looking statements, including as they relate to the potential Asset Purchase, include, without limitation: statements regarding new products or services; statements concerning litigation or other matters; statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance; statements of our management’s goals and objectives; statements concerning our competitive environment, availability of resources and regulation; trends affecting our financial condition, results of operations or future prospects; our financing plans or growth strategies; statements of the timing of the Asset Purchase; statements of the potential consummation of the Asset Purchase; and other similar expressions concerning matters that are not historical facts. Words such as “may”, “will”, “should”, “could”, “would”, “predicts”, “potential”, “continue”, “expects”, “anticipates”, “future”, “intends”, “plans”, “believes” and “estimates,” and variations of such terms or similar expressions, are intended to identify such forward-looking statements.

Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or our management’s good faith belief as of that time with respect to future events. Our actual results may differ materially from those expressed in, or implied by, the forward-looking statements due to a number of factors including, but not limited to, those set forth under the heading “Risk Factors” in this Proxy Statement, as well as other risks discussed in documents that we file with the SEC.

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. You should review our subsequent reports filed with the SEC described in the sections of this Proxy Statement entitled “Additional Information,” all of which are accessible on the SEC’s website at www.sec.gov.

SUMMARY TERM SHEET

This Summary Term Sheet provides an overview of material information regarding the proposed Asset Purchase and may not contain all of the information that is important to you. You should carefully read this entire proxy statement, including the Asset Purchase Agreement attached as Appendix C, for a more complete understanding of the Asset Purchase and related matters.

RISK FACTORS

You should carefully consider and evaluate all of the information contained in this Proxy Statement in evaluating the proposals to be voted on at the Annual Meeting. In particular, you should carefully consider and evaluate the risks and uncertainties described under the heading “Risk Factors” in this Proxy Statement. Stockholders are further advised that the risks described below may not be the only risks we face. Additional risks that we do not yet know of, or that we currently think are immaterial, may also negatively impact our business operations or financial results. Any of the risks and uncertainties set forth in this Proxy Statement could materially and adversely affect our business, results of operations and financial condition, which in turn could materially and adversely affect the value of our securities.

Risks Related to Data Vault’s Business and Industry

Data Vault has a limited operating history, which makes it difficult to forecast Data Vault’s future results of operations.

As a result of Data Vault’s limited operating history, Data Vault’s ability to accurately forecast it’s future results of operations is limited and subject to a number of uncertainties, including Data Vault’s ability to plan for and model future growth. Further, in future periods, Data Vault’s revenue growth could slow or its revenue could decline for a number of reasons, including slowing demand for its platform, increased competition, changes to technology, a decrease in the growth of its overall market, or its failure, for any reason, to continue to take advantage of growth opportunities. Data Vault has also encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described below. If Data Vault’s assumptions regarding these risks and uncertainties and its future revenue growth are incorrect or change, or if Data Vault do not address these risks successfully, Data Vault’s operating and financial results could differ materially from Data Vault’s expectations, and Data Vault’s business could suffer.

Data Vault may not have visibility into Data Vault’s financial position and results of operations.

Customers consume Data Vault’s platform through license and the use of Data Vault’s software as a service platform for the data refinery, meta data layer creation, and through the monetization of data assets. Because Data Vault’s customers have flexibility in the timing of their consumption, Data Vault does not have the visibility into the timing of revenue recognition that a typical subscription-based software company has. There is a risk that customers will consume Data Vault’s platform more slowly than Data Vault expects, and Data Vault’s actual results may differ from Data Vault’s forecasts. Further, investors and securities analysts may not understand how Data Vault’s consumption-based business model differs from a subscription-based business model, and Data Vault’s business model may be compared to subscription-based business models.

Data Vault has a history of operating losses and may not achieve or sustain profitability in the future.

Data Vault has experienced net losses in each period since inception. Data Vault expect its costs and expenses to increase in future periods. In particular, Data Vault intend to continue to invest significant resources to further develop Data Vault’s platform and expand Data Vault’s sales, marketing, and professional services teams. In addition, Data Vault’s platform currently operates on public artificial intelligence, blockchain infrastructure and cloud services provided by Amazon Web Services (AWS), Microsoft Azure (Azure), and Google Cloud Platform (GCP), and Data Vault’s costs and gross margins are significantly influenced by the prices Data Vault is able to negotiate with these public cloud providers, which in certain cases are also Data Vault’s competitors. Data Vault will also incur increased general and administrative expenses associated with Data Vault’s growth, including costs related to internal systems and operating as a public company. Data Vault’s efforts to grow Data Vault’s business may be costlier than Data Vault expects, or Data Vault’s revenue growth rate may be slower than Data Vault expects, and we may not be able to increase Data Vault’s revenue enough to offset the increase in operating expenses resulting from these investments. If Data Vault is unable to achieve and sustain profitability, or if Data Vault is unable to achieve the revenue growth that Data Vault expects from these investments, the value of Data Vault’s business and common stock may significantly decrease.

The markets in which Data Vault operates are highly competitive, and if Data Vault does not compete effectively, Data Vault’s business, financial condition, and results of operations could be harmed.

The markets in which Data Vault operates are rapidly evolving and highly competitive. As these markets continue to mature and new technologies and competitors enter such markets, Data Vault expects competition to intensify. Data Vault’s current competitors include: large, well-established, public cloud providers that generally compete in all of Data Vault’s markets, including BNY Mellon, Snowflake, The ICE, Inc., Workday, IBM, Microsoft and Oracle amongst others; less-established public and private cloud companies with products that compete in some of our markets; other established vendors of legacy database solutions or newer meta data offerings within those operations; and new or emerging entrants seeking to develop competing technologies.

Data Vault competes based on various factors, including price, performance, breadth of use cases, multi-cloud availability, brand recognition and reputation, customer support, and differentiated capabilities, including ease of implementation and data migration, ease of administration and use, scalability and reliability, data governance, security, and compatibility with existing standards. Many of Data Vault’s competitors have substantially greater brand recognition, customer relationships, and financial, technical, and other resources than Data Vault does, and may be able to respond more effectively than Data Vault to new or changing opportunities, technologies, standards, customer requirements, and buying practices.

Data Vault currently only offers its platform on to business operations in the United States and in International markets through partnerships. There is risk that one or more of these business operations verticals could reduce their demand for innovations or privileged interoperating capabilities that Data Vault’s technologies provide. Further, they have the resources to acquire or partner with existing and emerging providers of competing technology and thereby accelerate adoption of those competing technologies. All of the foregoing could make it difficult or impossible for Data Vault to provide products and services that compete favorably with those of the business operations.

For all of these reasons, competition may negatively impact Data Vault’s ability to maintain and grow consumption of Data Vault’s platform or put downward pressure on Data Vault’s prices and gross margins, any of which could materially harm our reputation, business, results of operations, and financial condition.

If Data Vault or its third-party service providers experience a security breach or unauthorized parties otherwise obtain access to Data Vault’s customers’ data, Data Vault’s data, or its platform, Data Vault’s platform may be perceived as not being secure, Data Vault’s reputation may be harmed, demand for its platform may be reduced, and Data Vault may incur significant liabilities.

