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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 30, 2025
TRIUNITY BUSINESS SERVICES LIMITED |
(Exact name of registrant as specified in its charter) |
Nevada | | 333-282541 | | 35-2851106 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
14114 N. Dallas Parkway, Suite 200, Dallas, Texas 75254
(Address of principal executive offices) (Zip Code)
(903) 944-7121
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | | Trading Symbol | | Name of each exchange on which registered |
N/A | | N/A | | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (§230.405 of this chapter) or Rule 12b-2 of the Exchange Act (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
EXPLANATORY NOTE
On December 30, 2025, Independence Power Holdings, Inc. (f/k/a TriUnity Business Services Limited) (the “Company,” “we,” “us” or “our”), through its newly formed, wholly owned subsidiary, TriUnity Merger Sub, Inc., a Texas corporation (“Merger Sub”), consummated the business combination described under Item 2.01 of this Current Report on Form 8-K (this “Report”) pursuant to which Independence Power, Inc., a Texas corporation (“Independence Power”) became our wholly owned subsidiary and the former sole stockholder of Independence Power, Independence Investors LLC, a Delaware limited liability company (“Independence Investors”), received shares of Class B Common Stock (as defined below) of the Company.
As a result of this transaction, Independence Power is treated as the accounting acquirer for financial reporting purposes, and the business conducted by Independence Power is now the primary business of the Company. Because this transaction constitutes, in substance, a “reverse merger,” this Report includes the information that would be required if Independence Power were filing a general form for registration of securities on Form 10 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, this Report contains detailed information about the business, management, financial condition and results of operations of Independence Power.
Until the Financial Industry Regulatory Authority (“FINRA”) has completed its review of our previously submitted Company-Related Action Notification Form such that the corporate name change, ticker symbol change and reclassification of outstanding shares of common stock into shares of Class A Common Stock as further described herein can effected in the marketplace, we expect that our common shares will continue to trade under our prior corporate name (TriUnity Business Services Limited) and pre-merger ticker symbol (TYBB) and will not reflect the new CUSIP obtained for the Class A Common Stock.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements include, among other things, statements regarding our expectations, beliefs, intentions or strategies regarding the future. These statements are based on current expectations and beliefs of management and are subject to a number of risks, uncertainties and assumptions that are difficult to predict and many of which are beyond our control.
Forward-looking statements can be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “could” and similar expressions. Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors, including, among others, those described in any risk factors we may file from time to time and elsewhere in this Report.
You should not place undue reliance on forward-looking statements, which speak only as of the date of this Report. We undertake no obligation to publicly update or revise any forward-looking statements after the date of this Report, except as required by law.
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Agreement and Plan of Merger
On December 30, 2025 (the “Closing Date”), the Company entered into and completed an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Merger Sub, Independence Power and Independence Investors, pursuant to which Merger Sub merged with and into Independence Power (the “Merger”), with Independence Power continuing as the surviving corporation and a wholly owned subsidiary of the Company. The transactions contemplated by the Merger took effect immediately after the A&R Charter (as defined under Item 5.03 of this Report) became effective in the State of Nevada.
The Merger Agreement and the consummation of the transactions contemplated thereby were unanimously approved by the board of directors of each of the Company, Merger Sub and Independence Power, and by Independence Investors and the Company as the sole stockholders of Independence Power and Merger Sub, respectively.
At the effective time of the Merger, the shares of capital stock of Independence Power issued and outstanding immediately prior to the Merger were converted into the right to receive, in the aggregate, 32,000,000 shares of the Company’s newly created Class B Common Stock, par value $0.0001 per share (the “Class B Common Stock”) as described under Item 5.03 of this Report, such that, immediately following the Merger, Independence Investors, together with its wholly owned subsidiary Energizer Systems, LLC, a Delaware limited liability company (“Energizer Systems”), collectively beneficially owned approximately 94.33% of the outstanding Common Stock (as defined below), and the Company’s other stockholders immediately prior to the Merger owned approximately 5.67% of the outstanding Common Stock, before giving effect to the exercise of any of the warrants described under the caption “Warrant Agreement” below.
The Merger Agreement contains customary representations, warranties and covenants for a transaction of this nature and does not impose indemnification or similar material post-closing obligations or liabilities on the Company or Independence Investors, as sole stockholder of Independence Power prior to the Merger.
The foregoing description is qualified in its entirety by reference to the full text of the Merger Agreement, filed as Exhibit 2.1 to this Report and incorporated herein by reference.
Warrant Agreement
In connection with completion of the Merger, on December 30, 2025, the Company entered into a warrant agreement (the “Warrant Agreement”) with BESS Rural Energy Cooperative, LCA, a Washington, D.C. limited cooperative association (the “Cooperative”). The Warrants (as defined below) were issued to the Cooperative in connection with the execution and delivery by Kyma Batteries, LLC, a wholly-owned subsidiary of Independence Power (“Kyma Batteries”), and the Cooperative of an asset management agreement (the “Asset Management Agreement”) pursuant to which Kyma Batteries will provide certain operational management services with respect to approximately 241 MW of battery energy storage equipment in exchange for a base management fee and performance-based compensation tied to revenue generation, referred to as Power-as-a-Service, while the Cooperative retains full ownership of such equipment. Pursuant to the Warrant Agreement, the Company granted to the Cooperative warrants to purchase up to 8,901,852 shares of Class A Common Stock of the Company, par value $0.0001 per share (the “Class A Common Stock” and, together with the Class B Common Stock, the “Common Stock”), representing 19% of the Common Stock on a fully diluted basis, at an exercise price of $3.594758 per share, reflecting an aggregate exercise price of $32,000,000 (the “Warrants”).
The Warrants are exercisable from the issuance date of December 30, 2025 until their expiration time, which is the later of (i) 30 days after the first annual report of the Company is filed with the SEC on Form 10-K or (ii) 30 days after the Company (or any of its subsidiaries) executes a definitive, binding energy equipment rental agreement or other instrument providing for the deployment of additional equipment constituting the Company’s (or any of its subsidiaries’) oilfield microgrid technology with an investment grade rated counterparty.
The Warrants were issued in a private transaction and do not constitute publicly traded or publicly offered instruments. The Warrants are held by the Cooperative as principal and, subject to the terms of the Warrant Agreement and applicable securities laws, may be assigned to members or non-members of the Cooperative. The Warrants were issued in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended, and have not been registered under the Securities Act or any state securities laws.
The foregoing description is qualified in its entirety by reference to the full text of the Warrant Agreement, filed as Exhibit 4.1 to this Report and incorporated herein by reference.
Employment Agreements
On December 30, 2025, the Company entered into executive employment agreements with each of Todd Parkin, as Chief Executive Officer, and Scott Stephenson, as Chief Financial Officer. See “Item 5. Directors and Executive Officers – Employment Agreements; Change in Control Benefits” for a full description of the respective employment agreements, each of which is qualified in its entirety by reference to the full text of the Parkin Employment Agreement (as defined herein) and the Stephenson Employment Agreement (as defined herein), filed as Exhibit 10.6 and Exhibit 10.7, respectively, to this Report and incorporated herein by reference.
Administrative Services Agreement
On January 5, 2026, the Company and its wholly-owned subsidiary, Kyma Batteries, LLC, entered into an Administrative Services Agreement (the “Administrative Services Agreement”) with IPAS Asset Management, LLC (“IPAS Asset Management”), an affiliate of the Company's controlling stockholder, pursuant to which IPAS Asset Management, LLC will provide certain administrative and payroll services to the Company, including, without limitation, human resources services, developing and establishing employee policies including employee compensation and benefit plans, information technology services, accounting and payroll services, and other administrative and consulting services.
The Company will pay to IPAS Asset Management the cost of such services based on IPAS Asset Management’s operating costs, plus a nominal amount. The Administrative Services Agreement has a one-year term, subject to automatic renewal, and may be terminated by either party without penalty on 30 day’s notice. The information set forth under “Form 10 Information – Item 7. Certain Relationships and Related Transactions, and Director Independence – Certain Business Relationships” is incorporated by reference herein. The foregoing description is qualified in its entirety by reference to the full text of the Administrative Services Agreement filed as Exhibit 10.8 to this Report and incorporated herein by reference.
ITEM 2.01. COMPLETION OF ACQUISITION OF ASSETS OR BUSINESS.
The information set forth in Item 1.01 of this Report under the caption “Agreement and Plan of Merger” is incorporated by reference herein.
On the Closing Date, the Company consummated the Merger pursuant to the Merger Agreement described under Item 1.01 of this Report. As a result of the Merger, Independence Power became a wholly-owned subsidiary of the Company, and Independence Investors was issued 32,000,000 shares of Class B Common Stock. Accordingly, the Merger constitutes a “reverse merger,” and Independence Power is considered the accounting acquirer for financial reporting purposes.
Upon completion of the Merger, the business conducted by Independence Power became the primary business of the Company. Pursuant to the provisions of Item 2.01(f) of Form 8-K, if the registrant was a shell company prior to a business combination transaction, then the registrant is required to disclose the information that would be required if such registrant were filing a general form for registration of its securities on Form 10.
As a result of the consummation of the Merger, and as discussed below in Item 5.06 of this Report, to the extent the Company could have been considered a shell company prior to completion of the Merger, the Company has ceased to be a shell company. The Company is providing below the information that would be included in a Form 10, with such information reflecting the registrant and its securities upon consummation of the Merger. The information provided under the caption “Form 10 Information” in this Report relates to the combined company after the consummation of the Merger transaction, unless otherwise specifically indicated or the context otherwise requires.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
The information set forth in Item 1.01 of this Report under the caption “Agreement and Plan of Merger” and under Item 2.01 of this Report is incorporated by reference herein.
On the Closing Date, in connection with the Merger, the Company issued an aggregate of 32,000,000 shares of Class B Common Stock to Independence Investors in exchange for all outstanding equity interests of Independence Power. The shares of Class B Common Stock issued in the Merger were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) as a transaction not involving a public offering.
Additional information regarding these transactions is set forth under Item 2.01 and “Form 10 Information – Item 4. Security Ownership of Certain Beneficial Owners and Management” and is incorporated herein by reference.
To the extent that Rule 145a under the Securities Act applies to the Merger, any deemed offer and sale of the Company’s shares of Common Stock outstanding immediately prior to the Merger would have been exempt from registration pursuant to Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.
The information set forth in Item 1.01 of this Current Report on Form 8-K under the caption “Warrant Agreement” is incorporated by reference herein. The offer and sale of the Warrants and the sale of Class A Common Stock pursuant to the exercise of any Warrants in accordance with the terms of the Warrant Agreement were and will be effected in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.
ITEM 5.01. CHANGES IN CONTROL OF REGISTRANT.
As described under Items 1.01, 2.01 and 3.02 of this Report, on the Closing Date, the Company completed the Merger with Independence Power. Immediately following the Merger, Independence Investors, directly and indirectly, beneficially owned 94.33% of the Company’s outstanding Common Stock.
The information set forth under Items 1.01, 2.01, 3.02 and “Form 10 Information – Item 4. Security Ownership of Certain Beneficial Owners and Management” is incorporated herein by reference.
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS;
ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;
COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
Effective December 30, 2025, in connection with and upon completion of the Merger, H. Nicholson Carter, David J. Durrett, Todd Parkin and Joseph Poling were appointed to the board of directors of the Company (the “Board”), with H. Nicholson Carter appointed as the Chairman of the Board.
David J. Durrett, age 56, founded Independence TX, LLC, a vertically integrated silica sand mining and logistics platform, in 2020 and built the company into a leading supplier of silica frac sand to leading unconventional oil and gas operators in North America. In connection with these operations, Mr. Durrett originated an internal power division to address off-grid energy reliability challenges, which later became Kyma Batteries, LLC. Previously, Mr. Durrett co-founded New Birmingham Resources, a silica sand producer and co-founded Damiron Minerals, LLC, an industrial minerals supplier serving the glass and cement industries. Mr. Durrett has also held project leadership roles on mining and infrastructure initiatives across North America, South America, Europe, and Russia, and previously served as a project manager on a United Nations-sponsored development initiative in Belize focused on economic sustainability and infrastructure revitalization.
Todd Parkin, age 56, has served as our Chief Executive Officer since December 2, 2025. Mr. Parkin is also a founder and senior executive of Independence Power and related operating entities and has extensive experience in media, broadcast, telecommunications and energy-related ventures. With a career spanning executive roles at Bally’s Sports Networks, MGM Studios, and multiple media startups, Mr. Parkin has overseen the creation and distribution of thousands of live sports events, launched new digital networks, and managed P&Ls exceeding $400 million. He is also a partner at Rincon Alpha, which is a consulting firm.
H. Nicholson Carter, age 79, has also served as a director of Alliance Resource Partners, L.P. (NASDAQ: ARLP), a publicly traded master limited partnership, since April 2015. Mr. Carter currently serves on the Audit Committee, Compensation Committee, and Conflicts Committee of the Board of Directors of Alliance Resource Partners, L.P. Mr. Carter has more than three decades of experience in the coal and natural resources industry, including as President and Chief Operating Officer of Natural Resource Partners L.P., a publicly traded owner of coal, mineral, and natural resource interests, President and Chief Operating Officer of Western Pocahontas Properties, L.P., and various management and legal roles with MAPCO Coal Corporation.
Joseph Poling, age 51, is an investor in and the Chief Executive Officer of XG Compute, an edge compute and artificial intelligence infrastructure platform deploying distributed data center capacity across hospitality and commercial locations. Since September 2019, Mr. Poling has served as President and Chief Revenue Officer of Think Consulting, a management consulting firm specializing in organizational transformation, program execution, and operational performance. has more than 25 years of experience building, operating, and scaling technology-enabled and services-based businesses, with a focus on execution discipline, operational infrastructure, and enterprise value creation, including as a Committee Member of the Technology Innovation Committee at Johns Hopkins Hospital, the Co-Founder and Managing Partner of The Stratmore Group, Senior Vice President of Technology and Operations at eSylvan, and the Co-Founder and leader in operating roles at Eyecon, LLC and Onsite Computer Services, Inc.
At this time, the Company has not entered into any arrangements with Mr. Durrett, Mr. Carter or Mr. Poling regarding the payment of compensation for their services as directors of the Company.
As of December 30, 2025, the Company has entered into an employment agreement with each of Todd Parkin and Scott Stephenson, each of which agreement is described under “Item 6. Executive Compensation – Employment Agreements; Change in Control Benefits” of this Report.
ITEM 5.03. AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR.
As previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 4, 2025 (the “December 4 Report”), the Company entered into the Recapitalization Letter Agreement with Energizer Systems pursuant to which the Company committed to amend its Articles of Incorporation to, among other things, increase its authorized Common Stock and to subsequently effect a forward stock split.
Amendment and Restatement of Articles of Incorporation and Bylaws
On December 30, 2025, the Company filed with the Secretary of State of Nevada the Amended and Restated Articles of Incorporation (the “A&R Charter”) and adopted the Amended and Restated Bylaws (the “A&R Bylaws”). The A&R Charter was approved by written consent of the Company’s stockholders on December 30, 2025, in accordance with the Nevada Revised Statutes (the “NRS”) and the Company’s then-effective articles of incorporation and bylaws. The A&R Bylaws were approved by the Board in accordance with its then-existing bylaws. The A&R Charter became effective upon filing with the Secretary of State of the State of Nevada, and the A&R Bylaws became effective upon adoption by the Board concurrent with the effectiveness of the A&R Charter, and each became effective immediately prior to the Merger. A copy of the A&R Charter and the A&R Bylaws are filed as Exhibit 3.1 and Exhibit 3.2 to this Report, respectively, and each is incorporated herein by reference.
The following is a summary of the material rights contained in the A&R Charter and A&R Bylaws. The discussion in this section does not include a description of rights or obligations under U.S. federal securities or tax laws or securities exchange listing requirements or of the Company’s corporate governance or other policies.
The statements in this section are qualified in their entirety by reference to, and are subject to, the detailed provisions of the NRS, the A&R Charter and the A&R Bylaws. See “Risks Related to the Business of the Company—Insiders have influence over us and could limit your ability to influence the outcome of key transactions, including a change of control” for more information. Capitalized terms used but not defined herein have the respective meanings given to such terms in the A&R Charter and A&R Bylaws, as applicable.
Company Name; Capital Stock.
1. Company Name.
The A&R Charter effects the change in the name of the Company from TriUnity Business Services Limited to its current name.
2. Authorized Capital Stock.
The Company previously had authorized capital stock of 75,000,000 shares of common stock, par value $0.0001 per share. The A&R Charter provides for authorized capital stock of 800,000,000 shares, consisting of (i) 566,000,000 shares of Class A Common Stock, (ii) 224,000,000 shares of Class B Common Stock and (ii) 10,000,000 shares of “blank check” preferred stock, all par value $0.0001 per share. The A&R Charter re-classified the issued and outstanding shares of common stock of the Company into shares of Class A Common Stock on a one-for-one basis.
Elections; Voting; Procedural Matters.
3. Number of Directors.
The A&R Bylaws provide that, subject to the terms of any series of preferred stock entitled to separately elect directors, the board of directors shall consist of a minimum of one (1) director, with the exact number of directors to be determined by the then-current board of directors. Each director will hold office until such director’s successor has been duly elected and qualified or until such director’s earlier death, resignation or removal.
4. Stockholder Nominations and Proposals.
The A&R Bylaws require advance notice of stockholder nominations of persons for election to the board of directors and of business to be brought by stockholders before any meeting of the stockholders. Except as otherwise provided in the articles of incorporation, for nominations or other business to be properly brought before an annual meeting by a stockholder, a stockholder must be a record holder at the time of notice, be entitled to vote at the meeting and comply with the specific notice requirements as to the contents of the notice set forth in the bylaws. Notice must be delivered in writing to the secretary at the principal executive offices of the Company not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting of stockholders. However, if the date of the annual meeting is advanced more than sixty (60) days before or delayed more than thirty (30) days after the anniversary of the prior year’s meeting, the stockholder’s notice must be delivered no earlier than the one hundred twenty (120) days prior to such meeting and no later than the later of ninety (90) days prior to the meeting or the tenth (10th) day following the day on which public announcement of the meeting date is first made. The public announcement of an adjournment or postponement of an annual meeting does not commence a new time period or extend any time period for the delivery of the stockholder’s notice.
5. Removal of Directors.
The A&R Bylaws provide that directors may only be removed from office in accordance with the articles of incorporation. The A&R Charter provides that, prior to the date on which the issued and outstanding shares of Class B Common Stock represent less than twenty-five percent (25%) of the voting power of the issued and outstanding Common Stock (the “Sunset Date”), directors may be removed from office by the stockholders, with or without cause, with the affirmative vote of the holders of not less than two-thirds (2/3rds) of the voting power of the shares then entitled to vote generally in the election of directors, voting together as a single class. From and after the Sunset Date, no director may be removed from office by the stockholders except for cause with the affirmative vote of the holders of not less than two-thirds (2/3rds) of the voting power of the shares then entitled to vote generally in the election of directors, voting together as a single class.
6. Vacancies.
The A&R Bylaws provide that vacancies on the board of directors resulting from death, resignation, removal or otherwise, and newly created directorships resulting from any increase in the number of directors, shall be filled solely by a majority of the directors then in office, although less than a quorum, or by the sole remaining director. Subject to the terms of any series of preferred stock entitled to separately elect directors and the provisions of the A&R Charter, whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors, vacancies and newly created directorships of such class or classes or series may be filled by a majority of directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. If there are no directors in office, an election may be held in accordance with the NRS.
7. Notice of Stockholder’s Meetings.
The A&R Bylaws provide that written notice stating the physical location, if any, date and hour of any meeting of stockholders, the means of remote communication, if any, by which stockholders and proxy holders may be deemed present and vote, the record date for determining stockholders entitled to notice of, and to vote at, such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting, to each stockholder of record entitled to notice of such meeting. Unless otherwise provided in the bylaws, when a meeting is adjourned, no notice need be given if the time, location, if any, and remote communication means, if any, are announced at the meeting at which the adjournment is taken. If the adjournment is for more than sixty (60) days, or a new record date is set, notice shall be given.
8. Quorum.
The A&R Bylaws provide that all meetings of the stockholders, the presence in person or by proxy (regardless of whether the proxy has authority to vote on any matter) of the holders of a majority of the voting power of all outstanding capital stock entitled to vote shall constitute a quorum for the transaction of business, except as otherwise provided by the NRS, the articles of incorporation or elsewhere in the bylaws. However, if such quorum shall not be present at any meeting of the stockholders, either the chair of the meeting or the holders of a majority in voting power of the shares present in person or represented by proxy shall have the power to adjourn the meeting, without notice other than announcement at the meeting, until a quorum shall be present. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.
9. Voting.
Under the A&R Charter, each share of the Class A Common Stock is entitled to one (1) vote per share, and each share of the Class B Common Stock is entitled to ten (10) votes per share. When a quorum is present at any meeting of the stockholders, unless otherwise provided in the A&R Charter or the A&R Bylaws and subject to the NRS, in all matters other than the election of directors, the affirmative vote of a majority in voting power of shares of capital stock present in person or represented by proxy (regardless of whether the proxy has authority to vote on any matter) and entitled to vote thereon shall be the act of the stockholders. Voting for directors shall be by a plurality of the voting power of shares of capital stock present in person or represented by proxy at the meeting and entitled to vote on the election of directors. A proxy may be appointed in writing or by any means of electronic communication permitted by law and shall be valid for six (6) months unless otherwise stated, subject to the NRS. Abstentions shall not count as votes cast for or against any proposal or nominee.
10. Written Consents of the Board and of the Stockholders.
The A&R Bylaws provide that any action required or permitted to be taken at a meeting of the board of directors or any committee thereof may be taken without a meeting if all members of the board or committee (other than the director(s) abstaining in writing pursuant to and in accordance with NRS 78.315(2)) consent in writing or by electronic transmission. Such written consents or electronic transmissions shall be filed with the minutes of the board or committee proceedings, either in paper form if the minutes are maintained in paper form or in electronic form if maintained electronically.
The A&R Charter and the A&R Bylaws provide that, subject to the rights of the holder of any one or more series of the preferred stock then outstanding, prior to the Sunset Date, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding capital stock of the Company having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Subject to the rights of holders of any one or more series of preferred stock then outstanding, from and after the Sunset Date, no action may be taken by the stockholders by written consent and from and after the Sunset Date, any action required or permitted to be taken at any annual or special meeting of stockholders may only be taken upon a vote of stockholders at an annual or special meeting of stockholders duly noticed and called in accordance with the A&R Bylaws and the NRS.
11. Cumulative Voting.
The A&R Charter and A&R Bylaws provide that there shall be no cumulative voting in the election of directors.
12. Conversion Rights.
The A&R Charter provides that each share of the Class B Common Stock shall be convertible, at the holder’s option, at any time and from time to time upon written notice to the Company into one (1) fully paid and nonassessable share of the Class A Common Stock. Prior to any voluntary conversion, the stockholder must surrender the certificate(s), if any, representing such shares at the Company’s principal office or the office of any transfer agent, coupled with a written notice of the election to convert and the name(s) in which the certificate(s), if any, for the Class A Common Stock are to be issued, or in which the shares are to be registered if uncertificated. Conversion shall be deemed effective immediately prior to the close of business on the date of such surrender and notice, and the person entitled to receive the Class A Common Stock shall be treated as the record holder as of such date. Each share of the Class B Common Stock shall automatically convert into one (1) fully paid and nonassessable share of the Class A Common Stock upon a Transfer (as defined in the A&R Charter), other than the Permitted Transfer (as defined in the A&R Charter), of such share. Additionally, all outstanding shares of the Class B Common Stock shall automatically convert into the Class A Common Stock upon the date and time or occurrence of an event, specified by the affirmative vote or written consent, if permitted, of the holders of a majority of the total voting power of the Class B Common Stock. If the Company has reason to believe that a Transfer triggering automatic conversion has occurred but such Transfer is not yet reflected in the Company’s stock ledger, the Company may request that the stockholder provide affidavits or other evidence sufficient to determine whether such Transfer has occurred. If the requested evidence is not provided within ten (10) days after the Company’s request, the relevant shares shall be automatically converted into shares of the Class A Common Stock as provided therein. Additionally, at the election of David Durrett in his sole discretion, all of the issued and outstanding shares of Class B Common Stock shall be converted by the Company into fully paid and nonassessable shares of the Class A Common Stock. Any converted shares of Class B Common Stock shall be retired and not reissued.
13. Redemption Rights.
The A&R Charter provides that the Company may redeem, suspend rights of or require the sale of shares of Common Stock or preferred stock if a stockholder acquires additional shares of Common Stock or preferred stock, or is otherwise attributed with ownership of such shares, that would cause such stockholder (together with their Affiliates) to be the beneficial owner of capital stock having more than twenty percent (20%) of the total voting power of the outstanding voting shares of all classes and series of the capital stock. In such case, the Company may (i) redeem a sufficient number of shares to eliminate the excess ownership at a price equal to (a) a mutually agreed amount or (b) if no other agreement is reached, seventy-five percent (75%) of fair market value if the holder is at fault or one hundred percent (100%) if the holder is not at fault, which is determined in good faith by the disinterested board members, (ii) suspend ownership rights the exercise of which causes or could cause such excess or (iii) require the sale of shares necessary to eliminate the excess, which the holder must promptly effect. At least fifteen (15) but not more than thirty (30) days, or a shorter period as determined by the board of directors, before the redemption date, written notice shall be sent to each record holder of shares to be redeemed, specifying the number of shares, redemption date, redemption price, payment location and the procedure for surrendering certificates, if any. Upon the surrender, the redemption price shall be paid. The foregoing redemption rights will not apply to David Durrett or any of his Affiliates or Permitted Transferees, and the Company shall have no authority to redeem, suspend or require the sale of any shares held by such persons.
14. Protective Provisions.
The A&R Charter provides that the Company shall not amend, alter, repeal or waive (i) Paragraph C, D (other than D.4) or I of Article VI of the A&R Charter, whether by merger, consolidation or otherwise, or adopt any provision inconsistent therewith, without first obtaining the affirmative vote or written consent, if permitted under the A&R Charter at such time, of the holders of a majority of the then outstanding shares of the Class B Common Stock, voting as a separate class or (ii) Paragraph D.4 of Article IV of the A&R Charter without first obtaining the written consent of the David Durrett, in each case, in addition to any other vote required by law, the A&R Charter or the A&R Bylaws.
Liquidation; Dividends; Interested Party Matters.
15. Liquidation Preferences.
The A&R Charter provides that, subject to the rights of any holders of preferred stock then outstanding, upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, the holders of the Class A Common Stock and the Class B Common Stock will be entitled to receive ratably all assets of the Company available for distribution to its stockholders. Any disparate or different treatment of shares of the Class A Common Stock and the Class B Common Stock with respect to such distributions must be approved in advance by the affirmative vote or written consent, if permitted, of the stockholders of a majority of the outstanding shares of the Class A Common Stock and the Class B Common Stock, each voting separately as a class (or, if any holders of preferred stock are entitled to vote together with the holders of Common Stock, as a single class with such preferred stockholders). Notwithstanding the foregoing, shares of one class may receive different or disproportionate distributions or payments in connection with a merger, consolidation or other transaction if the only difference in the per share distribution is that any securities distributed to the holders of the Class B Common Stock carry ten (10) times the voting power of the securities distributed to holders of the Class A Common Stock.
16. Declaration and Payment of Dividends.
The A&R Bylaws provide that, subject to the NRS and the articles of incorporation, if any, the board of directors may declare and pay dividends and other distributions upon the shares of capital stock of the Company, which dividends may be paid either in cash, in property or in shares of the Company’s capital stock. The A&R Charter provides that the Class A Common Stock and the Class B Common Stock shall be treated equally, identically and ratably on a per share basis with respect to any dividends or other distributions as may be declared and paid from time to time by the board of directors out of any assets legally available therefor; provided, that in the event a dividend is paid in the form of shares of the Class A Common Stock or the Class B Common Stock (or rights to acquire such shares), holders of the Class A Common Stock shall receive shares of the Class A Common Stock (or rights to acquire such shares, as the case may be) and holders of the Class B Common Stock shall receive shares of the Class B Common Stock, with holders of shares of the Class A Common Stock and the Class B Common Stock receiving, on a per share basis, an identical number of shares of the Class A Common Stock or the Class B Common Stock, as applicable. Notwithstanding the foregoing, the board of directors may pay or make a disparate dividend or other distribution per share of the Class A Common Stock or the Class B Common Stock if approved in advance by the affirmative vote (or written consent if action by written consent of stockholders is permitted at such time) of the holders of a majority of the outstanding shares of the Class A Common Stock and the Class B Common Stock, each voting separately as a class (or, if any holders of preferred stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of preferred stock).
17. Corporate Opportunity.
No member of the board of directors who is not an employee of the Company (a “Non-Employee Director”) (including any Non-Employee Director who serves as an officer in both his or her director and officer capacities) or his or her affiliates shall, to the fullest extent permitted by law, have any duty to refrain from directly or indirectly (i) engaging in the same or similar business activities or lines of business in which the Company or any of its affiliates engages or proposes to engage or (ii) otherwise competing with the Company or any of its affiliates, and, to the fullest extent permitted by law, no such person shall be liable to the Company or its stockholders or to any affiliate of the Company for breach of any fiduciary duty solely by reason of the fact that such person engages in any such activities or did not communicate or offer such activities to the Company. However, the Company does not renounce its interest in any corporate opportunity offered to any Non-Employee Director if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company.
18. Combination with Interested Stockholders.
Prior to the Sunset Date, the Company elects not to be governed by Sections 78.411 through 78.444, inclusive, of the NRS. From and after the Sunset Date, the Company shall immediately and automatically, without further action, become governed by NRS 78.411 through 78.444, inclusive.
Indemnification; Advancement of Expenses; Limitation on Personal Liability.
19. Indemnification.
The A&R Charter provides that the Company shall indemnify and hold harmless any person, including David Durrett, who was or is a party or is threatened to be made a party to or otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director, officer or employee of the Company or, while a director, officer or employee of the Company, served at the request of the Company as a director, officer, manager or managing member, employee, agent or trustee of another entity or enterprise, against all liability and loss suffered and expenses reasonably incurred, including attorneys’ fees, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended, and amounts paid in settlement, to the fullest extent permitted by the NRS. Notwithstanding the foregoing, except as otherwise provided in the A&R Charter, in the case of proceedings brought to enforce rights to indemnification, advancement of expenses or compulsory counterclaims brought by the indemnitee, the Company shall not be required to indemnify any person in connection with a proceeding initiated by such person unless the board of directors authorized the initiation of such proceeding.
20. Advancement of Expenses.
An indemnitee shall also have the right, to the fullest extent not prohibited by applicable law, to be paid by the Company the expenses (including attorneys’ fees) incurred by such person in appearing at, participating in or defending any proceeding in advance of its final disposition or in connection with a proceeding brought to establish or enforce a right to indemnification or advancement of expenses under the applicable provisions of the A&R Charter, subject in certain instance to the receipt of an undertaking by such person to repay all amounts advanced if it should be ultimately determined that such person is not entitled to be indemnified or entitled to advancement of expenses. The right to advancement of expenses under the A&R Charter shall not apply to any proceeding brought by the Company against an indemnitee regarding fraud, gross negligence or willful misconduct by such indemnitee.
21. Limitation of Liability.
The liability of directors and officers is eliminated or limited to the fullest extent permitted by the NRS. If and to the extent David Durrett or any of his affiliates or permitted transferees is deemed to have fiduciary duties to the Company or any of its stockholders, such duties are eliminated or limited to the fullest extent permitted by the NRS or other applicable law.
Amendments.
22. Amendment of Articles of Incorporation.
An amendment to the A&R Charter requires that the board of directors first approve the amendment and submit the proposed amendment to the stockholders for approval. The stockholders holding at least a majority of the voting power shares (or such greater proportion of the voting power as may be required in the case of the vote by classes or series) must also approve the amendment. However, from and after the Sunset Date, (i) the provisions of Articles V through XII of the A&R Charter may not be amended or repealed and no new provision may be adopted to modify, override or circumvent Articles V through XII of the A&R Charter unless the amendment is approved by the affirmative vote of the stockholders holding at least sixty-six and two-thirds percent (66 2/3%) of the total voting power of all outstanding voting securities generally entitled to vote in the election of directors, voting together as a single class.
23. Amendment of Bylaws.
Unless a higher percentage is required by the articles of incorporation as to any matter that is the subject of the A&R Bylaws, the A&R Bylaws may be amended by (i) the board of directors or (ii) prior to the Sunset Date, the affirmative vote of the holders of not less than a majority of the total voting power of all outstanding securities generally entitled to vote in the election of directors, voting together as a single class.
Forward Split Not Yet Effective
In connection with the Merger, the Board and holders of a majority of our outstanding shares of common stock prior to effectiveness of the A&R Charter approved a 7-for-1 forward stock split of the Company’s issued and outstanding Common Stock (the “Forward Stock Split”), such that, at the effective time of the Forward Stock Split, each one share of Class A Common Stock and Class B Common Stock issued and outstanding immediately prior to the Forward Stock Split will be reclassified and changed into seven (7) shares of Class A Common Stock and seven (7) shares of Class B Common Stock, respectively. No fractional shares will be issued in connection with the Forward Stock Split.
The Forward Stock Split has not yet occurred and will not be effective until we receive approval from the Financial Industry Regulatory Authority (FINRA). We will make a public announcement regarding the timing of the record date and the effectiveness of the Forward Stock Split.
Immediately following the effectiveness of the Merger, and before giving pro forma effect to the Forward Stock Split (and not taking into account the shares of Class A Common Stock underlying the Warrants), there were 5,950,000 shares of Class A Common Stock and 32,000,000 shares of Class B Common Stock outstanding. Giving effect to the Forward Stock Split on a pro forma basis, there will be 41,650,000 shares of Class A Common Stock and 224,000,000 shares of Class B Common Stock outstanding (not taking into account the shares of Class A Common Stock underlying the Warrants).
Change in Fiscal Year
In connection with the Merger, the Company has changed its fiscal year from July 31 to December 31. The Company adopted this change to align its fiscal year with the business of Independence Power, which currently has a December 31 fiscal year. The Company expects to file a transition report on Form 10-QT for the period from August 1, 2025 to December 31, 2025, which represents the transition period between the closing of the Company’s most recent fiscal year and the commencement of its newly adopted fiscal year.
ITEM 5.06. CHANGE IN SHELL COMPANY STATUS.
Prior to the Merger, the Company determined that it was not a “shell company” as defined in Rule 12b-2 under the Exchange Act. However, to the extent the Company could have been considered a shell company prior to completion of the Merger, as a result of the consummation of the Merger described in this Report, the Company has ceased to be a shell company. The information contained in this Report, including the information incorporated by reference herein, constitutes the “Form 10 information” that would be required to be filed with the SEC if it were determined that the Company was a shell company prior to completion of the Merger.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
The audited financial statements of Kyma Batteries, LLC as of and for the fiscal year ended December 31, 2024, and the unaudited interim financial statements as of and for the three and nine-month periods ended September 30, 2025 and 2024, are filed as Exhibits 99.1 and 99.2 to this Report and incorporated herein by reference. Independence Power was formed October 22, 2025 for the purpose of acquiring all of the equity interests in Kyma Batteries, LLC. As a result, Independence Power has no financial statements as of and for the fiscal year ended December 31, 2024 or as of and for the nine-month periods ended September 30, 2025 and 2024 other than, with respect to the nine-month period ended September 30, 2025, the operations of Kyma Batteries, LLC as its wholly-owned subsidiary.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined financial information of the Company as of and for the nine months ended September 30, 2025 and as of and for the year ended December 31, 2024, is filed as Exhibit 99.3 to this Report and incorporated herein by reference.
(d) Exhibits.
The following exhibits are filed as part of this Report.
No. | | Description of Exhibit |
2.1 | | Agreement and Plan of Merger, dated December 30, 2025, by and among Independence Power Holdings, Inc. (f/k/a TriUnity Business Services Limited), TriUnity Merger Sub Inc., Independence Power, Inc. and Independence Investors LLC. |
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3.1 | | Amended and Restated Articles of Incorporation of Independence Power Holdings, Inc. |
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3.2 | | Amended and Restated Bylaws of Independence Power Holdings, Inc. |
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10.1 | | Senior Secured Promissory Note, dated as of September 10, 2025, issued by GridCore Infrastructure, LLC, in favor of Kyma Batteries LLC. |
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10.2 | | Security Agreement, dated as of September 10, 2025, by and between GridCore Infrastructure, LLC and Kyma Batteries LLC. |
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10.3 | | Asset Management Agreement, dated as of October 1, 2025, by and between Kyma Batteries, LLC, BESS Rural Energy Cooperative LCA and DBD Express I, LLC. |
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10.4 | | Master Supply and Services Agreement, dated as of September 10, 2025, by and between GridCore Infrastructure, LLC and Kyma Batteries LLC. |
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10.5 | | Warrant to Purchase Class A Common Stock, dated December 30, 2025, issued by Independence Power Holdings, Inc. to BESS Rural Cooperative, LCA. |
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10.6 | | Employment Agreement, dated as of December 30, 2025, by and between Independence Power Holdings, Inc. and Todd Parkin.* |
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10.7 | | Employment Agreement, dated as of December 30, 2025, by and between Independence Power Holdings, Inc. and Scott Stephenson.* |
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10.8 | | Administrative Services Agreement, dated as of January 5, 2026, by and between Independence Power Holdings, Inc., Independence Power, Inc., Kyma Batteries, LLC and IPAS Asset Management, LLC. |
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10.9 | | Form of Indemnification Agreement* |
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23.1 | | Consent of Whitley Penn LLP. |
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99.1 | | Audited financial statements of Kyma Batteries, LLC as of and for year ended December 31, 2024. |
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99.2 | | Unaudited financial statements of Kyma Batteries, LLC as of September 30, 2025 and for the three and nine month periods ended September 30, 2025 and 2024. |
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99.3 | | Unaudited pro forma condensed combined financial information of Independence Power Holdings, Inc. as of and for the nine months ended September 30, 2025 and as of and for the year ended December 31, 2024. |
* Management contract or compensatory plan or arrangement.
FORM 10 INFORMATION
For the purposes of the Form 10 Information, unless the context indicates otherwise, references to “Independence Power” at all times, and to the “Company” at all times after completion of the Merger, should be understood to refer to and include Kyma Batteries, LLC.
ITEM 1. BUSINESS.
Corporate History and Background
The Company
Independence Power Holdings, Inc. (f/k/a TriUnity Business Services Limited) (the “Company” and, prior to the Merger, “TriUnity”), a Nevada corporation, was incorporated under the laws of the State of Nevada on April 30, 2024. TriUnity was headquartered in Kuala Lumpur, Malaysia. Prior to the Merger, TriUnity provided business related services such as accounting and bookkeeping, human resources management, payroll, administrative support, head-hunting and recruitment services to companies in Malaysia (the “Prior TriUnity Business”). Following the Merger described in Item 2.01 of this Report, the Company significantly expanded its activities to include the business of Independence Power as described below and moved its headquarters to Dallas, Texas.
Independence Power and Kyma Batteries
Independence Power, Inc. (“Independence Power”), a Texas corporation, was incorporated under the laws of the State of Texas on October 22, 2025, for the purpose of acquiring all of the equity interests in Kyma Batteries, LLC, a Texas limited liability company (“Kyma Batteries”) from Independence Investors LLC, a Texas limited liability company (“Independence Investors”) in a transaction pursuant to which Kyma Batteries became a wholly-owned subsidiary of Independence Power effective November 1, 2025 (the “Kyma Acquisition”). Kyma Batteries was formed by Independence Investors on December 8, 2023 and commenced operations on January 1, 2024. Independence Investors is wholly-owned and controlled by David Durrett, a member of the Company’s Board of Directors. See Item 5.02 above.
As a result of the Kyma Acquisition, Independence Investors became the sole stockholder of Independence Power. Through Kyma Batteries, Independence Power’s primary business activity is the software and hardware development, implementation and installation of industrial battery management and monitoring systems for high voltage battery storage systems. Independence Power’s battery energy storage system (“BESS”) solution is targeted to be deployed at unconventional oil and gas operations, initially in the Permian Basin in western Texas and southeastern New Mexico and other key energy-producing regions in the United States, and ultimately around the world. Independence Investors is affiliated with Independence TX LLC, a Texas limited liability company (“Independence TX”), an oilfield services business with over 30 years of experience through its management team in mining, energy and related technologies, which is majority owned and controlled by David J. Durrett, who is also the sole member and manager of Independence Investors.
The chart below illustrates our organizational and ownership structure as of December 31, 2025, immediately after giving effect to the Merger and the related recapitalization. The chart does not give effect to the proposed 7:1 forward stock split.
(1) | Independence Investors LLC holds 32,000,000 shares of Class B Common Stock, representing 100% of the issued and outstanding shares of Class B Common Stock and 84.32% of the total issued and outstanding shares of Common Stock. |
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(2) | Energizer Systems, LLC holds 3,800,000 shares of Class A Common Stock, representing 63.87% of the issued and outstanding shares of Class A Common Stock and 10.01% of the total issued and outstanding shares of Common Stock. |
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(3) | Other investors hold in the aggregate 2,150,000 shares of Class A Common Stock, representing 36.13% of the issued and outstanding shares of Class A Common Stock and 5.67% of the total issued and outstanding shares of Common Stock. |
Recapitalization, Change of Control and Merger
On November 26, 2025, TriUnity entered into a binding letter agreement (the “Recapitalization Letter Agreement”) with Energizer Systems, LLC, a Texas limited liability company (“Energizer Systems”), which set forth the principal terms of a recapitalization and reorganization involving TriUnity in connection with the purchase of 3,800,000 shares (the “Control Block”) of TriUnity’s common stock, par value $0.0001 per share by Energizer Systems. Energizer Systems is a wholly-owned subsidiary of Independence Investors.
Under the Recapitalization Letter Agreement, among other things, TriUnity agreed to pursue an acquisition of Independence Power. Following the Merger (as more fully described under Item 2.01 of this Report, the “Merger”), Independence Investors and Energizer Systems, collectively, beneficially own approximately 94.33% of the Company’s outstanding Common Stock, and the Company’s remaining stockholders immediately prior to the Merger own approximately 5.67 % of the Company’s outstanding Common Stock.
The purchase of the Control Block closed on November 26, 2025. As a result, Independence Investors, indirectly through Energizer Systems, acquired control of TriUnity on that date. Effective on December 2, 2025, Jervey Choon, the prior majority shareholder, resigned as the Chief Executive Officer, President, Secretary, Treasurer and sole Director of TriUnity, Todd Parkin was appointed as Chief Executive Officer and Scott Stephenson was appointed as Chairman, sole Director, President, Secretary, Chief Financial Officer, and Treasurer.
Upon completion of the Merger on the Closing Date, Independence Power became a wholly-owned subsidiary of the Company, which changed its name to Independence Power Holdings, Inc., and the business conducted by Independence Power became the primary business of the Company.
Overview of Operations
The Company, through its wholly-owned subsidiary Independence Power, is an energy technology company focused on software-enabled control and management of BESS deployed at unconventional oil and gas facilities. The Company’s strategy is to support the electrification of compression stations and related upstream infrastructure by integrating BESS into existing power configurations that may include diesel-fueled generators, field gas-fired generators and, where available, utility grid interconnections. The Company’s initial geographic focus is the Permian Basin, located in western Texas and southeastern New Mexico, with potential deployment in other United States basins and selected international markets over time.
Microgrid Architecture, Gas Generation and System Characteristics
The Company designs, manufactures and integrates battery energy storage system components and services modular power systems that combine natural-gas and diesel generation with battery energy storage. These systems function as localized microgrids capable of operating independently of the local electricity grid.
A significant portion of the Company’s targeted deployment environments include oilfield compression stations and related facilities that rely on on-site gas-fired or diesel generation (“gensets”) to supply power for compression and auxiliary loads. In many upstream oil and gas operating environments, continuous compression is a critical operational function because it supports production flow and pressure-dependent lift methods (including gas lift and other artificial lift systems) and, in certain configurations, helps maintain operating conditions across multiple wells tied into a common facility. A loss of power at a compression station can therefore interrupt compression, impair the operator’s ability to maintain required operating parameters, and result in production downtime or other adverse operational effects at associated wellsites and connected infrastructure.
Gensets operating in harsh field conditions may experience unplanned outages, including overheating-related protective shutdowns. In certain instances, following a shutdown, an overheated genset may require an extended cool-down period (which the Company believes can be several hours and, in some circumstances, up to approximately nine hours) before it can be returned to service, during which time the compression station may be unable to provide required compression. The Company believes that a prolonged interruption of compression at such facilities can create material operational and economic exposure for operators. Individual wells may represent several million dollars of capital investment, and a single compression station may support production from multiple wells. As a result, a sustained power interruption at a compression station may expose an operator to potential economic loss that can be significant in the aggregate. The magnitude of such exposure is highly site-specific and depends on well characteristics, lift method, field configuration, operating practices, and the duration and timing of the outage, among other factors.
BESS, when deployed with an associated battery management system and controls, are intended to mitigate certain categories of outage risk by providing fast-response backup power and “ride-through” capability during genset interruptions, including during genset protective shutdowns and re-start periods, to support continuity of compression operations. In addition, the Company believes BESS can improve power quality at sites utilizing gensets by helping to dampen transient events and address voltage fluctuations and spikes that can be inherent in generator-based microgrids, thereby acting as a “shock absorber” to stabilize power delivery to sensitive loads.
Under the contemplated structure, centralized BESS rental yards in the customer’s service territory are used to maintain a fleet of units that can be deployed to compression stations and other field locations as needed. A unit may be connected at the yard for testing, charging or local service, then transported to a customer site for a defined rental or service period and subsequently returned to the yard for redeployment. Independence Power’s Software Platform (as defined below) is intended to provide continuous control, monitoring and metering across these movements. BESS are intended for continuous operation in remote environments characterized by high temperatures, dust exposure, and limited infrastructure. The physical footprint and modular nature of BESS allow deployments at customer sites without requiring transmission extensions or substation buildouts. These operational continuity and power-quality functions are designed to complement other commercial and operational benefits of BESS deployment.
In evaluating deployment environments and operating requirements for distributed power solutions, the Company also benefits from the operating background of Independence-affiliated personnel and service businesses. Independence affiliates have experience providing field services to upstream oil and gas operators and working in operating conditions where unplanned downtime and power interruptions can have material operational consequences. The Company believes this experience informs system design assumptions, operating procedures, and the prioritization of reliability and rapid-response capabilities in its deployment model.
There can be no assurance that BESS will prevent all outages, eliminate all pressure or compression-related risks, or avoid all operational losses. Realized performance depends on system sizing, integration architecture, controls configuration, maintenance, operator procedures, fuel availability, ambient conditions, and other factors, and the Company’s ability to deploy BESS at scale is subject to execution risk, customer adoption, and other risks described elsewhere in this Report.
Market Opportunity for Battery Electrification of Oil and Gas Operations in the Permian Basin Market and Nationally
The Company’s current business is principally focused on the Permian Basin, which is the largest oil-producing region in the United States. The BESS Rural Energy Cooperative LCA (the “Cooperative”), a customer of the Company, has developed its DBD Electron Express Master Plan (the “DBD Express Plan”), which plan highlighted that the Permian Basin alone produces more oil than any member of OPEC except Saudi Arabia and contributes a substantial portion of total U.S. crude production.
Despite this scale, the region remains structurally underserved by electrical infrastructure. According to the DBD Express Plan, approximately two-thirds of the region’s field operations rely on diesel-fueled generators for critical surface equipment such as compression, gas lift, and water handling systems. Further, the Yale Clean Energy Forum in February 2025 found that the region’s electrification deficit is significant, with only approximately one-third of sites connected to the grid. This mismatch between production scale and power availability represents a central part of the Company’s market opportunity.
Documented ERCOT Transmission Constraints
Each of the Electric Reliability Council of Texas (“ERCOT”), S&P Global Commodity Insights and Yale’s Clean Energy Forum have concluded that West Texas transmission capacity has not kept pace with oilfield load growth. These materials describe a multi-year pattern of grid congestion, insufficient high-voltage transmission availability, and delays in connecting new industrial loads.
According to ERCOT load growth projections, electric demand in the Permian region is expected to increase from approximately 3.4 gigawatts in 2022 to potentially more than 11.9 gigawatts by 2032, reflecting more than 300 percent growth over the decade. ERCOT further forecasts that total basin-wide load—including upstream, midstream, and ancillary industrial activities—could reach 26 gigawatts by 2038.
Hart Energy reported in 2024 an existing regional shortfall estimated at between 8 and 13 gigawatts, depending on methodology. ERCOT and state regulators have announced long-term transmission expansion plans, but these plans have multi-year permitting and construction timelines. Hart Energy further reported that operators experience delays of 18 to 30 months for standard grid interconnection and, in some cases, an absence of feasible transmission extensions due to terrain, cost, or land-access limitations. These constraints have led many operators to continue relying on diesel generation to support critical field operations.
Dependence on Diesel Generation
Dependence on diesel is both an economic inefficiency and an operational vulnerability.
Diesel remains the default power source for a substantial share of upstream activity in the Permian Basin, however, diesel is not only costly and logistically intensive, but also prone to operational interruptions tied to fuel delivery, engine maintenance, and equipment failure. For example, RBN Energy estimates that the average drilling rig in the Permian Basin consumes approximately 50 barrels of diesel per day, equivalent to over 750,000 gallons per year. At Gulf Coast pricing as of December 2025 of $2.44 to $3.05 per gallon, this translates to annual fuel costs ranging from $1.83 million to $2.29 million per rig.
Diesel generators at drilling and production sites may consume fuel volumes that produce meaningful cost exposure and volatility. Research published by the University of New Mexico in 2023 identifies diesel combustion as a contributor to regional particulate emissions and associated public health impacts.
Use of Byproduct Natural Gas
The Company’s business model incorporates the use of natural gas produced as a byproduct of oil extraction. The Permian Basin produces large quantities of associated gas, much of which must be curtailed or flared during periods of pipeline constraint or price weakness.
Where permitted by contract and operationally feasible, oil and gas operations’ generation units are engineered to consume this byproduct gas as fuel. The Company believes this approach may reduce dependence on delivered diesel, mitigate exposure to pipeline disruptions, and allow operators to utilize gas that may otherwise be unused or flared. The Company’s BESS software solutions facilitate the optimization of site energy usage by allowing for timely and efficient transition between natural gas byproduct and battery-stored energy solutions.
Permian Electrification Deficit and Addressable Market
The Permian Basin’s electrification deficit is a structural condition which Independence Power expects to persist for years, notwithstanding planned ERCOT upgrades. S&P Global Commodity Insights estimates that only one-third of sites have grid access and that demand growth may outpace transmission expansion through the next decade.
Electrification needs extend beyond artificial lift to include compression, water recycling, sand handling, midstream pumping, and emerging digital infrastructure. These factors inform the Company’s view of its multi-year growth opportunity in the region. The Company views the documented 8–13 gigawatt regional shortfall, combined with continued reliance on diesel generation, as indicative of a substantial addressable market for behind-the-meter power solutions.
Operating Strategy and Future Expansion
The Company intends to grow its Power-as-a-Service platform by entering into long-term service agreements with upstream operators requiring continuous onsite power. Future expansion will depend on the Company’s ability to procure and deploy equipment, secure access to operational sites, demonstrate performance under field conditions, and maintain access to natural gas supplies suitable for use as fuel.
The Company may also expand into other domestic basins with similar transmission limitations and diesel reliance, such as the Utica and other shale basins.
Execution of the Company’s strategy will depend on customer demand, capital availability, regulatory conditions, availability of federal, state and local incentives, including investment tax credits, and competitive dynamics among providers of onsite power systems.
Operating Structure
The Company is organized around an “unbundled” operating structure that separates (i) ownership and financing of BESS equipment, (ii) field-level rental and operations and (iii) the software and control layer.
Asset ownership and financing. BESS equipment and related infrastructure are owned and financed by the Cooperative and other infrastructure-focused vehicles, which purchase the equipment and monetize any associated federal investment tax credits and depreciation. The Company does not acquire ownership or provide financing for BESS equipment.
Centralized rental yards and field operations. BESS units are intended to be aggregated and maintained at centralized BESS rental yards located at or near key hubs in the Cooperative’s service territory. These yards function as staging points where BESS units are stored, connected to local infrastructure as needed and made available for dispatch to individual field sites on a rental or service basis. The yards are expected to be operated by the Company or other oilfield service entities that manage transport, installation, retrieval, routine maintenance and on-site customer interface.
Software and System Management Services. Independence Power also provides the supervisory Software Platform (as defined below) and control logic that govern operation of the BESS units, both while they are installed at centralized rental yards and when they are deployed to compression stations or other field locations.
BESS units remain part of a pooled fleet at the rental yards and are scheduled into service at specific customer sites as load, infrastructure readiness and commercial arrangements permit. Independence Power’s software is intended to remain active across the full life cycle of each unit—at the yard, in transit and in the field—so that operation, telemetry and billing remain consistent regardless of where the unit is physically located.
Independence Power expects to generate revenue primarily from software license and subscription fees and related services associated with use of its Software Platform on deployed units and, where applicable, from fees tied to measured performance outcomes. The model is intended to allow the Company to focus on software and data, while capital-intensive equipment ownership and field operations are borne by parties whose business models and balance sheets are suited to those functions.
Products and Services
Operational Status and Placed-in-Service Certification
The Company has recently installed a battery software management system on a fleet of 104 BESS units representing approximately 241 megawatts of nameplate capacity and approximately $216.9 million in aggregate equipment value (the “BESS Fleet”) acquired by the Cooperative from GridCore Infrastructure, LLC (“GridCore”). The Company delivered its battery software management system installation services pursuant to a Master Supply and Services Agreement with GridCore (the “GridCore Agreement”). GridCore in turn delivered the entire system to the Cooperative, as end-user. Based on an independently executed Battery Energy Storage System Placed-in-Service Certificate dated October 26, 2025, and a related Technical Addendum thereto, each executed by a licensed professional engineer in the State of Texas following on-site inspection and testing, the fleet of battery systems was determined to be fully installed, energized, and ready for its intended operational use as of September 26, 2025.
As documented in such certification materials, the BESS Fleet is staged at a central distribution and deployment site located at the Z&T Ranch facility in Loving County, Texas and operate as part of a mobile equipment rental fleet supporting frac sand and oil and gas compression operations in the Permian Basin. The certification and addendum confirm that the systems were inspected, tested, and energized, and that they were capable of performing their intended energy storage and power delivery functions at the time of placement in service.
The Cooperative, through its wholly owned affiliate, DBD Express I, LLC (“DBD Express”), is the owner of the BESS Fleet.
Program Management Engagement Related to PaaS Activities
The Company, through Kyma Batteries or its assignee, has recently entered into an asset management agreement (the “Asset Management Agreement”) with the Cooperative and DBD Express (the “Cooperative Parties”), effective October 1, 2025, pursuant to which Independence Power provides administrative, monitoring, advisory and consulting services, including quarterly business analysis, daily operations of the BESS units, maintenance services, marketing services, customer support for end customers, marketing services and negotiation of rental agreements with end customers. Under the Asset Management Agreement, the Cooperative Parties are obligated to pay to Independence Power an amount calculated as a percentage, to be agreed per the terms of the Asset Management Agreement, of the aggregate gross rental fees that the Cooperative Parties actually receive under all rental agreements with end customers, subject to an aggregate maximum amount. Such fee shall not be less than $5,000 per month per BESS unit (initially, 101 units, with three in reserve). If the parties cannot agree on the percentage and maximum amount of the fee, such terms will be determined by binding arbitration. The initial term of the Asset Management Agreement is five years, which automatically renews for successive five year terms unless a written non-renewal notice is delivered at least 90 days before the last day of the current term. Additionally, the Cooperative Parties may terminate the Asset Management Agreement at any time with 60 days’ written notice, paying a termination fee of 50% of the monthly fee per BESS unit for the remaining term.
Independence Power’s responsibilities include coordinating site readiness, installation sequencing, commissioning and ongoing operational monitoring of the BESS Fleet. Independence Power performs these services solely in the capacity of an independent contractor. Consistent with its asset-light PaaS strategy, Independence Power does not hold, acquire or finance any ownership interest in the BESS equipment utilized in the BESS Fleet, nor does Independence Power have any obligations with respect to the procurement, manufacture, modification or financing of such equipment.
Software Licensing Arrangement in Support of PaaS Operations
In furtherance of its PaaS offering, Independence Power has granted GridCore a non-exclusive, non-transferable worldwide license to use certain proprietary battery-management, telemetry and microgrid-control software developed by Independence Power (the “Software Platform”) designed for use with BESS units staged at centralized rental yards and deployed in oilfield environments. The Software Platform provides embedded control logic and diagnostics functionality used in the operation of the BESS Fleet.
The licensing arrangement forms part of Independence Power’s asset-light service model and does not convey any ownership interest in the Software Platform or other intellectual property. Independence Power retains all right, title and interest in and to the Software Platform and may modify, enhance or license the software for additional commercial uses at its discretion.
The Software Platform functions as the supervisory control layer for an entire site and is designed to operate across batteries, inverters and site equipment from multiple manufacturers. Key functions include:
| · | issuing commands governing charge and discharge behavior and coordinating transitions among grid-connected, hybrid and islanded modes; |
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| · | enforcing operating limits and safety parameters; |
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| · | acquiring and standardizing operating data for real-time monitoring, diagnostics and predictive maintenance; and |
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| · | measuring energy flows and other operating parameters to support calculation of customer charges, including in structures that incorporate shared-savings or performance-based fee components. |
The Software Platform is intended to be hardware-agnostic and configurable for different site conditions, allowing multi-vendor BESS fleets to be integrated into a common control environment without redesign.
Relationships with Independence TX and the Cooperative
Independence Power is affiliated with Independence TX, an oilfield services business that operates surface sand mines that service a large number of wellhead locations under long-term arrangements with exploration and production companies. Independence TX is majority owned and controlled by David J. Durrett, who is also the sole member and manager of Independence Investors (the controlling stockholder of the Company). Independence TX and other affiliates provide the physical and operational context in which centralized BESS rental yards and associated spoke deployments are expected to occur.
The Cooperative is an independent separate legal entity organized in April 2025 as a rural electric cooperative. It is responsible for owning and leasing BESS equipment to its patron-members, qualifying for and monetizing investment tax credits and receiving any refundable direct-pay credits under applicable tax provisions. The Cooperative does not operate, dispatch or market power; those functions are expected to be performed by Independence Power pursuant to the Asset Management Agreement and other patron-member operators under separate agreements, with Independence Power also supplying the software and control layer.
Key Agreements and Initial Deployment Fleet
As part of the initial commercialization, the Cooperative, through its wholly-owned subsidiary DBD Express, acquired the BESS Fleet from GridCore for approximately $216.9 million. The units have been staged at the Z&T Ranch facility in Loving County, Texas and operate as part of a mobile equipment rental fleet supporting frac sand and oil and gas compression operations in the Permian Basin, to be deployed to individual sites on a programmatic basis. GridCore previously engaged Kyma Batteries to perform modification services, including integration of the embedded operating system and control logic, which are expected to be operated and further developed by the Company. We refer to the installation of the Software Platform on the BESS Fleet as the “GridCore Installation Project.” The Company delivered the Software Platform installation on the GridCore Installation Project pursuant to a Master Supply and Services Agreement, and GridCore in turn delivered the entire system to the Cooperative, as end-user. The Company does not own BESS equipment. Instead, capital investment in BESS is expected to be undertaken by the Cooperative and other asset owners serviced by the Company.
DBD Express and the Cooperative have entered into the Asset Management Agreement with Independence Power for deployment and operational management of the BESS Fleet. The Company expects that the Software Platform, including the embedded operating system and related control capabilities, will be utilized in connection with operation of the BESS Fleet at the rental yards and at field sites.
Stage of Development
The Company is in the process of commercializing the Software Platform and implementing the arrangements described above. Current activities include continued software development and testing, integration with the BESS Fleet, configuration of the Software Platform for use at centralized BESS rental yards and field sites, negotiation and implementation of framework agreements and planning for initial and follow-on deployment programs.
The Cooperative, through its wholly owned subsidiary DBD Express, acquired the BESS Fleet with an aggregate nameplate capacity of approximately 241 megawatts for deployment in the Permian Basin and other areas within the Cooperative’s service territory. Although the Cooperative and its subsidiary are not affiliates or subsidiaries of the Company, the Company’s Software Platform is installed on the BESS Fleet, and the Company expects the Software Platform to be used in connection with the operation of these units at centralized battery rental yards and field sites pursuant to existing and prospective commercial arrangements.
Accordingly, the Company expects that the BESS Fleet will represent a significant source of potential software and related services activity for Independence Power in the near term. The ultimate scale, timing and financial impact of this activity will depend on a number of factors, including completion of deployment schedules by the Cooperative and its operators, utilization of the fleet by Cooperative patron-members and other customers, performance of the equipment in field conditions and the Company’s ability to finalize and perform under related commercial arrangements. The Cooperative’s assets and activities are not consolidated with those of the Company.
Competition
We operate in the highly competitive energy storage and service sector, which is continuing to rapidly evolve and expand in response to regulatory requirements for carbon emissions, technological advances, decreases in battery costs and shifting consumer demand. Our Software Platform has been designed to enable the BESS Fleet to meet the unique, underserved needs of the Permian Basin, poised to convert diesel-reliance into dispatchable electric infrastructure. We believe we are a first-mover with structural advantages in the energy storage market of the Permian Basin and subsequent oil well locations, but we expect the Permian Basin energy services market to become increasingly competitive as awareness of the electrification imperative increases and new participants enter this market. We believe the principal competitive factors in the energy storage and service market include, but are not limited to:
| · | safety, reliability and quality; |
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| · | price of energy storage solutions, services and digital application offerings; |
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| · | product performance and uptime; |
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| · | historical track record and references for customer satisfaction; |
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| · | experience in proving bankability for multiple stakeholders; |
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| · | technological expertise and innovation; |
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| · | ability to take advantage of certain government initiatives and tax credits, including those under the IRA and OBBA; |
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| · | comprehensive solution from a single provider; |
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| · | upfront and ongoing costs of software and services; |
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| · | ease of integration and clarity of value proposition; |
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| · | cybersecurity components of energy storage solutions and components; and |
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| · | seamless hardware, software and service offerings. |
We believe that we have competitive advantages over our competitors, such as technological differentiation (through our patented Software Platform), a capital light business (separating technology from asset ownership) and execution credibility (backed by the 30-year operational track record of the management of Independence Investors, our controlling stockholder). However, many of our existing and potential competitors have greater financial, marketing, sales, distribution, manufacturing and technological resources than we do. We primarily compete with companies engaged in developing software to monitor and manage energy storage consumption, such as Solaris Energy Infrastructure, Crusoe Energy Systems, Liberty Energy, Atlas Energy Solutions, ProPetro and ProFrac. Many of these providers have longer operating histories, access to and influence with governmental bodies, and significantly more capital resources than we do. We may be unable to compete effectively against our competitors, either because they have greater resources or name recognition than we do, because their products and services are superior or more cost efficient than ours, or because they make technical advances to which we are unable to respond.
Intellectual Property (“IP”)
The success of our business depends, in part, on our ability to maintain and protect our proprietary technology and intellectual property. We rely on a combination of patent, trademark, copyright, unfair competition, and trade secret laws, as well as confidentiality procedures and contractual restrictions with our employees, contractors and third parties, to establish, maintain, and protect our proprietary rights.
As of December 31, 2025, we had one issued patent and 11 patent applications pending in the U.S. Outside the U.S., we have no issued patents and two patent applications pending in other countries throughout the world. We have one Patent Cooperation Treaty (“PCT”) patent applications pending. Our issued patent is expected to expire in 2045.
Furthermore, during onboarding, employees agree to assign all the inventions, designs, and technologies they develop during the course of employment with us, to the Company. From time to time, we may enter into research and development agreements with our related parties, pursuant to which we may collaborate on evaluating and developing energy storage solutions.
Government Regulation
Our business is subject to laws and regulations at the federal, state, regional, local, and, if we expand our business outside the United States, international levels, including government policies, regulations, legislation, and programs that encourage adoption of energy storage solutions across different markets through a variety of methods, including by providing financial support and incentives, facilitating grid integration, supporting research and development, and establishing favorable regulatory regimes.
While the current U.S. presidential administration has announced plans to roll back regulations addressing climate change, such efforts may spur stronger actions from other actors, including some state and local policymakers. Legislation and regulations with more stringent limitations on GHG emissions may potentially increase the demand for energy storage solutions and related services. However, to the extent that any existing government incentives are modified, reduced, eliminated, or are permitted to expire or there is the potential of such modifications, reductions, eliminations or expirations, or there is determination of inapplicability of such government incentives or regulations relating to or mandating or encouraging use of renewable energy and/or energy storage, there may in future be adverse effects on customer demand and our business. Changes in tax laws, trade policies, and government regulation relating to or encouraging use of energy storage could negatively impact our business operations and financial performance.
We are also subject to a range of complex laws and regulations, including those related to anti-bribery and corruption, antitrust and competition, and data privacy and security. We are also subject to various federal, state, local, and international laws and regulations relating to the protection of the environment and occupational health and safety and are subject to government policies or laws intended to protect human rights. For example, we are subject to the requirements of the federal Occupational Safety and Health Act, as amended, and comparable U.S. state laws that protect and regulate employee health and safety as well as comparable international laws that aim to protect and regulate employee health and safety. Changes in or adoption of domestic policies and policy initiatives, legislation and regulations on a federal, state, and local level as well as changes in or adoption of policies and policy initiatives, regulations and legislation in foreign jurisdictions in which we operate may pose risks or provide opportunities for the Company’s business that may impact our future operations and financial condition.
For more information about the potential risks of adoption or changes to such policies, government incentives, legislation and regulations, see Item 1A. “Risk Factors.” Certain energy storage-related legislation, policies, regulations, and guidelines that have impacted and may in the future impact our business are set forth below. Additionally, some of the key environment and environmental protection related legislation, policies, regulations, and guidelines that have impacted and may in the future impact our customers are set forth below.
IRA and OBBBA
The U.S. Congress is continuously reviewing and passing various proposals, incentives, regulations, and legislation that may support the energy storage industry, including in the form of tax credits and incentives that are important to our customers and enable them to invest in assets that create demand for our services. In August 2022, the United States passed the Inflation Reduction Act of 2022 (the “IRA”), which included incentives that supported the adoption of energy storage solutions, including a new “technology neutral” Section 48E investment tax credit (the “ITC”) and Section 45Y production tax credit (the “PTC”) and changes to the previous Section 48 non-“technology neutral” investment tax credit and Section 45 production tax credit. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law, which modified certain provisions of the IRA, including those related to energy storage. The OBBBA continues to support energy storage in the United States, as the bill includes long-term continued availability of the ITC for energy storage projects. Certain tax credits, notably including the ITC for energy storage, will begin to phase down for projects that start construction (in accordance with Internal Revenue Services (“IRS”) guidance) in 2033. The prevailing wage and apprenticeship requirements enacted under the IRA continue to apply under the OBBBA for the project owner to receive the full ITC value, and the credit value can be further increased if the project owner also qualifies for a domestic content bonus credit and energy communities bonus credit. The OBBBA amended the provisions of the domestic content bonus credit for the ITC such that the project owner now must achieve higher minimum domestic content percentage thresholds.
The deployment of the BESS Fleet equipped with our Software Platform has been specifically designed as a unified project qualifying under the placed-in-service timing requirements and other eligibility criteria for the § 48E investment tax credit, and to convert § 6417 refundable credits into capital-efficient infrastructure, without reliance on tax equity syndication or private fund intermediaries. Because the Cooperative is not a service provider or power operator, its role is limited to equipment ownership, leasing, and tax credit monetization, which preserves the Cooperative’s § 501(c)(12) and § 6417 status, while enabling full operational execution by the Company.
In addition, the OBBBA amended the ITC establishing Prohibited Foreign Entity (“PFE”) restrictions. The new PFE restrictions apply to virtually all key tax credits under the IRA and come in two forms: (i) for tax years beginning after July 4, 2025, the taxpayer taking the ITC tax credit cannot be a PFE and (ii) for ITC projects that start construction in 2026 and after, the ITC eligible project must source a certain percentage of material from non-PFEs, and the percentage of material from non-PFEs increase annually over time. The OBBBA includes substantive details regarding PFE restriction compliance requirements and requires U.S. Department of Treasury to issue implementation regulations by December 31, 2026. We believe our customers are well positioned to benefit from the ITC provisions (including the revised domestic content bonus credit thresholds).
Recent U.S. Tariffs and Trade Policies
The recent tariff policy changes and continued uncertainty relating to U.S. trade policy and the corresponding response from other foreign countries have impacted and may in the future impact the energy storage market, demand for our energy storage solutions by customers, our business, and results of operations as well as those of our customers, our contract manufacturers, and suppliers. The Company has potential exposure from the imposition of these new tariffs and from the tariff uncertainty in the global markets, as our customers may import components from overseas, including battery cells from China, into the United States for customers and projects in the United States. We may see impacts to customer contracting activity if there continues to be uncertainty relating to tariffs. This impact to customer contracting behavior from the uncertain trade environment has impacted and may in the future impact our revenue, business, operating metrics, and results of operations. In addition, currently there are ongoing investigations into certain additional tariffs on specific imports and trade practices that may result in tariffs and/or more restrictive trade duties and restrictions on components for our energy storage solutions that our customers may import into the U.S. from overseas.
U.S. Federal Energy Regulatory Commission (“FERC”)
The U.S. Federal Energy Regulatory Commission has taken several steps to help to enable the participation of energy storage in wholesale energy markets over the last decade. For example, in February 2018, FERC issued Order 841 directing regional transmission operators and independent system operators to remove barriers to the participation of storage in wholesale electricity markets and to establish rules to help ensure storage resources are compensated for the services they provide. In September 2020, FERC issued Order 2222 opening U.S. wholesale energy markets to aggregations of distributed energy resources, “behind the meter” batteries, and electric vehicles. In July 2023, FERC issued Order 2023, which was intended to speed up the process of connecting new energy projects to the grid due to the backlog of more than 10,000 energy projects awaiting interconnection in the United States at the time. Order 2023 includes more stringent deadlines and has adjusted processes that had previously created barriers to battery projects obtaining interconnection and improves interconnection procedures with elements such as more accurate operational modeling of energy storage in interconnection studies. In May 2024, FERC issued Order 1920, which required transmission operators to conduct and periodically update long-term transmission planning over a 20-year time horizon to anticipate future needs. It also provided for cost-effective expansion of transmission that is being replaced, when needed, known as “right-sizing” transmission facilities. Order 1920 was adopted to promote the more efficient and cost-effective integration of new renewable generation and battery energy storage resources and help meet the needs of a rapidly evolving grid.
More recently, FERC, at the direction of the U.S. Department of Energy (“DOE”) via a Section 403 Directive, opened a preliminary rulemaking proceeding to assert jurisdiction over the interconnection of large electrical loads to the US bulk electrical transmission system and establish standardized interconnection procedures for those loads. A final rulemaking action is scheduled for April 30, 2026, with initial comments due November 21 and reply comments due December 5. Energy storage products and solutions require interconnection agreements from the applicable authorities having jurisdiction to operate. In almost all cases, interconnection agreements are standard form agreements that have been pre-approved by the local public utility commission or other regulatory body with jurisdiction over interconnection agreements. As such, no additional regulatory approvals regarding grid interconnection are typically required once interconnection agreements are signed.
U.S. State and Regional Policies
U.S. states and regional transmission service operators (“TSOs”) have various policies designed to support and accelerate adoption of clean and/or reliable renewable energy and battery storage technologies. One or more of the following policies exist within nearly every U.S. state as well as many regional TSOs: utility and/or TSO related capacity, ancillary services, or power purchase agreement procurement requirements or associated tariffs and wholesale market structures that spur project deployment, incentives for project deployment (e.g. tax credits, grants), and policies to streamline project permitting. These policies are driving and accelerating the growth of the utility-scale battery energy storage market across the U.S., although we cannot guarantee when and if we will realize the anticipated benefits of these policies. Although we are not regulated as a utility, federal, state, and local government statutes and regulations concerning electricity heavily influence the market for our energy storage solutions and services. These statutes and regulations, which are continuously modified, often relate to electricity pricing, net metering, incentives, taxation, competition with utilities, and the interconnection of customer-owned electricity generation.
Governments, often acting through state utility or public service commissions, also change and adopt different rates and rate tariff structures for industrial, commercial and residential customers on a regular basis. These changes can have a positive or negative impact on our ability to deliver cost savings to customers for the purchase of electricity.
Permits and Approvals
To install, commission, and operate energy storage products and solutions on our platform, we, our customers, or our partners, as may be applicable, are required to obtain and maintain applicable permits and approvals from the relevant governmental or regulatory authorities having jurisdiction for the delivery and installation of energy storage products and solutions and to commission and interconnect the products with the local electrical utility and grid. We may not be able to predict whether or when all permits and approvals required for a given customer’s project will be granted or whether the conditions associated with the permits and approvals will be achievable. Furthermore, unforeseen delays in the permitting applications and the permitting process may in the future delay the timing of fulfilling our energy storage contracts thereby adversely affecting our revenue and operating results.
Environmental and Occupational Health and Safety Regulations Impacting Our Customers
Our customers may be required to undertake difficult and costly actions to comply with federal, tribal, state and local laws and regulations governing occupational health and safety, the discharge of materials into the environment and environmental protection, which could include the incurrence of potentially significant capital or operating expenditures to mitigate or prevent releases of materials from customer locations where we provide products and services. These laws and regulations may also, among other things, require the acquisition of permits to conduct regulated activities; restrict the types, quantities and concentration of various substances that can be released into the environment; require remedial measures to mitigate pollution from former and ongoing operations; impose specific safety and health criteria addressing worker protection; and impose substantial liabilities for pollution resulting from operations and support services.
The trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment or public health and our customers may be required to make significant, unanticipated capital and operating expenditures. Examples of regulatory initiatives to which our customers are subject to include regulation of hydraulic fracturing, induced seismicity, national ambient air quality standards, and climate change.
Further, as part of the services we provide, we engage third parties that operate as motor carriers and therefore, are subject to regulation by the DOT and analogous state agencies. These regulatory authorities exercise broad powers, governing activities such as the authorization to engage in motor carrier operations, regulatory safety, equipment testing, driver requirements and specifications, and insurance requirements. The trucking industry is subject to possible regulatory and legislative changes that may impact our operations, including increased costs, such as changes in fuel emissions limits, hours of service regulations that govern the amount of time a driver may drive or work in any specific period and limits on vehicle weight and size. We cannot predict whether, or in what form, any legislative or regulatory changes or municipal ordinances applicable to our logistics operations will be enacted and to what extent any such legislation or regulations could increase our costs or otherwise adversely affect our business or operations.
Employees
As of December 31, 2025, we had five full-time employees. None of our employees are represented by a labor union. We primarily rely upon an administrative services agreement with IPAS Asset Management, LLC (“IPAS Asset Management), effective as of January 5, 2026 (the “Administrative Services Agreement”) for the performance of administrative services, see “Item 7. Certain Relationships and Related Transactions, and Director Independence – Certain Business Relationships” for a complete description of the Administrative Services Agreement.
We believe we maintain good relations with our employees.
ITEM 1A. RISK FACTORS.
The risk factors set forth below are those the Company currently considers material with respect to its operations, prospects, and capital structure. They are not comprehensive, and there may be additional risks, uncertainties, and events that the Company does not currently anticipate or consider material.
An investment in our Class A Common Stock is highly speculative and involves an extremely high risk of loss. The Company has limited liquidity, minimal operating history, and significant uncertainties regarding its future operations and financial performance. As a result, an investment in our Class A Common Stock could result in the complete loss of an investor’s entire investment. Prospective investors should be prepared to bear the economic risk of such a loss. Only persons who can afford to lose their entire investment should consider investing in the Company. There can be no assurance that any investment in the Company will produce a return, and the risk of total loss is substantial.
Risks Related to Our Business
We are an early-stage company with an unproven business strategy and may never be able to fully implement our business plan or achieve profitability.
We did not generate any material amount of revenue under our Prior TriUnity Business model. In connection with the acquisition of Independence Power, we are implementing our new business plan related to software-enabled control and management of battery energy storage systems deployed at unconventional oil and gas facilities. Our new business plan is at an early stage of operational development and is subject to numerous risks and uncertainties, including those described herein. We anticipate that full implementation of our new business plan could take many years, and success is dependent on many factors beyond our control. Our ability to continue as a going concern depends on our ability to establish commercially viable operations and achieve sustained profitability. There can be no assurance that we will be able to execute our business strategy as planned, successfully develop our business, raise additional capital, consistently generate revenue or that our business model will prove viable. The failure to address the risks and uncertainties to which our business is subject successfully or promptly could have a material adverse effect on our future operating results and financial condition.
Our limited operating history makes it difficult to forecast revenues and plan operating expenses accurately.
To date, the Independence Power business that we acquired in December 2025 has produced revenue only pursuant to the GridCore Installation Project, which was placed into service and generated $97.2 million of revenue for Independence Power in the three months ended September 30, 2025. Of that amount, $86.6 million was received in the form of a two year secured promissory note due September 2027 issued by GridCore, with four equal quarterly principal payments beginning in December 2026 (the “GridCore Note”). See “Item 2. Financial Information – Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for a description of the GridCore Note.
Because we have a limited history of operations, we may be unable to forecast future revenues and expenses with accuracy. Any misalignment between anticipated and actual performance could result in unexpected losses and cash flow shortages, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
We recognized a substantial amount of revenue on the GridCore Installation Project, most of it in the form of the GridCore Note, but we expect our revenues in the future to be primarily related to servicing BESS, and there can be no assurance that we will be able to enter into similar installation contracts in the future.
Although we recognized a substantial amount of revenue in the three months ended September 30, 2025, related to the GridCore Installation Project, most of it in the form of the GridCore Note, there is no assurance that we will be able to enter into similar installation contracts in the future. Instead, we expect our revenues in the future to be primarily related to servicing BESS, and we have only one active servicing agreement, with the Cooperative, as of the date of this Report. See “We expect to generate revenue in the future primarily related to servicing BESS, and to date we have entered into only one such service contract,” “We may not receive any payments under the GridCore Note” and “We may not be able to fully realize the value of the collateral securing the GridCore Note” below.
We expect to generate revenue in the future primarily related to servicing BESS and we have only one active servicing contract.
We expect future revenue generation to be primarily related to and dependent upon servicing BESS upon which our Software Platform is installed. As of the date of this Report, we have only one active servicing contract, the Asset Management Agreement. Our ability to generate revenue in addition to the Asset Management Agreement is depending on our ability to attract new customers, see “—We operate in a highly competitive industry, and our inability to compete effectively could materially affect our business,” “—Our limited capital resources may restrict our marketing efforts and ability to attract customers” and “—Our future success depends on our ability to execute key elements of our business plan.” If we are unable to attract enough customers to generate sufficient additional revenue, we may be forced to reduce or suspend operations, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
We expect to be reliant on the Asset Management Agreement for a substantial portion of our revenue in 2026 and potentially future financial periods. Our ability to successfully perform this contract and to achieve the revenues associated with such performance is subject to a number of risks and uncertainties, including those summarized in these Risk Factors. If the Cooperative is unable to fund and maintain its operations, or we are unable to successfully service the BESS Fleet, or the Asset Management Agreement is terminated for any reason, our financial condition and results of operations in future periods would be materially adversely affected.
We may not receive payments under the GridCore Note
In connection with completion of the installation of the battery software management system on the GridCore Installation Project, we have received the GridCore Note in an aggregate initial principal amount of $86.6 million. Pursuant to the terms of the GridCore Security Agreement (as defined herein), the GridCore Note is secured by a range of collateral, including by a separate promissory note payable by DBD Express to GridCore in the principal amount of $193.42 million (the “DBD Express Note”), and by the related Cooperative Guarantee (as defined herein). See “Item 2. Financial Information – Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for a description of the GridCore Note, the GridCore Security Agreement, the DBD Express Note and the related Cooperative Guarantee and the other collateral securing the respective notes.
Our ability to receive payment on the GridCore Note is subject to the financial condition and results of operations of GridCore, which in turn may depend in part on the financial condition and results of operations of DBD Express and the Cooperative and their ability to make payments on the DBD Express Note and related Cooperative Guarantee, respectively. To the extent that the business, financial condition and results of operations of either GridCore, DBD Express or the Cooperative are adversely affected, their ability to service the GridCore Note, the DBD Express Note or the Cooperative Guarantee, as the case may be, or to repay or refinance such notes, could be materially and adversely affected. As a result, our ability to receive payments on the GridCore Note is dependent on such factors, and we may not receive timely payments or be paid the amounts due under the GridCore Note at all. Any failure by GridCore, DBD Express or the Cooperative to make timely and full payments in respect of their respective notes could have a material adverse effect on our cash flows, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
We may not be able to fully realize the value of the collateral securing the GridCore Note.
The GridCore Note is secured by a range of collateral, including the DBD Express Note and the Cooperative Guarantee. We may not be able to fully realize the value of the collateral securing the GridCore Note due to one or more of the following factors:
| · | the collateral may not be valuable enough to satisfy all of the obligations under the GridCore Note; |
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| · | bankruptcy laws may limit our ability to realize value from the collateral and may delay the realization process; |
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| · | the need to obtain regulatory and contractual consents could impair or impede how effectively the collateral would be liquidated and could affect the value received; and |
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| · | some or all of the collateral may be illiquid and may have no readily ascertainable market value. The liquidity and value of the collateral could be impaired as a result of changing economic conditions, competition, and other factors, including the availability of suitable buyers. |
Additionally, under the GridCore Security Agreement, GridCore pledged, assigned and granted to us a first-priority security interest in such collateral. Failure to perfect the security interest in the collateral, such as by failing to file appropriate financing statements, could adversely affect our ability, upon exercising remedies under the GridCore Note or the GridCore Security Agreement, to realize the value of the GridCore Note. Any failure to realize the value of the GridCore Note could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
We are a holding company with no operations and will depend on distributions from our operating subsidiary to provide us with the funds necessary to meet our financial obligations.
We are a holding company with no direct operating assets or revenue. Our business operations are conducted primarily out of, and almost all of our assets are held by, Independence Power and its subsidiary Kyma Batteries. Our ability to meet financial and other obligations will be dependent on dividends, distributions or other transfers from Independence Power. Payments to us from Independence Power, or indirectly from Kyma Batteries, will be dependent upon its operating results and earnings and subject to any limitations on the ability of such entity to make payments or other distributions to us, including limitations contained in any agreement to which it is a party. If the cash distributions we receive from our subsidiaries are insufficient for us to fund our financial obligations, we may be required to raise cash through the incurrence of debt, the issuance of equity or the sale of assets to fund. However, there is no assurance that we would be able to raise cash by these means. If the ability of any of our subsidiaries to pay dividends or make distributions or payments to us is materially restricted by regulatory or legal requirements, bankruptcy or insolvency, or is limited due to operating results or other factors, it could adversely affect our ability to meet our financial obligations.
We face a variety of risks related to our entry into a new line of business following the completion of the Merger and Acquisition of Independence Power.
Entry into a new line of business may subject us to new laws and regulations with which we are not familiar and may lead to increased litigation and regulatory risk. Further, our management team has not directly engaged in the industrial battery management and monitoring business before, and our lack of experience may result in delays or further complications to our new business and increases our dependence on Kyma Batteries employees that have experience in the field. If we are unable to successfully implement the acquired business of Independence Power, our revenue and profitability may not grow as we expect, our competitiveness may be materially and adversely affected, and our reputation and business may be harmed, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
We will require additional funds in the future to achieve our current business strategy, and our inability to obtain funding may cause our business to fail.
We have limited liquidity and will need to raise additional funds through public or private debt or equity financings in order to support our operations and implement our business plan. Such financings may not be available when needed or may only be available on unfavorable terms. Even if we are able to raise capital, the terms of any such financing could result in dilution of existing shareholders or include preferences that are materially adverse to their interests. If we are unable to obtain financing, we may be forced to delay, scale back, or discontinue our operations, which would have a material adverse effect on our business and could ultimately cause us to decrease or cease operations.
We may also seek additional financing even if in our view such additional financing is not required in order to take advantage of favorable market conditions or for strategic considerations. There can be no assurance that additional financing will be available on favorable terms, or at all. The inability to obtain such additional financing if needed may adversely affect our ability to operate at the levels necessary to execute our business strategy.
Even if we successfully raise additional capital, we may require further funding in the future to continue or expand our operations. There is no guarantee that future financing will be at favorable financial terms. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.
Technical issues with the Software Platform could disrupt our operations.
Because our business relies entirely on the continued performance of the Software Platform, as applicable, any software or technical malfunctions could materially affect our operations. Remediation of such issues could require significant time, expense, or expertise that we may not possess. A sustained disruption could lead to loss of customers, increased costs, or suspension of our operations, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
Our energy storage products and solutions, which are complex, could contain defects, or may not operate at expected performance levels, which may cause us to incur warranty expenses beyond current estimates and could adversely affect our business and results of operations.
Under the GridCore Services Agreement, we offer product warranties and extended service warranties on all equipment and software provided thereunder (the “GridCore Warranties”), which warranties “pass-through” to the Cooperative as the end-user. We expect to offer comparable warranties to future customers. Our GridCore Warranties cover defects in materials and workmanship of our products for normal use and service conditions for five years following the placed-in-service date. As a result, we bear the risk of warranty claims long after we have sold the products and recognized revenue. Because Independence Power has only recently begun offering its products and services, it is difficult to estimate the warranty and service guaranty expense which we may incur in the future. Our estimated costs of warranty for previously sold products and services may change to the extent future products may not be compatible with earlier generation products under warranty. Furthermore, as we are in a evolving, nascent industry, there is a degree of uncertainty regarding estimated warranty costs due to limited data for the industry as a whole. We have a relatively limited operating history as an independent entity and therefore must project how our solutions will perform over the estimated warranty period. In addition, under real world operating conditions, which may vary by location and design, as well as environmental conditions, our product may perform in a different way than under standard test conditions or other failure data sets. We must develop a reputation for safety and reliability and high-quality products and services, and exceptional customer service in order to attract new customers and maintain existing customers, and grow our business. If our products and services do not perform as anticipated or we experience unexpected reliability problems or widespread product failures, we could incur substantial warranty expense, our brand and market reputation could be significantly impaired and we may lose, or be unable to gain or retain, customers which could have a material adverse effect on our business and results of operations.
We have been required to make assumptions and apply judgments, including the reliability of our Software Platform and any delivered equipment, regarding their performance over the estimated warranty period and our anticipated rate of warranty claims. Our assumptions could prove to be materially different from the actual performance of our products, causing us to incur substantial expense to repair or replace defective products in the future. An increase in our estimates of future warranty obligations due to product failure rates, field service obligations, and rework costs incurred in correcting product failures could cause us to increase the amount of warranty obligations and may adversely impact on our results of operations. If we are unable to cover future warranty claims, our financial condition and results of operations will be adversely affected.
Our customer relationships, business, financial results, and reputation may be adversely impacted due to events and incidents relating to storage, delivery, installation, operation, maintenance, and shutdowns of our energy storage solutions.
Our customer relationships, business, financial results, and reputation may be adversely impacted due to events and incidents relating to storage, delivery, installation, operation, and shutdowns of the BESS units on which our Software Platform is installed, including events and incidents outside of our control. We are subject to various risks as a result of the size, weight, technology, and sophisticated nature of the energy storage solutions on which our Software Platform is installed, including exposure to production, delivery, supply chain, inventory, installation, and maintenance issues. Such issues may, and from time to time have, result in financial losses, including losses resulting from our failure to deliver or install our energy storage solutions on a contractually agreed timeframe, or losses resulting from agreed warranty or indemnity terms. Any of these developments could have a material adverse effect on our business, financial condition, and results of operations.
Substantially all of Independence Power’s revenue to date was derived in the three months ended September 30, 2025 pursuant to a single contract related to the installation of a battery software management system for the GridCore Installation Basin Project, and there can be no assurance that we will be successful in winning new customers for similar installation projects in the future.
We recognized $97.2 million in revenue in the three months ended September 30, 2025, all of which was related to the installation a battery software management system for the GridCore Installation Project. While we seek to win new customer orders for the installation of battery software management systems in our target market, there can be no assurance that we will be successful in doing so. Factors that could impact our ability to win new projects include changes in the availability of tax credits and other regulatory changes, competitive factors, our brand reputation and other factors described herein. Any failure to win additional installation projects could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
Our ability to generate service revenue is dependent on our ability to establish and maintain a customer base that will generate a recurring stream of revenues. If that recurring stream of revenues does not increase as expected, our operating results will be adversely affected.
We expect to generate revenue primarily from software license and subscription fees and related services associated with use of our Software Platform on deployed units and, where applicable, from fees tied to measured performance outcomes. In the near term, we expect to derive substantially all of our service revenue from a single customer, the Cooperative, and we may continue to derive a significant portion of our service revenue from Cooperative for the foreseeable future. The Cooperative commenced operations in April 2025, and our ability to generate service revenue from the Cooperative will depend in turn on the Cooperative’s ability to expand its active patron-member base. Any failure by the Cooperative to significantly expand its active patron-member base could materially harm our business and negatively impact our revenue, business, financial condition, results of operations, and cash flow.
Our ability to grow our service business in the future will be dependent on our ability to maintain and grow our customer base. There can be no assurances that the Cooperative will allow the Asset Management Agreement to automatically renew for additional five year terms, or that the Cooperative would not exercise its right to terminate the Asset Management Agreement, subject to the obligation to pay to Independence a termination fee equal to 50%. In addition, the Cooperative may terminate its agreement with us in certain circumstances, including if we materially breach our obligations under the Asset Management Agreement. Moreover, there is no assurance that we will be able to attract additional customers on favorable terms, if at all.
If we are unable to successfully market our service business and maintain and grow our existing customer base, then the potential success of our service business will be less than we anticipate, which could have a material adverse impact on our business, prospects and operations. Any reduction in the volume of services required under our service agreements or loss of any one of the Company’s significant customers, including the Cooperative, a significant customer’s inability to perform under its respective contracts, including any default in payment, a significant dispute with one of these customers, a significant downturn or deterioration in the business or financial condition of any of these customers, any delay of contracting processes with customers due to economic uncertainty, or any other event negatively impacting the contractual relationship with one of these customers could have a material adverse effect on the brand, business, revenues, financial condition, and cash flows of the Company.
For the near future, we expect to continue to derive a significant portion of our total revenue from a small number of customers. Accordingly, loss of a significant customer or a significant reduction in order volume from a significant customer or a change in contracting behavior by a significant customer could materially reduce revenue recognized and operating results in any reporting period compared to prior periods and/or expectations and impact our results of operations.
We operate in a highly competitive industry, and our inability to compete effectively could materially affect our business.
We operate in an intensely competitive business environment for our energy storage solutions, services, and digital application offerings. To increase our revenue and market share, our business strategy depends on our ability to attract new customers and retain our existing customers. Certain of our competitors have financial, technical, manufacturing, marketing, and other resources that are greater than ours, which may allow them to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their offerings than we may be able to and therefore more effectively compete for new projects and customers. We expect competition in the energy storage industry to increase primarily due to increased demand from customers and recent regulatory changes and incentives geared towards encouraging the adoption of increased renewable energy assets as well as energy storage solutions, including as a result of the IRA and the OBBBA and their current anticipated impacts in the United States.
Consolidation by other industry participants could further increase their resources and result in competitors with expanded market share, larger customer bases, greater diversified product and service offerings and greater technological and marketing expertise, which may allow them to compete more effectively against us in the future. Moreover, our competitors may have or may develop solutions, services, or digital applications that are superior, more efficient, and more effective compared to our offerings (on a price-to-value basis, operational impact, or otherwise), may offer products with a lower total cost of ownership, or may adapt more quickly to new or emerging technologies. If we are unable to convince potential customers of the benefits and superiority of our offerings, effectively differentiate our offerings from our competitors, or if potential or existing customers prefer the offerings of our competitors, we may not be able to effectively implement our growth strategy, which in turn may have a material adverse effect on our business.
Additionally, substantially all of our revenue to date has been from GridCore in connection with the Company’s embedded Software Platform on the BESS Fleet. If we fail to maintain this relationship or if this relationship weakens, or if the Cooperative decides to reduce or modify its energy storage activities, it could materially impact our business prospects, financial condition, cash flows, or sales. Our future growth would then be even more reliant on our ability to compete for and retain new customers and our inability to do so would harm our ability to execute our growth strategy, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
Our competitors may lower their sales prices in response to market competition. Some competitors may have lower operating expenses due to greater vertical integration and supportive regulatory frameworks, allowing them to operate with minimal or even negative margins over time. This may in the future hinder our ability to compete in certain markets, which may lead to reduced net sales and negatively impact our operating results. In response to such competitive pressures, we may also choose to adjust our pricing strategy in certain markets or reduce our margin expectations, which could further affect our financial performance.
Our business and customer demand for our offerings depends in large part on government incentives and/or regulations relating to the use of renewable energy and/or energy storage.
Changes or potential changes to government incentives or regulations has and could in the future impact demand for our energy storage solutions, which could lead to material adverse effects to our business, operating results, and cash flows. Federal, state, local, and foreign government bodies provide incentives and/or regulations relating to mandating or encouraging use of energy storage to owners, end users, distributors, system integrators, and manufacturers of energy storage products and solutions to promote energy storage in the form of rebates, tax credits, other financial incentives, procurement requirements and market structures. The range and duration of these incentives and regulations varies widely by jurisdiction and type of asset involved. The reduction, elimination, modification, expiration, or determination of inapplicability of government incentives or regulations related to mandating or encouraging the use of energy storage or the potential of any such reduction, elimination, modification, expiration, or determination of inapplicability of government incentives or regulations has and may in the future negatively affect the competitiveness of our offerings and the growth of our industry and our business. Such government incentives and/or regulations may expire on a particular date, end when the allocated funding is exhausted or be reduced or terminated as energy storage adoption rates increase or as a result of legal challenges, changing policies or priorities, the adoption of new statutes or regulations or changes to existing regulations, new regulatory guidance, or the passage of time. Reductions, modification, terminations, or determination of inapplicability of government incentives and/or regulations may occur without warning. Such policies, regulations, and incentives may not continue to exist in current form, or at all. The reduction, modification, elimination, or expiration or the potential of any such reduction, elimination, modification, expiration, of such government incentives or regulations or determination of inapplicability of such government incentives or regulations may in the future impact customer demand for our offerings, may lead to a loss of customers and potential customer projects, and may in the future have a material adverse on our business, financial condition, results of operations and the value of our shares of Common Stock.
For example, in August 2022, the United States passed the IRA, which included incentives that supported the adoption of energy storage solutions, including a new “technology neutral” Section 48E investment tax credit (the “ITC”) and Section 45Y production tax credit (the “PTC”), and changes to the previous Section 48 non-”technology neutral” investment tax credit and Section 45 production tax credit. On July 4, 2025, the OBBBA was signed into law, which significantly modified certain provisions of the IRA, including those related to energy storage. The OBBBA supports energy storage in the United States, as the bill includes long-term continued availability of the ITC for energy storage projects. Certain tax credits, notably including the ITC for energy storage, will begin to phase down for projects that start construction (in accordance with Internal Revenue Service (“IRS”) guidance) after 2033. The prevailing wage and apprenticeship requirements enacted under the IRA continue to apply under the OBBBA for the project owner to receive the full ITC value, and the credit value can be further increased if the project owner also qualifies for a domestic content bonus credit and energy communities bonus credit. The OBBBA amended the provisions of the domestic content bonus credit for the ITC such that the project owner now must achieve higher minimum domestic content percentage thresholds. In addition, the OBBBA amended the ITC establishing new Prohibited Foreign Entity (“PFE”) restrictions.
The new PFE restrictions apply to virtually all key tax credits under the IRA and come in two forms: (i) for tax years beginning after July 4, 2025, the taxpayer taking the ITC tax credit cannot not be a PFE and (ii) for ITC projects that start construction in 2026 and after, the ITC eligible project must source a certain percentage of material from non-PFEs (known as “material assistance”), and the percentage of material from non-PFEs increases annually over time. The OBBBA includes substantive details regarding PFE restriction compliance requirements and requires U.S. Department of Treasury to issue implementation regulations by December 31, 2026. There is continuing uncertainty on certain aspects of the IRA and related guidance, the OBBBA and forthcoming related guidance (including with respect to PFE restrictions). In the past such uncertainty related to the IRA caused certain customers to take an extended period to evaluate, negotiate, and enter energy storage arrangements, which has impacted our business and results of operations. Current uncertainty related to changes imposed by the OBBBA may in the future similarly cause customers to delay contracting decisions or may cause customers to delay or cancel existing projects as they navigate such uncertainty, which could have a material negative effect on our business and results of operations.
If we are unable to provide energy storage solutions that qualify our customers for the ITC (with or without the domestic content bonus credit) under the OBBBA on the timeline and in such quantities that we currently anticipate, then there may be negative impacts to our reputation, ability to compete in the market, demand from our customers, and our financial condition. Our competitors may be able to build a more robust domestic supply chain than us and may be able to offer customers U.S. domestic content products in greater quantity, with better pricing, and on a faster timeline than we may be able to if our production of our battery components in the U.S. (e.g., modules, cells, enclosures, and thermal management systems) is delayed or hindered or otherwise negatively impacted (including through the PFE restrictions under the OBBBA). Such impacts would adversely impact our brand and ability to compete, and in turn would adversely affect our results of operations.
The full impact of the modifications to the tax credits and PFE restrictions in the OBBBA, its accompanying guidance, and potential changes in law that may apply to our business and operations as well as our customers’ and suppliers’ businesses cannot be known with certainty and we may not recognize the full extent of benefits we currently anticipate, which may materially and adversely impact our business, financial condition, and results of operations. We are continuing to evaluate the potential overall impact and applicability of these tax credits, as modified by the OBBBA, and any potential future changes in law on our business and operations.
The international markets in which we may operate in the future have or may in the future put in place policies to promote energy storage. These incentives and mechanisms vary from country to country. In seeking to achieve growth internationally, we may in the future make investments that, to some extent, rely on governmental incentives and support in a new market. We may not be able to optimize the benefits offered by these incentives or realize the growth that we expect from investments in the incentives, particularly in relation to competitors whose products might benefit disproportionately from these incentives. Governments may not continue to provide sufficient incentives and support to the energy storage industry and the industry in any particular country may suffer significant downturns in the future as the result of changes in public policies or government interest in renewable energy, any of which would adversely affect demand for our energy storage solutions and services.
Several of the rules and regulations that we and our customers are subject to are not fully defined by the U.S. government at this time, and there are risks related to the interpretations of and assumptions made about such rules and regulations by us and others as a result.
Maintaining and enhancing our reputation and brand recognition is critical in a competitive energy storage market. If we are not able to maintain and strengthen our reputation and brand recognition, our business and results of operations may be harmed.
As the markets for energy storage and related SaaS products for storage become increasingly competitive, marketing initiatives are becoming increasingly time-consuming and expensive. Our marketing activities may not be successful or yield the anticipated increased revenue, the increased revenue may not offset the expenses we incur as part of any marketing initiatives, and our results of operations could be harmed. Our ability to maintain and strengthen our brand depends heavily on our ability to provide quality offerings to our customers and to continue to meet our performance commitments in our underlying contracts with both suppliers and customers. In order to protect our brand, we may also expend substantial resources to register our intellectual property rights and to prevent others from using similar intellectual property, including similar patents, copyrights, and trademarks. Any factor that diminishes our reputation or that of our management, including failing to meet the expectations of or provide quality products and services to our customers on a timely basis, or any adverse publicity, litigation, or regulatory proceeding, has in the past and could in the future make it more difficult for us to attract new customers and to maintain our existing customers. Our ability to successfully position our brand could also be adversely affected by perceptions of our competitors’ energy storage solutions, services, and digital applications. If we do not successfully maintain and strengthen our reputation and brand recognition, our business may not grow as we expect, if at all, and we could lose our relationships with existing customers, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
Our limited capital resources may restrict our marketing efforts and ability to attract customers.
Because we have limited financial resources, our marketing activities may be insufficient to generate meaningful awareness of our products. If we are unable to attract enough customers to achieve profitability, we may be forced to reduce or suspend operations, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
We expect our operating results to fluctuate from quarter to quarter.
Our revenues and operating results may vary significantly between quarters due to factors such as demand fluctuations, customer retention rates, growth management challenges, and general economic conditions. These variations may cause results in future periods to fall short of market expectations, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
The historical financial results of the Independence Power and TriUnity, and the unaudited pro forma financial information of the Company, may not be indicative of what the Company’s actual financial position or results of operations would have been.
The historical financial results and unaudited pro forma financial information included herein is presented for illustrative purposes only and is not necessarily indicative of what the Company’s actual financial position or results of operations would have been had the Merger been completed on the dates indicated. Accordingly, the combined business, assets, results of operations and financial condition may differ significantly from those indicated in the historical financial results and unaudited pro forma financial information, and such variations may have a material adverse effect on our financial condition, results of operations and the value of our shares of Common Stoc.
Our future success depends on our ability to execute key elements of our business plan.
Our ability to achieve profitability depends on successfully implementing our business plan, which includes acquiring customers, establishing operational systems, and managing business processes efficiently. Failure to achieve these milestones could impair our ability to expand or sustain operations, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
Our anticipated growth may strain our limited resources.
If our business expands, we may face significant operational and managerial challenges due to limited personnel and financial resources. Our systems and controls may not be adequate to support such growth, which could have a material adverse effect on our results of operations and financial condition.
Our business depends heavily on the continued service of our Chief Executive Officer and Chief Financial Officer, and the loss of their leadership could harm our operations.
We rely heavily on the experience and leadership of Todd Parkin, our Chief Executive Officer, and Scott Stephenson, our President and Chief Financial Officer. We currently have employment agreements with each of Mr. Parkin or Mr. Stephenson, see “Item 6. Executive Compensation – Employment Agreements; Change in Control Benefits” of this Report. The loss of their services could materially delay or disrupt our business operations, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
If we cannot effectively expand our sales and marketing capabilities, our revenues may not grow.
We must continue to develop our sales and marketing functions to increase awareness and adoption of our technology. If we fail to recruit, train, and retain capable sales and marketing personnel, we may be unable to gain market traction or enter new markets. This could have a material adverse effect our revenue growth and financial performance.
Technical issues, including data loss, system outages, or software errors, could impair our platform and lead to customer attrition.
The Software Platform depends on stable software performance and data integrity. If the Software Platform experiences prolonged or repeated disruptions such as data loss, system outages, or software errors lasting more than a temporary period, users may discontinue use of the service, adversely affecting revenue and reputation, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
We rely on third-party vendors and hosting providers, and interruptions in their services could adversely affect our business.
The Software Platform depends on external vendors and hosting providers for essential components of its platform. If those services are disrupted or terminated, our Software Platform could become inaccessible, resulting in customer losses and an increase in the Company’s deficit.
Cybersecurity breaches or data theft could materially harm our business and reputation.
Like many technology companies, the Company’s technology faces the risk of cyberattacks, ransomware, and other malicious activity. Such incidents could result in financial losses, recovery expenses, legal liabilities, and damage to customer trust. Although the Company implements measures to reduce such risk, there is no assurance that these efforts will prevent future breaches or mitigate all potential losses.
Risks Related to Our Intellectual Property and Technology
If we are unable to obtain, maintain, and enforce adequate protection for our intellectual property or if the scope of our intellectual property protection is not sufficiently broad, others may be able to develop, commercialize, and/or receive patents for technology and intellectual property substantially similar to ours, and our ability to successfully commercialize our technology or intellectual property may be adversely affected.
Our business depends on internally developed technology or other internally developed intellectual property, including software, databases systems, confidential information, and know-how, the protection of which is crucial to the success of our business. We rely on a combination of patent, trademark, trade-secret, copyright, and other intellectual property protection laws as well as internal confidentiality procedures and contractual provisions to establish, maintain, and protect our intellectual property rights in our internally developed technology and other intellectual property. However, our rights under these laws and agreements only afford us limited protection and the actions we take to establish, maintain, and enforce our intellectual property rights may not leave us free from adverse effects. We will, over time, take additional steps in protecting our intellectual property through growing our internal intellectual property team and through additional trademark, patent, and other intellectual property filings both in the United States and abroad that will be expensive and time-consuming. Effective intellectual property protection is expensive to develop and maintain and the aggregate costs of maintaining a portfolio of patents and registered copyrights and trademarks and trade secrets can be substantial, both in terms of initial and ongoing prosecution and maintenance requirements and the costs of enforcing and defending our rights. Despite our efforts to protect our intellectual property, these measures taken to date cannot guarantee us complete protection from our competitors or from other third parties attempting to copy, reverse engineer, or otherwise obtain and use our intellectual property. If we are unable to protect our intellectual property rights, our competitive position could be harmed, business opportunities and demand for our products, services and digital application offerings could decrease, and our business could be adversely impacted as third parties may be able to commercialize and use technologies, software products and intellectual property that are substantially the same as ours without incurring the development and licensing costs that we have incurred.
Any of our owned or licensed intellectual property rights could be challenged, invalidated, circumvented, infringed, or misappropriated, and our trade secrets and other confidential information could be disclosed in an unauthorized manner to third parties. Some of our services rely on technologies and software developed by or licensed from third parties, and we may not be able to maintain our relationships with such third parties or enter into similar relationships in the future on reasonable terms or at all. Further, in some cases, our intellectual property rights may not be sufficient to circumvent third party intellectual property and thereby not permit us to take advantage of market trends nor providing us with competitive advantages, which could result in costly redesign efforts, discontinuance of certain offerings, or other competitive harm.
Additionally, monitoring unauthorized use of our intellectual property is cumbersome and costly and any steps taken to prevent misappropriation may not be successful. In the future, we may seek to enforce our rights against potential infringers, however, the steps we have taken to protect our intellectual property rights still may not prevent actual infringement or misappropriation of our intellectual property. We may not be able to detect unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. We may also have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources.
Uncertainty may result from changes in intellectual property laws as a result of new legislation and from new interpretations of intellectual property laws by applicable courts and agencies throughout the world. Accordingly, despite our efforts, we may be unable to obtain and maintain the intellectual property rights necessary to provide us with a competitive advantage. Our failure to obtain, maintain, and enforce our intellectual property rights could therefore have a material adverse effect on our business, financial condition, and results of operations.
As a technology company selling commercial products, we run the risk of being sued by third parties for infringement, misappropriation, dilution, or other violation of their intellectual property or proprietary rights.
Technology, internet, advertising, and in general most companies involved with commercially selling products, frequently are subject to litigation based on allegations of infringement, misappropriation, dilution, or other violations of intellectual property rights. Some of these companies, including some of our competitors, as well as non-practicing entities, own or have rights to large numbers of patents, copyrights, trademarks, and trade secrets, which they may use to assert claims against us. For instance, the use of our technology to provide our offerings could be challenged by claims that such use infringes, dilutes, misappropriates, or otherwise violates the intellectual property rights of a third party. In addition, we may in the future be exposed to claims that content published or made available through our applications or websites violates third-party intellectual property rights.
As we face increasing competition and as a public company, the possibility of intellectual property right claims against us grows. Such claims and litigation may involve patent holding companies or other adverse intellectual property rights holders who have no relevant product revenue, and therefore our own pending patents and other intellectual property rights may provide little or no deterrence to these rights holders in bringing intellectual property right claims against us. Third parties may hold vast and/or undisclosed intellectual property rights that cover significant aspects of our technologies, content, branding, or business methods, and we cannot completely and consistently assure that we are not infringing or violating, and have not violated or infringed, any third-party intellectual property rights or that we will not be held to have done so or be accused of doing so in the future. We may not be aware of existing patents or patent applications that could be pertinent to our business as many patent applications are filed confidentially in the United States and are not published until 18 months following the applicable filing date. We expect that we may receive in the future notices that claim we or our customers using our energy storage solutions, services or digital applications, have infringed or misappropriated, other parties’ intellectual property rights, particularly as the number of competitors in our market grows and the functionality of applications amongst competitors overlaps.