Data Vault platform processes, stores, and transmits Data Vault’s customers’ proprietary and sensitive meta data, including at times personal information, protected health information, and financial data. Data Vault’s platform is built to be available on the infrastructure of third-party public cloud providers such as but not limited AWS, Microsoft, and Google in addition to decentralized blockchain services. Data Vault also uses third-party service providers and sub-processors to help Data Vault deliver services to its customers and their end-users. These vendors may store or process personal information, protected health information, or other confidential information of Data Vault’s employees, its partners, its customers, or its customers’ end-users. Data Vault collects such information from individuals located both in the United States and abroad and may store or process such information outside the country in which it was collected. While Data Vault, our third-party cloud providers, and Data Vault’s third-party processors have implemented security measures designed to protect against security breaches, these measures could fail or may be insufficient, resulting in the unauthorized disclosure, modification, misuse, destruction, or loss of Data Vault’s or its customers’ data or other sensitive information. Any security breach of Data Vault’s platform, Data Vault’s operational systems, physical facilities, or the systems of Data Vault’s third-party processors, Data Vault’s the perception that one has occurred, could result in litigation, indemnity obligations, regulatory enforcement actions, investigations, fines, penalties, mitigation and remediation costs, disputes, reputational harm, diversion of management’s attention, and other liabilities and damage to Data Vault’s business. Even though Data Vault does not control the security measures of third parties, Data Vault may be responsible for any breach of such measures or suffer reputational harm even where Data Vault does not have recourse to the third party that caused the breach. In addition, any failure by Data Vault’s vendors to comply with applicable law or regulations could result in proceedings against Data Vault by governmental entities or others.

Data Vault could suffer disruptions, outages, defects, and other performance and quality problems with its platform or with the public cloud and internet infrastructure on which it relies.

Data Vault’s business depends on our platform to be available without disruption. Data Vault has experienced, and may in the future experience, disruptions, outages, defects, and other performance and quality problems with Data Vault’s platform. Data Vault has also experienced, and may in the future experience, disruptions, outages, defects, and other performance and quality problems with the public cloud and internet infrastructure on which Data Vault’s platform relies. These problems can be caused by a variety of factors, including introductions of new functionality, vulnerabilities and defects in proprietary and open source software, human error or misconduct, capacity constraints, design limitations, or denial of service attacks or other security-related incidents.

Further, if Data Vault’s contractual and other business relationships with Data Vault’s public cloud providers are terminated, suspended, or suffer a material change to which Data Vault is unable to adapt, such as the elimination of services or features on which Data Vault depends, Data Vault could be unable to provide its platform and could experience significant delays and incur additional expense in transitioning customers to a different public cloud provider.

Any disruptions, outages, defects, and other performance and quality problems with Data Vault’s platform or with the public cloud and internet infrastructure on which it relies, or any material change in Data Vault’s contractual and other business relationships with Data Vault’s public cloud providers, could result in reduced use of Data Vault’s platform, increased expenses, including service credit obligations, and harm to Data Vault’s brand and reputation, any of which could have a material adverse effect on Data Vault’s business, financial condition, and results of operations.

Sales efforts to large customers involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller organizations.

Sales to large customers involve risks that may not be present or that are present to a lesser extent with sales to smaller organizations, such as longer sales cycles, more complex customer requirements, substantial upfront sales costs, and less predictability in completing some of Data Vault’s sales. For example, large customers may require considerable time to evaluate and test Data Vault’s platform prior to making a purchase decision and placing an order. A number of factors influence the length and variability of Data Vault’s sales cycle, including the need to educate potential customers about the uses and benefits of Data Vault’s platform, the discretionary nature of purchasing and budget cycles, and the competitive nature of evaluation and purchasing approval processes. As a result, the length of Data Vault’s sales cycle, from identification of the opportunity to deal closure, may vary significantly from customer to customer, with sales to large enterprises typically taking longer to complete. Moreover, large customers often begin to deploy Data Vault’s products on a limited basis but nevertheless demand implementation services and negotiate pricing discounts, which increase Data Vault’s upfront investment in the sales effort with no guarantee that sales to these customers will justify Data Vault’s substantial upfront investment. If we fail to effectively manage these risks associated with sales cycles and sales to large customers, Data Vault’s business, financial condition, and results of operations may be affected.

Complying with evolving privacy and other data related laws and requirements may be expensive and force Data Vault to make adverse changes to its business, and failure to comply with such laws and requirements could result in substantial harm to Data Vault’s business.

Laws and regulations governing data privacy and protection, the use of the Internet as a commercial medium, the use of data in artificial intelligence and machine learning, and data sovereignty requirements are rapidly evolving, extensive, complex, and include inconsistencies and uncertainties. Examples of recent and anticipated developments that have or could impact our business include the following:

These and other similar legal and regulatory developments could contribute to legal and economic uncertainty, affect how Data Vault designs, markets, sells, and operates its platform, how Data Vault’s customers process and share data, how Data Vault processes and uses data, and how Data Vault transfers personal data from one jurisdiction to another, which could negatively impact demand for Data Vault’s platform. Data Vault may incur substantial costs to comply with such laws and regulations, to meet the demands of Data Vault’s customers relating to their own compliance with applicable laws and regulations, and to establish and maintain internal policies, self-certifications, and third-party certifications supporting our compliance programs. Data Vault’s customers may delegate their GDPR compliance or other privacy law obligations to Data Vault via contract, and Data Vault may otherwise be required to expend resources to assist Data Vault’s customers with such compliance obligations. In addition, any actual or perceived non-compliance with applicable laws, regulations, policies, and certifications could result in proceedings, investigations, or claims against Data Vault’s by regulatory authorities, customers, or others, leading to reputational harm, significant fines, litigation costs, and damages. For example, if regulators assert that Data Vault has failed to comply with the GDPR, Data Vault may be subject to fines of up to EUR 20 million or 4% of Data Vault’s worldwide annual revenue, whichever is greater, as well as potential data processing restrictions for a violation of certain GDPR requirements. All of these impacts could have a material adverse effect on Data Vault’s business, financial condition, and results of operations.

The estimates of market opportunity and forecasts of market growth included in this Proxy Statement may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, Data Vault’s business could fail to grow at similar rates, if at all.

Market opportunity estimates and growth forecasts included in this prospectus, including those Data Vault has generated, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of Data Vault’s market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of addressable users or companies covered by Data Vault’s market opportunity estimates will purchase Data Vault’s platform or generate any particular level of revenue for Data Vault. Any expansion in Data Vault’s markets depends on a number of factors, including the cost, performance, and perceived value associated with Data Vault’s platform and the products of its competitors. Even if the markets in which Data Vault competes achieve the forecasted growth, Data Vault’s business could fail to grow at similar rates, if at all.

Data Vault does business with federal, state, and local governments and agencies, and heavily regulated U.S. and foreign organizations; as a result, Data Vault faces risks related to the procurement process, budget decisions driven by statutory and regulatory determinations, termination of contracts, and compliance with government contracting requirements.

Data Vault provides its platform to the U.S. government, state and local governments, and heavily regulated organizations directly and through Data Vault’s partners. Data Vault has made, and may continue to make, significant investments to support future sales opportunities in the federal, state, and local government sectors. This includes obtaining the following additional cloud security certifications: HHS CMS Acceptable Risk Safeguards (ARS) 3.1 and the U.S. Department of Defense Impact Level 2 in the Security Requirements Guide for cloud computing by the Defense Information Systems Agency. However, government certification requirements may change, or Data Vault may be unable to achieve or sustain one or more government certifications, including those mentioned above. As a result, Data Vault’s ability to sell into the government sector could be restricted until Data Vault obtains such certifications.