Any claim that we have violated intellectual property or other proprietary rights of third parties, with or without merit, and whether or not it results in litigation, settlement out of court, or is determined in our favor, could be time-consuming and costly to address and resolve, and could divert the time and attention of management and technical personnel from our business and the day-to-day operations. Furthermore, an adverse outcome of a dispute may result in an injunction and could require us to pay substantial monetary damages, including treble damages and attorneys’ fees, if we are found to have infringed a party’s intellectual property rights. Any settlement or adverse judgment resulting from such a claim could require us to enter into a licensing agreement to continue using the technology, content, or other intellectual property that is the subject of the claim; restrict or prohibit our use of such technology, content, or other intellectual property; require us to expend significant resources to redesign our technology or solutions; and require us to indemnify third parties. Royalty or licensing agreements, if required or desirable, may require significant royalty payments and other expenditures, or, they may be unavailable on commercially reasonable terms that are acceptable to us, or at all. We may also be required to develop alternative non-infringing technology, which could require significant time and expense and diversion of resources. We may not be able to develop or license suitable alternative technology, content, or other intellectual property to permit us to continue offering the affected technology, content, or services to our customers. If we cannot develop or license technology for any allegedly infringing aspect of our business, we would be forced to limit our offerings and may be unable to compete as effectively, if at all. Any of these events could materially harm our business, financial condition, and results of operations.
If our trademarks and trade names are not adequately protected or protectable, we may not be able to build name recognition in our markets of interest, and our competitive position may be harmed.
The registered and unregistered trademarks and trade names that we own may be challenged, infringed, circumvented, declared generic, lapsed, or determined to be infringing on or dilutive of other marks. We may not be able to protect our rights in these trademarks and trade names, which we need in order to build name recognition with potential members, partners, and clients. In addition, third parties may file for registration of trademarks similar or identical to our trademarks, thereby impeding our ability to build brand identity and possibly leading to market confusion. If they succeed in registering or developing common-law rights in such trademarks, and if we are not successful in challenging such third-party rights, we may not be able to use these trademarks to develop brand recognition of our technologies, products, or services. In addition, there could be potential trademark infringement claims brought by owners of other registered or unregistered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
We may not be able to enforce our intellectual property rights throughout the world.
As the geographic scope of our business expands, we will need to consider protecting our proprietary technology and other intellectual property in an increasing number of jurisdictions, a process that is expensive and may not be successful, and accordingly we may choose not to do so in every location. Filing, prosecuting, maintaining, defending, and enforcing intellectual property rights on our products, services, digital applications, and technologies in all countries throughout the world could be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. We do not own and have not registered or applied for intellectual property registrations in all countries outside the United States. Competitors may use our technologies in jurisdictions where we have not obtained protection to develop their own products, services, digital applications, and technologies and, further, may export otherwise violating products and services to territories where we have protection but enforcement is not as strong as that in the United States. These products, services, digital applications, and technologies may compete with our products, services, digital applications, and technologies, and we may not be effective or sufficient at preventing them from competing. In addition, the laws of some foreign countries do not protect certain proprietary and intellectual property rights to the same extent as the laws of the United States, and many other companies have encountered significant challenges in establishing and enforcing certain of their proprietary and intellectual property rights outside of the United States. These challenges can be caused by the absence or inconsistency of the application of rules and methods for the establishment and enforcement of intellectual property rights outside of the United States. For instance, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable for business methods. As such, we cannot ascertain the degree of future protection that we will have on our technologies, products, services, and digital applications.
In addition, the legal systems of some countries, particularly developing countries, do not favor the enforcement of intellectual property rights to the same degree at the United States. This could make it difficult for us to stop the misappropriation, dilution, infringement, or other violation of certain of our intellectual property rights. Accordingly, we may choose not to seek protection in certain countries, and thus, we will not have the benefit of intellectual property protection in such countries. Proceedings to enforce our intellectual property rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business. In addition, our efforts to protect our intellectual property rights in such countries may be inadequate. Changes in the law and the interpretation thereof as well as legal decisions by courts in the United States and foreign countries may affect our ability to obtain, maintain, and enforce adequate intellectual property protection for our products, services, digital applications, and other technologies. Any of the foregoing could have a material adverse effect on our competitive position, business, financial condition, results of operations, and prospects.
Our business depends on our ability to implement improvements to and properly maintain and protect the continuous operation and data integrity of our technology infrastructure, data and other business systems and the inability to do so may have a material adverse effect on our reputation and harm our business prospects, financial conditions, and operating results.
Our business is highly dependent on maintaining effective information and operational technology systems as well as the integrity of the data we use to serve our customers and operate our business. Because of the large amount of data that we collect and manage, it is possible that hardware failures or errors in our systems could result in data loss or corruption or cause the information that we collect to be incomplete or contain inaccuracies that our customers or other parties may regard as significant. If our data were found to be inaccurate or unreliable due to fraud or other error, or if we, or any of the third-party service providers we engage, were to fail to maintain information systems and data integrity effectively, we could experience operational disruptions that may impact our operations and hinder our ability to provide services, establish appropriate pricing, establish reserves, report financial results timely and accurately and maintain regulatory compliance, among other things. If any such failure of our information technology systems or data integrity were to result in the theft, corruption or other harm to the data or operations of our customers, our ability to retain and attract customers may be harmed, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
We must continue to invest in long-term solutions that will enable us to anticipate customer needs and expectations, enhance the customer experience, act as a differentiator in the market, and protect against cybersecurity risks and threats. Despite implementation of reasonable security measures designed to prevent cybersecurity risks and threats, we are vulnerable to potential harm and damages from computer viruses, natural disasters, fire, power loss, telecommunications failures, personnel misconduct or theft, human error, unauthorized access, physical or electronic security breaches, cyber-attacks (including malicious and destructive code, misconfigurations, “bugs” or other vulnerabilities in commercial software that is integrated into our (or our suppliers’) IT systems, products, or services, social engineering attacks, phishing attacks, ransomware, and denial of service attacks), and other similar disruptions and incidents. Such harm, damages, attacks, security breaches or disruptions may be perpetrated by bad actors internally or externally (including computer hackers, persons involved with organized crime, or foreign state or foreign state-supported actors) and create risks that threaten the confidentiality, integrity, and availability for our (as well as our suppliers’ and our customers’) internal networks, IT infrastructure, and other business systems and the data and information they store and process. Additionally, we are unable to comprehensively apply patches or confirm that measures are in place to mitigate all such vulnerabilities, or that patches will be applied before vulnerabilities are exploited by a threat actor. Cybersecurity threat actors employ a wide variety of methods and techniques that are constantly evolving, increasingly sophisticated, and difficult to detect and successfully defend against, including artificial intelligence that circumvent security controls, evade detection and remove forensic evidence. Geopolitical tensions or conflicts, such as Russia’s invasion of Ukraine, and heightened tensions in the Middle East, may further heighten the risk of cyber-attacks. We have experienced such cybersecurity incidents in the past, and any future incidents could expose us to claims, litigation, regulatory or other governmental investigations, administrative fines, and potential liability. Moreover, while we have implemented remedial measures in response to such incidents, we cannot guarantee that such measures will prevent all incidents in the future. Any system failure, accident, or security breach could result in disruptions to our operations. A material breach in the security of our IT systems could include the theft of our trade secrets, customer information, human resources information, or other confidential data, including but not limited to personal information. Material breaches could also include denial of service attacks resulting in disruption to our or our supplier’s supply chain systems, or targeted attacks against the control plane of remotely serviced battery energy storage systems within our customers’ environments, resulting in operational disruption to energy storage or physical damage to batteries, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
To the extent that any disruption or security breach results in the compromise of the control plane of one or more of our serviced customer sites, or a loss or damage to our data, or an inadvertent disclosure of confidential, proprietary personal, or customer information, it could cause significant damage to our reputation, affect our relationships with our customers and strategic partners, lead to claims against us from governments and private plaintiffs (including class actions), and adversely affect our business. We cannot guarantee that future cyberattacks and cybersecurity incidents, if successful, will not have a material adverse effect on our business or financial results.
If we fail to comply with our obligations under cybersecurity laws in the jurisdictions in which we operate, we could be subject to regulatory action and lawsuits (including class actions). We may also have other obligations, for example, under contracts, to notify customers or other counterparties of a security incident, including a data breach. Regardless of our contractual protections, if an actual or perceived cybersecurity breach of security measures, unauthorized access to our system or the systems of the third-party vendors that we rely upon, or any other cybersecurity threat occurs, we may incur liability, costs, or damages, contract termination, our reputation may be compromised, our ability to attract new customers could be negatively affected, and our business, financial condition, and results of operations could be materially and adversely affected. Any compromise of our security could also result in a violation of applicable domestic and foreign security, privacy or data protection, consumer protection, and other laws, regulatory or other governmental investigations, enforcement actions, and legal and financial exposure, including potential contractual liability. In addition, we may be required to incur significant costs to protect against and remediate damage caused by these disruptions or security breaches in the future. While we expect to carry cyber insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on commercially reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
Compromises, interruptions, and shutdowns of our systems, including those managed by third parties, whether intentional or inadvertent, could lead to delays in our business operations and, if significant or extreme, affect our results of operations.
From time to time, our Software Platform may require modifications and updates, including by adding new hardware, software, and applications, maintaining, updating, or replacing legacy programs, and integrating new service providers and adding enhanced or new functionality. There are inherent risks associated with modifying or replacing systems, and with new or changed relationships, including accurately capturing and maintaining data, realizing the expected benefit of the change, and managing the potential disruption of the operation of the systems as the changes are implemented. Potential issues associated with implementation of these technology initiatives has previously and could in the future reduce the efficiency of our operations in the short term. The efficient operation and successful growth of our business depends upon functional and efficient systems, including our financial, information technology, operating, and other systems. The failure of our systems and related third-party systems we rely on to perform as designed, or our failure to implement and operate them effectively, could disrupt our business or subject us to liability and thereby may have a material adverse effect on our business, financial condition, results of operations, and prospects.
Risks Related to Ownership of our Class A Common Stock
Because we have no current plans to pay regular cash dividends on our Class A Common Stock for the foreseeable future, you may not receive any return on investment unless you sell your Class A Common Stock for a price greater than that which you paid for it.
We do not anticipate paying any regular cash dividends on our Class A common stock in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, and such other factors that our board of directors may deem relevant. In addition, our ability to pay dividends is, and may be, limited by covenants of any future outstanding indebtedness we or our subsidiaries incur. Therefore, any return on investment in our Class A common stock is solely dependent upon the appreciation of the price of our Class A common stock on the open market, which may not occur.
The dual class structure of our Common Stock may adversely affect the trading market for our Class A Common Stock.
We cannot predict the effect our multiple class structure may have on the market price of our Class A Common Stock. We cannot predict whether our multi-class structure will result in a lower or more volatile market price of our Class A Common Stock, in adverse publicity or other adverse consequences. Certain stockholder advisory firms and large institutional investors may prefer companies that do not have multiple share classes or may have investment guidelines that preclude them from investing in companies that have multiple share classes. Any actions or publications by stockholder advisory firms or institutional investors critical of our corporate governance practices or capital structure could also have a material adverse effect on the value of our Class A Common Stock.
You may be diluted by future issuances of additional Class A Common Stock or Class B Common Stock; future sales of such shares in the public market, or the expectations that such sales may occur, could lower our stock price.
The sale of shares of our Class A Common Stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A Common Stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
As of December 30, 2025, after giving effect to the Merger (but not taking into account the shares of Class A Common Stock underlying the Warrants), we had a total of 5,950,000 shares of Class A Common Stock outstanding. Of the outstanding shares, 2,100,000 shares held by public investors are freely tradable without restriction or further registration under the Securities Act. Any shares of Class A Common Stock held by our affiliates may become eligible for resale pursuant to Rule 144 under the Securities Act, subject to the volume, manner of sale, holding period and other limitations of Rule 144.
There is a limited market for our common shares, which may make it difficult for you to sell your stock.
Our common shares are quoted on the OTCID Basic Market. The Company has applies to change its current symbol “TYBB,” to “ITXP,” which remains subject to OTC and FINRA approval. There is a limited trading market for our shares and there frequently has been days on which there is no trading in our shares. Accordingly, there can be no assurance as to the liquidity of any markets that may develop for our Class A Common Stock, the ability of holders of our Class A Common Stock to sell their shares, or the prices at which holders may be able to sell our Class A Common Stock. Further, because of the thin float, the reported bid and asked prices may have little relationship to the price you would pay if you wanted to buy shares or the price you would receive if you wanted to sell shares.
Risks Related to Our Existing Shareholders
David J. Durrett, Independence Investors LLC and its affiliates may exercise substantial influence over us, and they may have interests that differ from those of our other stockholders.
After giving effect to the Merger, Independence Investors and Energizer Systems together, and David J. Durrett (the “Principal Stockholder”) as holder of all limited liability company interests in Independence Investors, beneficially own 94.33% the shares of our outstanding common stock, including all of our outstanding shares of Class B Common Stock, representing more than 99% of the combined voting power of all classes of our voting stock. Our Principal Stockholder may elect to convert all of the issued and outstanding shares of Class B Common Stock into fully paid and nonassessable shares of Class A Common Stock. Given the number of shares of Class B Common Stock beneficially owned by our Principal Stockholder, even following any such conversion and until the date Mr. Durrett beneficially owns less than the required voting percentage, he will likely continue to have the ability to elect all of the members of our board of directors and thereby control our management and affairs, including determinations with respect to acquisitions, dispositions, borrowings, issuances of common stock or other securities, and the declaration and payment of dividends on our common stock. In addition, our Principal Stockholder and Independence Investors will continue to be able to determine the outcome of all matters requiring stockholder approval on a combined class vote basis, and will continue to be able to cause or prevent a change of control of our Company or a change in the composition of our board of directors. The concentration of ownership could deprive other holders of our Class A Common Stock of an opportunity to receive a premium for their common stock as part of a sale of our Company and might ultimately negatively affect the market price of our Class A Common Stock.
The Company through Independence Power and Kyma Batteries, its wholly owned subsidiaries, is also party to agreements with certain affiliates of Independence Investors, including the Administrative Services Agreement and the Commercial Lease Agreement (the “Commercial Lease”) between Independence WI LLC (“Independence WI”) and Kyma Batteries. Pursuant to the Administrative Services Agreement, IPAS Asset Management will perform certain enumerated administrative services in exchange for a nominal fee plus reimbursement of all expenses incurred by IPAS Asset Management while performing such services. Pursuant to the Commercial Lease, we lease property in Wisconsin for 12-month periods, beginning January 1, 2025, for a monthly payment of $50,000. See “Item 7. Certain Relationships and Related Transactions, and Director Independence – Certain Business Relationships” for a complete description of each of the Administrative Services Agreement and the Commercial Lease. The Company and Independence Investors or its affiliates may enter into various transactions from time to time in the future.
In addition, certain decisions concerning our operations or financial structure may present conflicts of interest between Independence Investors and its affiliates, on the one hand, and our other stockholders, on the other. For example, Independence Investors may in the future engage in a wide variety of activities in our industry that may result in conflicts of interest with respect to matters affecting us. Independence Investors may also make investments in businesses that directly or indirectly compete with us, or may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
The A&R Charter includes a corporate opportunity waiver.
To the fullest extent permitted under the NRS, the A&R Charter renounced any interest or expectancy of the Company in, or in being offered an opportunity to participate in, business opportunities that are presented to members of the Board who are not employees of the Company (a “Non-Employee Director”) (including any Non-Employee Director who serves as an officer in both his or her director and officer capacities). Our Non-Employee Directors and their respective affiliates do not (to the fullest extent permitted by applicable law) have any liability to the Company for any breach of fiduciary duty for engaging in any such activities or from not disclosing any corporate opportunities to the Company or from pursuing or acquiring such opportunities themselves or offering or directing such opportunities to any other person. As a result of these provisions, the Company may be not be offered certain corporate opportunities which could be beneficial, or our Non-Employee Directors may direct such opportunities to certain other businesses in which they are engaged (or such other businesses may otherwise pursue such opportunities) causing them to compete with the Company, which may cause such opportunities not to be available to the Company or to become more expensive or difficult for the Company to pursue, which could adversely impact the Company’s business or prospects. By being a stockholder in the Company, you will be deemed to have notice of and have consented to these provisions of our articles of incorporation.
Certain of our officers and Directors may have actual or potential conflicts of interest because of their positions with Independence Investors.
Scott Stephenson serves as our President, Chief Financial Officer, and Treasurer, as well as a member of the Board, and he retains his position with Independence TX, Independence Investors and Independence WI. Energizer Systems, which beneficially owns 10.01% of the Company’s total issued and outstanding Common Stock, is a wholly-owned subsidiary of Independence Investors. These holdings in and compensation from Independence Investors may be significant. These positions at Independence Investors and the other Independence companies, any compensation from Independence Investors and the other Independence companies, and the ownership of any equity or outstanding equity awards in Independence Investors may create the appearance of conflicts of interest when Mr. Stephenson is faced with decisions that could have different implications for Independence Investors and the other Independence companies than the decisions have for us.
Risks Related to Nevada Law, the A&R Charter and Anti-Takeover Provisions
Case law in Nevada may be less likely to provide guidance for specific fact scenarios than in Delaware.
The Company is a Nevada corporation. Because of Delaware’s prominence as a state of incorporation for many large corporations, the Delaware courts have developed considerable expertise in dealing with corporate issues and a substantial body of case law has developed construing Delaware law under certain sets of facts. While Nevada also has adopted comprehensive, modern and flexible corporate law statutes, because the volume of Nevada case law concerning the effects of its statutes and regulations is more limited, the Company may experience, and its stockholders may experience, less predictability with respect to the legal requirements in connection with corporate affairs and transactions, and stockholders’ rights to challenge them in specific situations where the application of the statute may be open to differing interpretations.
The Company’s directors and officers are protected from liability for a broad range of actions.
Nevada law, by default, with certain specific exceptions, eliminates the liability of directors and officers, to a corporation and its stockholders and creditors, except where (i) the presumption that such director or officer has acted in good faith, on an informed basis and with a view to the interests of the corporation has been rebutted, and (ii) it is proven that such director’s or officer’s act or failure to act was a breach of his or her fiduciary duties and such breach involved intentional misconduct, fraud or a knowing violation of law. The A&R Charter provides that, to the fullest extent permitted by Nevada law, its directors and officers will not be individually liable to it or any of its stockholders or creditors for damages as a result of any act or failure to act in their respective capacities as a director or officer.
The A&R Charter provides that the Eighth Judicial District Court of Clark County, Nevada and, except where the NRS confers mandatory sole jurisdiction on the district court of the State of Nevada, any state or federal court located in Dallas County, Texas are the sole and exclusive forums for substantially all disputes between the Company and its stockholders, which could limit the stockholders’ ability to obtain a favorable judicial forum for disputes with the Company or its directors, officers or employees.
The A&R Charter provides that the Eighth Judicial District Court of Clark County, Nevada and, except where the NRS confers mandatory sole jurisdiction on the district court of the State of Nevada, any state or federal court located in Dallas County, Texas are the sole and exclusive forums for many disputes between the Company and its stockholders, which could limit the stockholders’ ability to obtain a favorable judicial forum for disputes with the Company or its directors, officers or employees. The A&R Charter provides that, unless the Company consents in writing to the selection of an alternative forum, to the fullest extent permitted by applicable law the Eighth Judicial District Court of Clark County, Nevada and, except where the NRS confers mandatory sole jurisdiction on the district court of the State of Nevada, any state or federal court located in Dallas County, Texas are the sole and exclusive forums for any or all actions, suits or proceedings, whether civil, administrative or investigative or that asserts any claim or counterclaim: (a) brought in the Company’s name or right or on its behalf, (b) asserting a claim for breach of any fiduciary duty owed by any of the Company’s current or former directors, officers, stockholders, employees, agents or fiduciaries or its stockholders, (c) for any internal action (as defined in NRS 78.046), including any action asserting a claim against the Company arising pursuant to any provision of NRS Chapters 78 or 92A, any provision of the A&R Charter or the A&R Bylaws, any agreement entered into pursuant to NRS 78.365 or as to which the NRS confers jurisdiction on the district court of the State of Nevada, (d) to interpret, apply, enforce or determine the validity of the A&R Charter or the A&R Bylaws or (e) governed by the internal affairs doctrine.
The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers, or other employees, which may discourage such lawsuits against the Company and its directors, officers and other employees. Alternatively, if a court were to find the choice of forum provision contained in the A&R Charter to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions, which in turn could have a material adverse effect on our business, financial condition, results of operations and the value of our shares of Common Stock.
The Company’s governing documents and Nevada law could discourage takeover attempts and other corporate governance changes.
The A&R Charter and A&R Bylaws contain provisions that could delay or prevent a change in control of the Company. These provisions may also make it difficult for the Company’s stockholders to elect directors that are not nominated by the current members of the Board or take other corporate actions, including effecting changes in our management. These provisions include the following provisions:
| · | permit the Board to establish the number of directors and fill any vacancies and newly created directorships; |
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| · | require super-majority voting to amend certain provisions in our articles of incorporation and bylaws; |
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| · | a restriction on acquiring more than a 20% ownership interest in the Company; |
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| · | authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; |
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| · | specify that special meetings of our stockholders can be called only by the affirmative vote of a majority of the entire board of directors; |
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| · | provide that the board of directors is expressly authorized to make, alter or repeal our A&R Bylaws; |
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| · | provide that vacancies on the Board may be filled only by a majority of directors then in office, even though less than a quorum; |
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| · | prohibit cumulative voting in the election of directors; |
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| · | restrict the forum for certain litigation against us to Nevada and Texas; |
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| · | restrict the forum for certain litigation against us to the federal district courts of the United States; |
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| · | reflect the dual class structure of our Common Stock; and |
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| · | establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings. |
In addition, after certain events specified in the A&R Charter, we will be subject to Nevada’s statutes regarding combinations with interested stockholders. These provisions may prohibit large stockholders, in particular those owning 10% or more of the voting power of our outstanding voting stock, from merging or combining with us for a period of time.
Risks Related to Operating as a Public Company
We may be required to incur significant costs and require significant management resources to evaluate our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse effect on our stock price.
As a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Section 404 requires us to include an internal control report with our Annual Report on Form 10-K. This report must include management’s assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified. Failure to comply, or any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the value of our Common Stock.
Achieving continued compliance with Section 404 may require us to incur significant costs and expend significant time and management resources. No assurance can be given that we will be able to fully comply with Section 404 or that we and our independent registered public accounting firm would be able to conclude that our internal control over financial reporting is effective at fiscal year-end. As a result, investors could lose confidence in our reported financial information, which could have a material adverse effect on the value of our Common Stock, as well as subject us to civil or criminal investigations and penalties. In addition, our independent registered public accounting firm may not agree with our management’s assessment or conclude that our internal control over financial reporting is operating effectively.
We may not be able to meet the internal control reporting requirements imposed by the SEC, and any such failure could result in a possible decline in the price of our common stock and our inability to obtain future financing.
As directed by Section 404 of the Sarbanes-Oxley Act, the SEC adopted rules requiring each public company to include a report of management on the company’s internal controls over financial reporting in its annual reports. Although the Dodd-Frank Wall Street Reform and Consumer Protection Act exempts companies with a public float of less than $75 million from the requirement that our independent registered public accounting firm attest to our financial controls, this exemption does not affect the requirement that we include a report of management on our internal control over financial reporting and does not affect the requirement to include the independent registered public accounting firm’s attestation if our public float exceeds $75 million.
Our financial reporting function and system of internal controls may be less developed in certain respects than those of similar companies and may not provide our management with as much or as accurate or timely information. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Prior to the Merger, our management has not performed an assessment of the effectiveness of our internal control over financial reporting, and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, Whitley Penn LLP, the independent registered public accounting firm of Kyma Batteries, identified the following deficiencies in Kyma Batteries’ internal control over financial reporting in connection with their audit of the financial statements of Kyma Batteries as of and for the year ended December 31, 2024:
| · | the overall control environment does not provide for proper control design; |
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| · | there are minimal personnel and therefore minimal controls designed or operating properly; |
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| · | the control environment lacks segregation of duties between processes; |
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| · | lack of written policies and procedures such as formal employee handbook, code of conduct, job descriptions, formal strategic plan, or budget; |
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| · | no formal review process related to account reconciliations, journal entries, or closing processes; |
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| · | no formal and documented with evidence process for reviewing and finalizing financial statements, thus, several adjusting entries were required to correct material misstatements of the financial statements; |
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| · | the IT control environment was not properly designed or operating; |
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| · | several individuals at Kyma Batteries had access to the accounting software, including administrative rights, inappropriate for their role at the company; and |
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| · | no process documented to review the use access listing and ensure proper access is segregated to individuals based on their role at the company, including any terminated individuals. |
These weaknesses and deficiencies have not yet been fully remedied.
Additionally, we expect to establish but do not yet have an audit committee or an independent audit committee financial expert. While not being legally obligated to have an audit committee or independent audit committee financial expert, it is management’s view that to have an audit committee, comprised of independent board members, and an independent audit committee financial expert is an important entity-level control over the Company’s financial statements.
While we expect to expend significant resources in developing the necessary documentation and testing procedures required by Section 404 of the Sarbanes-Oxley Act, there is a risk that we may not be able to comply timely with all of the requirements imposed by this rule. Additionally, during the course of documenting and testing our internal control procedures, in the event that we identify weaknesses and deficiencies in our internal control over financial reporting, and fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented, or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Regardless of whether we are required to receive a positive attestation from our independent registered public accounting firm with respect to our internal controls, our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which may result in volatility in and a decline in the market price of the Class A Common Stock and our ability to obtain equity or debt financing as needed could suffer. Ineffective internal control over financial reporting could also expose us to increased risk of fraud or misuse of corporate assets and subject us to potential regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.
Further, in the event that our independent registered public accounting firm is unable to rely on our internal controls in connection with its audit of our financial statements, and in the further event that it is unable to devise alternative procedures in order to satisfy itself as to the material accuracy of our financial statements and related disclosures, it is possible that we would be unable to file our Annual Report on Form 10-K with the SEC, which could also have a material adverse effect on the market for and the market price of our Common Stock and our ability to secure additional financing as needed.
ITEM 2. FINANCIAL INFORMATION.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
On December 30, 2025, the Company entered into and completed an Agreement and Plan of Merger by and among the Company, Merger Sub, Independence Power and Independence Investors, pursuant to which Merger Sub merged with and into Independence Power (the “Merger”), with Independence Power continuing as the surviving company and a wholly owned subsidiary of the Company. The Merger was completed in a simultaneous sign and close transaction.
The Merger was accounted for as a “reverse merger,” and Independence Power was deemed to be the accounting acquirer in the Merger. Independence Power was formed on October 22, 2025, for the purpose of acquiring all of the equity interests in Kyma Batteries, and has had no operations prior to completion of its acquisition of Kyma Batteries effective November 1, 2025. Consequently, the financial condition, results of operations and cash flows discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations discussed below are those of Kyma Batteries. References herein to the” Company” and to “Independence Power” include Kyma Batteries, unless the context otherwise requires.
Objective
The objective of our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide users of our financial statements with the following:
| · | A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results; |
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| · | Useful context to the financial statements; and |
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| · | Information that allows assessment of the likelihood that past performance is indicative of future performance. |
This MD&A is provided as a supplement to, and should be read together with, Kyma Batteries’ audited financial statements for the fiscal year ended December 31, 2024 and Kyma Batteries’ unaudited financial statements for the fiscal quarters ended September 30, 2025 and 2024 with our pro forma financial information filed as an exhibit to this Report.
Overview
The Company, through its wholly-owned subsidiary Kyma Batteries, is an energy technology company focused on software-enabled control and management of Battery Energy Storage Systems (“BESS”) deployed at unconventional oil and gas facilities. The Company’s strategy is to support the electrification of compression stations and related upstream infrastructure by integrating BESS into existing power configurations that may include diesel-fueled generators, field gas-fired generators and, where available, utility grid interconnections. The Company’s initial geographic focus is the Permian Basin, located in western Texas and southeastern New Mexico, with potential deployment in other United States basins and selected international markets over time.
Substantially all of the revenue generated by Kyma Batteries in the three and nine months ended September 30, 2025 related to the installation of a battery software management system on the BESS Fleet (104 BESS units representing approximately 241 megawatts of nameplate capacity) acquired by the Cooperative from GridCore. We refer to the installation of the battery software management system on the BESS Fleet as the “GridCore Installation Project.” The Company delivered its battery software management system installation on the GridCore Installation Project pursuant to a Master Supply and Services Agreement, and GridCore in turn delivered the entire system to the Cooperative, as end-user. The Company does not own BESS equipment. Instead, capital investment in BESS is expected to be undertaken by the Cooperative and other asset owners serviced by the Company.
While Kyma Batteries recognized a substantial amount of revenue in connection with the GridCore Installation Project on the BESS Fleet, it is uncertain whether the Company will generate revenues from similar installation projects in the future. Therefore, you should not assume that the Company will generate such revenue from installation projects in the future. See “Item 1A. Risk Factors – We recognized a substantial amount of revenue on the GridCore Installation Project, most of it in the form of a promissory note, but we expect our revenues in the future to be primarily related to servicing BESS, and there can be no assurance that we will be able to enter into similar installation contracts in the future.”
The Company’s revenues in the future are expected to be derived primarily from software license and subscription fees and related services, and, in some cases, from performance-based fees. Additionally, it is expected that the Company and other service providers will provide field operations. For example, Kyma Batteries has entered into the Asset Management Agreement with the Cooperative, effective October 1, 2025, pursuant to which Kyma Batteries provides administrative, monitoring, advisory and consulting services, including quarterly business analysis, daily operations of the BESS units, maintenance services, marketing services, customer support for end customers, marketing services and negotiation of rental agreements with end customers. Under the Asset Management Agreement, the Cooperative is obligated to pay to Kyma Batteries on a quarterly basis an amount calculated as a percentage, to be agreed per the terms of the Asset Management Agreement, of the aggregate gross rental fees that the Cooperative actually receives under all rental agreements with end customers, subject to an aggregate maximum amount. Such fee shall not be less than $5,000 per month per BESS unit (initially, 101 units, with three in reserve). If the parties cannot agree on the percentage and maximum amount of the fee, such terms will be determined by binding arbitration. See “Item 1. Business – Products and Services – Program Management Engagement Related to PaaS Activities.”
As of the date of this Report, the Cooperative, through its subsidiary DBD Express, acquired the initial BESS Fleet, and the Software Platform is expected to be used on that fleet. The timing and scale of deployments of the BESS Fleet units will significantly influence the Company’s near-term operating results. To the extent we are not successful in deploying a significant percentage of the BESS Fleet, our operating results and financial position will be adversely affected.
Basis of Presentation
Because Independence Power is treated as the accounting acquirer, and because Independence Power had no operations prior to its acquisition of Kyma Batteries effective November 1, 2025, the following discussion refers to the historical operations of Kyma Batteries. Kyma Batteries has historically operated as a development-stage enterprise with limited revenue prior to the three months ended September 30, 2025.
Prior to the Merger, the Company’s fiscal year ended on July 31 of each year. Independence Power’s and Kyma Batteries’ fiscal years each end on December 31 of each year. In connection with the Merger and the Company’s acquisition of Independence Power, the Company changed its fiscal year end to December 31.
Prior to the Merger, TriUnity received a qualified opinion from its auditor, JP Centurion & Partners PLT, raising substantial doubt about the Company’s ability to continue as a going concern as of fiscal year end July 31, 2025, due to net loss and used cash, such that its ability to continue as a going concern was determined to be dependent on profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. Following the Merger, our ability to continue as a going concern will depend on our ability to successfully execute on our new business strategy and to access capital as needed. See “Risk Factors – Risks Related to Our Business – We are an early-stage company with an unproven business strategy and may never be able to fully implement our business plan or achieve profitability.”
Kyma Batteries is organized as a limited liability company and, as a wholly disregarded entity for federal tax purposes, its operation results flowed through to its sole member for inclusion in its income tax returns. Accordingly, Kyma Batteries incurred no income tax expense for the periods covered by its financial statements included herein. However, the Company will be subject to income tax in respect of Independence Power’s and Kyma Batteries’ consolidated operations after the closing of the Merger.
Key Factors Affecting Results
Key factors that will affect our results of operations and financial condition include:
| · | Pace and extent of BESS deployment and utilization by the Cooperative and its patron members, and by other BESS asset owners of their systems; |
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| · | Independence Power’s ability to win new contracts to provide its management services to other BESS asset owners; |
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| · | Execution and pricing of commercial arrangements for software and services, including the outcome of negotiations with the Cooperative of the percentage pricing model under the Asset Management Agreement; |
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| · | Investment in software development, integration capabilities and personnel; |
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| · | Dependence on a limited number of counterparties (including the Cooperative, Independence TX and a small group of exploration and production and midstream customers); |
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| · | Any increases in headcount or other costs necessary to support delivery of services to the Cooperative under the Asset Management Agreement and to other customers in the future; |
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| · | Regulatory and tax considerations affecting the Cooperative’s and other BESS asset owners’ programs (See “Item 1A. Risk Factors – Our business and customer demand for our offerings depends in large part on government incentives and/or regulations relating to the use of renewable energy and/or energy storage”); and |
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| · | Macroeconomic and industry conditions in the oil and gas sector, including commodity prices and capital spending levels. |
In addition, as a consequence of the Merger, the Company’s operations have been materially expanded, which will require the Company to hire additional personnel and implement and apply procedures and processes to Independence Power and its operations in order to address public company regulatory requirements and customary practices. The Company expects to incur significant additional annual expenses as a result.
Results of Operations
To date, Independence Power, through Kyma Batteries, has generated revenue only from the GridCore Installation Project. Future revenue is expected to be generated by Independence Power and to be derived primarily from software license and subscription fees and related services, and, in some cases, from performance-based fees. Operating expenses have consisted primarily of cost of sales, research and development (“R&D”) and general and administrative (“G&A”) costs, and the Company has incurred net losses for all periods except for the three months ended September 30, 2025.
As the BESS Fleet is commissioned and deployed, the Company expects its revenue mix to shift toward recurring software license and subscription fees and related services, with potential performance-based components. The timing and amount of revenue recognized will depend on the specific terms of the Company’s contracts, including whether fees are structured as fixed license fees, usage-based charges, shared-savings components or a combination thereof, and on the utilization patterns of the BESS units.
Comparison of Nine Months Ended September 30, 2025 and 2024
Revenue
Kyma Batteries recognized $97.2 million of revenue in the nine month period ended September 30, 2025, and did not recognize any revenue in the corresponding prior year period. All of the revenue recognized in the nine months ended September 30, 2025 was realized under the Master Supply and Services Agreement with GridCore dated September 10, 2025 and related to the installation of the battery software management system on the Bess Fleet. Approximately $10.6 million of this revenue was received in cash during the period, and the remaining $86.6 million in revenue was received in the form of the GridCore Note. There can be no assurances that we will collect all, or any, payments under the GridCore note. See “Item 1A. Risk Factors – We may not receive payments under the GridCore Note” and “— We may not be able to fully realize the value of the collateral securing the GridCore Note.”
Cost of Sales and Gross Profit
Kyma Batteries recognized cost of sales of $2.5 million and did not recognize any cost of sales in the corresponding prior year period. All of the cost of sales recognized in the nine months ended September 30, 2025 was paid to an affiliate, ITX MicroGrid Development LLC for contract services rendered as part of the Master Supply and Services Agreement.
Employment Expense
Employment expense was $508,583 in the nine months ended September 30, 2025, representing an approximately 1.2% decrease from $514,927 in the corresponding prior year period. Employment expense reflects headcount of approximately five full-time equivalent employees during the course of each period.
Research and Development Expense
Research and development expense was $1,580,974 in the nine months ended September 30, 2025, representing an approximately 63.1% increase from $969,115 in the corresponding prior year period. The increase in research and development expense primarily reflects additional costs incurred in in scaling the Software Platform.
General and Administrative Expense
General and administrative expense was $5,505,186 in the nine months ended September 30, 2025, representing an approximately $5.0 million increase from $503,785 in the corresponding prior year period. The increase in general and administrative expense primarily reflects expense under a management and consulting services agreement with an affiliate ($500,000 per month) and additional lease expense under a new lease ($50,000 per month) with an affiliate commencing January 1, 2025. Following completion of the Merger, the Company entered into administration services agreements with an affiliated company, which are expected to result in increased general administrative costs related to the increased scope of operations and applicable regulatory requirements as a public reporting company. See “Item 7. Certain Relationships and Related Transactions, and Director Independence – Relationships with Independence TX, Independence Power and the Cooperative.”
Tax
Kyma Batteries is organized as a limited liability and, as a wholly disregarded entity for federal tax purposes, incurred no income tax expense for the nine month periods ended September 30, 2024 or 2025.
Year Ended December 31, 2024
Revenue
Kyma Batteries was formed on December 8, 2023 and commenced operations on January 1, 2024. Kyma Batteries did not recognize any revenue in the year ended December 31, 2024.
Cost of Sales and Gross Profit
Kyma Batteries did not recognize any cost of sales in the year ended December 31, 2024.
Employment Expense
Employment expense was $762,784 in the year ended December 31, 2024, reflecting headcount of approximately five full-time equivalent employees during the course of the year.
Research and Development Expense
Research and development expense was $1,085,480 during the year ended December 31, 2024, reflecting the development of the hardware and software platform for the Battery Management System (“BMS”).
General and Administrative Expense
General and Administrative expense was $909,804 for the year ended December 31, 2024, comprised primarily of lease expense, other facility costs, insurances costs and other customary administrative expenses.
Tax
Kyma Batteries is organized as a limited liability and, as a wholly disregarded entity for federal tax purposes, incurred no income tax expense for the year ended December 31, 2024.
Liquidity and Capital Resources
Historically, Kyma Batteries has funded operations through equity contributions from its owner and has had limited revenue. As of September 30, 2025, Kyma Batteries had cash and cash equivalents of $509,354 and total liabilities of $0. In addition, in connection with its formation in October 2025 for the purpose of acquiring Kyma Batteries, Independence Power received a capital contribution in the amount of $2.0 million from its sole stockholder. As of December 31, 2025, the Company, including Independence power and Kyma Batteries, had cash and cash equivalents of approximately $1.6 million.
GridCore Note
At September 30, 2025, Kyma Batteries’ principal asset was the $86.6 million GridCore Note, issued by GridCore to Kyma Batteries in connection with entry into the GridCore Agreement. The GridCore Note pays semi-annual interest payments at a rate of 4.0% per annum, beginning March 10, 2026, and four equal quarterly principal payments of $21.65 million beginning December 10, 2026, with the final payment due on September 10, 2027. GridCore may prepay all or a portion of the outstanding principal amount under the GridCore Note at any time and from time to time without premium or penalty. From and after the occurrence and during the occurrence of any event of default under the GridCore Note, the rate of interest on the entire then-outstanding principal amount will increase to 12.0% per annum and Kyma Batteries may declare the entire unpaid principal amount, together with all accrued and unpaid interest, to be immediately due and payable. Such events of default include failure to pay principal or interest, breach of covenants, breach of representation, cross default under the GridCore Agreement or the GridCore Security Agreement, or an insolvency event.
The GridCore Note is secured by the security agreement, dated as of September 10, 2025, by and between GridCore and Kyma Batteries (the “GridCore Security Agreement”). Pursuant to terms of the GridCore Security Agreement, GridCore has pledged a broad range of assets, including its accounts, equipment, intellectual property and inventory, the DBD Express Note, its rights under the DBD Express Security Agreement (as defined below) and the Cooperative Guarantee described below, certain other assets and proceeds from all of the foregoing. Additionally, GridCore assigned to Kyma Batteries all of GridCore’s right, title, and interest in and to, including all proceeds received under the DBD Express Note described below, any and all such collateral.
In connection with the delivery by GridCore to DBD Express of the BESS Fleet, DBD Express issued GridCore the DBD Express Note in the principal amount of $193.42 million, which pays semi-annual interest payments at a rate of the applicable federal rate plus 6.0% per annum, beginning March 10, 2026, and four equal quarterly payments of $48.355 million beginning February 10, 2027, with the final payment due on September 10, 2027. Pursuant to the terms of the DBD Express Note, DBD Express granted to GridCore a first priority security interest in and to all of DBD Express’ right, title, and interest in, to and under the BESS Fleet and related collateral. Further, the Cooperative, DBD Express and GridCore entered into a continuing guaranty agreement (the “Cooperative Guarantee”), pursuant to which the Cooperative absolutely, unconditionally and irrevocably guaranteed to GridCore the full and prompt payment of all obligations of DBD Express to GridCore.
There can be no assurances that we will collect all, or any, payments under the GridCore Note. See “Item 1A. Risk Factors – We may not receive payments under the GridCore Note” and “—We may not be able to fully realize the value of the collateral securing the GridCore Note.”
During the nine months ended September 30, 2025, Kyma Batteries’ sole member contributed approximately $3.14 million to member’s equity. During the period, Kyma Batteries made a distribution of approximately $3.15 million to its sole member.
The Company’s primary future cash requirements are expected to include:
| · | funding operating losses until sufficient scale in software and services revenues is achieved; |
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| · | supporting software development, integration and support activities; |
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| · | hiring and retaining personnel in engineering, operations and corporate functions; and |
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| · | satisfying working capital needs, including accounts receivable and payables associated with software and services contracts. |
Because the Company does not expect to fund BESS equipment purchases, its capital needs are primarily operating in nature. Following the business combination, sources of liquidity consist of existing cash and cash equivalents, cash flows from operations, receipt of interest and principal payments on the GridCore Note and any future capital raised through equity or debt financing.
Management believes that existing cash and cash equivalents, together with expected cash flows from operations and payment of principal and interest on the GridCore Note, will be sufficient to meet anticipated operating requirements for at least twelve months from the date of this Report. Any such assessment should be read in conjunction with any going concern disclosures in the Company’s financial statements.
Cash Flows
Net cash used in operating activities has primarily reflected net losses, partially offset by non-cash charges and changes in working capital. Net cash used in investing activities has been limited and has consisted primarily of capitalized software development costs, if any, and purchases of property and equipment. Net cash provided by financing activities has reflected equity contributions from owners.
The Company expects cash used in operating activities to increase in absolute terms in the near term as it invests in scaling the Software Platform and public-company infrastructure, partially offset by any increases in revenue.
Contractual Obligations and Off-Balance Sheet Arrangements
The Company’s contractual obligations as of September 30, 2025, consist primarily of lease commitments, service and support contracts and software and cloud services agreements, as described in the notes to its financial statements. The Company does not currently have any material off-balance sheet arrangements, as such term is defined in Item 303 of Regulation S-K.
While the Company expects to enter into additional commercial agreements with the Cooperative, Independence TX and other counterparties, including software license, maintenance and service agreements, such arrangements are not expected to create significant fixed capital commitments with respect to BESS equipment, as ownership and financing of such equipment will reside with the Cooperative and other asset owners.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. The Company considers an accounting policy to be critical if it requires significant management judgment and if different judgments could reasonably be expected to result in materially different financial results.
Critical accounting policies and estimates that are expected to be particularly important to the Company’s financial reporting include:
| · | Revenue recognition, including identification of performance obligations in software and services contracts, allocation of transaction price to those obligations, determination of whether the Company acts as principal or agent in arrangements involving multiple parties and timing of revenue recognition for license, subscription and performance-based fees; |
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| · | Capitalization of software development costs, including the determination of when technological feasibility is established and which costs qualify for capitalization; and |
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| · | Income taxes, including the assessment of valuation allowances on deferred tax assets. |
A more detailed description of the Company’s critical accounting policies and estimates is included in the notes to its financial statements.
Recent Developments
Recent developments include the completion of the Merger, execution of key agreements relating to the Cooperative’s initial BESS Fleet and continued progress in configuring and testing the Company’s Software Platform for use at centralized BESS rental yards and initial field sites.
ITEM 3. PROPERTIES.
Pursuant to a commercial lease agreement, Independence Power leases a property in Chippewa Falls, WI 54729, consisting of a warehouse of 13,320 square feet and office space of 9,600 square feet, for 12-month periods, beginning January 1, 2025, for a monthly payment or $50,000. The lease must be extended by Independence Power’s written notice 30 days’ prior to the expiration of the previous lease term, and has been extended through December 31, 2026. The leased property are used as warehouse, research and development, and office spaces as well as other uses and services necessarily related thereto.
The lease contains standard prohibitions against increasing fire insurance rates and against waste, nuisance, or unlawful use. Independence Power procures and maintains public liability insurance. Independence WI pays all utilities furnished to the leased property, and maintains and keeps the leased property in good condition, while Independence Power is responsible for any leasehold improvements made to the leased property. The property is leased from Independence WI LLC, a company owned and controlled by Independence Investors. See “Item 7. Certain Relationships and Related Transactions, and Director independence.”
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information regarding the beneficial ownership of our Common Stock as of January 5, 2026, after giving effect to the business combination and related recapitalization transactions by:
| · | each person or entity known by us to beneficially own more than 5% of our issued and outstanding Common Stock (aggregate of Class A Common Stock and Class B Common Stock); |
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| · | each of our directors and named executive officers; and |
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| · | all of our directors and executive officers as a group. |
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities and is based on 5,950,000 shares of Class A Common Stock outstanding as of January 5, 2026 and 32,000,000 shares of Class B Common Stock outstanding as of January 5, 2026. In computing the number of shares beneficially owned by a person listed below and the percentage ownership of such person, all shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of January 5, 2026 are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. Unless otherwise indicated, we believe that each beneficial owner named below has sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by such owner.
Name of Beneficial Owner | | Amount of Class A Common Stock | | | Amount of Class B Common Stock | | | Percentage of Total Common Stock (%) | | | Percentage of Voting Power (%) | |
5% Stockholders: | | | | | | | | | | | | |
Independence Investors LLC(1) | | | – | | | | 32,000,000 | | | | 84.3 | % | | | 98.2 | % |
Energizer Systems, LLC(2) | | | 3,800,000 | | | | – | | | | 10.0 | % | | | * | |
BESS Rural Energy Cooperative, LCA(3) | | | 8,901,852 | | | | – | | | | 19.0 | % | | | * | |
Directors and Named Executive Officers: | | | | | | | | | | | | | | | | |
David J. Durrett(4) | | | 3,800,000 | | | | 32,000,000 | | | | 94.3 | % | | | 99.3 | % |
H. Nicholson Carter(5) | | | – | | | | – | | | | – | | | | – | |
Todd Parkin(6) | | | 50,000 | | | | – | | | | * | | | | * | |
Scott Stephenson(7) | | | – | | | | – | | | | – | | | | – | |
Joseph Poling(8) | | | – | | | | – | | | | – | | | | – | |
All directors and executive officers as a group (5 persons) | | | 3,850,0000 | | | | 32,000,000 | | | | 94.5 | % | | | 99.4 | % |
* | Less than 1%* |
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(1) | The principal business address of Independence Investors is 14114 N. Dallas Parkway, Suite 200, Dallas, Texas, 75254. |
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(2) | Energizer Systems is a wholly-owned subsidiary of Independence Investors. Together, Energizer Systems and Independence Investors beneficially own 94.335% of the Company. The principal business address of Energizer Systems is 14114 N. Dallas Parkway, Suite 200, Dallas, Texas, 75254. |
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(3) | Includes Warrants exercisable for 8,901,852 shares of Class A Common Stock. The principal business address of the Cooperative is 1717 N Street NW STE 1, Washington, District of Columbia 20036. |
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(4) | Includes the 3,900,000 shares of Class A Common Stock held by Energizer Systems and the 32,000,000 shares of Class B Common Stock held by Independence Investors, which David J. Durrett may be deemed to beneficially own as the sole owner of 100% of the limited liability company interests of Independence Investors. The principal business address of David J. Durrett is 14114 N. Dallas Parkway, Suite 200, Dallas, Texas, 75254. |
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(5) | The principal business address of H. Nicholson Carter is 14114 N. Dallas Parkway, Suite 200, Dallas, Texas, 75254. |
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(6) | Includes 50,000 shares of Class A Common Stock held by Rincon II LLC over which Mr. Parkin may be deemed to have or share beneficial ownership. The principal business address of Todd Parkin is 14114 N. Dallas Parkway, Suite 200, Dallas, Texas, 75254. |
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(7) | The principal business address of Scott Stephenson is 14114 N. Dallas Parkway, Suite 200, Dallas, Texas, 75254. |
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(8) | The principal business address of Joseph Poling is 14114 N. Dallas Parkway, Suite 200, Dallas, Texas, 75254. |
Percentages are based on 37,950,000 shares of Common Stock outstanding as of January 5, 2026, comprised of 5,950,000 shares of Class A Common Stock and 32,000,000 shares of Class B Common Stock. Except with respect to the Cooperative, the numbers reflected above do not take into account the shares of Class A Common Stock underlying the Warrants. In addition, the numbers reflected above do not give effect to our proposed 7:1 forward stock split.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS.
The following table sets forth information regarding the individuals who serve as our directors and executive officers following the completion of the business combination with Independence Power. Each director holds office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal.
Name | | Age | | Position(s) with the Company |
David J. Durrett | | 56 | | Director |
H. Nicholson Carter | | 79 | | Director, Chairman of the Board |
Todd Parkin | | 56 | | Chief Executive Officer; Director |
Scott Stephenson | | 51 | | President; Chief Financial Officer; Treasurer; Director |
Joseph Poling | | 51 | | Director |
Biographical Information
David J. Durrett – Director
Mr. Durrett has served as a member of the Board since December 30, 2025. Mr. Durrett founded Independence TX, LLC (“Independence TX”), a vertically integrated silica sand mining and logistics platform, in 2020 following the sale of a prior silica sand business he co-founded. Mr. Durrett built the company into the largest private supplier of silica frac sand to leading unconventional oil and gas operators in North America and continues to lead Independence TX as an active operative platform serving leading unconventional oil and gas operators in the Permian Basin and Eagle Ford. Independence TX operates four active mine sites and delivers approximately 800 truckloads of silica frac sand per day to support drilling and completion activity across multiple operating areas. Mr. Durrett has led the ongoing development and scaling of Independence TX’s fully integrated mining, processing, and logistics infrastructure, enabling reliable, high-volume supply into time- and cost-sensitive oilfield operations.
In connection with Independence TX’s operations, Mr. Durrett originated and developed an internal power and energy reliability initiative designed to address off-grid power constraints and operational downtime risks at remote oilfield sites. That initiative was later organized as Kyma Batteries, a then-affiliated battery energy storage and power systems business focused on industrial, energy, and mission-critical infrastructure applications. Kyma Batteries became a wholly-owned subsidiary of Independence Power effective November 1, 2025.
Prior to forming Independence TX, Mr. Durrett co-founded New Birmingham Resources, a silica sand producer serving energy and industrial end markets, and co-founded Damiron Minerals, LLC, an industrial minerals supplier serving the glass and cement industries. Mr. Durrett has also held project leadership roles on large-scale mining, materials and infrastructure initiatives across North America, South America and Europe, and previously served as a project manager on a United Nations-sponsored development initiative in Belize focused on economic sustainability and infrastructure revitalization.
In addition to his operating roles, Mr. Durrett is active in venture capital and growth-stage investing through his family office, with a focus on industrial technology, energy infrastructure, and resource-adjacent businesses. Mr. Durrett has more than two decades of experience building, scaling, and operating industrial and resource-based businesses, with particular expertise in vertically integrated operations, logistics-intensive platforms, and energy-adjacent infrastructure.
H. Nicholson Carter – Director, Chairman
Mr. Carter has served as a member and the Chairman of the Board since December 30, 2025. Mr. Carter has more than three decades of experience in the coal and natural resources industry. Mr. Carter has also served as a director of Alliance Resource Partners, L.P. (NASDAQ: ARLP), a publicly traded master limited partnership, since April 2015. Mr. Carter currently serves on the Audit Committee, Compensation Committee, and Conflicts Committee of the Board of Directors of Alliance Resource Partners, L.P. In September 2014, Mr. Carter retired as President and Chief Operating Officer of Natural Resource Partners L.P. (NYSE: NRP), having served in such capacities since 2002 and in other roles for NRP or its affiliates since 1990. Prior to 1990, Mr. Carter held various positions with MAPCO Coal Corporation and was engaged in the private practice of law.
Mr. Carter previously served on the board of directors, the audit committee and as Chairman of the compensation committee of Community Trust Bancorp, Inc. (NASDAQ: CTBI). Mr. Carter previously served as chairman of the National Council of Coal Lessors for 12 years and as chairman of the West Virginia Chamber of Commerce. He also previously served as a board member of the West Virginia Coal Association, the Indiana Coal Council, the National Mining Association, and ACCCE. Mr. Carter has served as a board member of the Kentucky Coal Association for over 20 years and currently is its Treasurer. Mr. Carter holds Bachelor and Juris Doctorate degrees from the University of Kentucky and a Master of Business Administration degree from the University of Hawaii.
Todd Parkin – Chief Executive Officer; Director
Mr. Parkin has served as our Chief Executive Officer since December 2, 2025 and a member of our Board since December 30, 2025. Mr. Parkin is also a founder and senior executive of Independence Power and related operating entities and has extensive experience in media, broadcast, telecommunications and energy-related ventures. With a career spanning executive roles at Bally’s Sports Networks, MGM Studios, and multiple media startups, Mr. Parkin has overseen the creation and distribution of thousands of live sports events, launched new digital networks, and managed P&Ls exceeding $400 million. He is also a partner at Rincon Alpha, which is a consulting firm. Mr. Parkin holds a Masters of Business Administration from the University of California, Los Angeles.
Scott Stephenson –President; Chief Financial Officer; Treasurer; Director
Mr. Stephenson has served as our President, Chief Financial Officer and Treasurer and as a member of the Board since December 2, 2025. Mr. Stephenson also serves as Chief Financial Officer of Independence Investors, an affiliate of Independence Power and our controlling stockholder, Energizer Systems, LLC. Mr. Stephenson has more than 28 years of experience in finance, accounting and capital markets, including prior roles at Arthur Andersen for three years and as the manager and owner of a CPA firm that handled tax, accounting and attestation services until June 2024. Mr. Stephenson holds a Bachelor of Business Administration from St. Edwards University in Austin, TX and has held a CPA license since July 2001.
Joseph Poling – Director
Mr. Poling has served as a member of the Board since December 30, 2025. Mr. Poling is an investor in and the Chief Executive Officer of XG Compute, an edge compute and artificial intelligence infrastructure platform deploying distributed data center capacity across hospitality and commercial locations. XG Compute has entered into contracts supporting a rollout footprint of up to approximately 9,000 sites, subject to deployment schedules, financing, and customary conditions. As Chief Executive Officer of XG Compete, Mr. Poling is responsible for strategy, capital formation, operating execution, and partner relationships.
Since September 2019, Mr. Poling has served as President and Chief Revenue Officer of Think Consulting, a management consulting firm specializing in organizational transformation, program execution, and operational performance. In this role, he leads commercial strategy and works directly with executive teams on execution-focused initiatives. In connection with certain engagements, Think Consulting has entered into co-advisory arrangements with global professional services firms, including KPMG Consulting and Deloitte Consulting, pursuant to which Mr. Poling serves as a subject-matter expert and provides deployment and execution advisory services. Think Consulting has been recognized by Inc. Magazine as one of America’s Fastest-Growing Private Companies for four consecutive years.
Additionally, from September 2018 to September 2019, Mr. Poling served as a Committee Member of the Technology Innovation Committee at Johns Hopkins Hospital, advising on the evaluation and advancement of internally developed technologies and innovations. From September 2005 through September 2019, Mr. Poling was Co-Founder and Managing Partner of The Stratmore Group, an advisory and acceleration firm serving founder-led and private equity-backed companies. Stratmore was successfully sold in 2018.
Earlier in his career, Mr. Poling served as Senior Vice President of Technology and Operations at eSylvan, and previously co-founded and led operating roles at Eyecon, LLC and Onsite Computer Services, Inc., each of which was later sold. Mr. Poling has more than 25 years of experience building, operating, and scaling technology-enabled and services-based businesses, with a focus on execution discipline, operational infrastructure, and enterprise value creation.
Corporate Governance
Our Board of Directors is responsible for overseeing our business and affairs and for supervising the management of our business. Following the business combination, we expect to be in the process of designing and implementing corporate governance practices appropriate for a public company of our size and stage of development.
We expect that our Board will establish an audit committee, a compensation committee and a nominating and corporate governance committee. Each committee will operate under a written charter approved by the Board, and we expect to appoint one or more independent directors (within the meaning of applicable exchange rules, to the extent we seek an exchange listing in the future) to serve on these committees. Until such committees are formed and independent directors are appointed, our full Board will perform the functions of these committees.
We intend to adopt a code of business conduct and ethics applicable to our directors, executive officers and employees. Upon adoption, a copy of the code will be made available on our website or provided without charge upon request.
ITEM 6. EXECUTIVE COMPENSATION.
The following discussion describes the material elements of compensation awarded to, earned by or paid to our “named executive officers” (“NEOs”) for the most recent fiscal year for which information is available. Because Independence Power operated as a privately held company prior to the business combination and we qualify as a smaller reporting company, the compensation information provided below is more limited than that required for larger reporting companies.
Summary Compensation
No compensation was paid to our NEOs for the fiscal years ended December 31, 2025 and December 31, 2024. During such periods, the business was managed pursuant to services delivered under the Kyma Services Agreement (as defined herein), see “Item 7. Certain Relationships and Related Transactions, and Director Independence – Certain Business Relationships.”
To date, we have not adopted a formal executive compensation program or policy. Compensation for our executive officers has historically been determined on an informal basis by the board or controlling owners of Independence Power and its affiliates and has primarily consisted of salary and, in some cases, discretionary bonuses.
Following the completion of the Merger, our Board, with the assistance of the compensation committee once formed, expects to develop a more structured compensation program for our executive officers. This program may include base salaries, annual cash incentive opportunities, long-term equity-based incentives, employee benefit programs and perquisites that the Board or compensation committee determines are necessary to attract and retain qualified executives and align their interests with those of our stockholders.
Equity Incentive Compensation
As of December 31, 2025, we did not have any equity compensation plans in effect and had not granted any options, restricted stock units or other equity awards to our executive officers. Following the business combination, we expect to propose an equity incentive plan for approval by our Board and, if required, our stockholders. Any awards granted under such a plan will be determined by the Board or the compensation committee and could dilute the ownership interests of existing stockholders.
Employment Agreements; Change in Control Benefits
Effective December 30, 2025, we entered into an executive employment agreement with each of Todd Parkin (the “Parkin Employment Agreement”) and Scott Stephenson (the “Stephenson Employment Agreement”). Otherwise, as of the date of this Report, we do not have written employment agreements with our executive officers that provide for severance or change-in-control benefits, other than such arrangements, if any, that may exist between Independence Power or its affiliates and our executives. Any such arrangements will be described in the final version of this section once determined.
Employment Agreement with Todd Parkin
Pursuant to the Parkin Employment Agreement dated as of December 30, 2025 between Todd Parkin and the Company, Mr. Parkin serves as Chief Executive Officer of the Company and its wholly owned subsidiary, Independence Power, Inc. The following summary of the material terms of the Parkin Employment Agreement is qualified in its entirety to the full text of the Parkin Employment Agreement filed as Exhibit 10.6 hereto and incorporated by reference herein.
Term: Mr. Parkin’s initial employment term is for a period of three years, subject to earlier termination pursuant to the terms of the Parkin Employment Agreement, and will automatically extend for a one-year period on December 30, 2028 and on each anniversary thereafter, subject to the option of the Company or Mr. Parkin to terminate the automatic extension upon written notice not less than 60 days prior to the end of the then current employment period.
Base Compensation: The Parkin Employment Agreement provides for an initial base salary of $321,000, which may be increased from time to time at the discretion of the Board. Mr. Parkin is entitled to participate in such long-term incentive and/or equity-based incentive compensation programs as may be established and upon the terms and conditions approved by the Board. Mr. Parkin also is entitled to participate in such employee benefit plans and programs of the Company as provided to other similarly situated officers of the Company and as provided in the Parkin Employment Agreement.
Termination for Cause, Resignation without Good Reason: If Mr. Parkin’s employment is terminated for “cause” (as defined in the Parkin Employment Agreement), including due to death or disability (as defined in the Parkin Employment Agreement), or without “good reason” (as defined in the Parkin Employment Agreement), Mr. Parkin (or his estate) is entitled only to his unpaid base salary, unreimbursed expenses and any benefits due to him through his date of termination (collectively, “Parkin Accrued Obligations”).
Termination without Cause or for Good Reason (Other than Following a Change in Control): If Mr. Parkin is terminated without “cause” (including a non-renewal of his employment term by the Company) or if he terminates his employment for “good reason,” he will be entitled to receive any Parkin Accrued Obligations and, in addition, the continuation of his then base salary for a period of 180 days from the date of termination, subject to providing a general release in favor of and in a form satisfactory to the Company.
Indemnification and Insurance. The Parkin Employment Agreement contains indemnification and related expense reimbursement provisions in favor of Mr. Parkin in his capacity as an employee and director of the Company and provides that the Company will maintain directors’ and officers’ liability insurance for Mr. Parkin on terms no less favorable than any other senior executive officer and director of the Company, and such coverage will continue or substantially similar tail coverage will be obtained and continue for a period of not less than four (4) years following a Change in Control (as defined in the Parkin Employment Agreement).
Restrictive Covenants: To protect the Company and its business, the Parkin Employment Agreement obligates Mr. Parkin to comply with confidentiality, non-solicitation, non-competition and non-disparagement requirements during his employment term and, in general, for 24 months thereafter.
Outside Activities and Prior Investments: Under the Parkin Employment Agreement, the Company has agreed that certain identified investments, ownership interests, advisory roles, board positions, consulting arrangements, and other business relationships of Mr. Parkin in entities unrelated to the Company (collectively, the “Parkin Prior Investments”) do not, in and of themselves, constitute a conflict of interest, breach of fiduciary duty, or violation of the Parkin Employment Agreement, and that Mr. Parkin will not be restricted from continuing to participate, manage or maintain such Parkin Prior Investments during the term of his employment. The Company also expressly waives certain corporate opportunity and disclosure expectations in respect of the Parkin Prior Investments, subject to exclusions and conditions set forth in the Parkin Employment Agreement.
Employment Agreement with Scott Stephenson
Pursuant to the Stephenson Employment Agreement dated as of December 30, 2025 between Scott Stephenson and the Company, Mr. Stephenson serves as Chief Financial Officer of the Company and its wholly owned subsidiary, Independence Power, Inc. The following summary of the material terms of the Stephenson Employment Agreement is qualified in its entirety to the full text of the Stephenson Employment Agreement filed as Exhibit 10.7 hereto and incorporated by reference herein.
Term: Mr. Stephenson’s initial employment term is for a period of three years, subject to earlier termination pursuant to the terms of the Stephenson Employment Agreement, and will automatically extend for a one-year period on December 30, 2028 and on each anniversary thereafter, subject to the option of the Company or Mr. Stephenson to terminate the automatic extension upon written notice not less than 60 days prior to the end of the then current employment period.
Base Compensation: The Stephenson Employment Agreement provides for an initial base salary of $321,000, which may be increased from time to time at the discretion of the Board. Mr. Stephenson is entitled to participate in such long-term incentive and/or equity-based incentive compensation programs as may be established and upon the terms and conditions approved by the Board. Mr. Stephenson also is entitled to participate in such employee benefit plans and programs of the Company as provided to other similarly situated officers of the Company and as provided in the Stephenson Employment Agreement.
Termination for Cause, Resignation without Good Reason: If Mr. Stephenson’s employment is terminated for “cause” (as defined in the Stephenson Employment Agreement), including due to death or disability (as defined in the Stephenson Employment Agreement), or without “good reason” (as defined in the Stephenson Employment Agreement), Mr. Stephenson (or his estate) is entitled only to his unpaid base salary, unreimbursed expenses and any benefits due to him through his date of termination (collectively, “Stephenson Accrued Obligations”).
Termination without Cause or for Good Reason (Other than Following a Change in Control): If Mr. Stephenson is terminated without “cause” (including a non-renewal of his employment term by the Company) or if he terminates his employment for “good reason,” he will be entitled to receive any Stephenson Accrued Obligations and, in addition, the continuation of his then base salary for a period of 180 days from the date of termination, subject to providing a general release in favor of and in a form satisfactory to the Company.
Indemnification and Insurance. The Stephenson Employment Agreement contains indemnification and related expense reimbursement provisions in favor of Mr. Stephenson in his capacity as an employee and director of the Company and provides that the Company will maintain directors’ and officers’ liability insurance for Mr. Stephenson on terms no less favorable than any other senior executive officer and director of the Company, and such coverage will continue or substantially similar tail coverage will be obtained and continue for a period of not less than four (4) years following a Change in Control (as defined in the Stephenson Employment Agreement).
Restrictive Covenants: To protect the Company and its business, the Stephenson Employment Agreement obligates Mr. Stephenson to comply with confidentiality, non-solicitation, non-competition and non-disparagement requirements during his employment term and, in general, for 24 months thereafter.
Outside Activities and Prior Investments: Under the Stephenson Employment Agreement, the Company has agreed that certain identified investments, ownership interests, advisory roles, board positions, consulting arrangements, and other business relationships of Mr. Stephenson in entities unrelated to the Company (collectively, the “Stephenson Prior Investments”) do not, in and of themselves, constitute a conflict of interest, breach of fiduciary duty, or violation of the Stephenson Employment Agreement, and that Mr. Stephenson will not be restricted from continuing to participate, manage or maintain such Stephenson Prior Investments during the term of his employment. The Company also expressly waives certain corporate opportunity and disclosure expectations in respect of the Stephenson Prior Investments, subject to exclusions and conditions set forth in the Stephenson Employment Agreement.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The following is a summary of certain transactions and relationships, existing or proposed, in which we have been or will be a participant, the amount involved exceeds $120,000 and in which any of our directors, executive officers, holders of more than 5% of our voting securities or their immediate family members had or will have a direct or indirect material interest. We believe that the terms of the transactions and agreements described below were no less favorable to us than those that could have been obtained from unaffiliated third parties.
Policies with Respect to Certain Activities
Article 8 of our A&R Charter provides that we shall not prohibit, to the fullest extent permitted by law, the officers, directors, stockholders, or related parties of the Company from engaging, either directly or indirectly, in the same or similar business activities of the types conducted by the Company.
Control Block Purchase and Recapitalization Arrangements with Energizer Systems
On November 25, 2025, Energizer Systems entered into a common stock purchase agreement with Ms. Jervey Choon, TriUnity’s former majority stockholder and sole director and executive officer. Pursuant to that agreement, Energizer Systems purchased the Control Block from Ms. Choon for an aggregate purchase price of $575,000, representing approximately 63.9% of TriUnity’s outstanding common stock at that time. The transaction closed on November 26, 2025, and resulted in a change in control of TriUnity.
In connection with the change in control, on November 26, 2025, TriUnity entered into the Recapitalization Letter Agreement with Energizer Systems. Under the Recapitalization Letter Agreement, TriUnity agreed, among other things, to amend its articles of incorporation to increase its authorized common stock to 400,000,000 shares and to effect a 7-for-1 forward stock split of its issued and outstanding common stock. Energizer Systems agreed to vote all shares it controls in favor of those amendments. The Recapitalization Letter Agreement further provided that, subject to completion of audited financial statements, TriUnity would pursue an acquisition of Independence Power from Energizer Systems in exchange for shares of its common stock. Upon completion of the Merger on the Closing Date, Independence Investors, together with Energizer Systems, beneficially own 94. 33% of the Company.
Energizer Systems is a wholly-owned subsidiary of Independence Investors and an affiliate of Independence Power. Accordingly, Energizer Systems is a holder of more than 5% of our voting securities and an affiliate of our principal operating business following the merger with Independence Power, and the Recapitalization Letter Agreement constitutes a related-party arrangement.
Certain Business Relationships
Following the Merger described in this Report, Independence Power is our wholly owned subsidiary and principal operating business. Independence Power is affiliated with Independence TX, an oilfield services business that is expected to act as an operator and service provider in connection with deployment of BESS owned by the Cooperative. Independence TX is majority owned and controlled by David J. Durrett, a member of our Board who is also the sole member and manager of Independence Investors, the controlling stockholder of the Company. IPAS Asset Management is also affiliated with Mr. Durrett.
Scott Stephenson, our President, Chief Financial Officer and Treasurer, as well as a member of our Board, also serves as the Chief Financial Officer of Independence TX, IPAS Asset Management and Independence WI, as well as the Chief Executive Officer of Independence Investors. Independence Investors, our controlling stockholder, is an affiliate of Independence TX. As a result, transactions between our company (including Independence Power), Independence TX and the Cooperative generally will be considered related-party transactions. Because Mr. Stephenson holds positions with both the Company and other Independence companies, and because Independence Investors is an affiliate of Independence TX and Independence Power, these arrangements will constitute related-party transactions.
IPAS Asset Management uses the resources of certain other affiliate entities that are affiliated with David J. Durrett. Additionally, Scott Stephenson is an officer for each of those affiliate entities. Todd Parkin, our Chief Executive Officer, also serves as the Chief Executive Officer of IPAS Asset Management.
As described under “Item 1. Business—Program Management Engagement Related to PaaS Activities” and “Item 1.01—Entry into a Material Definitive Agreement,” the Cooperative, through its wholly owned subsidiary DBD Express, acquired an initial fleet of 104 modified containerized BESS units from GridCore. Through its subsidiary Kyma Batteries, Independence Power has entered into the Asset Management Agreement with the Cooperative Parties under which Independence Power will provide deployment, operational management and related services for the BESS fleet. The Company’s embedded operating system and Software Platform are expected to be used in connection with the operation of this fleet at centralized battery rental yards and field sites pursuant to commercial arrangements with the Cooperative and the Company. We expect the Asset Management Agreement to effectively assume the long-term operational services under the GridCore Agreement.
Additionally, the Company through Independence Power and Kyma Batteries, its wholly owned subsidiaries, is also party to agreements with certain affiliates of Independence Investors, including the Administrative Services Agreements and the Commercial Lease between Independence WI and Kyma Batteries.
Effective as of January 6, 2026, the Company entered into the Administrative Services Agreement with IPAS Asset Management pursuant to which IPAS Asset Management will provide certain administrative and payroll services to the Company, including, without limitation: staffing, recruiting, and training employees; developing, advising, and establishing employee policies; providing accounting services; managing payroll processing and payment; offering financial advice and consulting services; preparing appraisal reports; and obtaining such other services as may be required by the Company. IPAS Asset Management will obtain resources from certain other affiliated entities to perform the administrative services described in the Administrative Services Agreement. The Company will pay to IPAS Asset Management the cost of such services based on IPAS Asset Management’s operating costs, plus a nominal amount. The Administrative Services Agreement has a one-year term, subject to automatic renewal, and may be terminated by either party without penalty on 30 day’s notice. We plan to use related-party administrative services on an interim basis, although we may continue to use such services for an extended period of time. The Company will pay IPAS Asset Management a nominal fee, plus reimburse all expenses incurred by IPAS Asset Management while performing the services.
In connection with entry into the Administrative Services Agreement, we expect to terminate the currently effective Management and Consulting Services Agreement between Independence TX and Kyma Batteries (the “Kyma Services Agreement”), pursuant to which, in exchange for a monthly management fee of $500,000, Independence TX oversees the day-to-day operations of Kyma Batteries, assists the key management staff of Kyma Batteries, assists with overall strategic planning including the development of growth models and goal setting, and performing any and all other management services requested by Kyma Batteries and its management.
Pursuant to the Commercial Lease, Independence Power leases property from Independence WI in Wisconsin for 12-month periods, beginning January 1, 2025 and renewed for January 1, 2026, for a monthly payment of $50,000. The premises are used as warehouse, research and development, and office spaces as well as other uses and services necessarily related thereto.
Other Relationships
Except as described above and as otherwise disclosed in this Report and the documents incorporated herein by reference, we are not aware of any transaction since the beginning of our last fiscal year, or any currently proposed transaction, in which:
| · | we were or are to be a participant; |
| | |
| · | the amount involved exceeds $120,000; and |
| | |
| · | any of our directors, executive officers, holders of more than 5% of our voting securities or their immediate family members had or will have a direct or indirect material interest. |
We expect that, in connection with becoming the operating business of a public company, our Board of Directors will adopt a formal written policy for the review, approval and ratification of related-party transactions in accordance with Item 404 of Regulation S-K.
Director Independence
Our Board has not yet determined whether the Company has a director who qualifies as an independent “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K, nor whether the Company has a director who qualifies as “independent” under the applicable rules and regulations of the SEC.
We believe that our officers and directors are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We do not believe it is necessary at this time to have a separate audit committee of the board of directors, as we believe that the full board of directors can adequately perform the functions of such a committee. Additionally, retaining a director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted given the current stage of our development.
ITEM 8. LEGAL PROCEEDINGS.
From time to time, we may become involved in legal proceedings arising in the ordinary course of business. As of the date of this Report, we are not a party to any material pending legal proceedings, and, to our knowledge, no such proceedings have been threatened against us.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Market Information
Our common shares are quoted on the OTCID Basic Market and are not listed on any national securities exchange. The Company has applied to change its current symbol, “TYBB,” to “ITXP,” subject to OTC and FINRA approval. There has been limited and sporadic trading to date and there can be no assurance that an active trading market for our Class A Common Stock will develop or be sustained in the future.
Because trading in our Class A Common Stock may be limited, the quotations for our Class A Common Stock on the OTC Markets may not necessarily represent actual transactions or a reliable indication of the fair value of our Class A Common Stock. Investors should exercise caution in relying on historical bid and ask quotations as an indication of market value. See “Item 1A. Risk Factor – Risks Related to Ownership of our Class A Common Stock – There is a limited market for our Class A Common Stock, which may make it difficult for you to sell your stock.”
Following the completion of the business combination with Independence Power described in this Report, the former sole stockholder of Independence Power and Energizer Systems, our controlling stockholder, beneficially owns a substantial majority of our outstanding Common Stock. As a result, the public float of our Common Stock is expected to be limited, which may further contribute to price volatility and illiquidity.
Holders
As of January 5, 2026, there were approximately nine holders of record of our Class A Common Stock and one holder of record of our Class B Common Stock. There are no outstanding shares of our preferred stock.
Dividend Policy
We have not declared or paid any cash dividends on our Common Stock and do not anticipate declaring or paying cash dividends in the foreseeable future. We currently intend to retain any future earnings to finance the operation and expansion of our business. Any future determination to declare cash dividends will be at the discretion of our Board of Directors, subject to applicable law and any contractual restrictions, and will depend on a number of factors, including our results of operations, financial condition, capital requirements, contractual restrictions, general business conditions and other factors that our Board of Directors may deem relevant.
Securities Authorized for Issuance Under Equity Compensation Plans
As of January 5, 2026, we did not have any equity compensation plans in effect and had not granted any options, restricted stock units or other equity-based awards to our directors, executive officers or employees. In connection with the Merger and the transition to operating as a public company with Independence Power as our primary business, we may in the future adopt one or more equity incentive plans, subject to approval by our Board of Directors and, if required, our stockholders. Any such plans and awards granted thereunder may dilute the ownership interests of existing stockholders.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
Information regarding recent sales of unregistered securities, including the issuance or proposed issuance of shares of Common Stock in connection with the Merger and the warrant arrangements described in this Report, is set forth under “Item 3.02 – Unregistered Sales of Equity Securities” and is incorporated herein by reference.
ITEM 11. DESCRIPTION OF REGISTRANT’S SECURITIES TO BE REGISTERED.
See Item 5.03 of this Report for a description of our capital stock. Such description does not purport to be complete and is qualified in its entirety by reference to our A&R Charter, and our A&R Bylaws, which are filed as exhibits to this Report.
Authorized Capital Stock
Our A&R Charter authorizes the issuance of 800,000,000 shares of capital stock, par value $0.0001 per share, comprised of (i) 566,000,000 shares of Class A Common Stock, (ii) 224,000,000 shares of Class B Common Stock and (iii) 10,000,000 shares of preferred stock (the “Preferred Stock”). As of December 31, 2025, there were 5,950,000 shares of Class A Common Stock and 32,000,000 shares of Class B Common Stock issued and outstanding and no shares of Preferred Stock issued and outstanding.
Securities Exchange
Our common shares are quoted on the OTCID Basic Market. The Company has applied to change its current symbol, “TYBB,” to “ITXP,” subject to OTC and FINRA approval.
Transfer Agent and Registrar
The transfer agent and registrar for the Class A Common Stock is Transfer Online, Inc.
Preferred Stock
The Board is authorized to issue up to 10,000,000 shares of Preferred Stock in one or more series and, with respect to each series, to fix the designation, powers, preferences, and rights, including dividend rights, conversion or exchange rights, redemption provisions, liquidation preferences, and voting powers, without stockholder approval (except as may be required by law). The issuance of Preferred Stock could have the effect of delaying, deferring, or preventing a change in control of the Company and could adversely affect the rights of holders of Class A Common Stock and Class B Common Stock.
Amendment of A&R Charter
Amendments to the A&R Charter must first be approved by the Board and then submitted to the stockholders for approval, requiring the affirmative vote of holders of at least a majority of the outstanding shares. However, once the issued and outstanding shares of Class B Common Stock cease to represent at least twenty-five percent (25%) of the Company’s total voting power (the “Sunset Date”), certain provisions (including those relating to the board structure, voting, conversion, and amendment thresholds) may not be amended, repealed, or otherwise altered - including through the adoption of new provisions intended to override or circumvent them - unless such changes are approved by the affirmative vote of at least sixty-six and two-thirds percent (66 2/3%) of the total voting power of all outstanding voting securities, voting together as a single class.
Amendment of A&R Bylaws
The Board holds the exclusive authority to adopt, amend, or repeal the A&R Bylaws, except as otherwise provided in the A&R Bylaws themselves. Prior to the Sunset Date, stockholders entitled to vote also possess the power to amend, modify, repeal, or adopt new bylaw provisions at any annual or special meeting, provided advance notice of the proposed changes is given. Any such stockholder-initiated amendments must either be approved by the Board or receive the affirmative vote of a majority of the total voting power of all outstanding voting securities entitled to vote in the election of directors, voting as a single class.
Election and Removal of Directors
Subject to the rights of any preferred stock series entitled to elect directors separately, the Board shall consist of not less than one individual, with the exact number of directors to be determined from time to time solely by resolution adopted by the affirmative vote of a majority of the entire Board.
Stockholders seeking to nominate individuals for election to the Board or to propose other business at a stockholder meeting must provide advance written notice and comply with specific procedural and content requirements. To bring such matters before an annual meeting, the stockholder must be a record holder at the time notice is given, be entitled to vote at the meeting, and deliver notice to the secretary at the company’s principal executive offices no earlier than the 120th day and no later than the close of business on the 90th day prior to the first anniversary of the previous year’s annual meeting. If the meeting date is advanced by more than 60 days or delayed by more than 30 days from the prior year’s anniversary date, notice must be delivered no earlier than the 120th day before the meeting and no later than the later of the 90th day before the meeting or the 10th day after public announcement of the meeting date. A public announcement of an adjournment or postponement does not restart or extend the notice period.
Directors are elected at the annual meeting of stockholders. Each director elected serves until a successor is duly elected and qualified. Prior to the Sunset Date, directors may be removed from office by the stockholders, with or without case, with the affirmative vote of the holders of not less than two-thirds (2/3rds) of the voting power of the shares then entitled to vote generally in the election of directors, voting together as a single class. From and after the Sunset Date, no director may be removed from office by the stockholders except for cause with the affirmative vote of the holders of not less than two-thirds (2/3rds) of the voting power of the shares then entitled to vote generally in the election of directors, voting together as a single class.
Limitations on Written Consents
Any action that is required or permitted to be taken at a meeting of the board of directors or any of its committees may be taken without a meeting if all members (excluding any who abstain in writing in accordance with NRS 78.315(2)) provide written consent or consent by electronic transmission. These consents must be filed with the official minutes of the board or committee proceedings, in either paper or electronic form, consistent with how the minutes are maintained. Prior to the Sunset Date, any action required or permitted to be taken at an annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding capital stock of the Company having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. However, from and after the Sunset Date, any action required or permitted to be taken at any annual or special meeting of stockholders may only be taken upon a vote of stockholders at an annual or special meeting of stockholders duly noticed and called in accordance with the A&R Bylaws and the NRS and may not be taken by written consent of stockholders without a meeting.
Stockholder Meetings
Written notice of a stockholder meeting must be delivered to each stockholder of record entitled to vote no fewer than ten (10) and no more than sixty (60) days before the meeting. The notice must include the physical location, if any, the date and time, any means of remote communication by which stockholders and proxy holders may be deemed present and vote, the record date for determining voting eligibility, and, for special meetings, the purpose(s) of the meeting. Unless otherwise specified, no additional notice is required for adjourned meetings if the time, location (if any), and remote communication means (if any) are announced at the original meeting. However, if the adjournment lasts more than sixty (60) days or a new record date is set, a new notice must be provided.
Restrictions on Beneficial Ownership
The Company is authorized to redeem, suspend rights of, or require the sale of shares of Class A and Class B Common Stock or Preferred Stock if a stockholder, together with its affiliates, would otherwise exceed twenty percent (20%) of the total voting power of the Company’s outstanding capital stock. In such instances, the Company may (i) redeem a sufficient number of shares to eliminate the excess, at a price equal to either a mutually agreed amount or, if no agreement is reached, seventy-five percent (75%) of fair market value if the holder is at fault for exceeding such percentage, or one hundred percent (100%) if not at fault, as determined in good faith by disinterested members of the Board, (ii) suspend ownership rights causing the excess, or (iii) require the sale of the necessary number of shares, which the holder must promptly carry out. Notice of redemption shall be given in writing between fifteen (15) and thirty (30) days, or a shorter period as determined by the Board, prior to the redemption date, by first class mail, overnight courier, or electronic mail, specifying the redemption details. Upon surrender, the redemption price shall be paid, and if fewer than all shares represented by a certificate are redeemed, a new certificate shall be issued for the remainder. From the redemption date, unless the Company defaults on payment, all rights in the redeemed shares shall terminate, and such shares shall no longer be transferable or deemed outstanding. These provisions do not apply to the Company, its affiliates, or Permitted Transferees, and the Company has no authority to redeem, suspend, or require the sale of any shares held by such parties, notwithstanding any contrary provision in the A&R Charter.
Corporate Opportunity Waiver
No Non-Employee Director (including any Non-Employee Director who serves as an officer in both his or her director and officer capacities) or his or her affiliates shall, to the fullest extent permitted by law, have any duty to refrain from directly or indirectly (i) engaging in the same or similar business activities or lines of business in which the Company or any of its affiliates engages or proposes to engage or (ii) otherwise competing with the Company or any of its affiliates, and, to the fullest extent permitted by law, no such person shall be liable to the Company or its stockholders or to any affiliate of the Company for breach of any fiduciary duty solely by reason of the fact that such person engages in any such activities or did not communicate or offer such activities to the Company. However, the Company does not renounce its interest in any corporate opportunity offered to any Non-Employee Director if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company.
Warrants and Rights
In connection with completion of the Merger, on December 30, 2025, the Company entered into the Warrant Agreement with the Cooperative. Pursuant to the Warrant Agreement, the Company granted to the Cooperative warrants to purchase up to 8,901,852 shares of Class A Common Stock, representing 19% of the Common Stock on a fully diluted basis, at an exercise price of $3.594758 per share, reflecting an aggregate exercise price of $32,000,000.
The Warrants are exercisable from the issuance date of December 30, 2025 until the expiration time, which is the later of (i) 30 days after the first annual report of the Company is filed with the SEC on Form 10-K or (ii) 30 days after the Company (or any of its subsidiaries) executes a definitive, binding energy equipment rental agreement or other instrument providing for the deployment of additional equipment constituting the Company’s (or any of its subsidiaries’) oilfield microgrid technology with an investment grade rated counterparty.
The Warrants were issued in a private transaction and do not constitute publicly traded or publicly offered instruments. The Warrants are held by the Cooperative as principal and, subject to the terms of the Warrant Agreement and applicable securities laws, may be assigned to members or non-members of the Cooperative. The Warrants were issued in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended, and have not been registered under the Securities Act or any state securities laws.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
On December 30, 2025, the Company entered into indemnification agreements (the “Indemnification Agreements”) with each of the members of the Board (each, an “Indemnitee”). Pursuant to the Indemnification Agreements and the A&R Charter, the Company shall indemnify and hold harmless an Indemnitee, in the case of the Indemnification Agreements, and any person, in the case of the A&R Charter, who was or is a party or is threatened to be made a party to or otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director, officer or employee of the Company or, while a director, officer or employee of the Company, served at the request of the Company as a director, officer, manager or managing member, employee, agent or trustee of another entity or enterprise, against all liability and loss suffered and expenses reasonably incurred, including attorneys’ fees, judgments, fines, excise taxes and amounts paid in settlement, to the fullest extent permitted by the NRS.
Notwithstanding the foregoing, except as otherwise provided in the A&R Charter or the Indemnification Agreements, in the case of proceedings brought to enforce rights to indemnification, advancement of expenses or compulsory counterclaims brought by the indemnitee, the Company shall not be required to indemnify any person in connection with a proceeding initiated by such person unless the Board authorized the initiation of such proceeding or if such proceeding is initiated by the Company against such indemnitee regarding fraud, gross negligence or willful misconduct by such indemnitee.
Each Indemnification Agreement provides that such agreement shall continue until and terminate upon the later of (a) 10 years after the date such Indemnitee has ceased to serve as a director or (if applicable) officer of the Company or (b) one year after the final termination of any proceeding.
The limitation of liability and indemnification provisions in the Indemnification Agreements and our A&R Charter may discourage stockholders from bringing a lawsuit against our directors for breach of fiduciary duty. These provisions also may reduce the likelihood of derivative litigation against our directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment in the registrant’s securities may be adversely affected to the extent we pay the costs of settlement and damage awards under these indemnification provisions.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See Item 9.01 “Financial Statements and Exhibits” of this Report, which is incorporated herein by reference.
Investors should read our audited financial statements and related notes and our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Report for a full understanding of our financial condition and results of operations.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
See Item 9.01 “Financial Statements and Exhibits” of this Report, which is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TRIUNITY BUSINESS SERVICES LIMITED | |
| | | |
Date: January 7, 2026 | By: | /s/ Todd Parkin | |
| | Todd Parkin Chief Executive Officer | |
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and among
INDEPENDENCE POWER HOLDINGS, INC.
(F/K/A TRIUNITY BUSINESS SERVICES LIMITED),
TRIUNITY MERGER SUB INC.,
INDEPENDENCE POWER, INC.
and
Independence Investors LLC
Dated as of December 30, 2025
TABLE OF CONTENTS
| | | Page |
| ARTICLE I | DEFINITIONS; CERTAIN RULES OF CONSTRUCTION | |
| | | |
| Section 1.01 | Certain Definitions | 2 |
| Section 1.02 | Other Definitions | 8 |
| Section 1.03 | Certain Rules of Construction | 9 |
| | | |
| ARTICLE II | THE MERGER | |
| | | |
| Section 2.01 | The Merger | 10 |
| Section 2.02 | Closing Date Transactions | 10 |
| Section 2.03 | Effect of the Merger | 10 |
| Section 2.04 | Certificate of Formation; Bylaws | 10 |
| Section 2.05 | Directors and Officers | 11 |
| | | |
| ARTICLE III | CONVERSION AND EXCHANGE OF SECURITIES | |
| | | |
| Section 3.01 | Issuance of Class B Parent Common Stock | 11 |
| Section 3.02 | Conversion of Securities | 11 |
| Section 3.03 | Exchange of Company Shares | 11 |
| Section 3.04 | Stock Transfer Books | 12 |
| Section 3.05 | Tax Treatment | 12 |
| | | |
| ARTICLE IV | REPRESENTATIONS AND WARRANTIES OF THE COMPANY | |
| | | |
| Section 4.01 | Organization and Qualification; Subsidiaries | 12 |
| Section 4.02 | Organizational Documents | 13 |
| Section 4.03 | Company Capitalization | 13 |
| Section 4.04 | Authority Relative to This Agreement | 14 |
| Section 4.05 | No Conflict; Required Filings and Consents | 14 |
| Section 4.06 | Permits; Compliance | 15 |
| Section 4.07 | Financial Reporting | 15 |
| Section 4.08 | Absence of Certain Events or Changes | 17 |
| Section 4.09 | Absence of Litigation and Orders | 17 |
| Section 4.10 | Employee Benefit Plans | 18 |
| Section 4.11 | Labor and Employment Matters | 20 |
| Section 4.12 | Real Property; Title to Assets | 20 |
| Section 4.13 | Intellectual Property | 21 |
| Section 4.14 | Taxes | 25 |
| Section 4.15 | Environmental Matters | 25 |
| Section 4.16 | Material Contracts | 26 |
| Section 4.17 | Insurance | 27 |
| Section 4.18 | Certain Business Practices | 27 |
| Section 4.19 | Interested Party Transactions | 27 |
| Section 4.20 | Exchange Act | 29 |
| Section 4.21 | Brokers | 29 |
| Section 4.22 | Full Disclosure | 29 |
| ARTICLE V | REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER | |
| | | |
| Section 5.01 | Organization | 29 |
| Section 5.02 | Authority Relative to This Agreement | 29 |
| Section 5.03 | No Conflict; Required Filings and Consents | 30 |
| Section 5.04 | Brokers | 30 |
| Section 5.05 | Title | 30 |
| | | |
| ARTICLE VI | REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB | |
| | | |
| Section 6.01 | Corporate Organization | 30 |
| Section 6.02 | Organizational Documents | 31 |
| Section 6.03 | Parent Capitalization | 31 |
| Section 6.04 | Authority Relative to This Agreement | 31 |
| Section 6.05 | No Conflict; Required Filings and Consents | 32 |
| Section 6.06 | Reporting and Certain Compliance Matters | 32 |
| Section 6.07 | Absence of Litigation and Orders | 34 |
| Section 6.08 | Operations of Merger Sub | 34 |
| Section 6.09 | Brokers | 34 |
| | | |
| ARTICLE VII | COVENANTS | |
| | | |
| Section 7.01 | Public Announcements; Form 8-K | 35 |
| Section 7.02 | D&O Indemnification | 35 |
| Section 7.03 | Further Assurances | 35 |
| | | |
| ARTICLE VIII | GENERAL PROVISIONS | |
| | | |
| Section 8.01 | Non-Survival | 36 |
| Section 8.02 | Expenses | 36 |
| Section 8.03 | Notices | 36 |
| Section 8.04 | Amendments and Waivers | 37 |
| Section 8.05 | Severability | 37 |
| Section 8.06 | Entire Agreement; Succession and Assignment | 37 |
| Section 8.07 | Parties in Interest | 38 |
| Section 8.08 | Specific Performance | 38 |
| Section 8.09 | Governing Law | 38 |
| Section 8.10 | Waiver of Jury Trial | 38 |
| Section 8.11 | Arbitration | 39 |
| Section 8.12 | Non-Recourse | 39 |
| Section 8.13 | Consent to Merger | 39 |
| Section 8.14 | Counterparts and Electronic Signature | 39 |
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of December 30, 2025 (this “Agreement”), is by and among Independence Power Holdings, Inc. (f/k/a TriUnity Business Services Limited), a Nevada corporation (“Parent”), TriUnity Merger Sub Inc., a Texas corporation and a wholly owned Subsidiary (as defined herein) of Parent (“Merger Sub”), Independence Power, Inc., a Texas corporation (the “Company”), and Independence Investors LLC, a Delaware limited liability company (the “Stockholder”).
WHEREAS, upon the terms and subject to the conditions of this Agreement and in accordance with the relevant provisions of the Texas Business Organizations Code (the “TBOC”), Parent desires to acquire the Company, through the merger of Merger Sub with and into the Company (the “Merger”), and, pursuant to the Merger, the Company shall become a wholly owned subsidiary of Parent;
WHEREAS, the board of directors of the Company has unanimously (i) approved and declared advisable this Agreement and the transactions contemplated by this Agreement, including the Merger, upon the terms and subject to the conditions of this Agreement and (ii) determined that this Agreement and such transactions are fair to, and in the best interests of, the Company and its stockholders;
WHEREAS, the Stockholder, owner of 100% of the issued and outstanding shares of Company Common Stock (as defined herein) as of the date hereof, by virtue of its execution of this Agreement, hereby adopts this Agreement and approves the transactions contemplated by this Agreement, including the Merger;
WHEREAS, each of the boards of directors of Parent and Merger Sub has unanimously (i) approved and declared advisable this Agreement and the transactions contemplated by this Agreement, including the Merger, upon the terms and subject to the conditions of this Agreement and (ii) determined that this Agreement and such transactions are fair to, and in the best interests of, Parent and its stockholders and Merger Sub and its shareholders, respectively;
WHEREAS, Parent, in its capacity as the owner of 100% of the issued and outstanding shares of common stock of Merger Sub, by virtue of its execution of this Agreement, hereby adopts this Agreement and approves the transactions contemplated by this Agreement, including the Merger;
WHEREAS, for U.S. federal income Tax purposes, the parties hereto intend that the Merger qualifies as a tax-deferred exchange of property for stock under the provisions of Section 351 of the Internal Revenue Code of 1986 (the “Code”) and also as a reorganization pursuant to Section 368(a) of the Code;
WHEREAS, prior to the execution and delivery of this Agreement, and pursuant to Nevada Revised Statutes (“NRS”) 78.390, the board of directors of Parent has unanimously approved, and the stockholder holding a majority of the outstanding and issued shares of Parent have approved, amending and restating Parent’s articles of incorporation in full (the “Parent Articles”), including filing such amended and restated Parent Articles with the Secretary of State of Nevada;
WHEREAS, pursuant to NRS 78.207, the board of directors of Parent has unanimously approved, and a majority of the stockholders of Parent have approved, amending the Parent Articles, immediately following the consummation of the Merger, to authorize a seven (7) for one (1) forward split of the Parent Common Stock upon the terms set forth therein (the “Parent Stock Split”); and
WHEREAS, for U.S. federal income Tax purposes, the parties hereto intend that the Parent Stock Split qualifies as a reorganization pursuant to Section 368(a) of the Code once effective.
NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements set forth herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, and intending to be legally bound hereby, Parent, Merger Sub and the Company agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN RULES OF CONSTRUCTION
Section 1.01 Certain Definitions. For all purposes of and pursuant to this Agreement, the following capitalized terms have the following respective meanings:
(a) “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this definition, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by Contract or otherwise.
(b) “Business Data” means all business information and data, including Personal Information (whether of employees, contractors, consultants, customers, consumers, or other Persons and whether in electronic or any other form or medium) that is accessed, collected, used, processed, stored, shared, distributed, transferred, disclosed, destroyed, or disposed of by any of the Business Systems or otherwise in the course of the conduct of the business of the Company and its Subsidiaries.
(c) “Business Day” means any day other than a Saturday or Sunday or a day on which commercial banks are authorized or required by Law to be closed in Houston, Texas or Las Vegas, Nevada.
(d) “Business Systems” means all Software, computer hardware (whether general or special purpose), electronic data processing, information, record keeping, communications, telecommunications, networks, interfaces, platforms, servers, peripherals, and computer systems, including any outsourced systems and processes, that are owned or used in the conduct of the business of the Company and its Subsidiaries.
(e) “Class A Parent Common Stock” means shares of common stock of Parent designated as “Class A Common Stock” in the Parent Articles, par value $0.0001 per share.
(f) “Class B Parent Common Stock” means shares of common stock of Parent designated as “Class B Common Stock” in the Parent Articles, par value $0.0001 per share.
(g) “Company Common Stock” means the common stock, par value $0.01 per share, of the Company.
(h) “Company IP” means, collectively, all Company Owned IP and Company Licensed IP.
(i) “Company Licensed IP” means all Intellectual Property Rights owned or purported to be owned by a third party and licensed to the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries otherwise has a right to use.
(j) “Company Material Adverse Effect” means any event, circumstance, change, development, effect or occurrence (collectively, “Effect”) that, individually or in the aggregate with all other Effects, is or would reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise), assets, Liabilities or operations of the Company and its Subsidiaries, taken as a whole.
(k) “Company Owned IP” means all Intellectual Property Rights owned or purported to be owned by the Company and its Subsidiaries.
(l) “Company Products” means any products or services, developed, manufactured, performed, out-licensed, sold, distributed or otherwise made available by or on behalf of the Company or any of its Subsidiaries, from which the Company or any of its Subsidiaries has derived previously, is currently deriving or is scheduled to derive, revenue from the sale or provision thereof.
(m) “Consent” means, with respect to any Person, any consent, approval, authorization, permission or waiver of, or registration, declaration or other action or filing with or exemption by, such Person.
(n) “Contract” means any oral or written contract, obligation, understanding, commitment, Lease, license, purchase order, bid or other agreement.
(o) “Disabling Devices” means undisclosed Software viruses, time bombs, logic bombs, Trojan horses, trap doors, back doors, or other computer instructions, intentional devices or techniques that are designed to threaten, infect, assault, vandalize, defraud, disrupt, damage, disable, maliciously encumber, hack into, incapacitate, infiltrate or slow or shut down a computer system or any component of such computer system, including any such device affecting system security or compromising or disclosing user data in an unauthorized manner.
(p) “Environmental Law” means any applicable Law or Order (i) relating to pollution or protection of the natural resources, endangered or threatened species, the environment (including ambient air, soil, surface water or groundwater, or subsurface strata) or human health and safety or (ii) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, treatment, generation, discharge, transportation, reporting, disposal or remediation of any Hazardous Substances.
(q) “ERISA” means the Employee Retirement Income Security Act of 1974.
(r) “ERISA Affiliate” means any entity that together with the Company or any of its Subsidiaries would be deemed a “single employer” for purposes of Section 4001(b)(1) of ERISA and/or Sections 414(b), (c) and/or (m) of the Code.
(s) “Exchange Act” means the Securities Exchange Act of 1934.
(t) “GAAP” means United States generally accepted accounting principles, as in effect from time to time, applied on a consistent basis throughout the periods indicated.
(u) “Governmental Body” means any federal, state, foreign, provincial or local governmental or regulatory commission, quasi governmental, authority, tribunal, arbitration panel, arbitrator, mediator, court, board, bureau, department, agency or regulatory, legislative, taxing or administrative agency or body.
(v) “Hazardous Substances” means (i) any substance, material or waste that is defined, listed, prohibited or regulated as hazardous, toxic, contaminant, pollutant, or words of similar meaning under any Environmental Law and (ii) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, mold, urea formaldehyde foam insulation, per- and polyfluoroalkyl substances, and polychlorinated biphenyls.
(w) “Intellectual Property Rights” means all (i) patents and patent applications, and all reissues, divisions, renewals, reexaminations, extensions, provisional applications, continuations and continuations-in-part thereof (“Patents”), (ii) copyrights and mask works (whether registered or unregistered), and all registrations, renewals and applications therefor, and rights in all works of authorship (including copyrights in Software) (“Copyrights”), (iii) corporate names, trademarks, service marks, trade dress, trade names and other indicia of source or origin, together with any and all goodwill associated with and symbolized by the foregoing items and all applications, registrations and renewals thereof (“Trademarks”), (iv) trade secrets and rights in confidential information, including rights in invention disclosures, proprietary processes and formulae, techniques, protocols, algorithms, layouts, designs, specifications, know-how, methods and inventions and improvements thereof (whether patentable or not) (“Trade Secrets”), (v) all design rights and any registrations and applications therefor, (vi) Internet domain name registrations, social media accounts and any and all goodwill associated with and symbolized by the foregoing items (“Domain Names”), (vii) rights in Software, data, databases, data compilations, and data collections, (viii) all moral rights and (ix) all other intellectual property rights arising anywhere in the world, including, in each case, all rights to claim priority thereto and recover damages for the infringement thereof.
(x) “IRS” means the U.S. Internal Revenue Service.
(y) “Knowledge” means (i) with respect to the Company, the actual knowledge of David J. Durrett or Scott Stephenson upon reasonable inquiry and (ii) with respect to Parent and Merger Sub, the actual knowledge of any of the officers or directors of Parent and Merger Sub upon reasonable inquiry (provided, that solely with respect to the Specified Representations, Knowledge shall mean the actual knowledge of any of the officers or directors of Parent and Merger Sub solely as obtained from the express representations and warranties of Jervey Choon set forth in Article II of the Share Sale Agreement).
(z) “Kyma Batteries” means Kyma Batteries LLC, a Delaware limited liability company and Subsidiary of the Company.
(aa) “Law” means any federal, state, local, provincial or foreign law, constitution, treaty, convention, ordinance, code, rule, regulation, act, statute, edict, proclamation, settlement, directive or other similar requirement enacted, adopted, promulgated or applied by a Governmental Body, including common law.
(bb) “Leased Real Property” means the real property leased by the Company or any of its Subsidiaries as tenant, together with, to the extent leased by the Company, all buildings and other structures, facilities or improvements located thereon and all easements, licenses, rights and appurtenances of the Company and its Subsidiaries relating to the foregoing.
(cc) “Liabilities” means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, asserted or unasserted, liquidated or unliquidated, due or to become due or determined or determinable.
(dd) “Lien” means any lien, mortgage, pledge, encumbrance, charge, security interest, adverse claim, liability, interest, charge, preference, priority, proxy, transfer restriction (other than restrictions under the Securities Act and state securities laws), encroachment, Tax, Order, community property interest, equitable interest, option, warrant, right of first refusal, easement, profit, license, servitude, right of way, covenant or zoning restriction.
(ee) “Open Source Software” means any Software that is licensed pursuant to (i) any license that is a license now or in the future approved by the Open Source Initiative and listed at http://www.opensource.org/licenses, which licenses include all versions of the GNU General Public License (GPL), the GNU Lesser General Public License (LGPL), the GNU Affero GPL, the MIT License, the Eclipse Public License, the Common Public License, the CDDL, the Mozilla Public License (MPL), the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL), and the Sun Industry Standards License (SISL), (ii) any license to Software that is considered “free” or “open source software” by the Open Source Foundation or the Free Software Foundation or (iii) any other license or distribution model similar to any of the foregoing.
(ff) “Order” means any temporary, preliminary or permanent stipulation, order, award, decision, injunction, judgment, ruling, decree, charge, writ, subpoena or verdict entered, issued, made or rendered by any Governmental Body or arbitrator.
(gg) “Organizational Documents” means (i) any certificate or articles of incorporation, bylaws, certificate or articles of formation, operating agreement or partnership agreement, (ii) any documents comparable to those described in clause (i) as may be applicable pursuant to any Law and (iii) any amendment or modification to any of the foregoing.
(hh) “Parent Common Stock” means, collectively, the Class A Parent Common Stock and the Class B Parent Common Stock.
(ii) “Parent Material Adverse Effect” means any Effect that, individually or in the aggregate with all other Effects, is or would reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise), assets, Liabilities or operations of Parent.
(jj) “Parent Preferred Stock” means shares of preferred stock of Parent, par value $0.0001 per share.
(kk) “Parent SEC Reports” means, collectively, all forms, statements, schedules, certifications, reports and other documents filed or furnished by Parent to the SEC as a reporting company under the Exchange Act or the Securities Act, in each case, including all exhibits and schedules thereto and documents incorporated by reference therein.
(ll) “PCAOB” means the Public Company Accounting Oversight Board and any division or subdivision thereof.
(mm) “Per Share Merger Consideration” means, with respect to each Company Share issued and outstanding as of immediately prior to the Effective Time, the right to receive the applicable number of shares of Class A Parent Common Stock set forth in Section 3.01.
(nn) “Permit” means any license, import license, export license, franchise, permit, registration, certificate, certificate of occupancy, Consent or Order issued by any Person.
(oo) “Permitted Liens” means (i) such imperfections of title, easements, encumbrances, Liens or restrictions that do not materially impair the current use of the Company’s assets that are subject thereto, (ii) materialmen’s, mechanics’, carriers’, workmen’s, warehousemen’s, repairmen’s, landlord’s and other similar Liens arising in the ordinary course of business, or deposits to obtain the release of such Liens, (iii) Liens for Taxes not yet due and payable, or being contested in good faith, (iv) zoning, entitlement, conservation restriction and other land use and environmental regulations promulgated by Governmental Bodies, (v) non-exclusive licenses granted by the Company in the ordinary course of business, (vi) non-monetary Liens, encumbrances and restrictions on real property (including easements, covenants, rights of way and similar restrictions of record) that do not materially interfere with the present uses of such real property, (vii) Liens identified in the Audited Financial Statements and (viii) Liens on Leases, subleases, easements, licenses, rights of use, rights to access and rights of way arising from the provisions of such agreements or benefiting or created by any superior estate, right or interest.
(pp) “Person” means any individual or corporation, association, partnership, limited liability company, joint venture, joint stock, or other company, business trust, trust, organization, Governmental Body, or other entity of any kind.
(qq) “Personal Information” means (i) information that is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, or related to an identified or identifiable individual (e.g., name, address telephone number, email address, financial account number, government-issued identifier), (ii) any other data used or intended to be used or which allows one to identify, contact, or precisely locate an individual, including any Internet protocol address or other persistent identifier and (iii) “personally identifiable information,” or “personal data,” as defined under applicable Privacy/Data Security Laws.
(rr) “Privacy/Data Security Laws” means all Laws to the extent pertaining to data protection, data privacy, data security, cybersecurity, and cross-border data transfer governing the receipt, collection, use, storage, processing, sharing, security, disclosure, or transfer of Personal Information or the security of Company’s Business Systems or Business Data.
(ss) “Proceeding” means any action, audit, lawsuit, litigation, investigation or arbitration (in each case, whether civil, criminal or administrative) pending by or before any Governmental Body or arbitrator.
(tt) “Proprietary Software” means any Software owned or purported to be owned by the Company or any of its Subsidiaries.
(uu) “Released Related Parties” means, with respect to any Person, any former, current and future direct or indirect equity holders, controlling Persons, equity holders, option holders, members, general or limited partners and other Representatives of such Person and each of their respective successors and assigns.
(vv) “Representative” means, with respect to any Person, any member, manager, partner, director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.
(ww) “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.
(xx) “SEC” means the Securities and Exchange Commission.
(yy) “Securities Act” means the Securities Act of 1933.
(zz) “Share Sale Agreement” means that certain Common Stock Purchase Agreement, dated as of November 14, 2025, by and between Jervey Choon and Energizer Systems, LLC.
(aaa) “Software” means all computer software (in object code or source code format), related data and databases, and related documentation.
(bbb) “Specified Representations” means those representations and warranties of Parent and Merger Sub contained in Section 6.06.
(ccc) “Subsidiary” means, with respect to any Person, any corporation of which a majority of the total voting power of shares of stock entitled to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof or any partnership, association or other business entity of which a majority of the partnership or other similar ownership interest is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof. For purposes of this definition, a Person is deemed to have a majority ownership interest in a partnership, association or other business entity if such Person is allocated a majority of the gains or losses of such partnership, association or other business entity or is or controls the managing director or general partner of such partnership, association or other business entity.
(ddd) “Tax” or “Taxes” means any federal, state, local, or foreign tax, levy, duty, or charge of any kind, including income, gross receipts, payroll, employment, excise, stamp, franchise, profits, withholding, social security (or similar, including FICA), real property, personal property, sales, use, escheat, abandoned property, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax, levy, duty or charge of any kind whatsoever, including any interest, penalty, or additions to tax imposed with respect thereto.