A substantial majority of Data Vault’s sales to date to government entities have been made indirectly through Data Vault’s distribution and reseller partners. Doing business with government entities presents a variety of risks. The procurement process for governments and their agencies is highly competitive, time-consuming, and may, in certain circumstances, be subject to political influence. Data Vault incurs significant up-front time and expense, which subjects Data Vault to additional compliance risks and costs, without any assurance that Data Vault (or a third-party distributor or reseller) will win a contract. Beyond this, demand for Data Vault’s platform may be adversely impacted by public sector budgetary cycles, and funding availability that in any given fiscal cycle may be reduced or delayed, including in connection with an extended federal government shutdown. Further, if Data Vault is or Data Vault’s partners are successful in receiving a bid award, that award could be challenged by one or more competitive bidders. Bid protests may result in an increase in expenses related to obtaining contract awards or an unfavorable modification or loss of an award. In the event a bid protest is unsuccessful, the resulting delay in the startup and funding of the work under these contracts may cause Data Vault’s actual results to differ materially and adversely from those anticipated. As a result of these lengthy and uncertain sales cycles, it is difficult for Data Vault to predict the timing of entering into customer agreements with government entities.

Data Vault’s intellectual property rights may not protect its business or provide Data Vault with a competitive advantage.

To be successful, Data Vault must protect its technology and brand in the United States and other jurisdictions through trademarks, trade secrets, patents, copyrights, service marks, invention assignments, contractual restrictions, and other intellectual property rights and confidentiality procedures. Despite Data Vault’s efforts to implement these protections, they may not protect Data Vault’s business or provide Data Vault with a competitive advantage for a variety of reasons, including:

Further, the laws of certain foreign countries, particularly certain developing countries, do not provide the same level of protection of corporate proprietary information and assets, such as intellectual property, trademarks, trade secrets, know-how, and records, as the laws of the United States. As a result, Data Vault may encounter significant problems in protecting and defending its intellectual property or proprietary rights abroad. Additionally, Data Vault may also be exposed to material risks of theft or unauthorized reverse engineering of Data Vault’s proprietary information and other intellectual property, including technical data, data sets, or other sensitive information. Data Vault’s efforts to enforce its intellectual property rights in such foreign countries may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop, which could have a material adverse effect on Data Vault’s business, financial condition, and results of operations. Moreover, if Data Vault is unable to prevent the disclosure of its trade secrets to third parties, or if Data Vault’s competitors independently develop any of its trade secrets, Data Vault may not be able to establish or maintain a competitive advantage in its market, which could seriously harm our business.

Data Vault may become subject to intellectual property disputes, which are costly and may subject Date Vault to significant liability and increased costs of doing business.

Data Vault competes in markets where there are a large number of patents, copyrights, trademarks, trade secrets, and other intellectual and proprietary rights, as well as disputes regarding infringement of these rights. In addition, many of the holders of patents, copyrights, trademarks, trade secrets, and other intellectual and proprietary rights have extensive intellectual property portfolios and greater resources than Data Vault does to enforce their rights. As compared to Data Vault’s large competitors, its patent portfolio is relatively undeveloped and may not provide a material deterrent to such assertions or provide us with a strong basis to counterclaim or negotiate settlements.

Risks Related to Asset Purchase

We will be subject to certain uncertainties while the Asset Purchase is pending, which could adversely affect our business.

Uncertainty about the effect of the Asset Purchase on employees and those that do business with us or invest in our securities may have an adverse effect on the Company or the trading price of our Common Stock. These uncertainties may impair our ability to attract, retain and motivate key personnel until the Asset Purchase is completed and for a period of time thereafter, and could cause those that transact with us to seek to change their existing business relationships with us. During the pendency of the Asset Purchase, management and other personnel will be required to dedicate time and attention to execution of the Asset Purchase, which may partially divert their attention from the Company’s business. The Company will also incur significant transaction expenses regardless of whether the Asset Purchase is consummated or beneficial, and such expenses may be more than anticipated, particularly if the Asset Purchase is not completed on the expected timeline.

We may be subject to lawsuits relating to the Asset Purchase, which could adversely affect our business, financial condition and operating results.

Lawsuits may be filed challenging the Asset Purchase, which could prevent the Asset Purchase from being completed, or could result in a material delay in, or the abandonment of, the Asset Purchase. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Asset Purchase, then that injunction may delay or prevent the Asset Purchase from being completed, which may adversely affect our business, financial position and results of operations.

The termination of the Asset Purchase Agreement could negatively impact our business.

The Asset Purchase Agreement is subject to a number of conditions that must be satisfied, including the approval by the Company’s shareholders of Proposal No. 14, or waived, in each case prior to the completion of the Asset Purchase. These conditions to the completion of the Asset Purchase Agreement, some of which are beyond the control of the Company, may not be satisfied or waived in a timely manner or at all, and, accordingly, the Asset Purchase Agreement may be delayed or may not be completed. The Asset Purchase Agreement may also be terminated under certain circumstances. If the Asset Purchase is not completed for any reason, the Company’s ongoing businesses and financial results may be adversely affected.

The Asset Purchase may be completed even though material adverse changes subsequent to the announcement of the Asset Purchase, such as industry-wide changes or other events, may occur.

In general, the parties to the Asset Purchase can refuse to complete the Asset Purchase if there is a material adverse change affecting the other party. However, some types of changes do not permit the Company to refuse to complete the Asset Purchase, even if such changes would have a material adverse effect on any of the parties involved in the Asset Purchase. For example, if there are changes in economic conditions, financial, credit or securities markets in general or the industries and markets in which the acquired assets are used, the Company would not have the right to refuse to complete the Asset Purchase. If adverse changes occur that affect the Transferred Assets but the parties are still required to complete the Asset Purchase, the Company’s share price, business and financial results after the completion of the Asset Purchase may suffer.

Subsequent to the consummation of the Asset Purchase, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and share price, which could cause you to lose some or all of your investment.

Although we have conducted due diligence on Data Vault, we cannot assure you that this diligence revealed all material issues that may be present in Data Vault’s assets, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of our and Data Vault’s control will not arise. As a result, we may be forced to later write down or write off Transferred Assets or incur impairment or other charges that could result in losses after closing of the Asset Purchase. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about the Company or its securities. In addition, charges of this nature may cause the Company to be unable to obtain future financing on favorable terms or at all.

The unaudited pro forma financial information included in this Proxy Statement may not be indicative of what our actual financial position or operational results would have been.

The unaudited pro forma financial information included in this Proxy Statement is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Asset Purchase been completed on the dates indicated. See the section entitled “Unaudited Pro Forma Condensed Consolidated Financial Information” for more information.

We will have limited protection in the event that any of the representations and warranties made by Data Vault in the Asset Purchase Agreement ultimately proves to be inaccurate or incorrect.

The Company will have limited protection if any representation or warranty made by Data Vault in the Asset Purchase Agreement proves to be inaccurate or incorrect and such representations and warranties will not survive the closing. Accordingly, to the extent such representations or warranties are incorrect, the Company would have limited or no indemnification claims with respect thereto, may not recover any damages it may have suffered and may not have sufficient cash on hand or other resources to seek to pursue an alternative strategic transaction or avoid the dissolution and liquidation of the Company in the event that the Asset Purchase does not close.

We may waive one or more of the conditions to the Asset Purchase.

We may agree to waive, in whole or in part, some of the conditions to our obligations to complete the Asset Purchase, to the extent permitted by our Certificate of Incorporation and applicable laws. For example, it is a condition of our obligation to close the Asset Purchase that Data Vault’s representations and warranties are true and correct in all respects as of the closing date. However, if the Board determines that it is in the stockholders’ best interest to waive any such breach, then the Board may elect to waive that condition and close the Asset Purchase.

Our ability to successfully operate and grow business related to the Transferred Assets will be largely dependent upon the efforts of Nathaniel Bradley. The loss of any of such key personnel could negatively impact the business and operations of the Company and its ability to grow the business related to the Transferred Assets.

Our ability to successfully operate and grow business related to the Transferred Assets following the Asset Purchase will be dependent upon the efforts of Nathaniel Bradley, the co-founder and Chief Executive Officer of Data Vault, who will become our Chief Executive Officer after the consummation of the Asset Purchase. Although we expect Nathaniel Bradley to remain with the Company following the Asset Purchase, it is possible that we will lose some key personnel, and the loss of their services could have a material, adverse effect on the business and operations the Company or the ability to grow the Company’s business.

A market for our Common Stock may not continue, which would adversely affect the liquidity and price of our Common Stock.

Following the Asset Purchase the market price of our Common Stock may fluctuate significantly due to the market’s reaction to the Asset Purchase and general market and economic conditions. An active trading market for our Common Stock following the Asset Purchase may never develop or, if developed, it may not be sustained. In addition, the market price of our Common Stock after the Asset Purchase can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. Additionally, if our Common Stock becomes delisted from Nasdaq for any reason and is relegated to the OTC Bulletin Board (an inter-dealer automated quotation system for equity securities that is not a national securities exchange), the liquidity and price of our Common Stock will be more limited than if we were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your shares of Common Stock unless a market for our Common Stock can be established or sustained.

The Company will incur significant transaction-related costs in connection with the Asset Purchase.

The Company expect to incur significant nonrecurring costs associated with the Asset Purchase before, at, and after closing the Asset Purchase. The Company will also incur transaction fees and costs related to formulating and implementing post-Asset Purchase plans.

If the Asset Purchase’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of our securities may decline.

If the benefits of the Asset Purchase do not meet the expectations of investors or securities analysts, the market price of our Common Stock prior to the completion of the Asset Purchase may decline. The market values of our securities at the time of the Asset Purchase may vary significantly from their prices on the date the Asset Purchase Agreement was executed, the date of this Proxy Statement, or the date on which our stockholders vote on the Proposal No. 14.

In addition, following the Asset Purchase, fluctuations in the price of our Common Stock could contribute to the loss of all or part of your investment. If an active market for our Common Stock develops and continues, the trading price of our Common Stock following the Asset Purchase could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our Common Stock and our Common Stock may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our Common Stock may not recover and may experience a further decline.

ASSET PURCHASE

Overview

On September 4, 2024, we entered into the Original Asset Purchase Agreement, amended by the APA Amended, with Data Vault, pursuant to which, among other things and subject to the terms and conditions contained therein, pursuant to which the Company has agreed to purchase, assume and accept from Data Vault all of the rights, title and interests in, to and under the Transferred Assets, including Data Vault’s information technology assets, certain patents, trademarks, and software source code. In exchange, the Company has agreed to acquire the transferred assets for an aggregate purchase price of $210,000,000, and shall consist of (i) $10,000,000 payable in the form of a promissory note issued by the Company to Data Vault, (ii) $200,000,000 in validly issued, fully paid and nonassessable shares of restricted Common Stock, which number of shares shall be 40,000,000, and is calculated based on a per share price of $5.00, and (iii) the assumption of the transferred liabilities, which clauses (i) through (iii) above, collectively, shall comprise the total consideration to be paid for the transferred assets. See below for more detailed discussion of the terms of the Asset Purchase Agreement.

Reasons for the Asset Purchase

In evaluating the Asset Purchase and recommending that the Company’s stockholders vote in favor of approval of Proposal No. 14, the Board, in consultation with the Company’s senior management, outside legal counsel and financial advisors, considered numerous positive factors relating to the Asset Purchase Agreement, the Asset Purchase and the other transactions contemplated thereby including the following material factors:

In the course of reaching the determinations and decisions and making the recommendation described above, the Board, in consultation with the Company’s senior management, outside legal counsel and financial advisors, considered the risks and potentially negative factors relating to the Asset Purchase Agreement, the Asset Purchase and the other transactions contemplated thereby, including the following material factors:

The foregoing discussion of factors considered by the Board is not intended to be exhaustive but is a summary only of the material factors considered by the Board. In light of the variety of factors considered in connection with its evaluation of the Asset Purchase, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determinations and recommendations. Moreover, each member of the Board applied his or her own personal business judgment to the process and may have given different weight to different factors. The Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Board based its recommendation on the totality of the information presented.

Background of the Asset Purchase

At the beginning of 2024, management recognized that with deteriorating capital markets, the Company’s ability to raise funds to continue its product development path had become and would continue to be increasingly difficult. To address these external market conditions, the Company’s management and Board commenced an assessment of our business, financial condition, results of operations and prospects. We began to identify opportunities to expand our business, and reviewed other opportunities including inorganic options. In April 2024, following a successful Nasdaq panel review of listing of our Common Stock, management began contemplating a business combination to strengthen the Company’s business opportunities and technology portfolio. On April 29, 2024, during the Micro Cap Investor conference in Las Vegas, management met the chairman of Data Vault, Nathaniel Bradley, who was discussing their technology innovation, their market opportunity once commercialized, and an expected strategic investor once they went public. The Company’s management proposed having a discussion regarding using the Company’s public listing as a vehicle for taking Data Vault public and closing on the strategic investment which would be quicker and less risky than pursuing an initial public offering. Previously, the Company’s management had met Data Vault’s management and tried to help facilitate a business partnership with another company, CompuSystems Inc. during the summer of 2023.

The following chronology summarizes key meetings and events that led to the signing of the Asset Purchase Agreement. This chronology does not purport to catalogue every conversation of, by, with or among members of the Board, the Company’s management, the Company’s financial advisors, legal advisors or other representatives or any other person.

On May 9, 2024, the Company and Data Vault participated in an initial teleconference to discuss the potential asset purchase, and interest in the opportunity.

On May 14, 2024, a mutual confidentiality and nondisclosure agreement was signed by and between the Company and Data Vault.

On May 16, 2024, a mutual confidentiality and nondisclosure agreement was signed by and among the Company, and potential investors.

On May 17, 2024, the Company organized a meeting with the potential investors, and Data Vault to discuss the business opportunities.

On May 22, 2024, the Company and Data Vault met at Data Vault’s office in New York to discuss Data Vault’s technology and IP portfolio strategy, and potential business opportunities between the parties.

On May 23, 2024, Sullivan & Worcester LLP, counsel to the Company (“Sullivan”) sent the initial draft of the non-binding term sheet (the “Term Sheet”) to Data Vault and Mitchell Silberberg & Knupp LLP, counsel to Data Vault (“MSK”), together with an initial legal due diligence request list. Between May 24, 2024 and June 2, 2024, Sullivan and MSK exchanged drafts and negotiated the terms of the Term Sheet. Regular meetings by phone call and video conference took place during this period, some of which included the parties’ respective legal counsels.