Section 1.02 Other Definitions. Each of the following terms is defined in the Section forth opposite such term:
| Term | | Section Reference | |
| | | | |
| Agreement | | Preamble | |
| Arbitrator | | Section 8.11 | |
| Audited Financial Statements | | Section 4.07(a) | |
| Blue Sky Laws | | Section 4.05(b) | |
| Certificate of Merger | | Section 2.02(c) | |
| Closing | | Section 2.02(a) | |
| Closing Date | | Section 2.02(a) | |
| Closing Filing | | Section 7.01(b) | |
| Closing Press Release | | Section 7.01(b) | |
| Code | | Recitals | |
| Company | | Preamble | |
| Company Disclosure Schedule | | Article IV | |
| Company Securities | | Section 4.03(b) | |
| Company Shares | | Section 3.02 | |
| Company Trade Secrets | | Section 4.13(c) | |
| Copyrights | | Section 1.01(w) | |
| Data Protection Requirements | | Section 4.13(i) | |
| Domain Names | | Section 1.01(w) | |
| Effective Time | | Section 2.02(c) | |
| Environmental Permits | | Section 4.15 | |
| Evaluation Date | | Section 6.06(e) | |
| Financial Statements | | Section 4.07(b) | |
| Intended Tax Treatment | | Section 3.05 | |
| Interim Balance Sheet | | Section 4.07(b) | |
| Interim Financial Statements | | Section 4.07(b) | |
| Internal Controls | | Section 6.06(e) | |
| Lease | | Section 4.12(b) | |
| Lease Documents | | Section 4.12(b) | |
| Material Contracts | | Section 4.16(a) | |
| Merger | | Recitals | |
| Merger Sub | | Preamble | |
| NRS | | Recitals | |
| Parent | | Preamble | |
| Parent Articles | | Recitals | |
| Parent Stock Split | | Recitals | |
| Patents | | Section 1.01(w) | |
| Plan | | Section 4.10(a) | |
| Remedies Exceptions | | Section 4.04 | |
| Shrink Wrap Code | | Section 4.16(a)(ii) | |
| Stockholder | | Preamble | |
| Surviving Corporation | | Section 2.01 | |
| TBOC | | Recitals | |
| Trade Secrets | | Section 1.01(w) | |
| Trademarks | | Section 1.01(w) | |
Section 1.03 Certain Rules of Construction.
(a) Joint Drafting. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any of the provisions of this Agreement.
(b) Headings. Section and subsection headings are not to be considered part of this Agreement, are included solely for convenience, are not intended to be full or accurate descriptions of the content of the Sections or subsections of this Agreement and shall not affect the construction hereof.
(c) Interpretation. Except as otherwise explicitly specified to the contrary herein, (i) the words “hereof”, “herein”, “hereunder” and words of similar import will refer to this Agreement as a whole and not to any particular Section or provision of this Agreement, and reference to a particular Section of this Agreement will include all subsections thereof, (ii) the word “including” means including without limitation, whether or not so specified, (iii) references in the singular or to “him,” “her,” “it,” “itself” or other like references, and references in the plural or the feminine or masculine reference, as the case may be, shall also, when the context so requires, be deemed to include the plural or singular, or the masculine or feminine, reference, as the case may be, (iv) references in this Agreement to any Section, Exhibit or Schedule will, unless otherwise specified, be deemed to be a reference to a Section, Exhibit or Schedule of or to this Agreement, in each case as such may be amended in accordance herewith, (v) references herein to “$” or “dollars” means United States dollars, (vi) references to any Law mean such Law as amended modified, codified, replaced or reenacted, in whole or in part, and in effect as of the time of such reference, including rules and regulations promulgated thereunder, (vii) references to a particular Contract as of a given date means the Contract as amended, supplemented and modified from time to time through such date, together with any annexes, schedules or exhibits thereto; provided, that the foregoing shall not apply to any agreement, Contract, document or instrument referenced in the Company Disclosure Schedule unless the applicable amendment, modification or supplementation is also referenced therein, (viii) references to any Person includes such Person’s successors and permitted assigns, (ix) references to “written” or “in writing” include in electronic form (including email), (x) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other theory extends and such phrase shall not mean “if”, (xi) to the extent that this Agreement requires an Affiliate or Subsidiary of any party hereto to take or omit to take any action, such covenant or agreement includes the obligation of such party hereto to cause such Affiliate or Subsidiary to take or omit to take such action, (xii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP, (xiii) references to the “date hereof” mean the date of this Agreement, (xiv) where this Agreement states that a party hereto “shall,” “will” or “must” perform in some manner or otherwise act or omit to act, it means the party hereto is legally obligated to do so in accordance with this Agreement, (xv) if the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not a Business Day, then the time for the giving of such notice or the performance of such action shall be extended to the next succeeding Business Day and (xvi) unless the context clearly requires otherwise, when used herein “or” shall not be exclusive (i.e., “or” shall mean “and/or”).
(d) Exhibits and Schedules. The Exhibits, Company Disclosure Schedule and other Schedules identified in this Agreement are incorporated herein by reference and made a part hereof.
(e) Time Periods. References to “days” shall refer to calendar days unless Business Days are specified. If any period expires on a day which is not a Business Day or any event or condition is required by the terms of this Agreement to occur or be fulfilled on a day which is not a Business Day, such period shall expire or such event or condition shall occur or be fulfilled, as the case may be, on the next succeeding Business Day.
(f) Ordinary Course. References to “ordinary course of business” shall refer to the ordinary course of business for the Company and its Subsidiaries, consistent with past custom and practice.
(g) Document Delivery. For purposes of this Agreement, any document that is being described as being “provided”, “delivered”, “furnished”, “made available” or other similar reference, shall be treated as if such document was (i) delivered to Parent or its Representatives prior to the execution of this Agreement or (ii) made available for viewing in the “virtual data room” for “Independence” hosted by Vedder Price, as such materials were posted to such “virtual data room” before 5:00 p.m. (Central time) on the date prior to the date hereof in a manner which is continuously visible from the date of posting until the Closing to the Person (and the Representatives of such Person) to whom such item was made available.
ARTICLE II
THE MERGER
Section 2.01 The Merger. Upon the terms set forth in this Agreement, and in accordance with the applicable provisions of the TBOC, at the Effective Time, Merger Sub shall be merged with and into the Company. As a result of the Merger, the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation of the Merger and a wholly owned Subsidiary of Parent. The Company, as the surviving corporation of the Merger, is sometimes referred to herein as the “Surviving Corporation.”
Section 2.02 Closing Date Transactions.
(a) Parent Articles. On the date hereof, immediately prior to the execution and delivery of this Agreement, Parent has caused the filing of the Parent Articles with the Secretary of State of the State of Nevada.
(b) Closing. Immediately following the execution and delivery of this Agreement, the closing of the Merger (the “Closing”) will take place at approximately 11:00 a.m. Eastern time on the date hereof (by the electronic exchange of fully executed documents contemplated by this Agreement to be exchanged or delivered at the Closing or, if otherwise agreed to by Parent and the Company, at the offices of Vedder Price P.C. located at 600 Brickell Avenue, Suite 1500, Miami, Florida 33131). The date upon which the Closing occurs is herein referred to as the “Closing Date.”
(c) Effective Time. On the Closing Date, immediately following the filing of the Parent Articles, the parties hereto shall cause the Merger to be consummated by filing the certificate of merger (the “Certificate of Merger”) with the Secretary of State of the State of Texas, in such form as required by, and executed in accordance with, the relevant provisions of the TBOC (the time of the acceptance of the Certificate of Merger by the Secretary of State of the State of Texas (or such later time as may be specified in the Certificate of Merger) being the “Effective Time”).
(d) Parent Articles Amendment; Parent Stock Split. On the Closing Date, immediately following the filing of the Certificate of Merger, Parent shall file an amendment to the Parent Articles with the Secretary of State of the State of Nevada authorizing the Parent Stock Split upon the terms set forth therein.
Section 2.03 Effect of the Merger. The Merger shall have the effects set forth in this Agreement and the applicable provisions of the TBOC. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of each of the Company and Merger Sub shall become the Liabilities, restrictions, disabilities and duties of the Surviving Corporation.
Section 2.04 Certificate of Formation; Bylaws.
(a) Certificate of Formation. At the Effective Time, the certificate of formation of the Merger Sub, as in effect immediately prior to the Effective Time, shall be the certificate of formation of the Surviving Corporation until thereafter amended as provided by law and such certificate of formation; provided, however, that, at the Effective Time, Article 1 of the certificate of formation of the Surviving Corporation shall be amended to read as follows: “The name of the entity is: Independence Power, Inc.”.
(b) Bylaws. At the Effective Time, the bylaws of Merger Sub as in effect immediately prior to the Effective Time shall become the bylaws of the Surviving Corporation, except that all references to Merger Sub shall be automatically amended and shall become references to the Surviving Corporation, until thereafter amended as provided by the TBOC, the certificate of formation and such bylaws.
Section 2.05 Directors and Officers. The initial directors and officers of the Surviving Corporation shall be the individuals set forth on Schedule 2.05, and each such director and officer shall hold office in accordance with the certificate of formation and bylaws of the Surviving Corporation. In addition, as of the Effective Time, the directors and officer of Parent shall be as specified on Schedule 2.05, each such director and officer to hold office in accordance with the Parent Articles (as amended) and bylaws of Parent.
ARTICLE III
CONVERSION AND EXCHANGE OF SECURITIES
Section 3.01 Issuance of Class B Parent Common Stock. Prior to the Effective Time and in connection with the approval of the Merger, Parent has declared an issuance of 32,000,000 shares of Class B Parent Common Stock to be issued as the consideration in the Merger, which issuance is conditioned upon the occurrence of the Effective Time and shall have a record date and time that is as of the close of business on the Closing Date.
Section 3.02 Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of Merger Sub, the Company or the holders of any of the following securities: (a) each share of Company Common Stock (all issued and outstanding shares of Company Common Stock being hereinafter collectively referred to as the “Company Shares”) issued and outstanding immediately prior to the Effective Time (other than any Company Shares to be canceled pursuant to clause (b) hereof) shall be canceled and converted into the right to receive 3,200 shares of Class B Parent Common Stock, which is a voting stock (with the result that the Stockholder will hold 32,000,000 shares of Class B Parent Common Stock as a result of the Merger), (b) each Company Share held in the treasury of the Company and each Company Share owned by Merger Sub, Parent or any direct or indirect wholly owned Subsidiary of Parent or of the Company immediately prior to the Effective Time shall be canceled without any conversion thereof and no payment or distribution shall be made with respect thereto and (c) each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.
Section 3.03 Exchange of Company Shares.
(a) Surrender of Company Shares. At the Closing, the Company shall deliver a stock power in customary form reasonably satisfactory to Parent, executed by the Stockholder, in favor of Parent with respect to all Company Shares. Only upon the surrender of each Company Share pursuant to a duly completed and validly executed stock power shall the Stockholder be entitled to receive in exchange therefor the Per Share Merger Consideration, and Parent shall deliver, or cause to be delivered, the Per Share Merger Consideration to the Stockholder, which shares of Class B Parent Common Stock, which is a voting stock, shall be book-entry and not be certificated. Until surrendered as contemplated by this Section 3.03(a), each Company Share held by the Stockholder shall be deemed at all times after the Effective Time to represent only the right to receive the Per Share Merger Consideration upon the surrender of such Company Share pursuant to a duly completed and validly executed stock power in favor of Parent.
(b) No Further Rights in Company Common Stock. All shares of Parent Common Stock issued upon conversion of the Company Shares in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such Company Shares.
(c) No Liability. Neither Parent nor the Surviving Corporation shall be liable to any holder of Company Shares for any such Company Shares (or dividends or distributions with respect thereto), or cash delivered to a public official pursuant to any abandoned property, escheat or similar Law.
Section 3.04 Stock Transfer Books. At the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers of Company Shares thereafter on the records of the Company. From and after the Effective Time, the holders of Company Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Company Shares, except as otherwise provided in this Agreement or by Law.
Section 3.05 Tax Treatment. For U.S. federal income Tax purposes, it is intended that the Merger qualify as a tax-deferred exchange of property for stock under the provisions of Section 351 of the Code. In addition, for U.S. federal income Tax purposes, it is intended that the Merger qualifies as a reorganization pursuant to Section 368(a) of the Code (this sentence with the prior sentence, the “Intended Tax Treatment”). The parties hereto hereby agree that this Agreement is adopted as a “plan of reorganization”, as such term is used in Section 368 of the Code and in Treasury Regulations Section 1.368-2(g). The Merger shall be reported by the parties hereto for all Tax purposes in accordance with the Intended Tax Treatment, including attaching the applicable statement described in Treasury Regulations Sections 1.351-3 and 1.368-3 on or with its Tax return for the taxable year of the Merger, unless otherwise required by a Governmental Body as a result of a final “determination” within the meaning of Section 1313(a) of the Code. Separately, for U.S. federal income Tax purposes, the parties hereto intend that the Parent Stock Split qualifies as a reorganization pursuant to Section 368(a) of the Code. The parties hereto shall reasonably cooperate with each other and their respective counsel to document and support the Intended Tax Treatment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company’s disclosure schedule delivered by the Company in connection with this Agreement (the “Company Disclosure Schedule”) which disclosure in the Company Disclosure Schedule shall be deemed to qualify or provide disclosure in response to the section or subsection of this Article IV that corresponds to the section or subsection of the Company Disclosure Schedule in which any such disclosure is set forth, each of the Stockholder and the Company, jointly and severally, hereby represents and warrants to Parent and Merger Sub as follows:
Section 4.01 Organization and Qualification; Subsidiaries
(a) Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Texas and has the requisite corporate power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted. The Company is duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, have a Company Material Adverse Effect.
(b) Subsidiaries. Section 4.01(b) of the Company Disclosure Schedule sets forth a true and complete list of all Subsidiaries of the Company as of the date hereof, together with the jurisdiction of incorporation or formation, as applicable, of each Subsidiary and the record owner of the outstanding capital stock of each Subsidiary. Except as disclosed in Section 4.01(b) of the Company Disclosure Schedule, the Company does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or other business association or other Person.
Section 4.02 Organizational Documents. The Company has, prior to the date hereof, made available to Parent a true, complete and correct copy of (a) its certificate of formation and bylaws and (b) the Organizational Documents of each Subsidiary of the Company, in each case of clauses (a) and (b), as amended through the date hereof. All such Organizational Documents are in full force and effect. Neither the Company nor any of its Subsidiaries is in violation of any of the provisions of its Organizational Documents.
Section 4.03 Company Capitalization.
(a) Capital Stock. The authorized capital stock of the Company consists of 10,000 shares of Company Common Stock, all of which are issued and outstanding and held by the Stockholder. All issued and outstanding shares of Company Common Stock are validly issued, fully paid, nonassessable and free of any preemptive rights. All outstanding shares of Company Common Stock, and all outstanding shares of capital stock of each Subsidiary of the Company, have been issued and granted in compliance with (i) all applicable securities laws and other applicable Laws and (ii) all requirements set forth in applicable Contracts.
(b) Company Securities. Except as described in Section 4.03(a), there are no (i) shares of capital stock of, or other equity interest in, the Company that are issued, reserved for issuance or outstanding, (ii) options, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company or any Subsidiary or obligating the Company or any Subsidiary to issue or sell any shares of capital stock of, or other equity interests in, the Company or any Subsidiary or (iii) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights issued by or with the approval of the Company or any of its Subsidiaries that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock or other voting securities of, or other ownership interests in, the Company (the items in clauses (i) through (iii), collectively, the “Company Securities”). Neither the Company nor any of its Subsidiaries has any outstanding bonds, debentures, notes or other indebtedness or similar obligations, the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) on any matter (on which stockholders of the Company may vote).
(c) Other Rights. There are no (i) stockholders agreements, voting trusts, registration rights agreements or similar arrangements or understandings to which the Company or any of its Subsidiaries is a party with respect to the voting, registration or disposition of any Company Securities or (ii) legally binding obligations of the Company or any of its Subsidiaries (A) granting any preemptive rights, anti-dilutive rights or rights of first refusal or other similar rights with respect to any Company Securities, (B) to make any payment based on the price or value of any equity interests of the Company or any of its Subsidiaries, (C) that obligates it to repurchase, redeem or otherwise acquire any Company Securities or (D) to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person.
(d) Subsidiary Securities. Each outstanding share of capital stock or other equity interest of each Subsidiary of the Company is duly authorized, validly issued, fully paid and nonassessable, and each such share or other equity interest is owned by the Company or another Subsidiary free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Company’s or any Subsidiary’s voting rights, charges and other encumbrances of any nature whatsoever.
Section 4.04 Authority Relative to This Agreement. The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by the Company of this Agreement, the performance by the Company of its obligations hereunder and the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (other than, with respect to the Merger, the filing and recordation of appropriate merger documents as required by the TBOC). This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other Laws of general application affecting enforcement of creditors’ rights generally, by general equitable principles (the “Remedies Exceptions”). To the Knowledge of the Company, no other state takeover statute is applicable to the Merger or the other transactions contemplated by this Agreement.
Section 4.05 No Conflict; Required Filings and Consents.
(a) No Conflict. The execution and delivery by the Company of this Agreement does not and, subject to receipt of the filing and recordation of appropriate merger documents as required by the TBOC, the performance of this Agreement by the Company will not (i) conflict with or violate the Organizational Documents of the Company or any of its Subsidiaries, (ii) conflict with or violate any Law applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien (other than any Permitted Lien) on any material property or asset of the Company or any of its Subsidiaries pursuant to, any Contract, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, have a Company Material Adverse Effect. The Stockholder has taken all necessary action to approve and adopt this Agreement and the transactions contemplated hereby, including the Merger.
(b) Required Filings and Consents. The execution and delivery of this Agreement by the Company does not, and the performance of this Agreement by the Company will not, require any Consent or Permit from, or filing with or notification to, any Governmental Body, except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, state securities or “blue sky” laws (“Blue Sky Laws”) and state takeover laws and filing and recordation of appropriate merger documents as required by the TBOC and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications would not, individually or in the aggregate, have a Company Material Adverse Effect.
Section 4.06 Permits; Compliance. Each of the Company and its Subsidiaries is in possession of all material Permits necessary for the Company or its Subsidiaries to own, lease and operate its properties or to carry on its business as it is now being conducted, except where the failure to have such Permits would not, individually or in the aggregate, have a Company Material Adverse Effect. No suspension or cancellation of any of such Permits is pending or, to the Knowledge of the Company, threatened. Neither the Company nor any of its Subsidiaries is in conflict with, or in default, breach or violation of, (a) any Law applicable to the Company or its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected or (b) any Contract or Permit, except, in each case, for any such conflicts, defaults, breaches or violations that would not, individually or in the aggregate, have a Company Material Adverse Effect.
Section 4.07 Financial Reporting.
(a) Annual Financial Statements. The Company has, prior to the date hereof, made available to Parent true, complete and correct copies of the audited balance sheet of Kyma Batteries as of December 31, 2024 and the related audited statements of operations and comprehensive loss, cash flows and stockholders’ equity of Kyma Batteries for the year then ended (collectively, the “Audited Financial Statements”), all of which are attached as Section 4.07(a) of the Company Disclosure Schedule. The Audited Financial Statements (including the notes thereto) (i) was prepared in accordance with GAAP (except as may be indicated in the notes thereto), (ii) fairly presents, in all material respects, the consolidated financial position, results of operations and cash flows of Kyma Batteries as at the date thereof and for the period indicated therein, except as otherwise noted therein and (iii) was audited in accordance with the standards of the PCAOB. The Audited Financial Statements have been prepared from, and are in accordance with, the books and records of Kyma Batteries.
(b) Interim Financial Statements. The Company, has prior to the date hereof, made available to Parent a true, complete and correct copy of the consolidated unaudited balance sheet of Kyma Batteries as of September 30, 2025 (the “Interim Balance Sheet”), and the related unaudited statements of operations and comprehensive loss and cash flows of Kyma Batteries for the nine-month period then ended (collectively with the Interim Balance Sheet, the “Interim Financial Statements” and together with the Audited Financial Statements, the “Financial Statements”), which are attached as Section 4.07(b) of the Company Disclosure Schedule. The Interim Financial Statements were prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated (except for the omission of footnotes and subject to year-end adjustments, none of which are individually or in the aggregate material) and fairly present, in all material respects, the consolidated financial position, results of operations and cash flows of the Company and its Subsidiaries as at the date thereof and for the period indicated therein, except as otherwise noted therein and subject to normal and recurring year-end adjustments (none of which are individually or in the aggregate material) and the absence of notes. The Interim Financial Statements have been prepared from, and are in accordance with, the books and records of the Company and its Subsidiaries.
(c) No Undisclosed Liabilities. Except as and to the extent set forth on the balance sheets of the Financial Statements, neither the Company nor any of its Subsidiaries has any Liability required to be reflected or reserved against on a consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP or in the notes thereto, except for (i) Liabilities that were incurred in the ordinary course of business since the date of such Interim Balance Sheet, (ii) obligations for future performance under any Contract to which the Company or any of its Subsidiaries is a party or (iii) Liabilities that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(d) Internal Control over Financial Reporting. The Company and its Subsidiaries have established and maintain a system of “internal control over financial reporting” (as defined and required pursuant to Rule 13a-15 promulgated under the Exchange Act). Such internal controls are designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of the Company’s consolidated financial statements for external purposes in accordance with GAAP. During the last five (5) years, neither the Company nor, to the Knowledge of the Company, the Company’s independent registered public accounting firm has identified or been made aware of (i) any “significant deficiencies” (as defined pursuant to Rule 12b-2 promulgated under the Exchange Act) in the system of internal control over financial reporting used by the Company and its Subsidiaries that has not been subsequently remediated, (ii) any “material weakness” (as defined pursuant to Rule 12b-2 promulgated under the Exchange Act) in the Company’s and its Subsidiaries’ internal control over financial reporting (whether or not remediated) or (iii) any fraud that involves the Company’s or any of its Subsidiaries’ management or other employees who have a role in the preparation of financial statements or the internal control over financial reporting utilized by the Company and its Subsidiaries.
(e) No Claims. During the last five (5) years, neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any director, officer, auditor or accountant of the Company or any of its Subsidiaries, has received or otherwise had or obtained knowledge of any material written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods (including with respect to loan loss reserves, write-downs, charge-offs and accruals) of the Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices.
(f) Certain Legal Matters. To the Knowledge of the Company, no employee of the Company or any of its Subsidiaries has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any Law. None of the Company or any of its Subsidiaries or, to the Knowledge of the Company, any officer, employee, contractor, subcontractor or agent of the Company or any of its Subsidiaries, has discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against an employee of the Company or any of its Subsidiaries in the terms and conditions of employment because of any act of such employee described in 18 U.S.C. sec. 1514A(a).
(g) Accounts Receivable. All accounts receivable of the Company and its Subsidiaries reflected on the Interim Balance Sheet or arising thereafter have arisen from bona fide transactions in the ordinary course of business and in accordance with GAAP and are not subject to valid defenses, setoffs or counterclaims. The Company’s reserve for contractual allowances and doubtful accounts is adequate and has been calculated in a manner consistent with past practices. Since the date of the Interim Balance Sheet, neither the Company nor any of its Subsidiaries has modified or changed in any material respect its sales practices or methods including, without limitation, such practices or methods in accordance with which the Company or any of its Subsidiaries sell goods, fill orders or record sales.
(h) Accounts Payable. All accounts payable of the Company and its Subsidiaries reflected on the Interim Balance Sheet or arising thereafter are the result of bona fide transactions in the ordinary course of business and have been paid or are not yet due or payable. Since the date of the Interim Balance Sheet, neither the Company nor any of its Subsidiaries has altered in any material respects its practices for the payment of such accounts payable, including the timing of such payment.
Section 4.08 Absence of Certain Events or Changes. Since January 1, 2025, except as expressly contemplated by this Agreement, (a) the Company and the Subsidiaries have conducted their businesses only in the ordinary course of business and (b) there has not been any Company Material Adverse Effect.
Section 4.09 Absence of Litigation and Orders. There is no material Proceeding pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries, or any property or asset of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries nor any material property or asset of the Company or any of its Subsidiaries is subject to any continuing Order of, consent decree, settlement agreement or other similar written agreement with, or, to the Knowledge of the Company, continuing investigation by, any Governmental Body or arbitrator, or any Order of any Governmental Body or arbitrator.
Section 4.10 Employee Benefit Plans.
(a) Plans. Section 4.10(a) of the Company Disclosure Schedule lists all material Plans. For purposes herein, a “Plan” is defined as (i) all employee benefit plans (as defined in Section 3(3) of ERISA), whether or not subject to ERISA, (ii) any other employee benefit plan, agreement, arrangement, program, policy or practice, including without limitation, any equity or equity-based compensation (including without limitation stock option, stock purchase, stock award, stock appreciation, phantom stock, restricted stock or restricted stock unit), deferred compensation, pension, retirement, savings, bonus, profit sharing, incentive compensation, retention, change-in-control, compensation, medical, dental, vision, prescription drug, life insurance, death benefit, cafeteria, flexible spending, dependent care, fringe benefit, vacation, paid time off, holiday pay, disability, sick pay, unemployment, severance, employee loan or educational assistance plan, agreement, arrangement, program, policy or practice and (iii) any employment, consulting, indemnification or other individual services agreement, which, in the case of each of clauses (i), (ii) and (iii), is sponsored or maintained by the Company or any of its Subsidiaries, or to which the Company or any of its Subsidiaries contributes or is required to contribute or is a party, in each case, on behalf of current or former employees, officers, independent contractors or directors of the Company or any of its Subsidiaries or any of the spouses, beneficiaries or dependents of the foregoing, or with respect to which the Company or any of its Subsidiaries has or may have any liability, contingent or otherwise. Each Plan is in writing and the Company has furnished to Parent a true, correct and complete copy of each Plan and has delivered to Parent a true and complete copy of each material document, if any, prepared in connection with each such Plan, including, without limitation, (i) a copy of each trust or other funding arrangement, (ii) each summary plan description and summary of material modifications, (iii) the most recently filed IRS Form 5500, (iv) the most recently received IRS determination letter for each such Plan and (v) the most recently prepared actuarial report and financial statement in connection with each such Plan. Neither the Company nor any of its Subsidiaries has any express or implied commitment, whether legally enforceable or not, (A) to create, incur liability with respect to or cause to exist any other employee benefit plan, program or arrangement, (B) to enter into any contract or agreement to provide compensation or benefits to any individual or (C) to modify, change or terminate any Plan, other than with respect to a modification, change or termination required by ERISA or the Code.
(b) Absence of Certain Plans. None of the Plans is, nor does the Company, any of its Subsidiaries or any ERISA Affiliate have or reasonably expect to have any liability or obligation under (i) a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA), (ii) a single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) subject to Sections 412, 430 or 4971 of the Code and/or Section 302 or Title IV of ERISA, (iii) a multiple employer plan subject to Section 413(c) of the Code or (iv) a multiple employer welfare arrangement under ERISA. No Plan is a “defined benefit plan”, within the meaning of Section 3(35) of ERISA, and none of the Company, any of its Subsidiaries or any ERISA Affiliate has liability (contingent or otherwise) with respect to any such Plan. Each of the Plans is subject only to the Laws of the United States or a political subdivision thereof.
(c) Absence of Certain Obligations. No Company nor any of its Subsidiaries is or will be obligated, whether under any Plan or otherwise, to pay separation, severance, termination or similar benefits to any Person directly as a result of any of the transactions contemplated by this Agreement, nor will any of the transactions contemplated by this Agreement accelerate the time of payment or vesting, or increase the amount, of any benefit or other compensation due to any individual. The transactions contemplated by this Agreement shall not be the direct or indirect cause of any amount paid or payable by the Company or any of its Subsidiaries being classified as an “excess parachute payment” under Section 280G of the Code. None of the Plans provides, nor does the Company or any of its Subsidiaries have or reasonably expect to have any obligation to provide, retiree medical benefits to any current or former employee, officer, director, consultant or other individual service provider of the Company or any of its Subsidiaries after termination of employment or service, except as may be required under Section 4980B of the Code and Parts 6 and 7 of Title I of ERISA and the regulations thereunder.
(d) Plan Compliance. Each Plan is, and has been during the last five (5) years, established, funded, operated and administered, in all material respects, in accordance with its terms and in compliance with the requirements of all Laws including, without limitation, ERISA and the Code. The Company and its Subsidiaries (and any ERISA Affiliates) have performed, in all material respects, all obligations required to be performed by them under, are not in any material respect in default under or in violation of, and have no knowledge of any default or violation in any material respect by any party to, any Plan. No Proceeding is pending or, to the Knowledge of the Company, threatened with respect to any Plan (other than claims for benefits in the ordinary course) and, to the Knowledge of the Company, no fact or event exists that would reasonably be expected to give rise to any such Proceeding. To the Knowledge of the Company, no Plan is under audit or investigation by any Governmental Body.
(e) 401(k) Plans. Each Plan that is intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code has timely received a favorable determination letter from the IRS covering all of the provisions applicable to the Plan for which determination letters are currently available that the Plan is so qualified and each trust established in connection with any Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code has received a determination letter from the IRS that it is so exempt, and no fact or event has occurred since the date of such determination letter or letters from the IRS to adversely affect the qualified status of any such Plan or the exempt status of any such trust.
(f) No Prohibited Transactions. There has not been any prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) nor any reportable events (within the meaning of Section 4043 of ERISA) with respect to any Plan that would reasonably be expected to result in material liability to the Company and its Subsidiaries. There have been no acts or omissions by the Company, any of its Subsidiaries or any ERISA Affiliate that have given or would reasonably be expected to give rise to any material fines, penalties, Taxes or related charges under Sections 502 or 4071 of ERISA or Section 511 or Chapter 43 of the Code for which the Company, any of its Subsidiaries or any ERISA Affiliate may be liable.
(g) Contributions. All contributions, premiums or payments required to be made with respect to any Plan have been timely made to the extent due or properly accrued on the Financial Statements in accordance with the provisions of the applicable Plan, except as would not result in material liability to the Company and its Subsidiaries.
Section 4.11 Labor and Employment Matters.
(a) Union Activities. None of the Company nor any of its Subsidiaries is party to any collective bargaining agreements, labor union contracts or trade union agreements. To the Knowledge of the Company, there are no activities or proceedings of any labor or trade union to organize any employees of the Company or any of its Subsidiaries with regard to their employment with the Company or any of its Subsidiaries. There is no strike, lockout, slowdown, or work stoppage against the Company or any of its Subsidiaries pending or, to the Knowledge of the Company, as of the date hereof, threatened directly against the Company or any of its Subsidiaries. No material grievance or material arbitration Proceeding arising out of or under any collective bargaining agreement is pending against the Company or any of its Subsidiaries and, to the Knowledge of the Company, no claim therefor has been asserted. There is no material charge pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries alleging unlawful discrimination in employment practices before any court or agency and there is no material charge of or Proceeding with regard to any unfair labor practice against the Company or any of its Subsidiaries pending before the National Labor Relations Board.
(b) Employment Law. Except for such failures to be in compliance as would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, the Company and its Subsidiaries are in compliance with applicable Laws with respect to employment (including applicable Laws regarding wage and hour requirements, immigration status, discrimination in employment, employee health and safety, termination of employment (including WARN) and collective bargaining). There are no material Proceedings pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries by any of its current or former employees. During the last five (5) years, (i) no material allegations of workplace sexual harassment or illegal retaliation or discrimination have been made known to the Company or any of its Subsidiaries, initiated, filed or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries or any current or former employee, officer, director, consultant or other individual service provider of the Company or any of its Subsidiaries, (ii) to the Knowledge of the Company, no incidents of any such workplace sexual harassment or illegal retaliation or discrimination have occurred and (iii) neither the Company nor any of its Subsidiaries has entered into any settlement agreement related to allegations of sexual harassment or illegal retaliation or discrimination by any current or former employee, officer, director, consultant or other individual service provider of the Company or any of its Subsidiaries.
Section 4.12 Real Property; Title to Assets.
(a) Owned Real Property. Neither the Company nor any of its Subsidiaries owns any real property.
(b) Leased Real Property. Section 4.12(b) of the Company Disclosure Schedule lists as of the date hereof the street address of each parcel of Leased Real Property, and sets forth a list as of the date hereof of each lease, sublease, and license pursuant to which the Company or any of its Subsidiaries leases, subleases or licenses any real property (each, a “Lease”), with the name of the lessor and the date of the Lease in connection therewith and each material amendment to any of the foregoing (collectively, the “Lease Documents”), and (i) there are no leases, subleases, concessions or other Contracts granting to any Person other than the Company or any of its Subsidiaries the right to use or occupy any real property covered by such Lease Documents, (ii) all such Leases are in full force and effect, are valid and enforceable in accordance with their respective terms, subject to the Remedies Exceptions and (iii) there is not, under any of such Leases, any existing material default or event of default (or event which, with notice or lapse of time, or both, would constitute a default) by the Company or any of its Subsidiaries or, to the Knowledge of the Company, by the other party to such Leases, except as would not, individually or in the aggregate, be material to the Company and its Subsidiaries. Neither the Company nor any of its Subsidiaries has subleased, sublicensed or otherwise granted to any Person any right to use, occupy or possess any portion of the Leased Real Property. True, complete and correct copies of all Lease Documents in effect as of the date hereof have prior to the date hereof been made available to Parent.
(c) Other Real Property Matters. There are no contractual or legal restrictions that preclude or restrict the ability of the Company or any of its Subsidiaries to use any Leased Real Property by such party for the purposes for which it is currently being used, except as would not, individually or in the aggregate, be material to the Company and its Subsidiaries. There are no latent defects or adverse physical conditions affecting the Leased Real Property, and improvements thereon, other than those that would not have a Company Material Adverse Effect.
(d) Title to Assets. The Company or its applicable Subsidiary has legal and valid title to, or, in the case of Leased Real Property and assets, valid leasehold or subleasehold interests in, all of its properties and assets, tangible and intangible, real, personal and mixed, used or held for use in its business, free and clear of all Liens except for such imperfections of title, if any, that do not materially interfere with the present value of the subject property or asset.
Section 4.13 Intellectual Property.
(a) Company IP. Section 4.13(a) of the Company Disclosure Schedule contains a true, complete and correct list of all of the following that are owned or purported to be owned by the Company and its Subsidiaries: (i) registered Intellectual Property Rights and applications for registrations of Intellectual Property Rights (showing in each case, as applicable, the filing date, date of issuance, expiration date and registration or application number, and registrar) and (ii) any Proprietary Software or Business Systems that is material to the business of the Company and its Subsidiaries as currently conducted that would have a replacement cost of more than $250,000. To the Knowledge of the Company, the Company IP constitutes all Intellectual Property Rights used or held for use in the operation of the business of the Company and its Subsidiaries and is sufficient for the conduct of such business as currently conducted and contemplated to be conducted as of the date hereof.
(b) IP Ownership. The Company (or its applicable Subsidiary) solely and exclusively owns and possesses, free and clear of all Liens (other than Permitted Liens), all right, title and interest in and to the Company Owned IP and has the right to use, pursuant to a valid and enforceable written license, all Company Licensed IP. All Company Owned IP is subsisting, valid and, except for applications for registrations of Intellectual Property Rights, to the Knowledge of the Company, enforceable. No loss or expiration of any of the Company Owned IP, or, to the Knowledge of the Company, any of the Company Licensed IP, is threatened, or pending. None of the Company Owned IP is subject to any outstanding order of any Governmental Body or arbitrator (except for ordinary course of business Proceedings for the prosecution of applications for registrations of Intellectual Property Rights) or any contract restricting or otherwise materially limiting the use, validity, enforceability, scope, disposition or exploitation thereof by the Company or any of its Subsidiaries or any right, title or interest of the Company or any of its Subsidiaries with respect thereto.
(c) Enforcement. The Company (or its applicable Subsidiary) has taken and takes commercially reasonable actions to maintain, protect and enforce Intellectual Property Rights in, including the secrecy, confidentiality and value of, the Trade Secrets included in the Company Owned IP and, to the extent contractually obligated, the Company Licensed IP (collectively, “Company Trade Secrets”). No Company Trade Secrets have been disclosed by the Company or any of its Subsidiaries to any Person other than pursuant to a valid and enforceable written agreement restricting the disclosure and use of Company Trade Secrets, which to the Knowledge of the Company has not been breached by such Person. All current and former officers, employees, consultants and contractors of the Company and its Subsidiaries are under written obligation to the Company and its Subsidiaries to maintain in confidence all Company Trade Secrets and other confidential or proprietary information acquired by them in the course of their employment with or engagement by the Company or any of its Subsidiaries.
(d) Disputes. There have been no pending or, to the Knowledge of the Company, threatened Proceedings with respect to: (i) the ownership, use, scope, validity or enforceability of any Company Owned IP (except for ordinary course of business Proceedings for the prosecution of applications for registrations of Intellectual Property Rights), (ii) the ownership, licensing or use by the Company or any of its Subsidiaries of any other Person’s Intellectual Property Rights, (iii) any actual or potential infringement, dilution, misappropriation or other violation of any Company Owned IP or (iv) any actual or potential infringement, dilution, misappropriation or other violation of any other Person’s Intellectual Property Rights by the Company. Neither the Company nor any of its Subsidiaries has sent to or received from any other Person any charge, complaint, claim, demand, notice or other communication in connection with clauses (i) through (iv) of the immediately preceding sentence. To the Knowledge of the Company, (A) neither the Company nor any of its Subsidiaries nor the operation of their business (including the development, manufacture, sale or use of Company Products) infringes, misappropriates or violates, and has not infringed, misappropriated or violated, any Intellectual Property Rights of any other Person and (B) no other Person has infringed, misappropriated or violated any of the Company Owned IP.
(e) IP Assignment. All Persons, including all current and former officers, employees, consultants and contractors of the Company and its Subsidiaries, who have contributed to, developed or conceived any Intellectual Property Rights for or on behalf of the Company or any of its Subsidiaries have executed valid, written agreements with the Company or its applicable Subsidiary, substantially in the form made available to Parent, pursuant to which such Persons have irrevocably assigned to the Company or its applicable Subsidiary all of their right, title, and interest in and to all such Intellectual Property Rights (excluding, solely with respect to consultants and contractors, modifications made to any pre-existing Intellectual Property Rights owned by such consultants or contractors) to the Company or its applicable Subsidiary, without further consideration or any restrictions or obligations whatsoever.
(f) Open Source. None of the Proprietary Software that is licensed or made available in any manner by the Company or any of its Subsidiaries to any third party incorporates, links to, or is embedded with any Open Source Software in a manner that (i) conditions the use or distribution of any such Open Source Software on the disclosure of any source code for any portion of such Proprietary Software, (ii) conditions the use or distribution of such Open Source Software on the granting to any Person of (A) the right to make derivative works or other modifications to such Proprietary Software or portions thereof (other than such portions that are the Open Source Software themselves) or (B) a license under such Proprietary Software or any rights or immunities under any Company Owned IP, (iii) conditions the use or distribution of any such Open Source Software on such Proprietary Software (other than such portions that are the Open Source Software themselves) being made subject to the terms and conditions of any Open Source Software license, (iv) requires such Proprietary Software (other than such portions that are the Open Source Software themselves) to be made available to any Person or (v) otherwise imposes an obligation on the Company or any of its Subsidiaries to distribute any such Proprietary Software (other than such portions that are the Open Source Software themselves) on a royalty-free basis. The Company and its Subsidiaries are and have been in compliance with the terms and conditions of all licenses for such Open Source Software. Neither the Company nor any of its Subsidiaries has received a written notice or request from any Person to disclose, distribute or license any Proprietary Software pursuant to an Open Source Software license, or alleging noncompliance with any Open Source Software license.
(g) Source Code. The Company or one of its Subsidiaries is in actual possession of, and has exclusive control over, the source code for all Proprietary Software (except for licenses granted to consultants and contractors for purposes of the development or maintenance of such Proprietary Software and who are subject to written, valid and enforceable obligations of confidentiality with respect thereto). Neither the Company nor any of its Subsidiaries has provided access to any source code to any Proprietary Software to any Person (other than its employees, consultants and contractors involved in the development or maintenance thereof who are subject to written, valid and enforceable obligations of confidentiality with respect thereto), and no Person has asserted any right to access the same. Neither the Company nor any of its Subsidiaries is party to any contract requiring the deposit of any proprietary source code with an escrow agent or escrow service. To the Knowledge of the Company, there has been no unauthorized theft, reverse engineering, decompiling, disassembling or other unauthorized disclosure of or access to any source code to any Proprietary Software.
(h) Business Systems. The Company or one of its Subsidiaries owns, leases, licenses, or otherwise has the legal right to use all Business Systems, and such Business Systems are sufficient for the immediate and anticipated future needs of the business of the Company as currently conducted by the Company and its Subsidiaries. The Company and its Subsidiaries maintain commercially reasonable disaster recovery and business continuity plans, procedures and facilities, and during the last five (5) years, there has not been any material failure with respect to any of the Business Systems that has not been remedied or replaced in all material respects. The Company and its Subsidiaries have purchased a sufficient number of seat licenses for its Business Systems.
(i) Data Protection Requirements. Except as would not have a Company Material Adverse Effect, the Company and its Subsidiaries are and have been during the last five (5) years in compliance with (i) all applicable Privacy/Data Security Laws, (ii) any applicable public or internal privacy or data security policies of the Company concerning the collection, dissemination, storage or use of Personal Information or other Business Data, (iii) any industry standards to which the Company or any of its Subsidiaries is legally bound and (iv) all applicable commitments in any contractual and legal requirements that the Company or any of its Subsidiaries has entered into or is otherwise bound with respect to privacy or data security, data breach notification, electronic communication, marketing by email (collectively, the “Data Protection Requirements”). During the last five (5) years, neither the Company nor any of its Subsidiaries has received, or been served with, any written complaints, subpoenas, demands, enforcement actions or notices, and there have not been any other complaints, subpoenas, demands or notices to the Company or any of its Subsidiaries, or any audits, investigations, claims or other Proceedings of or against the Company or any of its Subsidiaries conducted or asserted, by any other Person (including any Governmental Body), in each case investigating, inquiring into, or otherwise relating to any actual or potential violation of any Data Protection Requirement, except, in each case, other than with respect to any of the foregoing made or initiated by any Governmental Body, as would not be material to the Company and its Subsidiaries. No employee, officer, director, or agent of the Company has been debarred or otherwise forbidden by any Law or any Governmental Body (including judicial or agency order) from involvement in the operations of a business such as that of the Company and its Subsidiaries.
(j) Data Protection Policies. Except as would not have a Company Material Adverse Effect, the Company and its Subsidiaries have implemented reasonable data security safeguards and have maintained physical, technical and administrative security measures and policies, compliant with applicable Data Protection Requirements, that are designed to protect the security and integrity of their Business Systems and that are involved in the collection or processing of any Personal Information or Business Data in the Company’s or one of its Subsidiaries’ possession and control, including implementing reasonable procedures designed to prevent unauthorized access and the introduction of Disabling Devices. Neither the Company nor any of its Subsidiaries has inserted and, to the Knowledge of the Company, no other Person has inserted or alleged to have inserted any Disabling Device in any of the Business Systems or Company Product components.
(k) Data Breaches. Except as would not have a Company Material Adverse Effect, during the last five (5) years, neither the Company nor any of its Subsidiaries has experienced any unauthorized access to, or misuse, compromise, destruction, loss, alteration, unavailability, acquisition or disclosure of, any Personal Information or Business Data in the Company or any of its Subsidiaries that would require (i) notification of individuals, law enforcement or any Governmental Body or (ii) remedial action under Data Protection Requirements. During the last five (5) years, neither the Company nor any of its Subsidiaries has been subject to, or received written notice of, any Proceeding regarding the Company’s or any of its Subsidiaries’ collection, dissemination, storage or use of Personal Information or Business Data, or the violation of any applicable Data Protection Requirements by the Company or any of its Subsidiaries. To the Knowledge of the Company, during the last five (5) years, no third party that has access to or that receives Personal Information or Business Data from or on behalf of the Company or any of its Subsidiaries has experienced any misuse, compromise or unauthorized access, destruction, loss, alteration, unavailability, acquisition or disclosure of such Business Data, except as would not have a Company Material Adverse Effect.
Section 4.14 Taxes. The Company and the Subsidiaries have filed all U.S. federal, state, local and non-United States Tax returns and reports required to be filed by them and have paid and discharged all Taxes required to be paid or discharged. All such Tax returns are true, accurate and complete. Neither the IRS nor any other U.S. or non-U.S. taxing authority or agency is now asserting or, to the Knowledge of the Company, threatening to assert against the Company or any Subsidiary any deficiency or claim for any Taxes or interest thereon or penalties in connection therewith. Neither the Company nor any Subsidiary has granted any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any Tax. The accruals and reserves for Taxes reflected in the Interim Balance Sheet are adequate to cover all Taxes accruable through such date (including interest and penalties, if any, thereon) in accordance with GAAP. Neither the Company nor any Subsidiary has made an election under Section 341(f) of the Code. There are no Tax Liens upon any property or assets of the Company or any of the Subsidiaries except Liens for current Taxes not yet due. Neither the Company nor any of the Subsidiaries has been required to include in income any adjustment pursuant to Section 481 of the Code by reason of a voluntary change in accounting method initiated by the Company or any of the Subsidiaries, and the IRS has not initiated or proposed any such adjustment or change in accounting method, in either case which adjustment or change would have a Company Material Adverse Effect. Neither the Company nor any Subsidiary has been a “distributing corporation” or a “controlled corporation” in a distribution intended to qualify under Section 355(e) of the Code within the last five (5) years. Neither the Parent, the Company nor any Subsidiary will be required to include any item of income or exclude any item of deduction from taxable income in a taxable period (or portion thereof) ending after the Closing Date as a result of (a) change in any method of accounting in any taxable period (or portion thereof) ending on or prior to the Closing Date, (b) installment sale, intercompany transaction or open transaction entered into prior to the Closing, (c) deferred revenue or any prepaid amount received prior to the Closing or (d) closing agreement as described in Section 7121 of the Code or any corresponding or similar provision of state, local or non-U.S. law entered into prior to the Closing. Neither the Company or any Subsidiary has been a member of any affiliated group of entities filing combined, consolidated, or unitary Tax returns (other than any group the common parent of which is the Company) or has any liability for Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any analogous or similar state, local or non-U.S. law provision), as successor, indemnitor or transferee, by contract, by operation of law or otherwise.
Section 4.15 Environmental Matters. (a) Neither the Company nor any of its Subsidiaries has materially violated in the last five (5) years, or is in material violation of, applicable Environmental Law, (b) to the Knowledge of the Company, none of the properties currently or formerly leased or operated by the Company or any of its Subsidiaries (including, without limitation, soils and surface and ground waters) are contaminated with any Hazardous Substance in violation of applicable Environmental Laws which requires reporting, investigation, remediation, monitoring or other response action by the Company or any of its Subsidiaries pursuant to applicable Environmental Laws, (c) to the Knowledge of the Company, neither the Company nor any of its Subsidiaries is, in any material respect, actually, potentially or allegedly liable pursuant to applicable Environmental Laws for any off-site contamination by Hazardous Substances, (d) the Company and its Subsidiaries have all material permits, licenses and other authorizations required of the Company or any of its Subsidiaries under applicable Environmental Law (“Environmental Permits”) and (e) the Company and any of its applicable Subsidiaries are in all material respects in compliance with its Environmental Permits.
Section 4.16 Material Contracts.
(a) List of Material Contracts. Section 4.16(a) of the Company Disclosure Schedulelists, as of the date hereof, the following types of Contracts to which the Company or any of its Subsidiaries is a party (such Contracts as are required to be set forth on Section 4.16(a) of the Company Disclosure Schedule but excluding any Plan being the “Material Contracts”) and a true and complete copy of which, as in effect as of the date hereof, has been made available by the Company to Parent:
(i) all Contracts involving obligations of, or payments to, the Company or any of its Subsidiaries in excess of $100,000 (other than obligations of, or payments to, the Company or any of its Subsidiaries arising from purchase or sale agreements entered into in the ordinary course of business);
(ii) all Contracts (A) that involve the license of any Intellectual Property Rights to or from the Company or any of its Subsidiaries (but excluding any (1) nonexclusive licenses (or sublicenses) of Company Owned IP granted to customers in the ordinary course of business that are substantially in the same form as the Company’s or any of its Subsidiaries’ standard form customer agreements as have been provided to Parent on or prior to the date hereof, (2) non-exclusive licenses granted to service providers who access Company Owned IP on behalf of the Company or any of its Subsidiaries as part of their provision of services, (3) nondisclosure agreements entered into in the ordinary course of business, (4) licenses to unmodified, generally commercially available, “off-the-shelf” Software with a replacement cost or aggregate annual license and maintenance fees of less than $75,000) (such Software, “Shrink Wrap Code”) and (5) non-exclusive licenses granted to the Company or any of its Subsidiaries under the Company’s or any of its Subsidiaries’ standard form of employment agreement or (B) that contain a covenant not to sue or constitute a concurrent use agreement, settlement agreement or co-existence agreement, in each case, with respect to any Company Owned IP;
(iii) all Contracts that (A) involve the granting of rights to manufacture, produce, assemble, license, market or sell the Company Products or (B) limit, or purport to limit, in any material respect, the Company’s or any of its Subsidiaries’ exclusive right to develop, manufacture, assemble, distribute, market or sell its Company Products or that otherwise limit, or purport to limit, the ability of the Company or any of its Subsidiaries to compete in any line of business or with any Person or in any geographic area or during any period of time, excluding customary confidentiality agreements and agreements that contain customary confidentiality clauses;
(iv) all Contracts involving indemnification by the Company or any of its Subsidiaries with respect to infringement of Intellectual Property Rights (excluding indemnity obligations of the Company or any of its Subsidiaries included in (A) nonexclusive licenses or sublicenses of Company Owned IP granted to customers in the ordinary course of business that are substantially in the same form as the Company’s or any of its Subsidiaries’ standard form customer agreements as have been provided to Parent prior to the date hereof, (B) non-exclusive licenses granted to service providers who access Company Owned IP on behalf of the Company or any of its Subsidiaries as part of their provision of services and (C) licenses to Shrink Wrap Code);
(v) all management Contracts (excluding Contracts for employment) and Contracts with other consultants, including any Contracts involving the payment of royalties or other amounts calculated based upon the revenues or income of the Company or any of its Subsidiaries or income or revenues related to any product of the Company or any of its Subsidiaries to which the Company or any of its Subsidiaries is a party;
(vi) all Contracts involving the disposition of a material portion of the Company’s or any of its Subsidiaries’ assets or the acquisition of the business or securities or ownership interests of another Person;
(vii) all Contracts involving material uncapped indemnity obligations of the Company or any of its Subsidiaries (other than those excluded from disclosure under Section 4.16(a)(iv));
(viii) all Contracts evidencing indebtedness;
(ix) all partnership, joint venture or similar Contracts;
(x) all broker, distributor, dealer, manufacturer’s representative, franchise, agency, sales promotion, market research, marketing consulting and advertising Contracts to which the Company or any of its Subsidiaries is a party;
(xi) all Contracts with any Governmental Body to which the Company or any of its Subsidiaries is a party, other than any Permits;
(xii) all Contracts that result in any Person or entity holding a power of attorney from the Company or any of its Subsidiaries that materially impacts the Company’s or any of its Subsidiaries’ business, other than powers of attorney granted to law firms in the ordinary course of business in connection with patent prosecution;
(xiii) all leases or master leases of personal property reasonably likely to result in annual payments by or to the Company or any of its Subsidiaries of $250,000 or more in a twelve (12) month period; and
(xiv) all other Contracts, whether or not made in the ordinary course of business, which are material to the Company and its Subsidiaries, taken as a whole, or the conduct of their respective businesses, or the absence of which would, individually or in the aggregate, have a Company Material Adverse Effect.
(b) Validity. Each Material Contract is valid, binding and enforceable on the Company or its applicable Subsidiary that is a party thereto in accordance with its respective terms and, to the Knowledge of the Company, each other party thereto, and is in full force and effect, except where the failure to be valid, binding or enforceable in accordance with its terms, or in full force and effect, has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. No event has occurred that, with the giving of notice or lapse of time or both, would constitute a breach or default pursuant to any Material Contract by the Company or any of its Subsidiaries, or, to the Knowledge of the Company, any other party thereto, except for such breaches and defaults that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. In the last five (5) years, neither the Company nor any Subsidiary has received any written or, to the Knowledge of the Company, other notice (i) of a breach or default from a counterparty to any Material Contract and no counterparty to a Material Contract has notified the Company or any of its Subsidiaries in writing that it intends to terminate or not renew a Material Contract or (ii) challenging the validity or enforceability of any Material Contract, except in the cases of clauses (A) and (B) as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received any notice from any counterparty to any Material Contract seeking to adversely modify its relationship with the Company or its Subsidiaries under such Material Contract from the manner in which such relationship has been conducted during the twelve (12) months prior to the date hereof, except for such modifications that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.17 Insurance. The Company and its Subsidiaries maintain insurance coverage with reputable insurers in such amounts and covering such risks as are in accordance with normal industry practice for companies engaged in businesses similar to that of the Company and its Subsidiaries (taking into account the cost and availability of such insurance).
Section 4.18 Certain Business Practices. None of the Company, any Subsidiary or, to the Knowledge of the Company, any directors or officers, agents or employees of the Company or any Subsidiary, has (a) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, (b) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended or (c) made any payment in the nature of criminal bribery.
Section 4.19 Interested Party Transactions. Except for employment relationships and the payment of compensation, benefits and expense reimbursements and advances in the ordinary course of business, no director, officer or other Affiliate of the Company or any of its Subsidiaries has or has had, directly or indirectly: (a) an economic interest in any Person that has furnished or sold, or furnishes or sells, services or Company Products that the Company or any of its Subsidiaries furnishes or sells, or proposes to furnish or sell, (b) an economic interest in any Person that purchases from or sells or furnishes to, or proposes to the Company or any of its Subsidiaries to purchase from or sell or furnish to, the Company or any of its Subsidiaries, any goods or services, (c) a beneficial interest in any Material Contract or (d) any contractual or other arrangement with the Company or any of its Subsidiaries, other than in the case of this clause (d) customary indemnity arrangements; provided, however, that ownership of no more than 5% of the outstanding voting stock of a publicly traded corporation shall not be deemed an “economic interest in any Person” for purposes of this Section 4.19. Neither the Company nor any of its Subsidiaries has, during the last five (5) years, (i) extended or maintained credit, arranged for the extension of credit or renewed an extension of credit in the form of a personal loan to or for any director or executive officer (or equivalent thereof) of the Company or any of its Subsidiaries or (ii) materially modified any term of any such extension or maintenance of credit.
Section 4.20 Exchange Act. Neither the Company nor any of its Subsidiaries is currently (or has previously been) subject to the requirements of Section 12 of the Exchange Act.
Section 4.21 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or any of its Subsidiaries.
Section 4.22 Full Disclosure. No representation or warranty by the Company or the Stockholder in this Agreement and no statement contained in the Company Disclosure Schedule or any certificate or other document furnished or to be furnished to Parent pursuant to this Agreement contains any untrue statement of a material and adverse fact, or omits to state a material and adverse fact necessary to make the statements contained therein, in the light of the circumstances in which they are made, not materially misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Parent and Merger Sub as follows:
Section 5.01 Organization. The Stockholder is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware. The Stockholder is not in violation of any of the provisions of its Organizational Documents. Energizer Systems, LLC and the Stockholder are both entities that are disregarded as separate from their owner, which is David J. Durrett, for U.S. federal and applicable state and local tax purposes.