On May 24, 2024, Sullivan was granted access to a virtual data room.

On May 31, 2024, the parties and their respective legal counsels organized a video conference to discuss about the Asset Purchase Agreement, timeline of potential financing, the Company’s management post Asset Purchase, the Purchase Price, and the financing terms for a potential $50,000,000 PIPE financing (the “PIPE”).

On June 2, 2024, the Term Sheet was signed by and between the Company and Data Vault.

On June 7, 2024, Sullivan sent the initial draft Asset Purchase Agreement to MSK. Between June 7, 2024 and September 4, 2024, Sullivan and MSK exchanged drafts and negotiated the terms of the definitive transaction agreements, including the Asset Purchase Agreement. Regular meetings by phone call and video conference took place during this period, some of which included the parties’ respective legal counsel and financial advisors. The terms negotiated between the parties, among others, included the representations and warranties of both the Company and Data Vault to be contained in the Asset Purchase Agreement, including with respect to the financial statements to be delivered at the closing of the Asset Purchase and intellectual property, the interim covenants to be contained in the Asset Purchase Agreement, including regarding the solicitation of alternative transactions, and the Company’s ability to access capital (including a possible PIPE).

On June 10, 2024, the Company retained Greenberg Traurig, LLP, IP counsel to the Company (“Greenberg”) to review Data Vault’s intellectual property assets, who conducted due diligence on the Data Vaults intellectual property between June 10, 2024 and September 4, 2024.

On June 17, 2024, the Company organized a meeting by phone call with Data Vault to discuss about the business model.

On June 17, 2024, MSK sent a revised draft of the Asset Purchase Agreement to Sullivan, which included comments regarding the representations and warranties of Data Vault, and indemnification obligations of the parties. The parties initially agreed to make the indemnification provisions mutual.

On June 20, 2024, Sullivan and MSK conducted a meeting by phone call to discuss the Asset Purchase Agreement and Asset Purchase. July 5, 2024, the Company organized a meeting by phone call with Data Vault and the parties’ respective counsels to discuss the Asset Purchase Agreement.

On July 9, 2024, MSK sent a revised draft of the Asset Purchase Agreement to Sullivan, which included comments regarding the Royalty Agreement, key employees to be transferred as part of the Asset Purchase, and representations and warranties of Data Vault, and a closing condition requiring a financing of at least $50,000,000. The parties initially agreed to lower the financing closing condition to $25,000,000. Between July 9, 2024 and July 25, 2024, Sullivan and MSK exchanged drafts and negotiated further the terms of the Asset Purchase Agreement.

July 23, 2024, the Company organized a meeting by phone call with Data Vault, and the parties’ respective counsels, to discuss the Asset Purchase Agreement, including the Purchase Price and Data Vault’s intellectual property assets.

On July 30, 2024, Data Vault presented a new business plan to the Board, and the Company organized one on one meetings between the Chief Executive Officer of Data Vault and each member of the Board.

On August 5, 2024, Sullivan introduced the Company to Lake Street, in order for Lake Street to act as a financial advisor to the Company.

On August 11, 2024, a mutual confidentiality and nondisclosure agreement was signed by and between the Company and Lake Street. On August 11, 2024, Lake Street received the Asset Purchase Agreement and other ancillary documents regarding the Asset Purchase.

On August 13, 2024, the Company’s and Data Vault’s managements met in the Company’s office in Beaverton, OR.

On August 26, 2024, the Company hired Alliance Advisors IR to assist with obtaining the required stockholders’ approval and the Proxy Statement.

On August 28, 2024, the Company organized a meeting by phone call with the potential investors, and Data Vault. The investor confirmed that they were not yet in a position to complete the PIPE to fund the Asset Purchase.

On August 29, 2024, the Company organized a meeting by phone call with the Data Vault, and the parties’ respective legal counsel, to discuss certain changes to the deal terms.

On September 3, 2024, Sullivan sent a revised draft of the Asset Purchase Agreement to MSK, which included comments regarding the Purchase Price, and the closing condition requiring a financing of at least $40,000,000. The parties agreed to remove the closing condition requiring a financing of at least $40,000,000, and the parties agreed that as part of the Purchase Price, the Company will issue a promissory note of $10,000,000 to Data Vault, and $200,000,000 in validly issued restricted shares of Common Stock, valued at $5.00 per share. In addition, the parties agreed that for so long as the promissory note remains outstanding, in the event the Company receives proceeds from one or more subsequent financings, then Data Vault may demand that ten percent (10%) of such proceeds be used to repay the outstanding balance of the promissory note, and if the aggregate gross proceeds of the subsequent financings reach or exceed $50,000,000, then the Company shall repay the promissory note in full.

On September 3, the Board approved the Asset Purchase Agreement.

On September 4, 2024, the parties executed the Asset Purchase Agreement and the applicable ancillary documents, and the Company issued a press release announcing the transaction prior to the commencement of trading on Nasdaq on June 4, 2024. The Company and Data Vault management co-hosted a special investor conference call after the announcement. On September 4, 2024 the Company engaged Lake Street to render a fairness opinion to the Board.

The parties have continued and expect to continue regular discussions and weekly calls regarding the timing to consummate the Business Combination and necessary preparation in connection therewith.

Closing and Effective Time of the Asset Purchase

We are working to complete the Asset Purchase as quickly as possible, and we expect to complete the Asset Purchase promptly after the Annual Meeting if the Proposal No. 14 is approved. However, the Company cannot assure you when or if the Asset Purchase will occur. The Asset Purchase is subject to other conditions, and it is possible that factors outside the control of both the Company and Data Vault could result in the Asset Purchase being completed at a later time, or not at all.

Dissenters’ and Appraisal Rights

The Company stockholders do not have dissenters’ or appraisal rights under the Delaware General Corporation Law (the “DGCL”) in connection with the Asset Purchase and will not be afforded such rights.

Accounting Treatment

Both the Company and Data Vault prepare their financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company will account for the transaction as an asset purchase under the guidance provided in ASC 805-10-55-5 through ASC 805-10-55-9. The Company concluded that the consideration transferred under the Asset Purchase Agreement would be allocated primarily to a single group of similar identifiable assets comprised of the Acquired Assets. See “Unaudited Pro Forma Condensed Consolidated Financial Information.”

Interests of the Company’s Directors and Officers in the Asset Purchase

The beneficial ownership of the Company’s Common Stock is as set forth in the section titled “Security Ownership of Certain Beneficial Owners and Management.” The Company expects that its directors and executive officers will vote their shares in favor of each of the proposals to be presented at the Annual Meeting.

Regulatory Approvals Required for the Asset Purchase

Under Nasdaq Listing Rule 5635(a), a company listed on Nasdaq is required to obtain stockholder approval prior to the issuance of common stock, among other things, in connection with the acquisition of another company’s assets, if the number of shares of common stock to be issued is in excess of 20% of the number of shares of common stock then outstanding. Issuance of the Closing Stock Consideration will result in the issuance of more than 20% of our issued and outstanding shares of Common Stock immediately prior to closing in connection with the Asset Purchase.

Under Nasdaq Listing Rule 5635(b), a listed company is required to obtain stockholder approval prior to the issuance of common stock that will result in a “change of control” of the company (which may be deemed to occur if, as a result of the issuance, an investor or affiliated investor group acquires, or has the right to acquire, at least 20% of the outstanding shares of common stock (or securities convertible into or exercisable for common stock) or voting power of an issuer and such ownership or voting power would be the largest ownership position of the issuer). You should note that a “change of control” as described under Nasdaq Listing Rule 5635(b) applies only with respect to the application of such rule.

Accordingly, in order to ensure compliance with Nasdaq Listing Rule 5635(a) and Rule 5635(b), we must obtain the approval of our stockholders for the issuance of the Closing Stock Consideration in connection with the Asset Purchase.

Except as set forth above, the Asset Purchase and the transactions contemplated by the Asset Purchase Agreement are not subject to any additional federal or state regulatory requirement or approval, except for the Nasdaq’s approval of listing of the Closing Stock Consideration.

Asset Purchase Agreement

General

On September 4, 2024, we entered into the Original Asset Purchase Agreement, amended by the APA Amendment, with Data Vault, pursuant to which, among other things and subject to the terms and conditions contained therein, we will acquire the Transferred Assets in exchange for the Purchase Price, including the issuance to the Closing Stock Consideration.

Representations and Warranties

The Asset Purchase contains customary representations and warranties made by the Company. Specifically, the representations and warranties of the Company in the Asset Purchase Agreement (many of which are qualified by concepts of knowledge, materiality and/or dollar thresholds and are further modified and limited by confidential disclosure schedules delivered by the Company, as may or may not be specifically indicated in the text of the Asset Purchase Agreement) relate to the following subject matters, among other things:

The Asset Purchase Agreement also contains customary representations and warranties made by Data Vault. Specifically, the representations and warranties of Data Vault in the Asset Purchase Agreement (many of which are qualified by concepts of knowledge, materiality and/or dollar thresholds and are further modified and limited by confidential disclosure schedules delivered by Data Vault, as may or may not be specifically indicated in the text of the Asset Purchase Agreement) relate to the following subject matters, among other things:

The representations and warranties contained in the Asset Purchase Agreement (as well as the covenants described herein and set forth in the Asset Purchase Agreement) were made solely for purposes of the Asset Purchase Agreement and solely for the benefit of the parties to the Asset Purchase Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by references to the Company’s filings with the SEC and confidential disclosures, made for the purposes of allocating contractual risk among the parties to the agreements instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to stockholders. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Asset Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Company will provide additional disclosure in its public reports to the extent that it is aware of the existence of any material facts that are required to be disclosed under federal securities laws that might otherwise contradict the terms and information contained in the Asset Purchase Agreement and will update such disclosures as required by federal securities laws.

Covenants and Agreements

Data Vault has agreed to carry on its business in the ordinary course and in substantially in the manner as currently conducted, and has further agreed to, among other things, use commercially reasonable efforts to:

Data Vault has further agreed to, among other things, without the prior written approval of the Company, not take any of the following actions with respect to the Transferred Assets:

The Company has agreed to, among other things, establish a record date for a meeting of the its stockholders for the purpose of seeking a stockholder approval for the Asset Purchase, duly convene and give notice of the stockholders regarding the meeting as promptly as practicable and mail a proxy statement to the stockholders of the Company, and hold the stockholders meeting, and use commercially reasonable efforts to solicit the stockholders approval.

The parties to the Asset Purchase Agreement have also, among other things, agreed on the following covenants:

Post-Closing Covenants

The parties each agree that they will take any further action (including the execution and delivery of such further instruments and documents) as any other party reasonably may request in the event necessary to carry out the purposes of the Asset Purchase Agreement, including (i) change the name of the Company to Data Vault Holdings Inc., (ii) change the principal trading market to New York Stock Exchange, and (iii) change the Company’s ticker symbol to “DATA.”

Closing

The Asset Purchase Agreement requires the closing of the Asset Purchase to take place on the second business day following the satisfaction or waiver by the party entitled to the benefit thereof of the conditions set forth in Article VII of the Asset Purchase Agreement (other than conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions).

Conditions to Closing of the Asset Purchase

The obligations of the parties to complete the Asset Purchase are subject to the fulfillment or written waiver of certain closing conditions, including without limitation:

On July 26, 2022, Wisa and AQT entered into the AQT Letter Agreement, pursuant to which, upon consummation of the Asset Purchase, AQT shall be entitled to a success fee equal to the greater of (i) U.S.$1,500,000 and (ii) (a) three percent (3.0%) of the aggregate value of the Asset Purchase in the event such amount is less than U.S.$100,000,000, or (b) four percent (4.0%) of the aggregate value of the Asset Purchase in the event such amount is greater than or equal to U.S.$100,000,000.

Further, the obligations of Data Vault to close are subject to the satisfaction on or before the closing date of the following conditions:

Further, the obligations of the Company to close are subject to the satisfaction on or before the closing date of the following conditions:

Termination

The Asset Purchase Agreement may be terminated prior to the closing by:

Expenses

Except as otherwise expressly provided herein, whether or not the closing occurs, Data Vault and the Company shall each pay their respective expenses incurred in connection with the negotiation and execution of the Asset Purchase Agreement and the other transaction documents and the consummation of the transactions contemplated hereby and thereby.

Governing Law

All matters arising out of or relating to the Asset Purchase Agreement (including its interpretation, construction, performance and enforcement) shall be governed by and construed in accordance with the law of the State of Delaware without giving effect to any choice or conflict of law provision or rule that would cause the application of laws of any jurisdictions other than those of the State of Delaware.

Summary of Lake Street’s Financial Analysis

Pursuant to an engagement letter dated September 4, 2024, the Company retained Lake Street to, at the Company’s request, render an opinion to the Board as to the fairness, from a financial point of view, of the Purchase Price to be paid by the Company pursuant to the Asset Purchase Agreement. On November 24, 2024, Lake Street rendered its oral opinion, subsequently confirmed in writing, to the Board that, as of such date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations set forth in the opinion, the Purchase Price to be paid by the Company in connection with the Asset Purchase Agreement was fair, from a financial point of view, to the Company.

The full text of Lake Street’s written opinion, dated November 24, 2024, is attached to this Proxy Statement as Appendix D and is incorporated by reference herein. Stockholders of the Company are urged to read the entire opinion carefully and in its entirety to learn about the assumptions made, procedures followed, matters considered and limits on the scope of the review undertaken by Lake Street in rendering its opinion. The analysis performed by Lake Street should be viewed in its entirety; none of the methods of analysis should be viewed in isolation. The opinion addresses only the fairness of the Purchase Price, from a financial point of view, to be paid by the Company, as of the date of the opinion, and does not address the Company’s underlying business decision to proceed with or effect the Asset Purchase or the likelihood of consummation of the Asset Purchase. Lake Street’s opinion was directed to the Board in connection with its consideration of the Asset Purchase Agreement and was not intended to be, and does not constitute, a recommendation to the Board or to any stockholder of the Company as to how to vote with respect to the Asset Purchase or to take any other action in connection with the Asset Purchase or otherwise. Lake Street’s opinion does not in any manner address the relative merits of the Asset Purchase in comparison to any alternatives to the Asset Purchase, the Company’s underlying decision to proceed with the Asset Purchase, or any other aspect of the Asset Purchase, or alternatives to the Asset Purhcase available to the Company.