Section 5.02 Authority Relative to This Agreement. The Stockholder has all necessary limited liability company power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by the Stockholder of this Agreement, the performance by the Stockholder of its obligations hereunder and the consummation by the Stockholder of the transactions contemplated hereby have been duly and validly authorized by all necessary limited liability company action, and no other limited liability company proceedings on the part of the Stockholder are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Stockholder and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, except as limited by the Remedies Exceptions. The Stockholder has taken all necessary action to approve and adopt this Agreement and the transactions contemplated hereby, including the Merger.
Section 5.03 No Conflict; Required Filings and Consents.
(a) No Conflict. The execution and delivery by the Stockholder of this Agreement does not and, subject to receipt of the filing and recordation of appropriate merger documents as required by the TBOC, the performance of this Agreement by the Stockholder will not (i) conflict with or violate the Organizational Documents of the Stockholder, or (ii) conflict with or violate any Law applicable to the Stockholder or by which any property or asset of the Stockholder is bound or affected, except, with respect to clause (ii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, have a Company Material Adverse Effect.
(b) Required Filings and Consents. The execution and delivery of this Agreement by the Stockholder does not, and the performance of this Agreement by the Stockholder will not, require any Consent or Permit from, or filing with or notification to, any Governmental Body, except (i) for applicable requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover laws and filing and recordation of appropriate merger documents as required by the TBOC and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications would not, individually or in the aggregate, have a Company Material Adverse Effect.
Section 5.04 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Stockholder.
Section 5.05 Title. The Stockholder has good and valid title to all of the Company Shares, free and clear of any Lien, including any preemptive right, right of first refusal, or similar right, by contract or otherwise to any Person. Other than the Organizational Documents of the Company that have been made available to Parent prior to the date hereof, there is no Contract by and between the Stockholder and any other Person which currently affects or relates to the voting or giving of written consents with respect to any Company Shares.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the Parent SEC Reports publicly available prior to the date hereof (to the extent the qualifying nature of such disclosure is readily apparent from the content of such the Parent SEC Reports, but excluding disclosures referred to in “Forward-Looking Statements”, “Risk Factors” and any other disclosures therein to the extent they are of a predictive or cautionary nature or related to forward-looking statements) (it being acknowledged that nothing disclosed in such a Parent SEC Report will be deemed to modify or qualify the representations and warranties set forth in Section 6.01 (Corporate Organization), Section 6.03 (Parent Capitalization) and Section 6.04 (Authority Relative to This Agreement)), each of Parent and Merger Sub hereby represents and warrants to the Company as follows:
Section 6.01 Corporate Organization. Parent is a corporation duly organized, validly existing and in good standing under the Laws of the State of Nevada, and Merger Sub is a corporation duly organized, validly existing and in good standing under the Laws of the State of Texas, and each has the requisite corporate power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, have a Parent Material Adverse Effect.
Section 6.02 Organizational Documents. Each of Parent and Merger Sub has heretofore furnished to the Company true, complete and correct copies of their respective Organizational Documents. The Organizational Documents of Parent and Merger Sub are in full force and effect. Neither Parent nor Merger Sub is in violation of any of the provisions of its Organizational Documents.
Section 6.03 Parent Capitalization.
(a) Capital Stock. Immediately following the effectiveness of the Parent Articles and prior to the Merger, the authorized capital stock of Parent consists of 800,000,000 shares of Parent Common Stock, comprised of 566,000,000 shares of Class A Parent Common Stock, 224,000,000 shares of Class B Parent Common Stock and 10,000,000 shares of Parent Preferred Stock. Immediately following the effectiveness of the Parent Articles and prior to the Merger, 5,950,000 shares of Class A Parent Common Stock were issued and outstanding no share of Class B Parent Common Stock was issued or outstanding. All issued and outstanding shares of Parent Common Stock (including the shares of Class B Parent Common Stock to be issued pursuant to the Merger) are, or will be, validly issued, fully paid, nonassessable and free of any preemptive rights. All issued and outstanding shares of Parent Common Stock are validly issued, fully paid, nonassessable and free of any preemptive rights. All outstanding shares of Parent Common Stock (including the shares of Class B Parent Common Stock to be issued pursuant to the Merger) have been, or will be, issued and granted in compliance with (i) all applicable securities laws and other applicable Laws and (ii) all requirements set forth in applicable Contracts.
(b) Merger Sub Securities. The authorized, issued and outstanding capital stock of Merger Sub consists of 1,000 shares of common stock, par value $0.01 per share, all of which have been duly authorized, validly issued, fully paid and non-assessable and free of any preemptive rights in respect thereof and all of which are owned by Parent. Each outstanding share of capital stock of Merger Sub is duly authorized, validly issued, fully paid and non-assessable and each such share is owned by Parent or Merger Sub free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on Parent’s or Merger Sub’s voting rights, charges and other encumbrances of any nature whatsoever, except where failure to own such shares free and clear would not, individually or in the aggregate, have a Parent Material Adverse Effect.
Section 6.04 Authority Relative to This Agreement. Parent and Merger Sub each has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by Parent and Merger Sub of this Agreement, the performance by Parent and Merger Sub of their respective obligations hereunder and the consummation by Parent and Merger Sub of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and no other corporate proceedings on the part of Parent or Merger Sub are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (other than, with respect to the Merger, the filing and recordation of appropriate merger documents as required by the TBOC). This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of Parent and Merger Sub, enforceable against Parent and Merger Sub in accordance with its terms, except as limited by the Remedies Exceptions. Parent, as sole shareholder of Merger Sub, has taken all necessary action to approve and adopt this Agreement and the transactions contemplated hereby, including the Merger, on behalf of Merger Sub.
Section 6.05 No Conflict; Required Filings and Consents.
(a) No Conflict. The execution and delivery by Parent and Merger Sub of this Agreement does not and, subject to receipt of the filing and recordation of appropriate merger documents as required by the TBOC, the performance of this Agreement by Parent and Merger Sub will not (i) conflict with or violate the Organizational Documents of Parent or Merger Sub, (ii) conflict with or violate any Law applicable to Parent or Merger Sub or by which any property or asset of Parent or Merger Sub is bound or affected or (iii) result in any breach of or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien (other than any Permitted Lien) on any material property or asset of Parent or Merger Sub pursuant to, any Contract, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, have a Parent Material Adverse Effect.
(b) Required Filings and Consents. The execution and delivery of this Agreement by Parent and Merger Sub does not, and the performance of this Agreement by Parent and Merger Sub will not, require any Consent or Permit from, or filing with or notification to, any Governmental Body, except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, Blue Sky Laws and state takeover laws and filing and recordation of appropriate merger documents as required by the TBOC and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications would not, individually or in the aggregate, have a Parent Material Adverse Effect.
Section 6.06 Reporting and Certain Compliance Matters.
(a) Independent Accountants. To the Knowledge of Parent, JP Centurion & Partners PLT, who have certified certain financial statements of Parent and delivered their report with respect to the audited financial statements included in the Parent SEC Reports, have at all times been (i) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act), (ii) “independent” with respect to Parent within the meaning of Regulation S-X under the Exchange Act and (iii) in compliance with subsections (g) through (l) of Section 10A of the Exchange Act and the rules and regulations promulgated by the SEC and the PCAOB thereunder.
(b) Accounting System. To the Knowledge of Parent, (i) Parent makes and keeps accurate books and records and maintains a system of internal control over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) sufficient to provide reasonable assurance that: (A) transactions are executed in accordance with management’s general or specific authorization, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets, (C) access to assets is permitted only in accordance with management’s general or specific authorization, (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences and (E) the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Parent SEC Reports fairly presents the information called for in all material respects and is prepared in accordance with the SEC’s rules and guidelines applicable thereto, (ii) neither Parent nor any director, officer, employee, auditor, accountant or representative of Parent has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of Parent or its internal accounting controls, including any material complaint, allegation, assertion or claim that Parent has engaged in questionable accounting or auditing practices.
(c) Financial Statements. To the Knowledge of Parent, (i) as of their respective filing dates, the financial statements (including any related notes) contained or incorporated by reference in the Parent SEC Reports (A) complied as to form in all material respects with the Securities Act and the Exchange Act, as applicable, and the published rules and regulations of the SEC applicable thereto, (B) were prepared in accordance with GAAP unless otherwise noted therein and (C) fairly present, in all material respects, the consolidated financial position of Parent as of the respective dates thereof and the results of operations and cash flows of Parent for the periods covered thereby. There has been no material change in Parent’s accounting methods or principles that would be required to be disclosed in Parent’s financial statements in accordance with GAAP, (ii) Parent has not incurred any Liabilities except those incurred in the ordinary course of business since the date of such financial statements and (iii) the books of account and other financial records of Parent are true and complete in all material respects, and there is no transaction, arrangement or other relationship between Parent and an unconsolidated or other off-balance sheet entity that is required to be disclosed by Parent in the Parent SEC Reports and is not so disclosed.
(d) Filings with Government Agencies. To the Knowledge of Parent, (i) Parent is a voluntary reporting company as that term is described by the Securities Act, and has, on a timely basis and at all times, filed or furnished all required Parent SEC Reports, (ii) as of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date hereof, then on the date of such filing), each of the Parent SEC Reports complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act (as the case may be) and as of the time they were filed, none of the Parent SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (iii) there are no material outstanding or unresolved comments in comment letters from the staff of the SEC with respect to any of the Parent SEC Reports and (iv) Parent has also filed or made, on a timely basis and at all times, all forms filings with the State of Nevada that are required and is current in its filings and reporting to the State of Nevada.
(e) Sarbanes-Oxley Act; Disclosure Controls. To the Knowledge of Parent, (i) Parent is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder, (ii) Parent maintains a system of internal accounting controls designed to ensure that (A) material information relating to Parent is made known to Parent’s principal executive officer and its principal financial officer by others within those entities and (B) that information required to be disclosed by Parent in Parent SEC Reports is recorded, processed, summarized and reported with.in the time periods specified in the SEC’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to Parent’s management as appropriate to allow timely decisions regarding required disclosure, (iii) Parent has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for Parent and designed such disclosure controls and procedures to ensure that material information relating to Parent is made known to the certifying officers by others within those entities, particularly during the period in which Parent’s most recently filed periodic report under the Exchange Act, as the case may be, is being prepared, (iv) Parent has established internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, (v) Parent’s certifying officers have evaluated the effectiveness of Parent’s disclosure controls and procedures and Parent’s internal control over financial reporting (collectively, “Internal Controls”) as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”), (v) Parent presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the Internal Controls based on their evaluations as of the Evaluation Date, (vi) since the Evaluation Date, there have been no significant changes in Parent’s Internal Controls or in other factors that could materially affect Parent’s Internal Controls and there have been no material weaknesses in Parent’s Internal Control over financial reporting (whether or not remediated) and (vii) Parent maintains a standard system of accounting established and administered in accordance with GAAP and the applicable requirements of the Exchange Act.
Section 6.07 Absence of Litigation and Orders. There is no material Proceeding pending or, to the Knowledge of the Parent, threatened against the Parent or any of its Subsidiaries, or any property or asset of the Parent or any of its Subsidiaries. Neither the Parent nor any of its Subsidiaries nor any material property or asset of the Parent or any of its Subsidiaries is subject to any continuing order of, consent decree, settlement agreement or other similar written agreement with, or, to the Knowledge of the Parent, continuing investigation by, any Governmental Body or arbitrator, or any Order of any Governmental Body or arbitrator.
Section 6.08 Operations of Merger Sub. Merger Sub was formed solely for the purpose of engaging in the transactions contemplated by this Agreement, and has not engaged in any business activities or conducted any operations or incurred any obligation or liability, other than those incident to its existence or as contemplated by this Agreement.
Section 6.09 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Parent or Merger Sub.
ARTICLE VII
COVENANTS
Section 7.01 Public Announcements; Form 8-K.
(a) Public Announcements. Subject to Section 7.01(b), no party hereto nor any Affiliate or any Representative of such party hereto will issue or make any report, statement or release to the public (including employees, customers and suppliers of the parties hereto) with respect to this Agreement or the transactions contemplated hereby without the consent of the other parties hereto, which consent will not be unreasonably withheld, conditioned or delayed. If any party hereto is unable to obtain, after reasonable effort, the approval of its public report, statement or release from the other parties hereto and such report, statement or release is, on the advice of legal counsel to such party hereto, required by any applicable Law, Order, court process or the rules and regulations of any national securities exchange, then such party hereto may make or issue the legally required report, statement or release and promptly furnish the other parties hereto with a copy thereof.
(b) Form 8-K. The initial press release concerning this Agreement and the transactions contemplated hereby shall be a joint press release in the form agreed by the Company and Parent prior to the execution of this Agreement and such initial press release (the “Closing Press Release”) shall be released as promptly as reasonably practicable after the execution of this Agreement on the date hereof. Within four (4) Business Days after the date hereof, Parent shall file a current report on Form 8-K (the “ClosingFiling”) with the Closing Press Release and a description of the Closing as required by applicable securities Laws. The Stockholder and the Company shall fully cooperate with Parent, and provide all information necessary and appropriate, in connection with the preparation and filing of the Closing Filing. All information provided by the Company and the Stockholder for inclusion in the Closing Filing shall be true and correct, in all material respects, and shall not omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances in which they are made, not materially misleading.
Section 7.02 D&O Indemnification. The Organizational Documents of the Surviving Corporation shall contain provisions no less favorable with respect to indemnification, advancement or expense reimbursement than are set forth in the Organizational Documents of the Surviving Corporation at the Effective Time, which provisions shall not be amended, repealed or otherwise modified for a period of six (6) years from the Effective Time in any manner that would affect adversely the rights thereunder of individuals who, at or prior to the Effective Time, were directors, officers, employees, fiduciaries or agents of the Company or its Subsidiaries, unless such modification shall be required by Law.
Section 7.03 Further Assurances. At any time or from time to time after the Closing, each of the parties hereto shall, at the request of any other party hereto and at such requesting party’s expense, execute and deliver any further instruments or documents and take all such further actions as are reasonably requested of it in order to consummate and make effective the transactions contemplated by this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01 Non-Survival. None of the representations, warranties, covenants, obligations or other agreements in this Agreement or in any certificate, statement or instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants, obligations, agreements and other provisions, shall survive the Closing and all such representations, warranties, covenants, obligations or other agreements shall terminate and expire upon the occurrence of the Closing (and there shall be no liability after the Closing in respect thereof), except for (a) those covenants and agreements contained herein that by their terms expressly apply in whole or in part after the Closing and then only with respect to any breaches occurring after the Closing and (b) this Article VIII and any corresponding definitions or applicable rules of construction set forth in Article I.
Section 8.02 Expenses. All expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party hereto incurring such expenses.
Section 8.03 Notices. All notices, requests, demands, claims, and other communications required or permitted to be delivered, given, or otherwise provided under this Agreement must be in writing and must be delivered, given, or otherwise provided (a) by hand (in which case, it shall be effective upon delivery), (b) by overnight delivery by a nationally recognized courier service (in which case, it shall be effective on the Business Day after being deposited with such courier service) or (c) by electronic mail (in which case, it shall be effective when transmitted, unless transmitted after 5:00 p.m. (local time of the recipient address set forth below) on a Business Day or on a day that is not a Business Day, then on the next Business Day, in each case, with no “bounce back” received), in each case of clauses (a) through (c), to the address listed below (each of the parties hereto may also specify a different address by giving notice to the other parties hereto in accordance with this Section 8.03):
If to Parent, Merger Sub and, after the Effective Time, the Surviving Corporation:
Independence Power Holdings, Inc.
14114 Dallas Parkway, Suite 200
Dallas, Texas 75254
Attention: Todd Parkin and
Scott Stephenson
E-mail: tkparkin@rinconstrategic.com
stephenson@independco.com
with a copy (which shall not constitute notice) to:
Vedder Price P.C.
600 Brickell Ave, Suite 1500
Miami, Florida 33131
Attention: Adam L. Schwartz;
Kenneth A. Gerasimovich and
John T. Blatchford
E-mail: aschwartz@vedderprice.com;
kgerasimovich@vedderprice.com and
jblatchford@vedderprice.com
If to the Company, prior to the Effective Time, or the Stockholder:
Independence Power, Inc.
14114 Dallas Parkway, Suite 200
Dallas, Texas 75254
Attention: David J. Durrett
E-mail: durrett@independco.com
with a copy (which shall not constitute notice) to:
Shamoun & Norman, LLP
1800 Valley View Lane, Suite 200
Farmers Branch, Texas 75234
Attention: Brian K. Norman, esq.
E-mail: bkn@snlegal.com
Section 8.04 Amendments and Waivers. No amendment or waiver of any provision of this Agreement will be valid and binding unless it is in writing and signed, in the case of an amendment, by each of the parties hereto, or in the case of a waiver, by the party against whom the waiver is to be effective. No waiver by any party hereto of any breach or violation of, or default under, any covenant or other obligation hereunder, whether intentional or not, will be deemed to extend to any prior or subsequent breach or violation of, or default under, any such covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No delay or omission on the part of any party hereto in exercising any right, power or remedy under this Agreement will operate as a waiver thereof.
Section 8.05 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. In the event that any provision hereof were, under applicable Law, to be found invalid or unenforceable in any respect by a court of competent jurisdiction, each party hereto intends that such provision shall be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable Law and to otherwise give effect to the intent of the parties hereto.
Section 8.06 Entire Agreement; Succession and Assignment.
(a) Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties hereto, or any of them, with respect to the subject matter hereof.
(b) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. This Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise) by any party hereto without the prior express written consent of the other parties hereto; provided, that Parent may assign all or any of its rights and obligations hereunder to any Affiliate of Parent; provided, further, that no such assignment shall relieve Parent of its obligations hereunder if such assignee does not perform such obligations.
Section 8.07 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, other than Section 7.02 (which is intended to be for the benefit of the Persons covered thereby and may be enforced by such Persons) and Section 8.12 (which is intended to be for the benefit of the Released Related Parties of any party hereto).
Section 8.08 Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof, and, accordingly, that the parties hereto shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in state or federal court located in Dallas County, Texas, without proof of actual damages or otherwise, in addition to any other remedy to which they are entitled at law or in equity as expressly permitted in this Agreement. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any Law to post security or a bond as a prerequisite to obtaining equitable relief.
Section 8.09 Governing Law. This Agreement and any claim, controversy or dispute arising out of or related to this Agreement (including any non-contractual claim), any of the transactions contemplated hereby, the relationship of the parties hereto or the interpretation and enforcement of the rights and duties of the parties hereto, whether arising in contract, tort, equity or otherwise, shall be governed by and construed in accordance with the domestic Laws of the State of Texas (including in respect of the statute of limitations or other limitations period or procedural Law applicable to any such claim, controversy or dispute), without giving effect to any choice or conflict of Law provision or rule (whether of the State of Texas or any other jurisdiction); provided, that the Laws of the State of Nevada may apply as may be necessary to legally effect the Merger under NRS 92A.120 et seq.
Section 8.10 Waiver of Jury Trial. EACH OF THE PARTIES HERETO WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES HERETO AGAINST ANY OTHER PARTY HERETO OR ANY AFFILIATE OF ANY OTHER PARTY HERETO, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PARTIES HERETO AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES HERETO FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 8.11 Arbitration. ANY DISPUTE, CLAIM, OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION, OR VALIDITY HEREOF, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, SHALL BE RESOLVED BY SUBMISSION TO ARBITRATION. IF THE PARTIES PERMANENT RESIDENCE IS IN TEXAS, THE DISPUTE SHALL BE SUBMITTED TO ARBITRATION IN THE COUNTY OF DALLAS, STATE OF TEXAS, BEFORE AN ARBITRATOR SELECTED BY THE DALLAS JAMS SELECTION PROCEDURE (THE “ARBITRATOR”). THE ARBITRATION SHALL BE ADMINISTERED BY DALLAS JAMS, PURSUANT TO ITS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES, AND IN ACCORDANCE WITH THE EXPEDITED PROCEDURES CONTAINED THEREIN. IF THE PARTIES PERMANENT RESIDENCE IS NO LONGER IN TEXAS, THE PARTIES SHALL AGREE TO A LOCAL ARBITRATOR. THE ARBITRATOR SHALL FOLLOW ANY APPLICABLE FEDERAL LAW AND TEXAS STATE LAW IN RENDERING AN AWARD. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION OVER THE DISPUTE, CLAIM, OR CONTROVERSY SUBMITTED TO SUCH ARBITRATION. THIS SECTION SHALL NOT PRECLUDE ANY PARTY HEREIN FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF COMPETENT JURISDICTION IN DALLAS COUNTY, TEXAS ONLY. FURTHER, EACH PARTY AGREES AND ACKNOWLEDGES THAT THE ARBITRATOR’S DECISION SHALL BE FINAL, BINDING, AND CONFIDENTIAL, TO THE FULLEST EXTENT PERMITTED BY LAW, AND ENFORCEABLE BY ANY COURT HAVING JURISDICTION THEREOVER.
Section 8.12 Non-Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, this Agreement may only be enforced against, and any Proceeding for breach of this Agreement may only be made against, the entities that are expressly identified herein as parties to this Agreement, and no Released Related Party of a party hereto shall have any liability for any Liabilities of the parties hereto, whether in connection with a Proceeding (whether in tort, contract or otherwise) or otherwise, for breach of this Agreement or in respect of any oral representations made or alleged to be made in connection herewith. No party hereto shall have any right of recovery in respect hereof against any Released Related Party of any party hereto and no personal liability shall attach to any Released Related Party of a party hereto through such party hereto, whether by or through attempted piercing of the corporate veil, by the enforcement of any judgment, fine or penalty or by virtue of any Law or otherwise. The provisions of this Section 8.12 are intended to be for the benefit of, and enforceable by the Released Related Parties of the parties hereto and each such Person shall be a third party beneficiary of this Section 8.12.
Section 8.13 Consent to Merger. The Stockholder acknowledges that it has had the opportunity to review this Agreement and that it has consulted, or had the opportunity to consult, with independent legal, Tax, accounting, regulatory and financial advisors regarding its rights and obligations under this Agreement and that it fully understands the terms and conditions set forth, and the transactions contemplated, herein. The Stockholder, as evidenced by its signature hereto, does hereby waive all notice of the time, place and purposes of a special meeting of the Company’s stockholders for the purpose of adopting this Agreement and approving the Merger, and pursuant to the Company’s Organizational Documents and the TBOC, does hereby irrevocably consent in writing to the adoption of this Agreement and the approval of the Merger pursuant to the terms of this Agreement, and does hereby agree to be legally bound by the provisions and obligations hereof.
Section 8.14 Counterparts and Electronic Signature. This Agreement may be executed in multiple counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto, it being understood that all parties hereto need not sign the same counterpart. Counterpart signature pages to this Agreement may be delivered by electronic delivery (i.e., by email of a .pdf signature page) and each such counterpart signature page will constitute an original for all purposes.
[Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective duly authorized officers as of the date first written above.
PARENT:
| INDEPENDENCE POWER HOLDINGS, INC. (F/K/A TRIUNITY BUSINESS SERVICES LIMITED) |
| | | |
| By: | /s/ Scott Stephenson | |
| Name: | Scott Stephenson | |
| Title: | President | |
| | | |
| MERGER SUB: | |
| | | |
| TRIUNITY MERGER SUB INC. |
| | | |
| By: | /s/ Scott Stephenson | |
| Name: | Scott Stephenson | |
| Title: | President | |
| | | |
| COMPANY: | |
| | | |
| INDEPENDENCE POWER, INC. |
| | | |
| By: | /s/ Todd Parkin | |
| Name: | Todd Parkin | |
| Title: | Chief Executive Officer | |
| | | |
| STOCKHOLDER: | |
| | | |
| INDEPENDENCE INVESTORS LLC |
| | | |
| By: | /s/ David J. Durrett | |
| Name: | David J. Durrett | |
| Title: | Manager | |
Signature Page to Agreement and Plan of Merger
SCHEDULE 2.05
Directors and Officers of Surviving Corporation
Directors:
1. Todd Parkin
2. Scott Stephenson
Officers:
1. Todd Parkin – Chief Executive Officer and President
2. Scott Stephenson – Chief Financial Officer, Treasurer and Secretary
Schedule 2.05 to Agreement and Plan of Merger
EXHIBIT 3.1
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
TRIUNITY BUSINESS SERVICES LIMITED
The Articles of Incorporation of TriUnity Business Services Limited (the “Corporation”), were originally filed in the Office of the Secretary of State of the State of Nevada, 401 North Carson Street, Carson City, Nevada 89701, on April 30, 2024 as Document Number 20244027011.
On December 30, 2025, the Board of Directors of the Corporation unanimously adopted a resolution proposing and declaring advisable that the Articles of Incorporation of the Corporation be amended and restated in its entirety pursuant to Section 78.403 of the Nevada Revised Statutes (“NRS”) and duly adopted this Amended and Restated Articles of Incorporation of the Corporation.
In lieu of a special meeting of the stockholders of the Corporation, on December 30, 2025, the holders of a majority of the issued and outstanding shares of voting capital stock of the Corporation provided their written consent in favor of this Amended and Restated Articles of Incorporation of the Corporation in accordance with the provisions of NRS Sections 78.310 and 78.390.
The text of the Articles of Incorporation of the Corporation, as amended and restated herein, shall read as follows:
ARTICLE I
NAME
The name of the Corporation is “Independence Power Holdings, Inc.” (the “Corporation”).
ARTICLE II
REGISTERED OFFICE AND AGENT
The registered office of the Corporation shall be the street address of its registered agent in the State of Nevada. The Corporation may, from time to time, in the manner provided by law, change the registered agent and registered office within the State of Nevada. The Corporation may also maintain an office or offices for the conduct of its business, either within or without the State of Nevada.
ARTICLE III
PURPOSE
The nature or purpose of the business to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Nevada Revised Statutes (as amended from time to time, the “NRS”).
ARTICLE IV
CAPITAL STOCK
A. The total number of shares of all classes of stock that the Corporation is authorized to issue is Eight Hundred Million (800,000,000) shares, consisting of (i) Five Hundred Sixty-Six Million (566,000,000) shares of Class A common stock, with a par value of $0.0001 per share (the “Class A Common Stock”), (ii) Two Hundred Twenty-Four Million (224,000,000) shares of Class B common stock, with a par value of $0.0001 per share (the “Class B Common Stock” and together with the Class A Common Stock, the “Common Stock”) and (iii) Ten Million (10,000,000) shares of preferred stock, with a par value of $0.0001 per share as of the effective time of these Amended and Restated Articles of Incorporation and thereafter as may be established by the Board of Directors of the Corporation (the “Board of Directors”) with respect to any class or series thereof in the applicable Preferred Stock Designation (the “Preferred Stock”). Upon the effectiveness of these articles of incorporation (as amended from time to time, the “Articles of Incorporation”), automatically and without further action by any holder thereof, each share of common stock of the Corporation outstanding immediately prior to such effectiveness is hereby redesignated as a share of Class A Common Stock (each such share being entitled to one vote per share in accordance with the terms of these Articles of Incorporation).
B. Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, the number of authorized shares of any class of the Common Stock or the Preferred Stock may be increased or decreased, in each case by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together as a single class, and no vote of the holders of any class of the Common Stock or the Preferred Stock voting separately as a class will be required therefor, irrespective of the provisions of NRS 78.2055(3), 78.207(3) and 78.390(2) (and any separate class or series vote in this regard pursuant to such sections of the NRS is hereby specifically denied). Notwithstanding the foregoing, the number of authorized shares of any particular class may not be decreased below the number of shares of such class then outstanding, plus:
1. in the case of Class A Common Stock, the number of shares of Class A Common Stock issuable in connection with (i) the exchange of all outstanding shares of Class B Common Stock and (ii) the exercise of outstanding options, warrants, exchange rights, conversion rights or similar rights for Class A Common Stock; and
2. in the case of Class B Common Stock, the number of shares of Class B Common Stock issuable in connection with the exercise of outstanding options, warrants, exchange rights, conversion rights or similar rights for Class B Common Stock.
C. Rights of Class A Common Stock and Class B Common Stock.
1. Equal Status. Except as otherwise provided in these Articles of Incorporation or required by applicable law, shares of Class A Common Stock and Class B Common Stock shall have the same rights and powers, rank equally (including as to dividends and other distributions, and upon any liquidation, dissolution or winding up of the Corporation), share ratably and be identical in all respects and as to all matters.
2. Voting Rights. Each holder of Class A Common Stock will be entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of Preferred Stock), and each holder of Class B Common Stock will be entitled to ten (10) votes for each share of Class B Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of Preferred Stock), except that, in each case, to the fullest extent permitted by law and subject to the following sentence, holders of shares of each class of Common Stock, as such, will have no voting power with respect to, and will not be entitled to vote on, any amendment to these Articles of Incorporation (including any Preferred Stock Designation) that relates solely to the terms of any outstanding Preferred Stock if the holders of such Preferred Stock are entitled to vote as a separate class thereon under these Articles of Incorporation (including by merger, consolidation, reorganization or similar event or any certificate of designation relating to any series of Preferred Stock) or under the NRS, irrespective of the provisions of NRS 78.2055(3), 78.207(3) and 78.390(2) (and any separate class or series vote of the Common Stock in this regard pursuant to such sections of the NRS is hereby specifically denied). Notwithstanding the foregoing, (i) the holders of the outstanding shares of Class A Common Stock shall be entitled to vote separately upon any amendment to these Articles of Incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of Common Stock in a manner that is disproportionately adverse to the Class A Common Stock as compared to the Class B Common Stock and (ii) the holders of the outstanding shares of Class B Common Stock shall be entitled to vote separately upon any amendment to these Articles of Incorporation (including by merger, consolidation, reorganization or similar event) that would alter or change the powers, preferences or special rights of such class of Common Stock in a manner that is disproportionately adverse to the Class B Common Stock as compared to the Class A Common Stock. Except as provided in these Articles of Incorporation or by applicable law, the holder of shares of Class A Common Stock and Class B Common Stock shall at all times vote together as one class on all matters (including the election of directors) submitted to a vote or for the consent of the stockholders of the Corporation (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of Preferred Stock).
3. Dividend and Distribution Rights. Shares of Class A Common Stock and Class B Common Stock shall be treated equally, identically and ratably, on a per share basis, with respect to any dividends or other distributions as may be declared and paid from time to time by the Board of Directors out of any assets of the Corporation legally available therefor; provided, that in the event a dividend is paid in the form of shares of Class A Common Stock or Class B Common Stock (or rights to acquire such shares), then holders of Class A Common Stock shall receive shares of Class A Common Stock (or rights to acquire such shares, as the case may be) and holders of Class B Common Stock shall receive shares of Class B Common Stock (or rights to acquire such shares, as the case may be), with holders of shares of Class A Common Stock and Class B Common Stock receiving, on a per share basis, an identical number of shares of Class A Common Stock or Class B Common Stock, as applicable. Notwithstanding the foregoing, the Board of Directors may pay or make a disparate dividend or other distribution per share of Class A Common Stock or Class B Common Stock (whether in the amount of such dividend or other distribution payable per share, the form in which such dividend or other distribution is payable, the timing of the payment, or otherwise) if such disparate dividend or other distribution is approved in advance by the affirmative vote (or written consent if action by written consent of stockholders is permitted at such time under these Articles of Incorporation) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of Preferred Stock).
4. Subdivisions, Combinations or Reclassifications. Shares of Class A Common Stock or Class B Common Stock may not be subdivided, combined or reclassified unless the shares of the other class of Common Stock are concurrently therewith proportionately subdivided, combined or reclassified in a manner that maintains the same proportionate equity ownership between the holders of the outstanding Class A Common Stock and Class B Common Stock on the record date for such subdivision, combination or reclassification; provided, that shares of one such class may be subdivided, combined or reclassified in a different or disproportionate manner if such subdivision, combination or reclassification is approved in advance by the affirmative vote (or written consent if action by written consent of stockholders is permitted at such time under these Articles of Incorporation) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of Preferred Stock).
5. Liquidation, Dissolution or Winding Up. Subject to the preferential or other rights of any holders of Preferred Stock then outstanding, upon the dissolution, liquidation or winding up of the Corporation, whether voluntary or involuntary, holders of Class A Common Stock and Class B Common Stock will be entitled to receive ratably all assets of the Corporation available for distribution to its stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution or winding up is approved in advance by the affirmative vote (or written consent if action by written consent of stockholders is permitted at such time under these Articles of Incorporation) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class (or, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock, as a single class with such holders of Preferred Stock); provided, that shares of one such class may receive different or disproportionate distributions or payments in connection with such merger, consolidation or other transaction if the only difference in the per share distribution to the holders of the Class A Common Stock and Class B Common Stock is that any securities distributed to the holder of a share Class B Common Stock have ten (10) times the voting power of any securities distributed to the holder of a share of Class A Common Stock.
6. Merger or Consolidation. In the case of any distribution or payment in respect of the shares of Class A Common Stock or Class B Common Stock upon the consolidation or merger of the Corporation with or into any other entity, or in the case of any other transaction having an effect on stockholders substantially similar to that resulting from a consolidation or merger, such distribution or payment shall be made ratably on a per share basis among the holders of the Class A Common Stock and Class B Common Stock as a single class; provided, that shares of one such class may receive different or disproportionate distributions or payments in connection with such merger, consolidation or other transaction if (i) the only difference in the per share distribution to the holders of the Class A Common Stock and Class B Common Stock is that any securities distributed to the holder of a share Class B Common Stock have ten (10) times the voting power of any securities distributed to the holder of a share of Class A Common Stock or (ii) such merger, consolidation or other transaction is approved by the affirmative vote (or written consent if action by written consent of stockholders is permitted at such time under these Articles of Incorporation) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.
D. Conversion of Class B Common Stock.
1. Voluntary Conversion. Each share of Class B Common Stock shall be convertible, at the option of the holder thereof at any time and from time to time upon written notice to the Corporation, into one fully paid and nonassessable share of Class A Common Stock. Before any holder of Class B Common Stock shall be entitled to voluntarily convert any shares of such Class B Common Stock, such holder shall surrender the certificate(s) therefor (if any), duly endorsed, at the principal corporate office of the Corporation or of any transfer agent for the Class B Common Stock, and shall give written notice to the Corporation at its principal corporate office of the election to convert the same and shall state therein the name or names (i) in which the certificate(s) (if any) representing the shares of Class A Common Stock into which the shares of Class B Common Stock are so converted are to be issued if such shares are certificated or (ii) in which such shares are to be registered in book entry if such shares are uncertificated. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Class B Common Stock, or to the nominee or nominees of such holder, certificate(s) representing the number of shares of Class A Common Stock to which such holder shall be entitled as aforesaid (if such shares are certificated) or, if such shares are uncertificated, register such shares in book-entry form. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Class B Common Stock to be converted following or contemporaneously with the written notice of such holder’s election to convert required by this ParagraphD.1 of this Article IV, and the person or persons entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Class A Common Stock as of such date. Each share of Class B Common Stock that is converted pursuant to this ParagraphD.1 of this Article IV shall be retired by the Corporation and shall not be available for reissuance.
2. Automatic Conversion. (i) Each share of Class B Common Stock, automatically and without further action by the holder thereof, shall be converted into one fully paid and nonassessable share of Class A Common Stock, upon the occurrence of a Transfer, other than a Permitted Transfer, of such share of Class B Common Stock and (ii) all shares of Class B Common Stock, automatically and without further action by any holder thereof, shall be converted into an identical number of shares of Class A Common Stock at such date and time, or the occurrence of an event, specified by the affirmative vote (or written consent if action by written consent of stockholders is permitted at such time under these Articles of Incorporation) of the holders of a majority of the total voting power of the outstanding Class B Common Stock, voting as a separate class (or, if any holders of Preferred Stock are entitled to vote together with such holders of Class B Common Stock, as a single class with the holders of Preferred Stock) (the occurrence of an event described in the foregoing clause (i) or (ii), a “Conversion Event”). Each outstanding stock certificate that, immediately prior to a Conversion Event, represented one or more shares of Class B Common Stock subject to such Conversion Event shall, upon such Conversion Event, be deemed to represent an equal number of shares of Class A Common Stock, without the need for surrender or exchange thereof. The Corporation shall, upon the request of any holder whose shares of Class B Common Stock have been converted into shares of Class A Common Stock as a result of a Conversion Event and upon surrender by such holder to the Corporation of the outstanding certificate(s) formerly representing such holder’s shares of Class B Common Stock (if any), issue and deliver to such holder certificate(s) representing the shares of Class A Common Stock into which such holder’s shares of Class B Common Stock were converted as a result of such Conversion Event (if such shares are certificated) or, if such shares are uncertificated, register such shares in book-entry form. Each share of Class B Common Stock that is converted pursuant to this Paragraph D.2 of this Article IV shall thereupon be retired by the Corporation and shall not be available for reissuance.
3. Evidence of Conversion. If the Corporation has reason to believe that a Transfer giving rise to a Conversion Event has occurred but has not theretofore been reflected in the stock ledger of the Corporation, the Corporation may request that the holder of such shares furnish affidavits or other evidence to the Corporation as the Corporation deems necessary to determine whether such a Transfer has occurred, and if such holder does not within ten (10) days after the date of such request furnish sufficient evidence to the Corporation (in the manner provided in the request) to enable the Corporation to determine that no such Transfer has occurred, all such shares of Class B Common Stock that are subject to such Transfer, to the extent not previously converted, shall be automatically converted, in accordance with ParagraphD.2 of this Article IV, into shares of Class A Common Stock.
4. Principal Stockholder Conversion. At the election of the Principal Stockholder in his sole discretion, all of the issued and outstanding shares of Class B Common Stock shall be converted by the Corporation into fully paid and nonassessable shares of Class A Common Stock (the “Principal Stockholder Conversion”). Such election shall be made by written notice delivered to the Corporation’s Secretary, stating the date of such conversion (the “Principal Stockholder Conversion Date”), which shall be a date after the delivery of such notice. On the Principal Stockholder Conversion Date, (i) the Corporation shall, prior to 5:30 p.m. Eastern Time, issue a public statement, or file with the Securities and Exchange Commission a Current Report on Form 8-K, announcing the Principal Stockholder Conversion and (ii) each share of Class B Common Stock, automatically and without further action by the holder thereof, shall be converted into one fully paid and nonassessable share of Class A Common Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on such date, and the person or persons entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Class A Common Stock as of such date. The Corporation shall, as soon as practicable thereafter, issue and deliver at the principal corporate office of the Corporation or of any transfer agent for the Class B Common Stock to each holder of Class B Common Stock, a certificate(s) representing the number of shares of Class A Common Stock to which such holder shall be entitled as aforesaid (if such shares are certificated) or, if such shares are uncertificated, register such shares in book-entry form. Each share of Class B Common Stock that is converted pursuant to this ParagraphD.4 of this Article IV shall be retired by the Corporation and shall not be available for reissuance.
5. Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common Stock, such number of shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock into shares of Class A Common Stock.
6. Taxes. The issuance of shares of Class A Common Stock upon the exercise by holders of shares of Class B Common Stock will be made without charge to the holders of the shares of Class B Common Stock for any transfer taxes, stamp taxes or duties or other similar tax in respect of the issuance; provided, that if any such shares of Class A Common Stock are to be issued in a name other than that of the then record holder of the shares of Class B Common Stock being exchanged (or The Depository Trust Company or its nominee for the account of a participant of The Depository Trust Company that will hold the shares for the account of such holder), then such holder and/or the Person in whose name such shares are to be delivered, shall pay to the Corporation the amount of any tax that may be payable in respect of any transfer involved in the issuance or shall establish to the reasonable satisfaction of the Corporation that the tax has been paid or is not payable.
7. Protective Provisions. The Corporation shall not, whether by merger, consolidation or otherwise, amend, alter, repeal or waive (i) ParagraphC, D (other than D.4) or I of this Article IV (or adopt any provision inconsistent therewith), without first obtaining the affirmative vote (or written consent if action by written consent of stockholders is permitted at such time under these Articles of Incorporation) of the holders of a majority of the then outstanding shares of Class B Common Stock, voting as a separate class or (ii) ParagraphD.4 of this Article IV (or adopt any provision inconsistent therewith) without first obtaining the written consent of the Principal Stockholder (notwithstanding ParagraphA.2 of Article VI), in each case, in addition to any other vote required by applicable law, these Articles of Incorporation or the bylaws of the Corporation. (as amended from time to time, the “Bylaws”).
E. Preferred Stock. The shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby empowered to authorize by resolution(s) from time to time the issuance of one or more series of Preferred Stock and, by filing a certificate of designation pursuant to NRS 78.1955 (a “Preferred Stock Designation”), to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, with respect to each such series of Preferred Stock and the number of shares constituting each such series, and to increase or decrease the number of shares of any such series to the extent permitted by the NRS. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:
1. the designation of the series, which may be by distinguishing number, letter or title;
2. the number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding);
3. the amounts payable on, and the preferences, if any, of shares of the series in respect of dividends, and whether such dividends, if any, shall be cumulative or noncumulative;
4. dates on which dividends, if any, shall be payable in respect of shares of the series;
5. the redemption rights and price or prices, if any, for shares of the series;
6. the terms and amount of any sinking fund provided for the purchase or redemption of shares of the series;
7. whether the shares of the series shall be convertible into or exchangeable for shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series of such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made; provided, that no shares of any series of Preferred Stock shall be convertible into Class B Common Stock without the affirmative vote of holders of a majority of the total voting power of the outstanding Class B Common Stock;
8. the rights of the holders of the shares of such series upon the dissolution or upon the subsequent distribution of assets of, the Corporation;
9. restrictions on the issuance of shares of the same series or of any other class or series;
10. the voting powers, full or limited, or no voting powers, of the holders of shares of the series; and
11. the manner in which any facts ascertainable outside of these Articles of Incorporation or the resolution or resolutions providing for the issuance of such series shall operate upon the voting powers, designations, preferences, rights, and qualifications, limitations, or restrictions of such series.
F. Subject to Terms of Preferred Stock. Notwithstanding anything to the contrary in these Articles of Incorporation, the shares of Common Stock shall be subject to the express terms of the shares of Preferred Stock and any series thereof.
G. No Notice of Stockholder Meetings. Except as may otherwise be provided by law, in these Articles of Incorporation or in a Preferred Stock Designation, the holders of shares of Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, and holders of shares of Preferred Stock and any series thereof shall not be entitled to receive notice of any meeting of stockholders at which they are not entitled to vote.
H. Stockholders Appearing on Stock Ledger. The Corporation shall be entitled to treat the person in whose name any share of its stock is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not the Corporation shall have notice thereof, except as expressly provided by applicable law. In connection with any action of stockholders taken at a meeting or by written consent (if action by written consent of stockholders is permitted at such time under these Articles of Incorporation), the stock ledger of the Corporation shall be presumptive evidence as to who are the stockholders entitled to vote in person or by proxy at any meeting of stockholders or in connection with any such written consent and the class or classes or series of shares held by each such stockholder and the number of shares of each class or classes or series held by such stockholder.
I. Ownership Restrictions.
1. Subject to ParagraphI.4 of this Article IV, at any time a holder of shares of Common Stock or Preferred Stock acquires additional shares of Common Stock or Preferred Stock, or is otherwise attributed with ownership of such shares, that would cause such Person (together with their Affiliates) to be the beneficial owner (as defined in Rule 13d-3 or 13d-5 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or any successor statute or regulation) of capital stock of the Corporation having more than 20% of the total voting power of the outstanding voting shares of all classes and series of the capital stock of the Corporation (a “Maximum Ownership Restriction”), then the Corporation may (i) redeem from the holder or holders causing such Maximum Ownership Restriction a sufficient number of shares of Common Stock or Preferred Stock to eliminate the Maximum Ownership Restriction by paying in cash therefor a sum equal to the Redemption Price, (ii) suspend those rights of stock ownership the exercise of which causes or could cause such Maximum Ownership Restriction and/or (iii) require the sale of as many shares of Common Stock or Preferred Stock held by such stockholder as is necessary to eliminate such Maximum Ownership Restriction, and if the Corporation so requires, such stockholder shall promptly sell, and take all actions to sell, such shares such that, following such sale, the Maximum Ownership Restriction has been eliminated. The “Redemption Price” shall equal such price as is mutually determined by the applicable holder and the Corporation or, if no mutually acceptable agreement can be reached, shall equal either (a) 75% of the Common Stock Fair Market Value or 75% of the Preferred Stock Fair Market Value, as applicable, where such holder was at fault in any part for causing the Maximum Ownership Restriction or (b) the Common Stock Fair Market Value or the Preferred Stock Fair Market Value, as applicable, where the Maximum Ownership Restriction was caused by no fault of the holder; provided, that the determination of whether such party was at fault for causing the Maximum Ownership Restriction shall be made, in good faith, by the disinterested members of the Board of Directors. As used in this ParagraphI.1 of this Article IV, the “Common Stock Fair Market Value” means:
a. if the Common Stock is listed on a U.S. national or regional securities exchange (an “Exchange”) on such date, (i) in the case of Common Stock listed on The New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market (or any of their respective successors) (each, a “Principal Exchange”) on such day, the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such day as reported in composite transactions for the Principal Exchange and (ii) in the case of Common Stock listed on an Exchange other than a Principal Exchange on such day, the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such day as reported in composite transactions for the primary Exchange on which such shares are traded for such date (the “Last Reported Sale Price”) (or, if such date is not a Trading Day, the Trading Day immediately preceding such date); or
b. if the Common Stock is not publicly traded at the time of determination, then the fair value of the Common Stock as determined in good faith by a majority of the disinterested members of the Board of Directors or a committee thereof.
As used in this ParagraphI.1 of this Article IV, (i) the “Preferred Stock Fair Market Value” means the value determined by multiplying the Common Stock Fair Market Value by the number of shares of Common Stock into which the share of Preferred Stock is then convertible and (ii) “Trading Day” means a day on which (a) trading in the Common Stock generally occurs on the Principal Exchange or, if the Common Stock is not then listed on a Principal Exchange, on the principal other Exchange on which the Common Stock is then listed and (b) a Last Reported Sale Price for the Common Stock is available on such securities exchange.
2. At least fifteen (15) days, but no more than thirty (30) days (or such shorter period as determined by the Board of Directors), prior to any date on which Common Stock or Preferred Stock is to be redeemed to avoid a Maximum Ownership Restriction (a “Redemption Date”), written notice shall be sent by mail, first class postage prepaid, overnight mail, or electronic mail to each holder of record (at the close of business on the business day next preceding the day on which notice is given) of the shares of Common Stock or Preferred Stock to be redeemed, at the address last shown on the records of the Corporation for such holder, notifying such holder of the redemption to be effected, specifying the number of shares to be redeemed from such holder, the Redemption Date, the Redemption Price, the place at which payment may be obtained and calling upon such holder to surrender to the Corporation, in the manner and at the place designated, his, her or its certificate(s) (if any) representing the shares to be redeemed (the “Redemption Notice”). Except as provided in ParagraphI.3 of this Article IV, on or after the Redemption Date, each holder of shares of Common Stock or Preferred Stock to be redeemed shall surrender to the Corporation the certificate(s) (if any) representing such shares, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price of such shares shall be payable to the order of the person whose name appears on such certificate(s) or in the stock ledger of the Corporation as the owner thereof and all surrendered certificate(s) shall be canceled. In the event less than all the shares represented by any such certificate(s) are redeemed, a new certificate shall be issued representing the unredeemed shares.
3. From and after the Redemption Date, unless there shall have been a default in payment of the Redemption Price, all rights of the holders of shares of Common Stock or Preferred Stock designated for redemption in the Redemption Notice as holders of such shares of Common Stock or Preferred Stock (except the right to receive the Redemption Price without interest upon surrender of their certificate or certificates) shall cease with respect to such shares, and such shares shall not thereafter be transferred on the books of the Corporation or be deemed to be outstanding for any purpose whatsoever.
4. The provisions of ParagraphI.1 through I.3 of this Article IV shall not apply to the Principal Stockholder or any of his Affiliates or Permitted Transferees, any acquisition of shares of Common Stock or Preferred Stock by the Principal Stockholder or any of his Affiliates or Permitted Transferees or any ownership of such shares otherwise attributed to the Principal Stockholder or any of his Affiliates or Permitted Transferees, and the Corporation shall not have the authority under ParagraphI.1 through I.3 of this Article IV to redeem, suspend the rights of, or require the sale of, any shares of Common Stock or Preferred Stock beneficially owned, directly or indirectly, by the Principal Stockholder or any of his Affiliates or Permitted Transferees, in each case notwithstanding anything to the contrary in these Articles of Incorporation.
ARTICLE V
BOARD OF DIRECTORS
A. Management by Board. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
B. Size of Board; Committees. Subject to the terms of any series of Preferred Stock entitled to separately elect directors, the Board of Directors shall consist of not less than one individual, with the exact number of directors to be determined from time to time solely by resolution adopted by the affirmative vote of a majority of the entire Board of Directors. The Board of Directors will have such committees as may be determined by the Board of Directors from time to time as provided in the Bylaws.
C. Term; No Cumulative Voting.
1. Subject to these Articles of Incorporation, each director shall hold office until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal.
2. There shall be no cumulative voting in the election of directors.
D. Vacancies. Vacancies on the Board of Directors resulting from death, resignation, removal or otherwise and newly created directorships resulting from any increase in the number of directors shall, except as otherwise required by law, be filled solely by a majority of the directors then in office (although less than a quorum) or by the sole remaining director.
E. Removal. Subject to ParagraphF of this Article V, prior to the Sunset Date, directors may be removed from office by the stockholders, with or without cause, by the affirmative vote of the holders of not less than two-thirds of the voting power of the shares then entitled to vote generally in the election of directors, voting together as a single class. From and after the Sunset Date, no director may be removed from office by the stockholders except for cause with the affirmative vote of the holders of not less than two-thirds of the voting power of the shares then entitled to vote generally in the election of directors, voting together as a single class.
F. Directors Elected by Holders of Preferred Stock. Notwithstanding the foregoing, whenever the holders of one or more series of Preferred Stock shall have the right, voting separately as a series, to elect directors, the election, term of office, filling of vacancies, removal and other features of such directorships shall be governed by the terms of the resolution or resolutions adopted by the Board of Directors pursuant to Article IV applicable thereto and the applicable provisions of the NRS, and such directors so elected shall not be subject to the provisions of this Article V unless otherwise provided therein.
G. Amendment to Bylaws. The Board of Directors shall have the exclusive right to adopt, amend or repeal the Bylaws, except to the extent expressly set forth in the Bylaws.
ARTICLE VI
STOCKHOLDERS
A. Written Consent of Stockholders.
1. Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken (i) by a vote of stockholders at a meeting of stockholders duly noticed and called in accordance with the Bylaws and the NRS or (ii) only for so long as the issued and outstanding shares of Class B Common Stock represent at least twenty five percent (25%) of the voting power of the issued and outstanding Common Stock, without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding capital stock of the Corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
2. Subject to the rights of holders of any one or more series of Preferred Stock then outstanding, at such time as the issued and outstanding shares of Class B Common Stock represent less than twenty five percent (25%) of the voting power of the issued and outstanding Common Stock (the “Sunset Date”), no action may be taken by the stockholders by written consent and from and after the Sunset Date, any action required or permitted to be taken at any annual or special meeting of stockholders may only be taken upon a vote of stockholders at an annual or special meeting of stockholders duly noticed and called in accordance with the Bylaws and the NRS.
B. Special Meetings of Stockholders. Special meetings of stockholders may be called only by the affirmative vote of a majority of the entire Board of Directors.
ARTICLE VII
LIMITATIONS ON LIABILITY AND INDEMNIFICATION
A. Limitation on Liability.
1. The liability of directors and officers of the Corporation and the Principal Stockholder are hereby eliminated or limited to the fullest extent permitted by the NRS.
2. Neither the amendment or repeal of this ParagraphA of this Article VII, nor the adoption of any provision of these Articles of Incorporation, nor, to the fullest extent permitted by the NRS, any modification of law shall adversely affect any right or protection of a director or officer of the Corporation or the Principal Stockholder hereunder in respect of any act or omission occurring prior to the time of such amendment, repeal, adoption or modification. If the NRS is amended after the date of filing these Articles of Incorporation further eliminating or limiting the liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the NRS, as so amended.
3. If and to the extent the Principal Stockholder or any of his Affiliates or Permitted Transferees is deemed to have fiduciary duties to the Corporation or any of its stockholders, such duties are hereby eliminated or limited to the fullest extent permitted by the NRS or other applicable law.
B. Right to Indemnification. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law (including, without limitation, NRS 78.7502 and 78.751) as it presently exists or may hereafter be amended, any Person (a “Covered Person”) who was or is a party or is threatened to be made a party to or otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a Person for whom he or she is the legal representative, is or was a director, officer or employee of the Corporation, or the Principal Stockholder (in his capacity as such), or, while a director, officer or employee of the Corporation or the Principal Stockholder, is or was serving at the request of the Corporation as a director, officer, manager or managing member, employee, agent or trustee of another entity or enterprise, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees and expenses, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended, and amounts paid or to be paid in settlement) reasonably incurred by such Covered Person. Notwithstanding the foregoing, except as otherwise provided in ParagraphD of this Article VII with respect to Proceedings to enforce rights to indemnification or advancement of expenses or with respect to any compulsory counterclaim brought by such indemnitee, the Corporation shall be required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by the Board of Directors.
C. Prepayment of Expenses. In addition to the right to indemnification conferred herein, an indemnitee shall also have the right, to the fullest extent not prohibited by applicable law, to be paid by the Corporation expenses (including attorneys’ fees) incurred by a Covered Person in appearing at, participating in or defending any Proceeding in advance of its final disposition or in connection with a Proceeding brought to establish or enforce a right to indemnification or advancement of expenses under this Article VII (which shall be governed by ParagraphD of this Article VII); provided, that if and to the extent required by applicable law or in the case of advance made in a Proceeding brought to establish or enforce a right to indemnification or advancement, such payment of expenses in advance of the final disposition of the Proceeding shall be made solely upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified or entitled to advancement of expenses under this Article VII or otherwise; provided, further, that the right to advancement of expenses hereunder shall not apply to any Proceeding brought by the Corporation against a Covered Person regarding fraud, gross negligence or willful misconduct by such Covered Person.