In connection with our review of the Asset Purchase, and in arriving at our opinion, Lake Street among other things:

At the direction of the Board, Lake Street’s analysis did not include an evaluation of the transferred liabilities to be assumed by the Company, and therefore Lake Street disclaimed any opinion with respect thereto.

In preparing its opinion, with the consent of the Board, Lake Street assumed and relied, without independent verification, upon the accuracy and completeness of all information that was publicly available or was furnished, or otherwise made available, to it or discussed with or reviewed by or for them it the Company and/or Data Vault. Lake Street further assumed that management of neither the Company nor Data Vault was aware of any information or facts that would make any information provided to it incomplete or misleading. Without limiting the generality of the foregoing, for the purpose of its opinion, Lake Street assumed that with respect to financial forecasts, estimates and other forward-looking information discussed with and reviewed by it, that such information was reasonably prepared based on assumptions reflecting the best currently available estimates and judgments of the management of the Company and Data Vault as to the expected future results of operations and financial condition of the Transferred Assets and did not evaluate or otherwise test such financial forecasts, estimates and other forward-looking information or the underlying assumptions. Lake Street expressed no opinion as to any such financial forecasts, estimates or forward-looking information or the assumptions on which they were based. Lake Street also expressed no opinion as to whether the Transferred Assets and transferred liabilities were sufficient to conduct the Transferred Assets.

In connection with its opinion, Lake Street assumed and relied upon, without independent verification, the accuracy and completeness of all the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by it. Lake Street’s opinion did not address any legal, regulatory, tax or accounting issues.

Lake Street relied upon and assumed, without independent verification, that (i) the representations and warranties set forth in the Agreement and all related documents and instruments that are referred to therein were true and correct, (ii) all of the covenants and agreements required to be performed pursuant to the Asset Purchase Agreement would be will fully and timely performed, (iii) the Asset Purchase would be consummated pursuant to the terms of the Asset Purchase Agreement without amendment of any term or condition thereof the effect of which would have been in any way meaningful to Lake Street’s analysis, and (iv) all conditions to the consummation of the Asset Purchase would be satisfied without waiver of any conditions or obligations thereunder the effect of which would have been in any way meaningful to its analysis. Additionally, Lake Street assumed that all the necessary regulatory approvals and third-party consents required for the consummation of the Asset Purchase would be obtained in a manner that would not adversely affect the Company or the contemplated benefits of the Asset Purchase to the Company.

In arriving at its opinion, Lake Street did not perform any appraisals or valuations of the Transferred Assets or the transferred liabilities (fixed, contingent, or other) of Data Vault, and was not furnished or provided with any such appraisals or valuations, nor did it evaluate the solvency of Data Vault under any state or federal law relating to bankruptcy, insolvency, or similar matters. Without limiting the generality of the foregoing, Lake Street did not undertake any independent analysis of any pending or threatened litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which Data Vault was a party or may become subject, and at the direction of the Company and with its consent, Lake Street’s opinion made no assumption concerning, and therefore did not consider, the possible assertion of claims, outcomes or damages arising out of any such matters.

Lake Street’s opinion was necessarily based upon the information available to it and facts and circumstances as they existed and were subject to evaluation on the date of the opinion; events occurring after the date of the opinion could materially affect the assumptions used in preparing Lake Street’s opinion. Lake Street did not express any opinion as to the price or range of prices at which shares of Common Stock may trade at any time after the date of the opinion including after the consummation of the Asset Purchase. Lake Street did not undertake to reaffirm or revise its opinion or otherwise comment upon any events occurring after the date of the opinion and does not have any obligation to update, revise or reaffirm the opinion.

Lake Street’s opinion was furnished pursuant to an engagement letter dated September 4, 2024. Lake Street’s opinion was directed to the Board for its use in connection with its consideration of the Asset Purchase and did not constitute a recommendation to the Board or to any stockholder of the Company as to how to vote with respect to the Asset Purhcase or to take any other action in connection with the Asset Purchase or otherwise. Lake Street’s opinion was approved for issuance by the Lake Street Capital Markets, LLC Fairness Opinion Committee.

Consistent with applicable legal and regulatory requirements, Lake Street has adopted policies and procedures to establish and maintain the independence of its research departments and personnel. As a result, Lake Street’s research analysts may hold views, make statements or investment recommendations and/or publish research reports with respect to the Company and the Asset Purchase that differ from the views of its investment banking personnel.

Lake Street’s opinion addressed only the fairness, from a financial point of view, to the Company of the Purchase Price to be paid by the Company in connection with the Asset Purchase Agreement and Lake Street expressed no opinions as to the fairness of any consideration paid in connection with the Asset Purchase Agreement to the holders of any class of securities, creditors or other constituencies of the Company. Furthermore, Lake Street expressed no opinion as to any other aspect or implication (financial or otherwise) of the Asset Purchase, or any other agreement, arrangement or understanding entered into in connection with the Asset Purchase or otherwise, including, without limitation, the fairness of the amount or nature of, or any other aspect relating to, any compensation or consideration to be received by or otherwise payable to any officers, directors or employees of any party to the Asset Purchase, or class of such persons, relative to the Purchase Price or otherwise. Lake Street’s opinion did not constitute a recommendation that the Company should complete the Asset Purchase. Lake Street was not requested to opine as to, and its opinion did not in any manner address the relative merits of the Asset Purchase in comparison to any alternatives to the Asset Purchase, the Company’s underlying decision to proceed with the Asset Purchase, or any other aspect of the Asset Purchase, or alternatives to the Asset Purchase available to the Company.

Summary of Material Financial Analysis

The following is a summary of the material financial analyses performed by Lake Street and reviewed by the Board in connection with Lake Street’s opinion relating to the Asset Purchase and does not purport to be a complete description of the financial analyses performed by Lake Street. The rendering of a fairness opinion is a complex analytic process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, this summary does not purport to be a complete description of the analyses performed by Lake Street or of its presentation to the Board on November 24, 2024. The order of analyses described below does not represent the relative importance or weight given to those analyses by Lake Street. Some of the summaries of the financial analyses include information presented in tabular format. In order to fully understand Lake Street’s financial analyses, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Lake Street’s financial analyses.

Data Vault Intellectual Property Valuation

Lake Street used the relief from royalty method (“RFRM”) in valuing the Transferred Assets. Under the RFRM, a royalty rate is applied to the projected revenue, or “royalty base,” over the expected remaining life of the intellectual property to estimate the annual royalty savings. The RFRM calculates the value of an intellectual property portfolio as the present value of the potential royalty payments, adjusted for taxes and other expenses, that are avoided by owning the intellectual property. The RFRM method consists of (i) determining the total addressable market (“TAM”) related to the technology covered by the patent portfolio; (ii) calculating a royalty base by adjusting the TAM to account for the applicability of each market to the intellectual property portfolio and to reflect the estimated licensing penetration rate achievable through a potential licensing program; (iii) calculating the potential royalty income by applying the royalty rate to the projected royalty base and adjusting for related expenses; and (iv) calculating the net present value (“NPV”) of the patent portfolio by discounting the royalty income by a discount rate that takes into account the risks associated with the stage of the patent portfolio technology.

Lake Street identified three markets relevant to Data Vault's intellectual property portfolio when calculating the TAM: (i) Web 3.0 markets, non-fungible token (“NFT’) marketplaces, and data monetization markets; (ii) Individual NFT creators; and (iii) enterprise NFT creators. Because projected markets involve a significant degree of speculation, insights were drawn from established sources whenever possible.