D. Claims. If a claim for indemnification or advancement of expenses under this Article VII is not paid in full within thirty (30) days after a written claim therefor by the Covered Person has been received by the Corporation, the Covered Person may file suit to recover the unpaid amount of such claim or to obtain an advancement of expenses, as applicable. To the fullest extent permitted by law, if successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Covered Person shall be entitled to be paid the expense of prosecuting or defending such claim. In any such action the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law. In (i) any suit brought by a Covered Person to enforce a right to indemnification hereunder (but not in a suit brought by a Covered Person to enforce a right to an advancement of expenses) it shall be a defense that and (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, such Person has not met any applicable standard for indemnification imposed by the NRS under such circumstances. Neither the failure of the Corporation (including by its directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Covered Person is proper in the circumstances because the Covered Person has met any applicable standard of conduct imposed by the NRS under such circumstances, nor an actual determination by the Corporation (including by its directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) that the Covered Person has not met any such applicable standard of conduct, shall create a presumption that such Person has not met such standard of conduct or, in the case of such a suit brought by the Covered Person, be a defense to such suit.
E. Non-Exclusivity of Rights. The rights conferred on any Covered Person by this Article VII shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, provision of these Articles of Incorporation, the Bylaws, agreement, vote of stockholders or disinterested directors or otherwise.
F. Other Sources. Subject to ParagraphG of this Article VII, the Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another entity or enterprise shall be reduced by any amount such Covered Person has actually collected as indemnification or advancement of expenses from such other entity or enterprise.
G. Indemnitor of First Resort. Given that certain jointly indemnifiable claims may arise due to the service of a Covered Person as a director, officer and/or employee of the Corporation (or due to the status of the Principal Stockholder as a stockholder) at the request of the indemnitee-related entities, the Corporation shall be fully and primarily responsible for the payment to the Covered Person in respect of indemnification or advancement of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of these Articles of Incorporation or the Bylaws (or any other agreement between the Corporation and such persons) in connection with any such jointly indemnifiable claims, pursuant to and in accordance with the terms of this Article VII, irrespective of any right of recovery the Covered Person may have from the indemnitee-related entities. Any obligation on the part of any indemnitee-related entities to indemnify or advance expenses to any Covered Person shall be secondary to the Corporation’s obligation and shall be reduced by any amount that the Covered Person has actually collected as indemnification or advancement from the Corporation. The Corporation irrevocably waives, relinquishes and releases the indemnitee-related entities from any and all claims it may have against the indemnitee-related entities for contribution, subrogation or any other recovery of any kind in respect thereof. Under no circumstance shall the Corporation be entitled to any right of subrogation or contribution by the indemnitee-related entities and no right of advancement or recovery a Covered Person may have from the indemnitee-related entities shall reduce or otherwise alter the rights of the Covered Person or the obligations of the Corporation hereunder. In the event that any of the indemnitee-related entities shall make any payment to a Covered Person in respect of indemnification or advancement of expenses with respect to any jointly indemnifiable claim, the indemnitee-related entity making such payment shall be subrogated to the extent of such payment to all of the rights of recovery of the Covered Person against the Corporation, and the Covered Person shall execute all instruments or other documents reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such instruments or other documents as may be necessary to enable the indemnitee-related entities effectively to bring suit to enforce such rights. Each of the indemnitee-related entities shall be third-party beneficiaries with respect to, and be entitled to enforce, this ParagraphG of this Article VII. For purposes of this ParagraphG of this Article VII, the following terms shall have the following meanings:
1. The term “indemnitee-related entities” means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Corporation or any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise for which a Covered Person has agreed, on behalf of the Corporation or at the Corporation’s request, to serve as a director, officer, manager or managing member, employee or agent and which service is covered by the indemnity described herein) from whom a Covered Person may be entitled to indemnification or advancement of expenses with respect to which, in whole or in part, the Corporation may also have an indemnification or advancement obligation.
2. The term “jointly indemnifiable claims” shall be broadly construed and shall include, without limitation, any action, suit or proceeding for which a Covered Person shall be entitled to indemnification or advancement of expenses from both the indemnitee-related entities and the Corporation pursuant to the NRS, any agreement or articles of incorporation, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or comparable organizational documents of the Corporation or the indemnitee-related entities, as applicable.
H. Amendment or Repeal. Neither the amendment or repeal of the foregoing provisions of this Article VII, nor the adoption of any provision of these Articles of Incorporation, shall adversely affect any right or protection hereunder of any Covered Person in respect of any act or omission occurring prior to the time of such amendment, repeal or adoption.
I. Other Indemnification and Prepayment of Expenses. This Article VII shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to Persons other than Covered Persons when and as authorized by appropriate corporate action.
J. Reliance. Covered Persons who after the date of the adoption of this provision become or remain a Covered Person described in this Article VII will be conclusively presumed to have relied on the rights to indemnity, advance of expenses and other rights contained in this Article VII in entering into or continuing the service. The rights to indemnification and to the advance of expenses conferred in this Article VII will apply to claims made against any Covered Person described in this Article VII arising out of acts or omissions in respect of the Corporation or one of its subsidiaries that occurred or occur both prior and subsequent to the adoption hereof. The rights conferred upon Covered Persons in this Article VII shall be contract rights and such rights shall continue as to a Covered Person who has ceased to be a director, officer, employee or, in the case of the Principal Stockholder, a stockholder of the Corporation, or in the case and shall inure to the benefit of the Covered Person’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article VII that adversely affects any right of a Covered Person or its successors shall be prospective only and shall not limit, eliminate or impair any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.
K. Insurance. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the NRS.
ARTICLE VIII
CORPORATE OPPORTUNITY
A. Acknowledgment. In recognition and anticipation that members of the Board of Directors who are not employees of the Corporation (“Non-Employee Directors”) or its Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, the provisions of this Article VIII are set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve any of the Non-Employee Directors or their respective Affiliates and the powers, rights, duties and liabilities of the Corporation and its directors, officers and stockholders in connection therewith.
B. Competition and Corporate Opportunities; Renouncement. No Non-Employee Director (including any Non-Employee Director who serves as an officer of the Corporation in both his or her Director and officer capacities) or his or her Affiliates (collectively, “Identified Persons” and, individually, as an “Identified Person”) shall, to the fullest extent permitted by law, have any duty to refrain from directly or indirectly (i) engaging in the same or similar business activities or lines of business in which the Corporation or any of its Affiliates now engages or proposes to engage or (ii) otherwise competing with the Corporation or any of its Affiliates, and, to the fullest extent permitted by law, no Identified Person shall be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities or did not offer such activities to the Corporation. To the fullest extent permitted by law, the Corporation hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity which may be a corporate opportunity for an Identified Person and the Corporation or any of its Affiliates, except as provided in ParagraphC of this Article VIII. Subject to ParagraphC of this Article VIII, in the event that any Identified Person acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity for itself, herself or himself and the Corporation or any of its Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no duty to communicate or offer such transaction or other business opportunity to the Corporation or any of its Affiliates and, to the fullest extent permitted by law, shall not be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary duty as a stockholder, director or officer of the Corporation solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, herself or himself, or offers or directs such corporate opportunity to another Person.
C. Allocation of Corporate Opportunities. The Corporation does not renounce its interest in any corporate opportunity offered to any Non-Employee Director if such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Corporation, and the provisions of ParagraphB of this Article VIII shall not apply to any such corporate opportunity.
D. Certain Matters Deemed Not Corporate Opportunities. In addition to and notwithstanding the foregoing provisions of this Article VIII, a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Corporation if it is a business opportunity that (i) the Corporation is neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the Corporation’s business or is of no practical advantage to the Corporation or (iii) is one in which the Corporation has no interest or reasonable expectancy.
E. Notice. To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article VIII.
ARTICLE IX
EXCLUSIVE JURISDICTION; WAIVER OF JURY TRIAL
A. Exclusive Jurisdiction. To the fullest extent permitted by law, and unless the Corporation consents in writing to the selection of an alternative forum, the Eighth Judicial District Court of Clark County, Nevada and, except where the NRS confers mandatory sole jurisdiction on the district court of the State of Nevada, any state of federal court located in Dallas County, Texas, shall be the sole and exclusive forums for any actions, suits or proceedings, whether civil, administrative or investigative (i) brought in the name or right of the Corporation or on its behalf, (ii) asserting a claim for breach of any fiduciary duty owed by any current or former director, officer, stockholder, employee, agent or fiduciary of the Corporation to the Corporation or the Corporation’s stockholders, (iii) for any internal action (as defined in NRS 78.046), including any action asserting a claim against the Corporation arising pursuant to any provision of NRS Chapters 78 or 92A, the Articles of Incorporation or the Bylaws or any agreement entered into pursuant to NRS 78.365, (iv) to interpret, apply, enforce or determine the validity of the Articles of Incorporation or the Bylaws or (v) asserting a claim governed by the internal affairs doctrine; provided, that such exclusive forum provisions will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. In the event that neither the Eighth Judicial District Court of Clark County, Nevada nor any state of federal court located in Dallas County, Texas has jurisdiction over any such action, suit or proceeding, then any other state district court located in the State of Nevada or, except where the NRS confers mandatory sole jurisdiction on the district court of the State of Nevada, State of Texas shall be the sole and exclusive forums therefor and in the event that no state district court in the State of Nevada or State of Texas has jurisdiction over any such action, suit or proceeding, then a federal court located within the State of Nevada or State of Texas shall be the sole and exclusive forum therefor. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any claim asserting a cause of action arising under the Securities Act of 1933, as amended, against any Person in connection with any offering of the Corporation’s securities, including, for the avoidance of doubt, any auditor, underwriter, expert, control person, or other defendant, which Person shall have the right to enforce this clause. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and, to the fullest extent permitted by law, to have consented to the provisions of this Article IX.
B. Waiver of Jury Trial. To the fullest extent permitted by applicable law, all internal actions (as such term is defined in NRS 78.046 or any successor statute) to be tried in any court of the State of Nevada must be tried before the presiding judge as the trier of fact, and not before a jury. This requirement must conclusively operate as a waiver of the right to trial by jury by each party to any internal action (as such term is defined in NRS 78.046 or any successor statute) to which this requirement applies.
ARTICLE X
COMBINATIONS WITH INTERESTED STOCKHOLDERS
Until the Sunset Date, the Corporation elects not to be governed by the terms and provisions of NRS 78.411 through 78.444, inclusive, as the same may be amended, superseded, or replaced by any successor section, statute, or provision. From and after the Sunset Date, the Corporation shall immediately and automatically, without further action on the part of the Corporation or any stockholder of the Corporation, become governed by NRS 78.411 through 78.444, inclusive. No amendment to these Articles of Incorporation, directly or indirectly, by merger or consolidation or otherwise, having the effect of amending or repealing any provision of this Article X shall apply to or have any effect on any agreement, transaction or other event (including, without limitation, anything that would otherwise have constituted a “combination” (as defined in NRS 78.416)) occurring prior to such amendment or repeal.
ARTICLE XI
MISCELLANEOUS
The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation and for the further definition of the powers of the Corporation and of its directors and stockholders:
A. The directors shall have the non-exclusive power to adopt, amend or repeal the Bylaws.
B. Elections of directors need not be by written ballot unless the Bylaws so provide.
C. Notwithstanding any other provision in these Articles of Incorporation or the Bylaws to the contrary, and in accordance with the provisions of NRS 78.378, the provisions of NRS 78.378 to 78.3793, inclusive, or any successor statutes, relating to acquisitions of controlling interests in the Corporation, shall not apply to any acquisition of any shares of the Corporation’s capital stock. No amendment to these Articles of Incorporation, directly or indirectly, by merger or consolidation or otherwise, having the effect of amending or repealing any provision of this ParagraphC of this Article XI shall apply to or have any effect on any agreement, transaction or other event (including, without limitation, anything that would otherwise have constituted an “acquisition” (as defined in NRS 78.3783)) occurring prior to the eleventh calendar day following such amendment or repeal.
D. As used in these Articles of Incorporation, the following terms shall have the following meanings:
1. “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person; provided, that (i) neither the Corporation nor any of its subsidiaries will be deemed an Affiliate of any stockholder of the Corporation or any of such stockholders’ Affiliates, (ii) no stockholder of the Corporation will be deemed an Affiliate of any other stockholder of the Corporation, in each case, solely by reason of any investment in the Corporation (including any representatives of such stockholder serving on the Board of Directors) and (iii) none of the Principal Stockholder or any of his Affiliates described in the foregoing clauses (i) and (ii) shall be deemed to be an Affiliate of the Corporation.
2. “Articles of Incorporation” has the meaning set forth in ParagraphA of Article IV.
3. “Board of Directors” has the meaning set forth in ParagraphA of Article IV.
4. “Bylaws” has the meaning set forth in ParagraphD.7 of Article IV.
5. “Charitable Trust” means a trust that is exempt from taxation under Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended (or any successor provision thereto) (whether a determination letter with respect to such exemption is issued before, at or after the Merger Closing Date), and further includes any successor entity that is exempt from taxation under Section 501(c)(3) (or any successor provision thereto) upon a conversion of, or transfer of all or substantially all of the assets of, a Charitable Trust to such successor entity (whether a determination letter with respect to such successor’s exemption is issued before, at or after the conversion date).
6. “Class A Common Stock” has the meaning set forth in ParagraphA of Article IV.
7. “Class B Common Stock” has the meaning set forth in ParagraphA of Article IV.
8. “Common Stock” has the meaning set forth in ParagraphA of Article IV.
9. “Common Stock Fair Market Value” has the meaning set forth in ParagraphI.1 of Article IV.
10. “Conversion Event” has the meaning set forth in ParagraphD.2 of Article IV.
11. “Exchange” has the meaning set forth in ParagraphI.1.a of Article IV.
12. “Exchange Act” has the meaning set forth in ParagraphI.1 of Article IV.
13. “Family Member” means with respect to any natural person who is a Qualified Stockholder, the spouse, parents, grandparents, lineal descendants, siblings and lineal descendants of siblings of such Qualified Stockholder. Lineal descendants shall include adopted persons, but only so long as they are adopted during minority.
14. “Identified Person” has the meaning set forth in ParagraphB of Article VIII.
15. “Last Reported Sale Price” has the meaning set forth in ParagraphI.1.a of Article IV.
16. “Maximum Ownership Restriction” has the meaning set forth in ParagraphI.1 of Article IV.
17. “Merger Agreement” means that certain Agreement and Plan of Merger, to be entered into immediately after the effectiveness of these Articles of Incorporation, by and among the Corporation, TriUnity Merger Sub Inc., a Texas corporation and a wholly owned subsidiary of the Corporation, Independence Power, Inc., a Texas corporation, and Independence Investors LLC, a Delaware corporation.
18. “Merger Closing Date” means the later to occur of (i) the Effective Time (as defined in the Merger Agreement) and (ii) the issuance of the Per Share Merger Consideration (as defined in the Merger Agreement).
19. “Non-Employee Directors” has the meaning set forth in ParagraphA of Article VIII.
20. “NRS” has the meaning set forth in Article III.
21. “Permitted Entity” means with respect to a Qualified Stockholder (i) a Permitted Trust solely for the benefit of (a) such Qualified Stockholder, (b) one or more Family Members of such Qualified Stockholder, (c) any other Permitted Entity of such Qualified Stockholder and/or (iv) any entity that is described in Sections 501(c)(3), 170(b)(1)(A), 170(c), 2055(a) or 2522(a) of the United States Internal Revenue Code of 1986, as amended (or any successor provision thereto), (ii) any general partnership, limited partnership, limited liability company, corporation or other entity exclusively owned by (a) such Qualified Stockholder, (b) one or more Family Members of such Qualified Stockholder and/or (c) any other Permitted Entity of such Qualified Stockholder, (iii) any Charitable Trust created by a Qualified Stockholder, which Charitable Trust was (a) validly created and (b) a registered holder of shares of capital stock of the Corporation, in each case prior to the Merger Closing Date (whether or not it continuously holds such shares of capital stock or any other shares of capital stock of the Corporation at all times before or after the Merger Closing Date), (iv) the personal representative of the estate of a Qualified Stockholder upon the death of such Qualified Stockholder solely to the extent the executor is acting in the capacity as personal representative of such estate, (v) a revocable living trust, which revocable living trust is itself both a Permitted Trust and a Qualified Stockholder, during the lifetime of the natural person grantor of such trust, (vi) a revocable living trust, which revocable living trust is itself both a Permitted Trust and a Qualified Stockholder, following the death of the natural person grantor of such trust, solely to the extent that such shares are held in such trust pending distribution to the beneficiaries designated in such trust. Except as explicitly provided for herein, a Permitted Entity of a Qualified Stockholder shall not cease to be a Permitted Entity of that Qualified Stockholder solely by reason of the death of that Qualified Stockholder or (vii) such Qualified Stockholder’s Affiliates.
22. “Permitted Transfer” means, and will be restricted to, any Transfer of a share of Class B Common Stock: (i) by a Qualified Stockholder (or the estate of a deceased Qualified Stockholder) to (a) one or more Family Members of such Qualified Stockholder, (b) any Permitted Entity of such Qualified Stockholder or (c) to such Qualified Stockholder’s revocable living trust, which revocable living trust is itself both a Permitted Trust and a Qualified Stockholder, (ii) by a Permitted Entity of a Qualified Stockholder to (a) such Qualified Stockholder or one or more Family Members of such Qualified Stockholder or (b) any other Permitted Entity of such Qualified Stockholder or (iii) by a Qualified Stockholder that is a natural person or revocable living trust to an entity that is exempt from taxation under Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended (or any successor provision thereto) (a “501(c)(3) Organization”) or an entity that is exempt from taxation under Section 501(c)(3) and described in Section 509(a)(3) of United States Internal Revenue Code of 1986, as amended (or any successor provision thereto) (a “Supporting Organization”), as well as any Transfer by a 501(c)(3) Organization to a Supporting Organization of which such 501(c)(3) Organization (a) is a supported organization (within the meaning of Section 509(f)(3) of the United States Internal Revenue Code of 1986, as amended (or any successor provision thereto)) and (b) has the power to nominate a majority of the board of directors, provided that such 501(c)(3) Organization or such Supporting Organization irrevocably elects, no later than the time such share of Class B Common Stock is Transferred to it, that such share of Class B Common Stock shall automatically be converted into Class A Common Stock upon the death of such Qualified Stockholder or the natural person grantor of such Qualified Stockholder.
23. “Permitted Transferee” means a transferee of shares of Class B Common Stock received in a Transfer that constitutes a Permitted Transfer.
24. “Permitted Trust” means a bona fide trust where each trustee is (i) a Qualified Stockholder, (ii) a Family Member of a Qualified Stockholder, (iii) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies and bank trust departments or (iv) solely in the case of any such trust established by a natural person grantor prior to the Merger Closing Date, any other bona fide trustee.
25. “Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity.
26. “Preferred Stock” has the meaning set forth in ParagraphA of Article IV.
27. “Preferred Stock Designation” has the meaning set forth in ParagraphE of Article IV.
28. “Preferred Stock Fair Market Value” has the meaning set forth in ParagraphI.1 of Article IV.
29. “Principal Exchange” has the meaning set forth in ParagraphI.1.a of Article IV.
30. “Principal Stockholder” means David Durrett, an individual currently residing at 14114 Dallas Parkway, Suite 200, Dallas TX 75254.
31. “Principal Stockholder Conversion” has the meaning set forth in ParagraphD.4 of Article IV.
32. “Principal Stockholder Conversion Date” has the meaning set forth in ParagraphD.4 of Article IV.
33. “Proceeding” has the meaning set forth in ParagraphB of Article VII.
34. “Qualified Stockholder” means (i) the Principal Stockholder, (ii) any Person who directly receives shares of Class B Common Stock on the Merger Closing Date and (iii) a Permitted Transferee.
35. “Redemption Date” has the meaning set forth in ParagraphI.2 of Article IV.
36. “Redemption Notice” has the meaning set forth in ParagraphI.2 of Article IV.
37. “Redemption Price” has the meaning set forth in ParagraphI.1 of Article IV.
38. “Sunset Date” has the meaning set forth in ParagraphA.2 of Article VI.
39. “Trading Day” has the meaning set forth in ParagraphI.1 of Article IV.
40. “Transfer” of a share of Class B Common Stock means, any sale, assignment, transfer, exchange, gift, bequest, pledge, hypothecation or other disposition or encumbrance of such share or any legal or beneficial interest in such share, in whole or in part, whether or not for value and whether voluntary or involuntary or by operation of law; provided, that the following shall not be considered a “Transfer”: (i) the granting of a revocable proxy to officers or directors of the Corporation at the request of the Board of Directors in connection with actions to be taken at annual or special meetings of stockholders or in connection with any action by written consent of the stockholders solicited by the Board of Directors (at such times as action by written consent of stockholders is permitted under these Articles of Incorporation), (ii) entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with the Corporation and/or its stockholders that (a) is disclosed either in a Schedule 13D filed with the Securities and Exchange Commission or in writing to the Secretary of the Corporation, (b) either has a term not exceeding one year or is terminable by the holder of the shares subject thereto at any time and (c) does not involve any payment of cash, securities, property or other consideration to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner, (iii) entering into a customary voting or support agreement (with or without granting a proxy) or delivering a written consent in connection with any merger, consolidation or other business combination of the Corporation, whether effectuated through one transaction or series of related transactions (including a tender offer followed by a merger in which holders of Class A Common Stock receive the same consideration per share paid in the tender offer), (iv) the pledge of shares of capital stock of the Corporation by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction so long as such stockholder continues to exercise sole Voting Control over such pledged shares; provided, that a foreclosure on such shares or other similar action by the pledgee shall constitute a “Transfer,” (v) the fact that the spouse of any holder of Class B Common Stock possesses or obtains an interest in such holder’s shares of Class B Common Stock arising solely by reason of the application of the community property laws of any jurisdiction, so long as no other event or circumstance shall exist or have occurred that constitutes a “Transfer” of such shares of Class B Common Stock or (vi) any change in the trustees or the person(s) and/or entity(ies) having or exercising Voting Control over shares of Class B Common Stock (a) of a Charitable Trust that qualifies as a Permitted Entity or (b) of a Permitted Entity; provided, that following such change such Permitted Entity continues to be a Permitted Entity. A “Transfer” shall also be deemed to have occurred with respect to a share of Class B Common Stock beneficially held by an entity that is a Permitted Entity, if there occurs any act or circumstance that causes such entity to no longer be a Permitted Entity. “Transferred” shall have a correlative meaning.
41. “Voting Control” means, with respect to a share of Class B Common Stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.
ARTICLE XII
AMENDMENTS
The Corporation reserves the right from time to time to amend these Articles of Incorporation in any manner permitted by the NRS, and all rights and powers conferred upon stockholders, directors and officers herein are granted subject to this reservation. Notwithstanding the foregoing, from and after the Sunset Date, the provisions set forth in Article V, Article VI, Article VII, Article VIII, Article IX, Article X, Article XI and this Article XII may not be repealed or amended in any respect, and no other provision may be adopted, amended or repealed which would have the effect of modifying or permitting the circumvention of the provisions set forth in any of Article V, Article VI, Article VII, Article VIII, Article IX, Article X, Article XI and this Article XII, unless such action is approved by the affirmative vote of the holders of not less than 66 2/3% of the total voting power of all outstanding securities of the Corporation generally entitled to vote in the election of directors, voting together as a single class.
ARTICLE XIII
SEVERABILITY
If any provision or provisions of these Articles of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any Person or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of these Articles of Incorporation (including, without limitation, each portion of any sentence of these Articles of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other Persons and circumstances shall not in any way be affected or impaired thereby.
* * * *
EXHIBIT 3.2
AMENDED AND RESTATED BYLAWS
OF
INDEPENDENCE POWER HOLDINGS, INC.
ARTICLE I
OFFICES
1.1 Registered Office.
The address of the registered office of Independence Power Holdings, Inc. (the “Corporation”) shall be the street address of the corporation’s registered agent in the State of Nevada, as determined by the Corporation’s board of directors (the “Board of Directors”) from time to time in accordance with the Corporation’s Articles of Incorporation (as amended from time to time, the “Articles of Incorporation”), these bylaws (as amended from time to time, these “Bylaws”), and the Nevada Revised Statutes (as amended from time to time, the “NRS”).
1.2 Other Offices.
The Corporation may also have offices at such other places both within and without the State of Nevada as the Board of Directors may from time to time determine or the business of the Corporation may require.
1.3 Books.
The books of the Corporation may be kept within or without the State of Nevada as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 Time and Place of Meetings.
All meetings of stockholders shall be held at such physical location, if any, either within or without the State of Nevada, on such date and at such time as may be determined from time to time by the Board of Directors (or the chair in the absence of a designation by the Board of Directors).
2.2 Annual Meeting.
Unless directors are elected by written consent in lieu of an annual meeting as permitted by the NRS, and the Articles of Incorporation, an annual meeting of stockholders, commencing with the fiscal year 2026, shall be held for the election of directors and to transact such other business as may properly be brought before the meeting.
2.3 Special Meetings.
(a) Except as otherwise provided in the Articles of Incorporation, special meetings of stockholders (i) may be called at any time by the affirmative vote of a majority of the entire Board of Directors and (ii) until the Sunset Date (as such term is defined in the Articles of Incorporation), shall be called by the secretary of the Corporation at the request of the Principal Stockholder (as such term is defined in the Articles of Incorporation). Such request shall state the purpose or purposes of the proposed meeting.
(b) A special meeting shall be held at such date, time and physical location, if any, and/or by such method of remote communication, if any, as may be fixed by the Board of Directors in accordance with these Bylaws.
(c) Business conducted at a special meeting shall be limited to the matters described in the applicable request for such special meeting and any other matters as the Board of Directors shall determine.
2.4 Notice of Meetings and Adjourned Meetings; Waivers of Notice.
(a) Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the physical location, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining stockholders entitled to notice of, and to vote, at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by the NRS, such notice shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to notice of such meeting. Unless these Bylaws otherwise require, when a meeting is adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time, physical location, if any, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than sixty (60) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to notice of such adjourned meeting.
(b) Whenever notice is required to be given under any provision of the NRS or the Articles of Incorporation or these Bylaws, a written waiver signed by the person entitled thereto, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meetings of stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Articles of Incorporation or these Bylaws. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
2.5 Notice of Nominations and Stockholder Business.
(a) Annual Meetings of Stockholders.
(i) Except as otherwise provided in the Articles of Incorporation, nominations of persons for election to the Board of Directors or the proposal of other business to be transacted by the stockholders may be made at an annual meeting of stockholders only (A) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (B) by or at the direction of the Board of Directors or (C) by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 2.5(a), who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.5(a).
(ii) Unless the Board of Directors determines otherwise, for nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to clause (C) of Section 2.5(a)(i), the stockholder must have given timely notice thereof in writing to the secretary of the Corporation and any such proposed business (other than the nominations of persons for election to the Board of Directors) must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to or mailed and received by the secretary of the Corporation at the principal executive offices of the Corporation not less than ninety (90) days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced more than sixty (60) days prior to such anniversary date or delayed more than thirty (30) days after such anniversary date then to be timely such notice must be received by the Corporation no earlier than 120 days prior to such annual meeting and no later than the later of ninety (90) days prior to the date of the meeting or the tenth (10th) day following the day on which Public Announcement of the date of the meeting was first made by the Corporation. In no event shall the Public Announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. For purposes of Section 2.5(a)(ii) and Section 2.5(b) of these Bylaws, “Public Announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, the Associated Press, Business Wire, PR Newswire or any comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (including the rules and regulations promulgated thereunder, the “Exchange Act”).
(iii) A stockholder’s notice to the secretary shall set forth (A) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these Bylaws, the text of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made:
(1) the name and address of such stockholder (as they appear on the Corporation’s books) and any such beneficial owner;
(2) the class or series and number of shares of capital stock of the Corporation which are held of record or are beneficially owned by such stockholder and by any such beneficial owner;
(3) a description of any agreement, arrangement or understanding between or among such stockholder and any such beneficial owner, any of their respective affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such nomination or other business;
(4) a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or any such beneficial owner or any such nominee with respect to the Corporation’s securities (a “Derivative Instrument”);
(5) to the extent not disclosed pursuant to clause (4) above, the principal amount of any indebtedness of the Corporation or any of its subsidiaries beneficially owned by such stockholder or by any such beneficial owner, together with the title of the instrument under which such indebtedness was issued and a description of any Derivative Instrument entered into by or on behalf of such stockholder or such beneficial owner relating to the value or payment of any indebtedness of the Corporation or any such subsidiary;
(6) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting; and
(7) a representation as to whether such stockholder or any such beneficial owner intends or is part of a group that intends to (I) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding capital stock required to approve or adopt the proposal or to elect each such nominee and/or (II) otherwise to solicit proxies from stockholders in support of such proposal or nomination.
If requested by the Corporation, the information required under clauses (C)(2), (C)(3), (C)(4) and (C)(5) of the preceding sentence of this Section 2.5 shall be supplemented by such stockholder and any such beneficial owner not later than ten (10) days after the record date for notice of the meeting to disclose such supplemental information as requested by the Corporation as of such record date.
Notwithstanding anything to the contrary, the notice requirements set forth herein with respect to the proposal of any business pursuant to this Section 2.5 other than a nomination shall be deemed satisfied by a stockholder if such stockholder has submitted a proposal to the Corporation in compliance with Rule 14a-8 promulgated under the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for the meeting of stockholders.
(b) Special Meetings of Stockholders.
(i) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting pursuant to Section 2.4. Nominations of persons for election to the Board of Directors at a special meeting of stockholders may be made by stockholders only if the election of directors is included as business to be brought before a special meeting in the Corporation’s notice of meeting and then only by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 2.5(b) who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.5(b). For nominations to be properly brought before a special meeting of stockholders by a stockholder pursuant to this Section 2.5(b), the stockholder must have given timely notice thereof in writing to the secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received by the secretary of the Corporation at the principal executive offices of the Corporation (A) not earlier than 120 days prior to the date of the special meeting nor (B) later than the later of ninety (90) days prior to the date of the special meeting or the tenth (10th) day following the day on which public announcement of the date of the special meeting was first made. A stockholder’s notice to the secretary shall comply with the notice requirements of Section 2.5(a)(iii).
(c) General.
(i) At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the secretary of the Corporation the information that is required to be set forth in a stockholder’s notice of nomination that pertains to the nominee. No person shall be eligible to be nominated by a stockholder to serve as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.5. No business shall be conducted at a stockholder meeting except in accordance with the procedures set forth in Section2.3 and this Section 2.5. The chair of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws or that business was not properly brought before the meeting, and if he should so determine and declare, the defective nomination shall be disregarded or such business shall not be transacted, as the case may be. Notwithstanding the foregoing provisions of this Section 2.5, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or other proposed business, such nomination shall be disregarded or such proposed business shall not be transacted, as the case may be, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.5, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
(ii) Without limiting the foregoing provisions of this Section 2.5, a stockholder shall also comply with all applicable requirements of the Exchange Act with respect to the matters set forth in this Section 2.5; provided, however, that any references in these Bylaws to the Exchange Act are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 2.5, and compliance with Section 2.5(a) or Section 2.5(b) shall be the exclusive means for a stockholder to make nominations or submit other business (other than as provided in the last paragraph of Section 2.5(a)).
2.6 Quorum.
Unless otherwise provided in the Articles of Incorporation or these Bylaws and subject to the NRS, the presence, in person or by proxy (regardless of whether the proxy has authority to vote on any matter), of the holders of a majority of the voting power of all outstanding capital stock of the Corporation entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business. If, however, such quorum shall not be present at any meeting of the stockholders, either the chair of the meeting or holders of a majority in voting power of the shares of capital stock of the Corporation present in person or represented by proxy shall adjourn the meeting, without notice other than announcement at the meeting, until a quorum shall be present. At such adjourned meeting at which a quorum shall be present any business may be transacted which might have been transacted at the meeting as originally notified.
2.7 Voting.
(a) Unless otherwise provided in the Articles of Incorporation and subject to the NRS, each stockholder shall be entitled to one vote for each outstanding share of capital stock of the Corporation held by such stockholder. Any share of capital stock of the Corporation held by the Corporation shall have no voting rights. Unless otherwise provided in the Articles of Incorporation or these Bylaws and subject to the NRS, in all matters other than the election of directors, the affirmative vote of a majority in voting power of shares of capital stock of the Corporation present in person or represented by proxy (regardless of whether the proxy has authority to vote on any matter) and entitled to vote thereon shall be the act of the stockholders. Subject to the rights of the holders of any series of preferred stock to elect additional directors under specific circumstances, directors shall be elected by a plurality of the voting power of shares of capital stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the election of directors.
(b) Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to a corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, or by proxy sent by cable, telegram or by any means of electronic communication permitted by law, which results in a writing from such stockholder or by his attorney, and delivered to the secretary of the meeting. No proxy shall be voted after six months from its date, unless said proxy provides for a longer period, subject to and in accordance with the NRS.
(c) Votes may be cast by any stockholder entitled to vote in person or by his proxy. In determining the number of votes cast for or against a proposal or nominee, shares abstaining from voting on a matter (including elections) will not be treated as a vote cast.
2.8 Action by Consent.
Until the Sunset Date and unless otherwise provided in the Articles of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding capital stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in Nevada, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.
2.9 Organization.
At each meeting of stockholders, the chair of the Board of Directors, if one shall have been elected, or in the chair’s absence or if one shall not have been elected, the director or officer designated by the vote of the majority of the directors present at such meeting, shall act as chair of the meeting. The secretary (or in the secretary’s absence or inability to act, the person whom the chair of the meeting shall appoint secretary of the meeting) shall act as secretary of the meeting and keep the minutes thereof.
2.10 Order of Business.
The order of business at all meetings of stockholders shall be as determined by the chair of the meeting.
2.11 Conduct of Meetings.
The Board of Directors may adopt such rules and procedures for the conduct of stockholder meetings as it deems appropriate. At each meeting of stockholders, the chair or, in the absence of the chair, the chief executive officer, shall preside over the meeting. Except to the extent inconsistent with the rules and procedures as adopted by the Board of Directors, the person presiding over the meeting of stockholders shall have the right and authority to convene, adjourn and reconvene the meeting from time to time, to prescribe such additional rules and procedures and to do all such acts as, in the judgment of such person, are appropriate for the proper conduct of the meeting. Such rules and procedures, whether adopted by the Board of Directors or prescribed by the person presiding over the meeting, may include (a) the establishment of an agenda or order of business for the meeting, (b) rules and procedures for maintaining order at the meeting and the safety of those present, (c) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the person presiding over the meeting shall determine, (d) restrictions on entry to the meeting after the time fixed for the commencement thereof and (e) limitations on the time allotted to questions or comments by participants. The person presiding over any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, may determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, he or she shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The secretary or, in his or her absence, one of the assistant secretaries, shall act as secretary of the meeting. If none of the officers above designated to act as the person presiding over the meeting or as secretary of the meeting shall be present, a person presiding over the meeting or a secretary of the meeting, as the case may be, shall be designated by the Board of Directors and, if the Board of Directors has not so acted, in the case of the designation of a person to act as secretary of the meeting, designated by the person presiding over the meeting. To the extent permitted by applicable law, meetings of stockholders may be conducted in whole or in part by remote communications, including by webcast.
ARTICLE III
BOARD OF DIRECTORS
3.1 General Powers.
Except as otherwise provided in the NRS or the Articles of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
3.2 Number, Election, Term of Office.
(a) Subject to the terms of any series of Preferred Stock (as such term is defined in the Articles of Incorporation) entitled to separately elect directors, the Board of Directors shall consist of not less than one individual, with the exact number of directors to be determined from time to time solely by resolution adopted by the affirmative vote of a majority of the entire Board of Directors.
(b) Except as otherwise provided in the Articles of Incorporation, each director shall hold office until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal. Directors need not be stockholders.
(c) There shall be no cumulative voting in the election of directors.
3.3 Quorum and Manner of Acting.
Unless the Articles of Incorporation or these Bylaws require a greater number, a majority of the total number of directors shall constitute a quorum for the transaction of business, and the affirmative vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. When a meeting is adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time and physical location hereof, if any, and the means of remote communications, if any, are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Board of Directors may transact any business which might have been transacted at the original meeting. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat shall adjourn the meeting, from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
3.4 Time and Place of Meetings.
The Board of Directors shall hold its meetings at such physical location, if any, either within or without the State of Nevada, and at such time as may be determined from time to time by the Board of Directors (or the chair in the absence of a determination by the Board of Directors).
3.5 Annual Meeting.
The Board of Directors shall meet for the purpose of organization, the election of officers and the transaction of other business, as soon as practicable after each annual meeting of stockholders. Notice of such meeting need not be given. In the event such annual meeting is not held on the same day and at the same physical location, if any, as the annual meeting of stockholders, the annual meeting of the Board of Directors may be held at such physical location, if any, either within or without the State of Nevada, on such date and at such time as shall be specified in a notice thereof given as hereinafter provided in Section 3.7 or in a waiver of notice thereof signed by any director who chooses to waive the requirement of notice.
3.6 Regular Meetings.
After the physical location, if any, and time of regular meetings of the Board of Directors shall have been determined and notice thereof shall have been once given to each member of the Board of Directors, regular meetings may be held without further notice being given.
3.7 Special Meetings.
Special meetings of the Board of Directors may be called by the chair of the Board of Directors, the chief executive officer or the secretary (including, if requested by at least two directors in writing). Notice of special meetings of the Board of Directors shall be given to each director at least 24 hours before the date of the meeting in such manner as is determined by the Board of Directors.
3.8 Committees.
(a) The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.
(b) Unless otherwise provided in the Articles of Incorporation, these Bylaws or the resolution of the Board of Directors designating the committee, a committee may create one or more subcommittees consisting of one or more members of such committee and delegate to such subcommittee any or all of the powers and authority of the committee.
(c) Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules, each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to this Article III.
3.9 Action by Consent.
Unless otherwise restricted by the Articles of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be (other than any director(s) abstaining in writing pursuant to and in accordance with NRS 78.315(2)), consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions, are filed with the minutes of proceedings of the board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
3.10 Telephonic Meetings.
Unless otherwise restricted by the Articles of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or such committee, as the case may be, by means of conference telephone or other communications equipment (including any means of remote communications permitted under the NRS) by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
3.11 Resignation.
Any director may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the secretary of the Corporation. The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
3.12 Vacancies.
Vacancies on the Board of Directors resulting from death, resignation, removal or otherwise and newly created directorships resulting from any increase in the number of directors shall, except as otherwise required by law or as set forth in the Articles of Incorporation, be filled solely by a majority of the directors then in office (although less than a quorum) or by the sole remaining director. Subject to the terms of any series of preferred stock entitled to separately elect directors and the provisions of the Articles of Incorporation, whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the Articles of Incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. If there are no directors in office, then an election of directors may be held in accordance with the NRS.
3.13 Removal.
Directors may only be removed from office in the manner set forth in the Articles of Incorporation. Any vacancies created by any such removal may be filled in accordance with Section 3.12.
3.14 Compensation.
Unless otherwise restricted by the Articles of Incorporation or these Bylaws, the Board of Directors shall have authority to fix the compensation of directors, including fees and reimbursement of expenses.
ARTICLE IV
OFFICERS
4.1 Principal Officers.
The principal officers of the Corporation shall be a chief executive officer, a president, a chief financial officer, a treasurer and a secretary who shall have the duty, among other things, to record the proceedings of the meetings of stockholders and directors in a book kept for that purpose. Subject to Section 3.1, the chief executive officer shall conduct and direct generally all the day-to-day business and affairs of the Corporation. The Corporation may also have such other principal officers as the Board of Directors may in its discretion appoint. One person may hold the offices and perform the duties of any two or more of said offices, except that no one person shall hold the offices and perform the duties of chief executive officer and secretary.
4.2 Election, Term of Office and Remuneration.
The principal officers of the Corporation shall be elected annually by the Board of Directors at the annual meeting thereof. Each such officer shall hold office until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal. The remuneration of all principal officers of the Corporation shall be fixed by the Board of Directors. Any vacancy in any office shall be filled in such manner as the Board of Directors shall determine.
4.3 Subordinate Officers.
In addition to the principal officers enumerated in Section 4.1, the Corporation may have one or more assistant secretaries and such other subordinate officers, agents and employees as the Board of Directors may deem necessary, each of whom shall hold office for such period as the Board of Directors may from time to time determine. The Board of Directors may delegate to any principal officer the power to appoint, fix the compensation of and remove any such subordinate officers, agents or employees.
4.4 Removal.
In addition to the authority granted pursuant to Section 4.3 with respect to subordinate officers, any officer may be removed, with or without cause, at any time, by resolution adopted by the Board of Directors.
4.5 Resignations.
Any officer may resign at any time by giving written notice to the Board of Directors (or to a principal officer if the Board of Directors has delegated to such principal officer the power to appoint and remove such officer). The resignation of any officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
4.6 Powers and Duties.
The officers of the Corporation shall have such powers and perform such duties incident to each of their respective offices and such other duties as may from time to time be conferred upon or assigned to them by the Board of Directors.
ARTICLE V
CAPITAL STOCK
5.1 Certificates For Stock; Uncertificated Shares.
The shares of the Corporation’s capital stock shall be uncertificated; provided, that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be represented by one or more certificates, with such certificates (or, if the shares of capital stock are uncertificated, such entries with the transfer agent) containing restrictive legends as may be required by the Board of Directors in its sole discretion. Except as otherwise provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of shares of the same class and series represented by certificates shall be identical. Every holder of stock represented by certificates shall be entitled to have a certificate signed by or in the name of the Corporation by the chief executive officer of the Corporation, and by the chief financial officer or secretary of the Corporation, representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be electronic. In case any officer, transfer agent or registrar who has signed or whose electronic signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. The Corporation shall not have power to issue a certificate in bearer form.
5.2 Transfer of Shares.
Shares of the stock of the Corporation may be transferred on the record of stockholders of the Corporation by the holder thereof or by such holder’s duly authorized attorney upon surrender of a certificate therefor properly endorsed or upon receipt of proper transfer instructions from the registered holder of uncertificated shares or by such holder’s duly authorized attorney and upon compliance with appropriate procedures for transferring shares in uncertificated form, unless waived by the Corporation.
5.3 Authority for Additional Rules Regarding Transfer.
The Board of Directors shall have the power and authority to make all such rules and regulations, not inconsistent with these Bylaws, as they may deem expedient concerning the issue, transfer and registration of certificated or uncertificated shares of the stock of the Corporation, as well as for the issuance of new certificates in lieu of those which may be lost or destroyed, and may require of any stockholder requesting replacement of lost or destroyed certificates, bond in such amount and in such form as they may deem expedient to indemnify the Corporation and the transfer agents and registrars of its stock against any claims arising in connection therewith.
ARTICLE VI
GENERAL PROVISIONS
6.1 Fixing the Record Date.
(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a record date for notice of any meeting of stockholders, such date shall also be the record date for determining the stockholders entitled to vote at such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of and to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, that the Board of Directors may fix a new record date for determination of stockholders entitled to notice of, and to vote at, the adjourned meeting in accordance with the foregoing provisions of this Section 6.1(a).
(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors pursuant to this Section 6.1(b), the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by the NRS, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Nevada, its principal place of business or any officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the NRS, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
(c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
6.2 Dividends and Other Distributions.
Subject to limitations contained in the NRS and the Articles of Incorporation, if any, the Board of Directors may declare and pay dividends and other distributions upon the shares of capital stock of the Corporation, which dividends may be paid either in cash, in property or in shares of the capital stock of the Corporation.
6.3 Fiscal Year.
The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors and may be changed by the Board of Directors.
6.4 Voting of Stock Owned by the Corporation.
The Board of Directors may authorize any person, on behalf of the Corporation, to attend, vote at and grant proxies to be used at any meeting of stockholders of any corporation (except this Corporation) in which the Corporation may hold stock.
6.5 Amendments.
These Bylaws or any of them, may be altered, amended or repealed, or new Bylaws may be made, by the stockholders entitled to vote thereon at any annual or special meeting thereof or by the Board of Directors. Unless a higher percentage is required by the Articles of Incorporation as to any matter that is the subject of these Bylaws, all such amendments must be approved by (a) the Board of Directors or (b) prior to the Sunset Date, the affirmative vote of the holders of not less than a majority of the total voting power of all outstanding securities of the Corporation generally entitled to vote in the election of directors, voting together as a single class.
6.6 Construction; Definitions.
Unless the context requires otherwise, the general provisions, rules of construction and definitions in the NRS shall govern the construction of these Bylaws. Without limiting the generality of this provision, the singular number includes the plural and the plural number includes the singular.
6.7 Seal.
The Corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board of Directors. The Corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
6.8 Registered Stockholders.
The Corporation:
(i) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner; and
(ii) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Nevada.
6.9 Delivery of Notice; Notice by Electronic Transmission.
(a) Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation under any provisions of the NRS, the Articles of Incorporation, or these Bylaws may be given in writing directed to the stockholder’s mailing address (or by electronic transmission directed to the stockholder’s electronic mail address, as applicable) as it appears on the records of the Corporation and shall be given (i) if mailed, when the notice is deposited in the U.S. mail, postage prepaid, (ii) if delivered by courier service, the earlier of when the notice is received or left at such stockholder’s address or (iii) if given by electronic transmission, when directed to such stockholder’s electronic mail address unless the stockholder has notified the Corporation in writing or by electronic transmission of an objection to receiving notice by electronic transmission. A notice by electronic transmission must include a prominent legend that the communication is an important notice regarding the Corporation.
(b) Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation under any provision of the NRS, the Articles of Incorporation or these Bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice or electronic transmission to the Corporation. Notwithstanding the provisions of this paragraph, the Corporation may give a notice by electronic transmission in accordance with Section 6.9(a) without obtaining the consent required by this paragraph.
(c) Any notice given pursuant to the preceding paragraph shall be deemed given:
(i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;
(ii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and
(iii) if by any other form of electronic transmission, when directed to the stockholder.
(d) Notwithstanding the foregoing, a notice may not be given by an electronic transmission from and after the time that (i) the Corporation is unable to deliver by such electronic transmission two (2) consecutive notices given by the Corporation and (ii) such inability becomes known to the Secretary or an Assistant Secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice, provided, however, the inadvertent failure to discover such inability shall not invalidate any meeting or other action.
(e) An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
6.10 Waiver of Notice.
Whenever notice is required to be given under any provision of the NRS, the Articles of Incorporation or these Bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Articles of Incorporation or these Bylaws.
6.11 Definitions.
As used in these Bylaws, unless the context otherwise requires, the following terms shall have the following meanings:
An “electronic mail” means an electronic transmission directed to a unique electronic mail address (which electronic mail shall be deemed to include any files attached thereto and any information hyperlinked to a website if such electronic mail includes the contact information of an officer or agent of the Corporation who is available to assist with accessing such files and information).
An “electronic mail address” means a destination, commonly expressed as a string of characters, consisting of a unique user name or mailbox (commonly referred to as the “local part” of the address) and a reference to an internet domain (commonly referred to as the “domain part” of the address), whether or not displayed, to which electronic mail can be sent or delivered.
The term “electronic transmission” shall have the meaning given such term in Section 75.050 of the NRS.
The term “person” means any individual, general partnership, limited partnership, limited liability company, corporation, trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of such entity.
* * * *
EXHIBIT 10.1
SENIOR SECURED PROMISSORY NOTE
Principal Amount: $86,600,000.00
Date of Issuance: September 10, 2025
Maturity Date: September 10, 2027
This SENIOR SECURED PROMISSORY NOTE (this “Note”) is issued by GRIDCORE INFRASTRUCTURE, LLC, a Colorado limited liability company (the “Maker”), in favor of KYMA BATTERIES LLC, a Delaware limited liability company (the “Holder”).
FOR VALUE RECEIVED, the Maker hereby unconditionally promises to pay to the order of the Holder, in lawful money of the United States of America and in immediately available funds, the principal sum of Eighty-Six Million Six Hundred Thousand and 00/100 Dollars ($86,600,000.00) (the “Principal Amount”), together with all accrued and unpaid interest thereon, as provided in this Note.
This Note is issued pursuant to that certain Master Supply and Services Agreement, dated as of September 10, 2025, entered into by and between the Maker and the Holder (as amended, restated, supplemented, or otherwise modified from time to time, the “Supply Agreement”), and is secured by that certain Security Agreement, entered into by and between the Maker and the Holder dated as of even date herewith (the “Security Agreement”).
ARTICLE I: DEFINITIONS
1.1. Defined Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Supply Agreement or the Security Agreement. As used in this Note, the following terms shall have the following meanings:
“Business Day” shall mean any day of the week other than Saturday and Sunday or any other day when national banking institutions in Dallas, Texas are not open for business.
“Default Rate” shall have the meaning set forth in Section 3.1 hereof.
“Event of Default” shall have the meaning set forth in Article IV hereof.
“Holder” shall mean KYMA Batteries LLC and any transferee, assignee, or successor of the Holder.
“Maturity Date” shall mean September 10, 2027.
“Principal Amount” shall mean the principal sum of Eighty-Six Million Six Hundred Thousand and 00/100 Dollars ($86,600,000.00).
“Secured Obligations” shall mean all obligations of the Maker under this Note, the Security Agreement, and the Supply Agreement.
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ARTICLE II: PAYMENT TERMS
2.1. Payment of Principal. The Maker will make quarterly payments of Twenty-One Million Six Hundred Fifty Thousand and 00/100 Dollars ($21,650,000.00) on December 10, 2026, March 10, 2027, and June 10, 2027 with a final payment of all outstanding principal and accrued and unpaid interest on September 10, 2027.
2.2. Interest Rate. The unpaid Principal Amount of this Note shall bear simple interest from the Date of Issuance until paid in full at a fixed rate of four percent (4.0%) per annum, computed on the basis of a 360-day year for the actual number of days elapsed.
2.3. Payment of Interest. Accrued and unpaid interest is due semi-annually beginning March 10, 2026, with subsequent interest only payments due September 10, 2026, March 10, 2027 and a final payment of all accrued and unpaid interest, along with any outstanding principal due on the Maturity Date.
2.4. Prepayment. The Maker shall have the right to prepay all or any portion of the outstanding Principal Amount at any time and from time to time without premium or penalty. Any partial prepayment shall be applied first to any accrued and unpaid interest and thereafter to the outstanding Principal Amount.
2.5. Method of Payment. All amounts payable hereunder shall be paid to the Holder at such account as the Holder may designate in writing to the Maker from time to time.
ARTICLE III: DEFAULT INTEREST
3.1. Default Rate. From and after the occurrence and during the continuance of any Event of Default, the rate of interest on the entire outstanding Principal Amount shall be increased to twelve percent (12.0%) per annum (the “Default Rate”).
3.2. Maximum Rate. In no event shall interest payable under this Note be payable at a rate in excess of the maximum rate permitted by applicable law. If the applicable law is ever judicially interpreted so as to render usurious any amount paid by Maker or received by Holder under this Note, then it is Maker’s and Holder’s express intent that all amounts charged in excess of the maximum lawful rate shall be automatically canceled, ab initio, and all amounts in excess of the maximum lawful rate therefore collected by Holder shall be credited on the principal balance of this Note (or, if this Note has been or would thereby be paid in full, refunded to Maker), and the provisions of this Note shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder; provided however, if this Note has been paid in full before the end of the stated term of this Note, then Maker and Holder agree that Holder shall, with reasonable promptness after Holder discovers or is advised by Maker that interest was received in an amount in excess of the Maximum Lawful Rate, refund such excess interest against this Note. Maker hereby agrees that as a condition precedent to any claim seeking usury penalties against Holder, Maker will provide written notice to Holder, advising Holder in reasonable detail of the nature and amount of the violation, and Holder shall have sixty (60) days after receipt of such notice in which to correct such usury violation, if any, by either refunding such excess interest to Maker or crediting such excess interest against this Note.
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ARTICLE IV: EVENTS OF DEFAULT
4.1. Events of Default. The occurrence of any one or more of the following events shall constitute an “Event of Default” hereunder:
| (a) | Failure to Pay Principal or Interest. The Maker fails to pay (i) the Principal Amount and all accrued interest on the Maturity Date; or (ii) any other amount payable hereunder within ten (10) Business Days after such amount becomes due, including, without limitation, any and all payments due and owing under Section 2.1 hereof. |
| | |
| (b) | Breach of Covenants. The Maker breaches any material covenant or agreement contained in this Note, the Security Agreement, or the Supply Agreement, and such breach continues unremedied for a period of thirty (30) days after written notice thereof from the Holder. |
| | |
| (c) | Breach of Representations. Any representation or warranty made by the Maker in this Note, the Security Agreement, or the Supply Agreement proves to have been incorrect in any material respect when made. |
| | |
| (d) | Cross-Default. A default or event of default by the Maker occurs and is continuing under the Supply Agreement or the Security Agreement. |
| | |
| (e) | Insolvency Event. The Maker (i) becomes insolvent or is unable to pay its debts as they mature; (ii) makes a general assignment for the benefit of its creditors; (iii) commences or has commenced against it any proceeding under any bankruptcy, insolvency, or similar law, and, in the case of an involuntary proceeding, such proceeding is not dismissed within sixty (60) days; or (iv) seeks dissolution or reorganization or the appointment of a receiver, trustee, custodian, or liquidator for it or a substantial portion of its property, assets, or business. |
ARTICLE V: REMEDIES
5.1. Acceleration. Upon the occurrence and during the continuance of any Event of Default, the Holder may, at its option and by written notice to the Maker, declare the entire unpaid Principal Amount of this Note, together with all accrued and unpaid interest and any other amounts payable hereunder, to be immediately due and payable, without presentment, demand, protest, or other notice of any kind, all of which are hereby expressly waived by the Maker.
5.2. Other Remedies. The remedy of acceleration is in addition to, and not exclusive of, any other rights and remedies available to the Holder under the Security Agreement, at law, or in equity.
5.3. Application of Payments. Following an Event of Default, all payments received by the Holder may be applied to the Secured Obligations in such order and manner as the Holder may determine in its sole discretion.
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ARTICLE VI: SECURITY
6.1. Security Interest. The obligations of the Maker under this Note are secured by a first-priority security interest in and to the Collateral, as more particularly described in the Security Agreement.