Web 3.0 markets, NFT marketplaces, and Data Monetization Markets:

To project the TAM size for Web 3.0, data monetization, and NFT marketplaces, Lake Street relied on several research reports, including The Business Research Company: Web 3.0 Global Market Report 2024, Grand View Research: Web 3.0 Market Size (Global), Statista Market Insights: NFT - Worldwide, Grand View Research: Data Monetization Market Size (Global), and Fortune Business Insights: Global Data Monetization Market Size. To ensure consistency among the market reports, Lake Street applied each report’s compound annual growth rate (CAGR) to the base forecast year for each respective report and projected the markets through 2028. Growth rates were then tapered linearly over the following five years, reaching a long-term growth rate of 3%.

The projection period, spanning 2024 to 2038, was determined through discussions with the Company and Data Vault management teams, along with Lake Street’s understanding of market dynamics and the economic lifespan of the patents. Given the interconnected nature and inherent overlap of these markets, Lake Street calculated the weighted average of annual projections for each market, weighted equally, to determine the TAM for Web 3.0, NFT marketplaces, and data monetization markets.

In calculating the royalty base, Lake Street viewed the entire market applicable to the Transferred Assets and assumed a 5% penetration rate achievable over the next five years. Penetration estimates were based on a traditional S-curve analysis that simulates the penetration rate of a typical licensing program. The results of this analysis are summarized in the table below.

Individual NFT creators:

Lake Street viewed the total number of individual NFT creators as the total addressable market size. This estimate was calculated by multiplying Coinbound’s projected number of unique NFT sellers in 2024 by the percentage of primary NFT sales over the trailing twelve months (TTM) relative to total NFT sales, based on market data from Nonfungible.

The projection period of 2024 to 2038 was determined through discussions with the Company and Data Vault management teams, along with Lake Street’s understanding of market dynamics and the economic lifespan of the patents. The estimated number of NFT sellers over the period is expected to grow at the growth rate of the weighted average Web 3.0 markets, NFT marketplaces, and Data Monetization Markets. The percentage of primary sellers is estimated to remain constant over the life of the forecast.

In calculating the royalty base, Lake Street viewed all NFT creators as applicable to the Transferred Assets and assumed a 5% penetration rate achievable over the next five years (“Marketplace Subscribers”). Penetration estimates are based on a traditional S-curve analysis that simulates the penetration rate of a typical licensing program. Each Marketplace Subscriber is assumed to pay a subscription fee of $250 a month to arrive at our royalty base. The subscription fee is expected to grow annually at 3% per year. The results of this analysis are summarized in the table below.

Enterprise NFT Creators:

Lake Street considered the total number of companies in the United States as the addressable market size for enterprise NFT creators. Projections for the number of U.S. companies through 2026 were sourced from Statista Market Insights and held constant for the remainder of the projection period.

The projection period of 2024 to 2038 was determined through discussions with the Company and Data Vault management teams, along with Lake Street’s understanding of market dynamics and the economic lifespan of the patents.

In calculating the royalty base, Lake Street viewed only enterprises with 100 or more employees as applicable to the Transferred Assets and assumed a 5% penetration rate achievable over the next five years (“Enterprise Customers”). Penetration estimates are based on a traditional S-curve analysis that simulates the penetration rate of a typical licensing program. Each Enterprise Customer is then assumed to pay a license fee of $25,750 a year to arrive at our royalty base. The license fee is expected to grow annually at 3% per year. The results of this analysis are summarized in the table below.

Data Vault Intellectual Property Net Present Value

Lake Street summed the annual royalty bases for the markets listed above to calculate a total royalty base subject to Data Vault’s intellectual property portfolio. Lake Street then applied an obsolescence rate based on a 20.0-year life utilizing arithmetic sequence to calculate adjusted revenue subject to Data Vault's intellectual property portfolio. The rate of obsolescence was determined through discussions with the Company and Data Vault management teams, along with Lake Street’s understanding of market dynamics and the economic lifespan of the patents.

Lake Street conducted a search of the RoyaltyStat Database to identify comparable market transactions, focusing on license agreements related to software, marketing, NFTs, cryptocurrency, and blockchain. The selected agreements, listed in Table 1, were chosen for their similarities to the Transferred Assets in one or more respects, such as the nature of the business. While no licensing agreement included in this analysis is identical or directly comparable to either the Transferred Assets, the selected transactions were deemed relevant for the purpose of this analysis. From these transactions, Lake Street applied a selected royalty rate of 22.9%, which was derived from the average of the median royalty rates identified in Table 1.

Note: For each licensing agreement listed above, Lake Street reviewed publicly available company filings, RoyaltyStat, and press releases to identify the high, median, and low royalty rates for each respective transaction. From this analysis, Lake Street calculated the average of the median royalty rates for the selected precedent licensing agreements to be 22.9%.

Lake Street also accounted for expenses, including a 3% share of the Company’s revenue generated from or attributable to any patent rights included in the Transferred Assets, which is payable to the Data Vault per the Royalty Agreement entered into in connection with the Asset Purchase Agreement. Additionally, estimated taxes were considered to calculate net royalty income. The net royalty income was then discounted to its present value using a discount rate of 32.5%, derived as the median of the moderate risk and high-risk benchmarks in Table 2. Through a sensitivity analysis, Lake Street established a valuation range for the Data Vault assets between $77M and $145M.

The results of the NPV analysis are summarized below:

Adio Intellectual Property Valuation

Lake Street identified two markets relevant to Adio's intellectual property portfolio when calculating the TAM: (i) digital advertising, mobile advertising, and contextual advertising markets; and (ii) asset tracking markets. Because projected markets involve a significant degree of speculation, insights were drawn from established sources whenever possible.

Digital Advertising, Mobile Advertising, and Contextual Advertising Markets:

To project the total addressable market size for digital advertising, mobile advertising, and contextual advertising markets, Lake Street relied on several research reports, including Grand View Research: Digital Advertising Market Size (Global), Statista Market Insights: Ad spending of the digital advertising market in North America, Fortune Business Insights: Mobile Advertising Market Size (Global), and Grand View Research: Contextual Advertising Market Size (Global). Where applicable, the global market sizes were adjusted to the percentage of the market attributed to North America, with this rate held constant for each respective report throughout the projection period. To ensure consistency among the market reports, Lake Street applied each report’s CAGR to the base forecast year for each respective report and projected the markets through 2028. Growth rates were then tapered linearly over the following five years, reaching a long-term growth rate of 3%.

The projection period of 2024 to 2038 was determined through discussions with the Company and Data Vault management teams, along with Lake Street’s understanding of market dynamics and the economic lifespan of the patents. Given the interconnected nature and inherent overlap of these markets, Lake Street calculated the weighted average of annual projections for each market, weighted equally, to determine the TAM for digital advertising, mobile advertising, and contextual advertising markets.

In calculating the royalty base, Lake Street considered only the percentage of location-based advertising spend applicable to the Transferred Assets, which is 59% in North America per the Location Based Marketing Association, held constant through the projection period, and 5% penetration rate achievable over the next five years. Penetration estimates are based on a traditional S-curve analysis that simulates the penetration rate of a typical licensing program. The results of this analysis are summarized in the table below.