6.2. Rights and Remedies. The Holder shall have all rights and remedies provided in the Security Agreement, which rights and remedies are cumulative and not exclusive of any other rights or remedies available at law or in equity.
6.3 Cumulative Rights. No delay on the part of Holder in the exercise of any power or right under this Note shall operate as a waiver thereof, nor shall a single or partial exercise of any such power or right. Enforcement by Holder of any security for the payment hereof shall not constitute any election by it of remedies so as to preclude the exercise of any other remedy available to it.
ARTICLE VII: MISCELLANEOUS
7.1. Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, sent by facsimile, electronic mail, or United States mail or courier service, and shall be deemed to have been given when delivered in person or by courier service, upon receipt of facsimile or electronic mail, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed.
7.2. Amendments and Waivers. No amendment, modification, termination, or waiver of any provision of this Note shall be effective without the written concurrence of the Holder. No failure or delay on the part of the Holder in the exercise of any power, right, or privilege hereunder shall impair such power, right, or privilege or be construed to be a waiver of any default or acquiescence therein. All rights and remedies existing under this Note are cumulative and not exclusive of any rights or remedies otherwise available.
7.3. Successors and Assigns. This Note shall be binding upon the Maker and its successors and assigns and shall inure to the benefit of the Holder and its successors and assigns. The Holder may, in its sole and absolute discretion, transfer or assign this Note and the Secured Obligations to any other person without written consent of the Maker.
7.4. Severability. In case any provision in or obligation hereunder shall be invalid, illegal, or unenforceable in any jurisdiction, the validity, legality, and enforceability of the remaining provisions or obligations shall not in any way be affected or impaired thereby.
7.5. Headings. Article and section headings herein are included for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.
7.6. GOVERNING LAW. THE LAWS OF THE STATE OF TEXAS SHALL GOVERN THE CONSTRUCTION, VALIDITY, ENFORCEMENT, AND INTERPRETATION HEREOF, EXCEPT TO THE EXTENT FEDERAL LAWS OTHERWISE GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION HEREOF, EACH WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
| SENIOR SECURED PROMISSORY NOTE - PAGE 4 OF 7 | | INITIAL |
7.7. CONSENT TO JURISDICTION. SUBJECT TO SECTION 7.9 HEREOF, EACH OF THE MAKER AND THE HOLDER HEREBY CONSENT TO THE JURISDICTION OF ANY STATE DISTRICT OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF DALLAS WITHIN THE STATE OF TEXAS AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE SHALL BE LITIGATED IN SUCH COURTS. EACH PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.
7.8. WAIVER OF JURY TRIAL. THE MAKER HEREBY WAIVES ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM, CAUSE OF ACTION, COUNTERCLAIM, OR CROSS-CLAIM IN ANY ACTION, PROCEEDING OR OTHER HEARING BROUGHT BY EITHER THE MAKER OR THE HOLDER BASED UPON OR ARISING OUT OF THIS NOTE OR ANY DEALINGS BETWEEN THE MAKER AND THE HOLDER RELATING TO THE SUBJECT MATTER OF THIS NOTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE MAKER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTERING INTO THIS NOTE, THAT THE MAKER ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS NOTE AND THAT THE MAKER WILL CONTINUE TO RELY ON THIS WAIVER IN ANY RELATED FUTURE DEALINGS BETWEEN THE MAKER AND THE HOLDER. THE MAKER FURTHER WARRANTS AND REPRESENTS THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THE MAKER EXPRESSLY AGREES TO WAIVE ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER RELATING TO THIS NOTE.
7.9. ARBITRATION. ANY DISPUTE, CLAIM, OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS NOTE OR ANY DEALINGS BETWEEN THE PARTIES, OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION, OR VALIDITY OF THIS NOTE, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, SHALL BE RESOLVED BY SUBMISSION TO ARBITRATION IN THE COUNTY OF DALLAS, STATE OF TEXAS, BEFORE AN ARBITRATOR SELECTED BY DALLAS JAMS SELECTION PROCEDURES (THE “ARBITRATOR”). THE ARBITRATION SHALL BE ADMINISTERED BY DALLAS JAMS, PURSUANT TO ITS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES, AND IN ACCORDANCE WITH THE EXPEDITED PROCEDURES CONTAINED THEREIN. THE ARBITRATOR SHALL FOLLOW ANY APPLICABLE FEDERAL LAW AND TEXAS STATE LAW IN RENDERING AN AWARD. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION OVER THE DISPUTE, CLAIM, OR CONTROVERSY SUBMITTED TO SUCH ARBITRATION. THIS SECTION SHALL NOT PRECLUDE THE PARTIES FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF COMPETENT JURISDICTION IN DALLAS COUNTY, TEXAS ONLY. FURTHER, THE PARTIES AGREE AND ACKNOWLEDGE THAT THE ARBITRATOR’S DECISION SHALL BE FINAL AND BINDING, TO THE FULLEST EXTENT PERMITTED BY LAW, AND ENFORCEABLE BY ANY COURT HAVING JURISDICTION THEREOF.
| SENIOR SECURED PROMISSORY NOTE - PAGE 5 OF 7 | | INITIAL |
7.10. DISCLAIMER OF RELIANCE. THE MAKER ACKNOWLEDGES THAT NONE OF THE PARTIES HERETO, NOR ANY AGENTS OR COUNSEL OF ANY OTHER PARTY, HAVE MADE ANY PROMISE, REPRESENTATION, OR WARRANTY, EXPRESS OR IMPLIED, NOT CONTAINED HEREIN, TO INDUCE THE PARTIES’ EXECUTION OF THIS NOTE. THE MAKER ACKNOWLEDGES AND WARRANTS THAT THE MAKER IS NOT EXECUTING THIS NOTE IN RELIANCE ON ANY PROMISE, REPRESENTATION, OR WARRANTY NOT CONTAINED HEREIN. MAKER REPRESENTS AND WARRANTS THAT THE MAKER HAS CONDUCTED AN INDEPENDENT INVESTIGATION AND THAT THE MAKER HAS HAD THE OPPORTUNITY TO CONSULT WITH THE COUNSEL OF THE MAKER’S CHOICE AND SO HAS CONSULTED. THE MAKER SPECIFICALLY DISCLAIMS RELIANCE ON ANY REPRESENTATIONS MADE BY ANY OTHER PARTY, EXCEPT FOR THOSE REPRESENTATIONS THAT ARE SPECIFICALLY REDUCED TO WRITING IN THIS NOTE.
7.11. WAIVER OF DTPA. THE MAKER ACKNOWLEDGES AND AGREES THAT IT SHALL, AND HEREBY DOES, WAIVE ANY AND ALL RIGHTS, CLAIMS, CAUSES OF ACTION, COUNTERCLAIMS, CROSS-CLAIMS, AND DEFENSES IT MAY HAVE UNDER THE TEXAS DECEPTIVE TRADE PRACTICES ACT RELATING TO THIS NOTE.
7.12. Counterparts. This Note may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.
7.13. Waivers by Maker. The Maker hereby waives presentment, demand for payment, notice of dishonor, protest, notice of protest, notice of intent to accelerate, notice of acceleration, and all other notices or demands in connection with the delivery, acceptance, performance, default, or enforcement of this Note.
7.14. Attorneys’ Fees and Costs. If any holder of this Note retains an attorney-at-law in connection with any Event of Default or at maturity or to collect, enforce, or defend this Note or any part hereof in any lawsuit or in any probate, reorganization, bankruptcy, insolvency, or other proceeding, or if the Maker sues any holder in connection with this Note and does not prevail, then the Maker agrees and promises to pay to each such holder, in addition to the principal balance hereof and all interest hereon, all costs and expenses of collection or incurred by such holder or in any such suit or proceeding, including, but not limited to, reasonable attorneys’ fees, expert witness fees, and costs associated with depositions.
7.15. Entire Agreement. This Note, the Security Agreement, and the Supply Agreement embody the entire agreement and understanding between the Maker and the Holder and supersede all prior written or verbal agreements, representations, warranties, inducements, understandings, or promises between such parties relating to the subject matter hereof. In the event of any conflict between the provisions of this Note, the Security Agreement, or the Supply Agreement and any other written or verbal agreement, representation, warranty, inducement, understanding, or promise, the provisions of this Note, the Security Agreement, and the Supply Agreement shall control. The Maker and Holder acknowledge and agree that no written or verbal agreements, representations, warranties, inducements, understandings, or promises that relate to the subject matter hereof and that is not embodied in this Note, the Security Agreement, or the Supply Agreement: (a) has been made by any such party, or anyone acting on behalf of any such party; and (b) shall be binding on any such party.
[Remainder of Page Intentionally Left Blank.]
| SENIOR SECURED PROMISSORY NOTE - PAGE 6 OF 7 | | INITIAL |
IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed by its authorized representative as of the Date of Issuance.
MAKER:
GRIDCORE INFRASTRUCTURE, LLC,
a Colorado limited liability company
| By: | /s/ Greg Harrington | |
| Name: | Greg Harrington | |
| Its: | Managing Member | |
| | | |
| Date: September 10, 2025 | |
| SENIOR SECURED PROMISSORY NOTE - PAGE 7 OF 7 | | 
|
EXHIBIT 10.2
SECURITY AGREEMENT
This SECURITY AGREEMENT (this “Agreement”), dated as of September 10, 2025, is entered into by and between GRIDCORE INFRASTRUCTURE, LLC, a Colorado limited liability company (“Grantor”), and KYMA BATTERIES LLC, a Delaware limited liability company (“Secured Party”).
RECITALS
WHEREAS, reference is made to that certain Master Supply and Services Agreement entered into by and between Grantor and Secured Party, dated as of even date herewith (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Supply Agreement”), pursuant to which Secured Party has agreed to supply certain Equipment and Services for the development of a 222 MW Battery Energy Storage System (the “Project”);
WHEREAS, in connection with the Supply Agreement, Grantor has issued a Senior Secured Promissory Note of even date herewith in the principal amount of Eighty-Six Million Six Hundred Thousand and 00/100 Dollars ($86,600,000.00) in favor of Secured Party (the “Note”); and
WHEREAS, as a condition precedent to Secured Party entering into the Supply Agreement, Grantor shall grant Secured Party the security interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
Section 1. DEFINITIONS
1.1. General Definitions. Capitalized terms used herein without definition shall have the meanings assigned to them in the UCC. As used in this Agreement, the following terms shall have the following meanings:
“Collateral” shall have the meaning set forth in Section 2.1 hereof.
“Intellectual Property” shall mean, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets, and the Trade Secret Licenses, including, without limitation, Grantor’s license to use the Kyma Energy Management System Software as described in Schedule II, attached hereto.
“Kyma Energy Management System Software” shall mean the proprietary software platform as more fully described in Schedule II, attached hereto.
“Physical Collateral” shall mean the BESS Equipment as more fully described in Schedule I, attached hereto.
| SECURITY AGREEMENT | | PAGE 1 OF 12 |
“Secured Obligations” shall mean all present and future obligations and liabilities of Grantor to Secured Party under the Note, this Agreement, and the Supply Agreement.
“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of Texas.
Section 2. GRANT OF SECURITY INTEREST
2.1. Grant of Security Interest. As collateral security for the prompt and complete payment and performance of all Secured Obligations, Grantor hereby pledges, assigns, and grants to Secured Party a continuing first-priority security interest in and to all of Grantor’s right, title, and interest in, to, and under all of its personal property, whether now owned or hereafter acquired or arising, and wherever located, including, without limitation, the following (collectively, the “Collateral”):
| | (a) | any and all of Grantor’s Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment (including the Physical Collateral), Fixtures, General Intangibles (including the Intellectual Property), Instruments, Inventory, Investment Property, and Letter-of-Credit Rights; |
| | | |
| | (b) | without limiting the foregoing, that certain Secured Promissory Note and Security Agreement made by DBD Express I LLC, a Texas limited liability company (“DBD Express”), for the benefit of Grantor, having the original face value of One Hundred Ninety-Three Million Four Hundred Twenty Thousand and 00/100 Dollars ($193,420,000.00) (the “DBD Express Promissory Note”); |
| | | |
| | (c) | without limiting the foregoing, that certain Security Agreement entered into by and between DBD Express and Grantor, related to the DBD Express Promissory Note; |
| | | |
| | (d) | without limiting the foregoing, that certain Continuing Guaranty Agreement entered into by and among BESS Rural Energy Cooperative LCA, a District of Columbia limited cooperative association, Secured Party, and Debtor; |
| | | |
| | (e) | the Physical Collateral as described in Schedule I, attached hereto; |
| | | |
| | (f) | any and all of Grantor’s Intellectual Property; |
| | | |
| | (g) | without limiting the foregoing, Grantor’s license to use the Kyma Energy Management System Software, as described in Schedule II, attached hereto; |
| | | |
| | (h) | all contracts and agreements related to the Project, including the End-User Agreement with BESS Rural Energy Cooperative LCA; and |
| | | |
| | (i) | all accessions to, substitutions for, and all replacements, products, and proceeds (including insurance proceeds) of any and all of the foregoing. |
| SECURITY AGREEMENT | | PAGE 2 OF 12 |
Section 3. REPRESENTATIONS AND WARRANTIES
3.1. Good Title. Grantor owns the Collateral in its entirety. The Collateral is owned free and clear of any mortgage, pledge, lien, charge, security interest, claim, community property interest, option, equitable interest, restriction of any kind (including, without limitation, any restriction on use, voting, transfer, receipt of income, or exercise of any other ownership attribute), or any other encumbrance (each, an “Encumbrance”).
3.2. Creation, Perfection, and Priority. This Agreement shall create in favor of Secured Party, and as security for Grantor’s performance of the Secured Obligations, a valid and perfected first priority security interest in any portion of the Collateral (the “Security Interest”).
3.3. Organization and Good Standing. Grantor is a Colorado limited liability company, duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization.
3.4. Authority. Grantor has all requisite power, right, and authority to enter into this Agreement and consummate the transactions contemplated herein, without the consent or approval of any person.
3.5. Enforceability. As of the Effective Date, this Agreement will be duly executed and delivered by Grantor, and the provisions contained herein will be the legal, valid, and binding obligations of Grantor, enforceable against Grantor in accordance with the terms hereof.
3.6. No Violation. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby, will not constitute a violation (with or without the giving of notice or lapse of time, or both) of any law, judgment, decree, order, regulation, or rule of any court, agency, or other governmental authority applicable to Grantor.
3.7. State of Formation. Grantor will not change Grantor’s formation to another state at any time without prior written notice to Secured Party. Grantor will not change Grantor’s legal name at any time unless Grantor gives Secured Party prior written notice.
3.8. Taxes. Grantor shall pay when due all taxes, assessments, and any other governmental levy which is, or may be, levied against any Collateral, and shall otherwise maintain the Collateral free of all liens, charges, and encumbrances.
Section 4. COVENANTS
4.1. Protection of Collateral. Grantor shall not sell, lease, or otherwise dispose of any Collateral, except for sales of inventory in the ordinary course of business. Grantor shall keep the Collateral free from all liens other than the security interest granted hereby.
4.2. Insurance. Grantor shall maintain insurance on all tangible Collateral against loss or damage by fire and other hazards, in such amounts and with such insurers as are reasonably satisfactory to Secured Party. All such policies shall name Secured Party as an additional insured and loss payee.
| SECURITY AGREEMENT | | PAGE 3 OF 12 |
4.3. Intellectual Property. Grantor shall not, without the prior written consent of Secured Party,
(a) modify, alter, or create derivative works of the Kyma Energy Management System Software;
(b) sublicense, rent, lease, or otherwise permit any third party to use the Kyma Energy Management System Software; or (c) take any action that would jeopardize Secured Party’s rights in the Intellectual Property.
4.4. Proceeds from Sale of Collateral. In the event that Grantor sells, transfers, or otherwise disposes of any portion of the Physical Collateral or Intellectual Property to any third party, whether with or without the consent of Secured Party, all proceeds, revenues, and consideration received by Grantor from such sale, transfer, or disposition (whether in the form of cash, securities, promissory notes, or other property) shall be automatically pledged to Secured Party and shall be held in trust for the benefit of Secured Party. Grantor shall immediately remit all such proceeds to Secured Party for application against the Secured Obligations in such order and manner as Secured Party may determine in its sole discretion. This provision shall survive any Event of Default and shall remain in full force and effect until all Secured Obligations have been paid in full.
4.5. Further Assurances. Grantor will, at Grantor’s cost and expense, execute, deliver, file, and/or record (in such manner and form as Secured Party may require) any assignment, financing statement or other paper that may reasonably be necessary or desirable, or that Secured Party may reasonably request, in order to create, preserve or perfect any security interest granted hereby or to enable Secured Party to exercise and enforce its rights hereunder or with respect to the Collateral. Secured Party is further granted the power, coupled with an interest, to sign on behalf of Grantor as attorney-in-fact and to file one (1) or more financing statements in any jurisdiction under the Uniform Commercial Code of Texas or other applicable law naming Grantor, as debtor, and Secured Party, as secured party, and describing the Collateral herein specified. Grantor and Secured Party shall each enter into a reasonable form of Deposit Account Control Agreement with respect to the Lockbox Account (as defined below) on the request of Secured Party.
4.6. Lockbox Account. Grantor shall cause any and all amounts arising from payments of principal and/or interest on the Note, along with any and all amounts received from foreclosure proceedings arising in connection therewith, to be paid from a lockbox account (the “Lockbox Account”) maintained by a bank designated by Grantor and Secured Party (the “Bank”), and the Lockbox Account shall be jointly held by Grantor and Secured Party; provided, that the Bank shall make monthly distributions to the respective bank accounts designated by Grantor and Secured Party. Secured Party shall have the right to access and immediately withdrawal any and all funds held in the Lockbox Account. Grantor shall cause DBD Express to deposit any and all amounts paid by DBD Express to Grantor under the DBD Express Promissory Note into the Lockbox Account. In the event of Grantor’s failure to cause the distribution of any amounts due to any holder of the Note, pursuant to this Section 4.6, Secured Party shall assume exclusive control over the Lockbox Account.
4.7. UCC-1 Financing Statement. Grantor shall, and hereby will, timely file with the appropriate Secretary of State a UCC-1 financing statement to perfect Grantor’s security interest in the Collateral.
| SECURITY AGREEMENT | | PAGE 4 OF 12 |
4.8. Termination. Grantor’s obligations in this Agreement shall terminate on the date on which the has been indefeasibly repaid in full (the “Termination Date”). Promptly after the Termination Date, Secured Party will promptly file a UCC-3 termination statement and take any other actions reasonably necessary to release its Security Interest in the Collateral.
Section 5. DEFAULT AND REMEDIES
5.1. Event of Default.Grantor will be in default upon the occurrence of any of the following events (an “Event of Default”): (a) failure to make the payment, when due and payable of any of the Secured Obligations and such non-payment is not cured within any applicable cure period; (b) failure of the performance of any obligation or covenant contained or referred to herein or the Note or the Supply Agreement; (c) any warranty, representation or statement made or furnished to Secured Party by Grantor pursuant to this Agreement proves to have been false in any material respect when made or furnished; (d) any event which results in the acceleration of the maturity of the Secured Obligations; (e) encumbrance to, or of, the Collateral or the making of any levy, seizure of attachment thereof or thereon; (f) failure to issue membership interest, including, but not limited to, the Collateral, to Secured Party; or (g) appointment of a receiver of any part of the property of, assignment for the benefit of creditors by, or the commencement of any proceeding under any bankruptcy or insolvency law by or against, Grantor which is not dismissed, discharged or stayed within thirty (30) days following the occurrence of the applicable foregoing event. Upon the occurrence of an Event of Default, Secured Party may at its option declare any or all of the Secured Obligations to be due and payable and such sums shall then be due and payable immediately, without notice or demand.
5.2. Remedies. Rights and Remedies on Default. After the occurrence of any Event of Default, Secured Party may exercise at any time and from time to time any rights and remedies available to Secured Party under the Uniform Commercial Code in effect in the State of Texas and under applicable law, including, without limitation, those rights and remedies under Section 9.607, et seq. under such Uniform Commercial Code. Any notice of intended disposition of any of the Collateral required by law shall be deemed reasonable if such notice is given at least fourteen (14) days before the time of such disposition. Any proceeds of any disposition by Secured Party of any of the Collateral may be applied by Secured Party to the payment of expenses in connection with the Collateral, including, but not limited to, repossession expenses and reasonable attorneys’ fees and legal expenses, and any balance of such proceeds shall be then applied against the Secured Obligations and other amounts secured hereby in such order of application as Secured Party may elect.
Section 6. MISCELLANEOUS
6.1. Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, sent by facsimile, electronic mail, or United States mail or courier service, and shall be deemed to have been given when delivered in person or by courier service, upon receipt of facsimile or electronic mail, or three (3) business days after depositing it in the United States mail with postage prepaid and properly addressed.
| SECURITY AGREEMENT | | PAGE 5 OF 12 |
6.2. Amendments and Waivers.No amendment, modification, termination, or waiver of any provision of this Agreement shall be effective without the written concurrence of Secured Party. No failure or delay on the part of Secured Party in the exercise of any power, right, or privilege hereunder shall impair such power, right, or privilege or be construed to be a waiver of any default or acquiescence therein. All rights and remedies existing under this Agreement are cumulative and not exclusive of any rights or remedies otherwise available.
6.3. Successors and Assigns.This Agreement shall be binding upon the parties hereto and their respective successors and assigns. Grantor shall not, without the prior written consent of Secured Party, assign any right, duty, or obligation hereunder. Secured Party may assign or otherwise transfer any Secured Obligations to any other person, and such other person shall thereupon become vested with all the benefits granted to Secured Party herein.
6.4. Severability.In case any provision in or obligation hereunder shall be invalid, illegal, or unenforceable in any jurisdiction, the validity, legality, and enforceability of the remaining provisions or obligations shall not in any way be affected or impaired thereby.
6.5. Headings.Section headings herein are included for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.
6.6.GOVERNINGLAW.THELAWSOFTHESTATEOFTEXASSHALLGOVERNTHECONSTRUCTION, VALIDITY, ENFORCEMENT, AND INTERPRETATION HEREOF, EXCEPT TO THE EXTENT FEDERAL LAWS OTHERWISE GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION HEREOF, EACH WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
6.7. CONSENT TO JURISDICTION. SUBJECT TO SECTION 6.9 HEREOF, EACH OF GRANTOR AND SECURED PARTY HEREBY CONSENT TO THE JURISDICTION OF ANY STATE DISTRICT OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF DALLAS WITHIN THE STATE OF TEXAS AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.
6.8. WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY CLAIM, CAUSE OF ACTION, COUNTERCLAIM, OR CROSS-CLAIM IN ANY ACTION, PROCEEDING OR OTHER HEARING BROUGHT BY EITHER GRANTOR OR SECURED PARTY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN GRANTOR AND SECURED PARTY RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. GRANTOR ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTERING INTO THIS AGREEMENT, THAT GRANTOR ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT GRANTOR WILL CONTINUE TO RELY ON THIS WAIVER IN ANY RELATED FUTURE DEALINGS BETWEEN GRANTOR AND SECURED PARTY. GRANTOR FURTHER WARRANTS AND REPRESENTS THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. GRANTOR EXPRESSLY AGREES TO WAIVE ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER RELATING TO THIS AGREEMENT.
| SECURITY AGREEMENT | | PAGE 6 OF 12 |
6.9. ARBITRATION. ANY DISPUTE, CLAIM, OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES, OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION, OR VALIDITY OF THIS AGREEMENT, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, SHALL BE RESOLVED BY SUBMISSION TO ARBITRATION IN THE COUNTY OF DALLAS, STATE OF TEXAS, BEFORE AN ARBITRATOR SELECTED BY DALLAS JAMS SELECTION PROCEDURES (THE “ARBITRATOR”). THE ARBITRATION SHALL BE ADMINISTERED BYDALLAS JAMS, PURSUANT TO ITS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES, AND IN ACCORDANCE WITH THE EXPEDITED PROCEDURES CONTAINED THEREIN. THE ARBITRATOR SHALL FOLLOW ANY APPLICABLE FEDERAL LAW AND TEXAS STATE LAW IN RENDERING AN AWARD. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION OVER THE DISPUTE, CLAIM, OR CONTROVERSY SUBMITTED TO SUCH ARBITRATION. THIS SECTION SHALL NOT PRECLUDE THE PARTIES FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF COMPETENT JURISDICTION IN DALLAS COUNTY, TEXAS ONLY. FURTHER, THE PARTIES AGREE AND ACKNOWLEDGE THAT THE ARBITRATOR’S DECISION SHALL BE FINAL AND BINDING, TO THE FULLEST EXTENT PERMITTED BY LAW, AND ENFORCEABLE BY ANY COURT HAVING JURISDICTION THEREOF.
6.10 DISCLAIMER OF RELIANCE. GRANTOR ACKNOWLEDGES THAT NONE OF THE PARTIES HERETO, NOR ANY AGENTS OR COUNSEL OF ANY OTHER PARTY, HAVE MADE ANY PROMISE, REPRESENTATION, OR WARRANTY, EXPRESS OR IMPLIED, NOT CONTAINED HEREIN, TO INDUCE THE PARTIES’ EXECUTION OF THIS AGREEMENT. GRANTOR ACKNOWLEDGES AND WARRANTS THAT GRANTOR IS NOT EXECUTING THIS AGREEMENT IN RELIANCE ON ANY PROMISE, REPRESENTATION, OR WARRANTY NOT CONTAINED HEREIN. GRANTOR REPRESENTS AND WARRANTS THAT GRANTOR HAS CONDUCTED AN INDEPENDENT INVESTIGATION AND THAT GRANTOR HAS HAD THE OPPORTUNITY TO CONSULT WITH THE COUNSEL OF GRANTOR’S CHOICE AND SO HAS CONSULTED. GRANTOR SPECIFICALLY DISCLAIMS RELIANCE ON ANY REPRESENTATIONS MADE BY ANY OTHER PARTY, EXCEPT FOR THOSE REPRESENTATIONS THAT ARE SPECIFICALLY REDUCED TO WRITING IN THIS AGREEMENT.
6.11. WAIVER OF DTPA. GRANTOR ACKNOWLEDGES AND AGREES THAT IT SHALL, AND HEREBY DOES, WAIVE ANY AND ALL RIGHTS, CLAIMS, CAUSES OF ACTION, COUNTERCLAIMS, CROSS-CLAIMS, AND DEFENSES IT MAY HAVE UNDER THE TEXAS DECEPTIVE TRADE PRACTICES ACT RELATING TO THIS AGREEMENT.
| SECURITY AGREEMENT | | PAGE 7 OF 12 |
6.12. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.
6.13. Waivers by Grantor. Grantor hereby waives presentment, demand for payment, notice of dishonor, protest, notice of protest, notice of intent to accelerate, notice of acceleration, and all other notices or demands in connection with the delivery, acceptance, performance, default, or enforcement of this Agreement.
6.14. Prevailing Party. In the event of any legal action (including arbitration) to enforce or interpret this Agreement, the non-prevailing Party shall pay the reasonable attorneys’ fees and other costs and expenses (including expert witness fees) of the prevailing Party in such amount as may be determined by the finder of fact. In addition, such non-prevailing Party shall pay reasonable attorneys’ fees incurred by the prevailing Party in enforcing, or on appeal from, a judgment in favor of the prevailing Party. The preceding sentence is intended by the Parties to be severable from the other provisions of this Agreement and to survive and not be merged into such judgment.
6.15. Entire Agreement. This Agreement, the Note, and the Supply Agreement embody the entire agreement, understandings, representations, and warranties Grantor and Secured Party and supersede all prior agreements, understandings, representations, and warranties between such parties relating to the subject matter hereof.
[Remainder of Page Intentionally Left Blank.]
| SECURITY AGREEMENT | | PAGE 8 OF 12 |
IN WITNESS WHEREOF, Grantor and Secured Party have executed this Agreement as of the date first above written.
GRANTOR:
GRIDCORE INFRASTRUCTUE, LLC,
a Colorado limited liability company
| By: | 
| |
| Name: | Greg Harrington | |
| Its: | Managing Member | |
SECURED PARTY:
KYMA BATTERIES LLC,
a Delaware limited liability company
| SECURITY AGREEMENT | | PAGE 9 OF 12 |
SCHEDULE I: PHYSICAL COLLATERAL (BESS EQUIPMENT)
This schedule details the specific physical assets, constituting the “Physical Collateral,” subject to the security interest granted herein. The assets are valued as of June 20, 2025, per the DAI Management Consultants Valuation Memo.
| Asset Description | | Quantity | | Location | | Fair Market Value (USD) |
| Sungrow | ST2236UX-US BESS | | 92 | | 9100 Missippi St Houston, TX | | $65,080,223 |
| Sungrow | ST2236UX-US BESS | | 12 | | 18551 Beaumont Hwy Crosby, TX | | $8,490,000 |
| Sungrow | ST3727KWH BESS | | 6 | | 3340 Sandy Elm Road LaVernia, TX | | $7,190,361 |
| Sungrow | ST3727KWH BESS | | 4 | | 1501 Southport Parkway Wilmer, TX | | $4,793,574 |
| Sungrow | SC4000UD-MV- US PCS | | 18 | | 3340 Sandy Elm Road LaVernia, TX | | $5,176,594 |
| Total | | | | | | | $90,730,752 |
Note: Valuation figures are derived from the total FMV of $92,002,785, allocated pro-rata based on quantity and type.
Key Asset Specifications:
| · | Sungrow ST2236UX-US BESS: A fully containerized, liquid-cooled, utility-scale battery energy storage system with approximately 2.2 MWh energy capacity per unit. Features modular architecture, integrated switchgear, and advanced thermal management. |
| | |
| · | Sungrow ST3727KWH BESS: A high-capacity, fully integrated system featuring Lithium Iron Phosphate (LFP) battery chemistry, with a total energy capacity of 3,727 kWh per unit. Includes batteries, PCS, transformers, and switchgear. |
| | |
| · | Sungrow SC4000UD-MV-US PCS: Power Conversion Systems designed for grid- connected applications and medium-voltage integration. |
| SECURITY AGREEMENT | | PAGE 10 OF 12 |
SCHEDULE II INTELLECTUAL PROPERTY COLLATERAL
This schedule details the specific intellectual property assets, constituting the “Intellectual Property” collateral, subject to the security interest granted herein. The central asset is the Kyma Energy Management System Software.
1. Kyma Energy Management System (EMS) Software
The Kyma EMS is a proprietary, unified operational backbone for energy storage sites, providing real-time control, data acquisition, and simulation-based decision support. The value of the Physical Collateral is fundamentally enhanced by its integration with the Kyma EMS.
Core Capabilities Secured:
| · | Supervisory Control Logic: The software’s capacity to serve as the primary control layer for the entire installation, issuing real-time operational commands that govern power conversion, routing, and delivery across the site. |
| | |
| · | Manufacturer-Agnostic Control: The vendor-neutral foundation that enables control over batteries, inverters, and site equipment from any vendor through universal communication protocols (e.g., CAN, Modbus, MQTT). |
| | |
| · | Real-Time Data Acquisition & Standardization: The system for continuously capturing and normalizing data from all plant components into a consistent internal format for real-time evaluation and control. |
| | |
| · | Predictive Simulation-Based Control: The integrated simulation engine that models future battery states, load curves, and system conditions to determine the safest and most effective operating path before command execution. |
| | |
| · | Grid-Independent Architecture: The split on-grid/off-grid architecture enabling coordinated, independent operation and sub-20-millisecond transitions between operating modes. |
| | |
| · | Remote Operations Platform: The unified operational interface and enterprise-grade dashboard for on-site and remote management, including diagnostics, historical performance review, and remote command execution. |
| | |
| · | Security Architecture: The zero-trust security model, including isolated networks, encrypted communication channels, certificate-based authorization, and containerized services. |
| SECURITY AGREEMENT | | PAGE 11 OF 12 |
Components Secured:
| · | All source code, object code, and executable files for the Kyma EMS. |
| | |
| · | All algorithms, control logic, and operational parameters embedded within the software. |
| | |
| · | All databases, data schemas, and standardized data formats used by the system. |
| | |
| · | All documentation, manuals, and technical specifications related to the software. |
| | |
| · | All future enhancements, including the planned AI-driven intelligence layer (scheduled for mid-2026). |
This grant secures the Kyma EMS as an integrated and inseparable component of the overall energy storage system, acknowledging that its intellectual property is fundamental to the operational capability and economic value of the Physical Collateral.
| SECURITY AGREEMENT | | PAGE 12 OF 12 |
EXHIBIT 10.3
EXHIBIT 10.4
MASTER SUPPLY AND SERVICES AGREEMENT
This Master Supply and Services Agreement (the “Agreement”) is made and entered into as of September 10, 2025 (the “Effective Date”), by and between: GridCore Infrastructure, LLC, a Colorado limited liability company, with its principal place of business at 4400 N. Scottsdale Road, Ste. 9-289 Scottsdale AZ 85251 (“Purchaser”), and KYMA Batteries LLC, a Texas limited liability company, with its principal place of business at 1400 Halbleib Road Chippewa Falls WI 54729 United States (“Supplier”).
RECITALS
WHEREAS, Purchaser is in the business of developing and selling integrated energy solutions;
WHEREAS, Purchaser has entered into an agreement (the “End-User Agreement”) to sell a fully integrated 222 MW Battery Energy Storage System (the “Project”) to BESS Rural Energy Cooperative LCA (the “End-User”);
WHEREAS, Purchaser is responsible for delivering the completed Project to the End-User and requires certain specialized equipment, software, and services to fulfill its obligations under the End-User Agreement;
WHEREAS, Supplier, together with its affiliate ITX Micro Grid Development (“ITX”), is an expert in the design, manufacture, and integration of BESS components, including proprietary software, power conversion systems, and related construction management services;
WHEREAS, Purchaser desires to engage Supplier to provide such equipment, software, and services, and Supplier is willing to do so, on the terms and conditions set forth in this Agreement, including the extension of all warranties to the End-User.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained herein, the Parties agree as follows:
ARTICLE 1: DEFINITIONS
1.1. “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person.
1.2. “Contract Price” means the fixed price of $97,200,000.00 payable by Purchaser to Supplier for the Work.
1.3. “End-User” means BESS Rural Energy Cooperative LCA.
1.4. “End-User Agreement” means the agreement between Purchaser and End-User for the sale of the Project.
1.5. “ITX” means ITX Micro Grid Development, an Affiliate of Supplier.
1.6. “Project” means the fully integrated 222 MW Battery Energy Storage System to be delivered to the End-User.
1.7. “Purchaser-Furnished Equipment” means the base battery enclosures to be procured and delivered by Purchaser.
1.8. “Work” means all equipment (excluding Purchaser-Furnished Equipment), software, and services to be provided by Supplier as detailed in this Agreement and its Schedules and Annexes.
ARTICLE 2: SCOPE OF WORK
2.1. Supplier’s Responsibilities. Supplier shall provide all equipment, software, and services necessary to deliver a fully integrated and commissioned BESS solution as detailed in the Schedules and Annexes attached hereto. The Work expressly includes:
(a) Procurement and delivery of all Power Conversion Systems (PCS), inverters, and controllers;
(b) Development, integration, and commissioning of the proprietary Battery Management System (BMS) software;
(c) Provision and installation of all Balance of Plant components;
(d) Engineering, procurement, and construction services to be performed by ITX as detailed in Annex A; and
(e) All other services necessary to achieve Final Acceptance and Placed-in-Service status.
2.2. Purchaser’s Responsibilities. Purchaser shall be responsible for the timely procurement and delivery to the Project site(s) of the Purchaser-Furnished Equipment in accordance with the project schedule to be mutually agreed upon by the Parties.
2.3. Coordination. The Parties shall cooperate and coordinate their respective activities to ensure the timely and successful completion of the Project.
ARTICLE 3: CONTRACT PRICE AND PAYMENT
3.1. Contract Price. As full and final consideration for the Work, Purchaser shall pay Supplier the Contract Price of Ninety-Seven Million, Two Hundred Thousand U.S. Dollars ($97,200,000.00).
3.2. Cost Allocation. The Contract Price is allocated among the components of the Work as set forth in Schedule 1 (Cost Allocation C Schedule of Values) for the purposes of progress payments and Investment Tax Credit accounting.
3.3. Payment Schedule. The Contract Price shall be paid in accordance with Schedule 2 (Milestone Payment Schedule),
3.4. Invoicing. Supplier shall submit invoices to Purchaser upon achievement of each milestone. All invoices shall include sufficient detail to demonstrate achievement of the applicable milestone.
3.5. Payment Terms. Except as otherwise specified in Schedule 2, Purchaser shall pay all undisputed invoices within thirty (30) days of receipt.
ARTICLE 4: WARRANTIES
4.1. Supplier’s Warranty to Purchaser. Supplier warrants to Purchaser that:
(a) The Work will be performed in a professional and workmanlike manner in accordance with industry standards;
(b) All equipment and software provided will be free from defects in materials and workmanship;
(c) All equipment and software will conform to the specifications set forth in this Agreement and its Annexes;
(d) The completed Project will meet the performance metrics set forth in Annex B (Performance Guarantees C Testing Protocols); and
(e) Supplier has the right to provide all intellectual property included in the Work.
4.2. Warranty Period. The warranty period shall commence on the Placed-in-Service Date and shall continue for a period of 5 years (the “Warranty Period”).
4.3. Pass-Through Warranty to End-User. Supplier acknowledges that Purchaser is not the final owner of the Project but is reselling it to the End-User. Therefore, Supplier expressly agrees that all warranties provided in Section 4.1 are “pass-through” warranties for the direct benefit of the End-User.
4.4. Assignment and Direct Enforcement.
(a) All warranties under this Article 4 shall be fully and freely assignable by Purchaser to the End-User without the need for Supplier’s further consent.
(b) Supplier agrees that the End-User shall be entitled to enforce all rights and remedies under these warranties directly against Supplier as if the End-User were the original Purchaser hereunder.
(c) Purchaser’s assignment of warranties to the End-User shall not release Supplier from any of its obligations under this Agreement.
(d) Supplier shall execute any additional documentation reasonably requested by Purchaser or End-User to effectuate the intent of this Section 4.4.
4.5. Warranty Claims and Remedies. In the event of a warranty claim, whether initiated by Purchaser or the End-User:
(a) Supplier shall cooperate fully to promptly investigate and remedy the claim;
(b) Supplier shall, at its option, either (i) repair or replace the defective equipment or software, (ii) make make-whole payments to compensate for lost revenue or underperformance, or (iii) pay liquidated damages as specified in Annex B; and
(c) All remedies shall be provided at no cost to Purchaser or End-User.
4.6. Exclusions. The warranties in this Article 4 shall not apply to:
(a) Defects caused by Purchaser’s or End-User’s failure to operate or maintain the Project in accordance with Supplier’s written instructions;
(b) Defects in the Purchaser-Furnished Equipment, except to the extent caused by Supplier’s improper integration or installation; or
(c) Damage caused by force majeure events, accidents, or intentional misconduct by Purchaser or End-User.
ARTICLE 5: REPRESENTATIONS AND WARRANTIES
5.1. Mutual Representations. Each Party represents and warrants to the other that:
(a) It is duly organized, validly existing, and in good standing under the laws of its state of formation;
(b) It has full corporate power and authority to enter into this Agreement and to perform its obligations hereunder;
(c) The execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action;
(d) This Agreement constitutes a legal, valid, and binding obligation enforceable against it in accordance with its terms; and
(e) Its execution and performance of this Agreement does not violate any law or any agreement to which it is a party.
5.2. Supplier’s Additional Representations. Supplier further represents and warrants that:
(a) It has the expertise, experience, and resources necessary to perform the Work;
(b) It holds all necessary licenses, permits, and certifications required to perform the Work; and
(c) ITX is its Affiliate and Supplier has the authority to cause ITX to perform the EPC services as contemplated herein.
ARTICLE 6: INDEMNIFICATION
6.1. Supplier’s Indemnity. Supplier shall indemnify, defend, and hold harmless Purchaser and the End-User, and their respective officers, directors, employees, and agents (collectively, the “Purchaser Indemnified Parties”), from and against any and all third-party claims, demands, actions, damages, losses, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to:
(a) Any breach of Supplier’s warranties, representations, or obligations under this Agreement;
(b) Any claim that the equipment, software, or services provided by Supplier infringe upon any patent, copyright, trademark, trade secret, or other intellectual property right of a third party;
(c) Any personal injury, death, or property damage caused by Supplier’s negligence or willful misconduct; or
(d) Any violation of applicable law by Supplier in the performance of the Work.
6.2. Purchaser’s Indemnity. Purchaser shall indemnify, defend, and hold harmless Supplier and its officers, directors, employees, and agents from and against any and all third-party claims arising out of Purchaser’s breach of its obligations under this Agreement or its negligence or willful misconduct.
6.3. Procedures. The indemnified party shall provide prompt notice of any claim to the indemnifying party and shall cooperate in the defense of such claim. The indemnifying party shall have the right to control the defense and settlement of any claim, provided that it shall not settle any claim without the indemnified party’s consent if such settlement would impose any obligation on the indemnified party.
ARTICLE 7: LIMITATION OF LIABILITY
7.1. Exclusion of Consequential Damages. Except for breaches of confidentiality obligations or indemnification obligations under Article 6, neither Party shall be liable to the other for any indirect, incidental, special, consequential, or punitive damages, including lost profits, even if advised of the possibility of such damages.
7.2. Cap on Liability. Except for breaches of confidentiality obligations, indemnification obligations under Article 6, or Supplier’s warranty obligations under Article 4, each Party’s total aggregate liability under this Agreement shall not exceed the Contract Price.
ARTICLE 8: INTELLECTUAL PROPERTY
8.1. Supplier’s Pre-Existing IP. Supplier shall retain all right, title, and interest in and to its pre-existing intellectual property, including the BMS software and all related documentation.
8.2. License to Purchaser and End-User. Supplier hereby grants to Purchaser and End-User a non-exclusive, perpetual, irrevocable, royalty-free, worldwide license to use the BMS software and all related intellectual property as integrated into the Project. This license includes the right to operate, maintain, repair, and modify the software as necessary for the operation of the Project.
8.3. No Transfer of Ownership. Nothing in this Agreement shall be construed as transferring ownership of Supplier’s intellectual property to Purchaser or End-User.
ARTICLE 9: CONFIDENTIALITY
9.1. Confidential Information. Each Party acknowledges that it may receive confidential and proprietary information of the other Party. Each Party agrees to hold such information in strict confidence and not to disclose it to any third party without the other Party’s prior written consent, except as required by law or to its employees, agents, and advisors who have a need to know.
9.2. Exceptions. Confidential information does not include information that (a) is or becomes publicly available through no breach of this Agreement, (b) was rightfully in the receiving Party’s possession prior to disclosure, (c) is independently developed by the receiving Party, or (d) is rightfully received from a third party without breach of any confidentiality obligation.
ARTICLE 10: ITC COMPLIANCE AND DOCUMENTATION
10.1. ITC Support. Supplier acknowledges that Purchaser and End-User intend to claim Investment Tax Credits (ITC) under Section 48 of the Internal Revenue Code in connection with the Project. Supplier shall provide, in a timely manner, all necessary documentation to support such claims.
10.2. Required Documentation. Supplier shall provide:
(a) Detailed cost breakdowns and invoices supporting the cost allocation in Schedule 1;
(b) Documentation establishing the origin and provenance of all equipment;
(c) Commissioning reports and test results as specified in Annex B;
(d) A certification from a licensed Professional Engineer confirming the Placed- in-Service date and that the Project is complete and available for its intended use; and
(e) Any other documentation reasonably requested by Purchaser or End-User to support the ITC claim.
10.3. Cooperation. Supplier shall cooperate fully with Purchaser and End-User in connection with any ITC audit or inquiry by the Internal Revenue Service or other governmental authority.
ARTICLE 11: TERM AND TERMINATION
11.1. Term. This Agreement shall commence on the Effective Date and shall continue until the completion of the Work and the expiration of the Warranty Period, unless earlier terminated in accordance with this Article 11.
11.2. Termination for Cause. Either Party may terminate this Agreement upon written notice if the other Party:
(a) Materially breaches this Agreement and fails to cure such breach within thirty (30) days after receiving written notice thereof; or
(b) Becomes insolvent, files for bankruptcy, or has a receiver appointed for substantially all of its assets.
11.3. Termination for Convenience. Purchaser may terminate this Agreement for convenience upon sixty (60) days’ written notice to Supplier. In such event, Purchaser shall pay Supplier for all Work completed through the date of termination plus reasonable demobilization costs.
11.4. Effect of Termination. Upon termination:
(a) Supplier shall immediately cease performance of the Work;
(b) Purchaser shall pay Supplier for all Work completed and accepted through the date of termination; and
(c) The provisions of Articles 4 (Warranties), 6 (Indemnification), 7 (Limitation of Liability), 8 (Intellectual Property), 9 (Confidentiality), and 12 (General Provisions) shall survive.
ARTICLE 12: GENERAL PROVISIONS
12.1. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of laws principles.
12.2. Dispute Resolution.
(a) Any dispute arising out of or relating to this Agreement shall first be subject to good faith negotiations between senior executives of the Parties.
(b) If the dispute is not resolved within thirty (30) days of the commencement of negotiations, either Party may submit the dispute to binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association.
(c) The arbitration shall be conducted in Denver, Colorado, and judgment upon the award may be entered in any court having jurisdiction.
12.3. Notices. All notices under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by confirmed facsimile or email, or sent by certified mail, return receipt requested, to the addresses set forth in the preamble or to such other address as a Party may designate by notice.
12.4. Assignment. Neither Party may assign this Agreement without the prior written consent of the other Party, except that Purchaser may assign this Agreement to the End- User or to a financing party as collateral security without Supplier’s consent.
12.5. Force Majeure. Neither Party shall be liable for any failure or delay in performance due to causes beyond its reasonable control, including acts of God, war, terrorism, labor disputes, or governmental actions, provided that the affected Party gives prompt notice and uses reasonable efforts to mitigate the effects.
12.6. Entire Agreement. This Agreement, together with its Schedules, Annexes, and Exhibits, constitutes the entire agreement between the Parties and supersedes all prior negotiations, understandings, and agreements, whether written or oral.
12.7. Amendments. This Agreement may be amended only by a written instrument signed by both Parties.
12.8. Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party against whom the waiver is sought to be enforced.
12.9. Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.
12.10. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized representatives as of the Effective Date.
| GRIDCORE INFRASTRUCTURE, LLC | |
| | | |
| By: | | |
| Greg Harrington Managing Member | |
| | | |
| KYMA BATTERIES, LLC | |
| | | |
| By: | /s/ David J. Durrett | |
| David J. Durrett Manager | |
SCHEDULE 1: COST ALLOCATION C SCHEDULE OF VALUES
This Schedule 1 provides the allocation of the $97,200,000.00 Contract Price for the purpose of progress payments and Investment Tax Credit (ITC) accounting. The Supplier shall use this schedule of values as the basis for its applications for payment.
| Category | Description | | Allocated Value | |
| 1 | | | PCS / Inverters + Controllers | | $ | 21,600,000.00 | |
| 2 | | | Integral Software (Independence Power) | | $ | 32,400,000.00 | |
| 3 | | | Balance of Plant | | $ | 32,400,000.00 | |
| 4 | | | Soft Costs (EPC, Permits, IDC) | | $ | 10,800,000.00 | |
| | | | Total | | $ | 97,200,000.00 | |
SCHEDULE 2: PAYMENT SCHEDULE
Description Payment Amount and Due Date
The payment for Milestone 1 shall be sourced from the $10,600,000.00 down payment made by BESS Coop to the Purchaser under the End-User Agreement. Upon receipt of said funds, the Purchaser shall execute the following payments:
| | · | $10,600,000.00 shall be paid to Supplier for EPC services to be executed by Supplier’s subcontractor, ITX. This payment shall be credited against the Contract Price owed by Purchaser to Supplier. |
| | | |
| | · | $400,000.00 shall be paid to the Purchaser (GridCore). |
Secured Promissory Note - Monetary Terms
| | · | Principal Amount: $86,600,000.00 |
| | | |
| | · | Interest Rate: Applicable Federal Rate + 6.0% per annum |
| | | |
| | · | Default Interest Rate: Applicable Federal Rate + 12.0% per annum |
| | | |
| | · | Interest Calculation: 360-day year, actual days elapsed |
| | | |
| | · | Interest Payment Schedule: - Semi-annually in arrears - First payment: March 10, 2026 - Subsequent payments: Every 6 months until Maturity Date |
| | | |
| | · | Principal Payment Schedule: - Four (4) equal quarterly installments of $21,650,000.00 each - First payment: December 10, 2026- Subsequent payments: Ǫuarterly thereafter |
| | | |
| | · | Maturity Date: September 10, 2027 (2 years from execution) |
| | | |
| | · | Prepayment: Permitted at any time without penalty - Partial prepayments applied first to accrued interest, then to principal in inverse order of maturity |
| | | |
| | · | Digital Asset Payment Option: - Available at Maker’s option with 30 days prior written notice - Must be exchange-traded digital asset on reputable regulated exchange - Value determined by VWAP over 24-hour period before due date - Maker pays all transaction fees, network fees, and gas fees |
Supplier hereby irrevocably authorizes and directs Purchaser to make the payment to Kyma as specified above and agrees that such payment shall constitute a partial payment of the Contract Price for all purposes under this Agreement.
ANNEX A: INSTALLATION C COMMISSIONING
This Annex A details the turnkey installation and commissioning responsibilities of the Supplier, to be executed by its affiliate, ITX.
1. SCOPE OF WORK
ITX shall provide all labor, materials, equipment, and supervision necessary for the complete installation and commissioning of the BESS Project, including but not limited to:
1.1. Site Preparation
Civil and electrical work required to prepare the site(s) for BESS installation, including:
| | · | Foundation pads and mounting systems |
| | | |
| | · | Trenching and conduit installation |
| | | |
| | · | Grounding and bonding systems |
| | | |
| | · | Site fencing and security measures |
| | | |
| | · | Access roads and laydown areas |
1.2. Equipment Installation
Mechanical and electrical installation of all Project equipment, including:
| | · | The Purchaser-Furnished Equipment (base battery enclosures) |
| | | |
| | · | PCS/Inverters and controllers |
| | | |
| | · | All Balance of Plant components |
| | | |
| | · | Electrical interconnections and cabling |
| | | |
| | · | HVAC and fire suppression systems |
| | | |
| | · | Monitoring and control systems |
1.3. System Integration
Integration of all hardware and software components to ensure seamless operation, including:
| | · | Installation and configuration of the BMS software |
| | | |
| | · | Integration with existing grid infrastructure |
| | | |
| | · | Communication system setup and testing |
| | | |
| | · | SCADA system integration |
1.4. Commissioning
A comprehensive commissioning process to verify that the system is installed correctly and functions in accordance with the Specifications. The commissioning process shall include:
1.4.1. Pre-Commissioning Checks
| | · | Visual inspections of all installed equipment |
| | | |
| | · | Continuity checks of all electrical connections |
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| | · | Insulation resistance testing |
| | | |
| | · | Verification of proper grounding |
1.4.2. Functional Testing
| | · | Verification of the functionality of individual components and subsystems |
| | | |
| | · | Testing of safety systems and interlocks |
| | | |
| | · | Verification of control and monitoring systems |
| | | |
| | · | Testing of communication systems |
1.4.3. System-Level Testing
| | · | Testing of the integrated system to ensure it meets the performance requirements of the Project |
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| | · | Performance testing in accordance with Annex B |
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| | · | Grid interconnection testing and verification |
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| | · | Final acceptance testing |
2. PROJECT MANAGEMENT
ITX Power shall provide full project management services, including:
| | · | Development and maintenance of a detailed project schedule |
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| | · | Coordination of all subcontractors and suppliers |
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| | · | Regular progress reporting to the Purchaser (weekly during construction, monthly otherwise) |
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| | · | Management of all permits and regulatory approvals |
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| | · | Ǫuality assurance and quality control |
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| | · | Health, safety, and environmental management |
3. ACCEPTANCE
3.1. Substantial Completion
Upon completion of installation and successful completion of functional testing, ITX shall notify Purchaser that the Project has achieved Substantial Completion. Purchaser shall have ten (10) business days to inspect the Project and provide a punch list of any deficiencies.
3.2. Final Acceptance
Upon successful completion of all commissioning activities, including the acceptance testing specified in Annex B, ITX shall conduct a final acceptance test in the presence of the Purchaser’s representative. Upon successful completion of the acceptance test and resolution of all punch list items, the Purchaser shall issue a Certificate of Final Acceptance, which will be a prerequisite for the final milestone payment under Schedule 2.
4. PLACED-IN-SERVICE CERTIFICATION
As part of the final commissioning report, ITX Micro Grid shall provide a certification from a licensed Professional Engineer confirming that:
| | · | The Project is complete and has been constructed in accordance with the specifications |
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| | · | The Project has been tested in accordance with the testing protocols in Annex B |
| | | |
| | · | The Project is available for its intended use and is capable of operating at its full rated capacity |
| | | |
| | · | The date on which the Project was placed in service |
This certification shall establish the “Placed-in-Service” date for ITC purposes and shall be in a form acceptable to the Purchaser and End-User for submission to the Internal Revenue Service.
5. DOCUMENTATION
Upon Final Acceptance, ITX Micro Grid shall provide the following documentation to Purchaser:
| | · | As-built drawings and specifications |
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| | · | Operations and maintenance manuals |
| | | |
| | · | Warranty documentation for all equipment |
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| | · | Training materials and records |
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| | · | Commissioning test reports |
| | | |
| | · | Placed-in-Service certification |
| | | |
| | · | All permits and regulatory approvals |
ANNEX B: PERFORMANCE GUARANTEES C TESTING PROTOCOLS
This Annex B defines the performance guarantees for the Project and the testing protocols to be used to verify compliance.
1. PERFORMANCE GUARANTEES
Supplier guarantees that the Project will meet or exceed the following key performance metrics under the conditions defined in the testing protocols herein:
1.1. Reserved
1.2. System Availability
The Project shall maintain a minimum availability of 99.8% on an annual basis, calculated as:
Availability = (Total Hours - Unavailable Hours) / Total Hours × 100%
Where: - Total Hours = 8,760 hours per year - Unavailable Hours = hours during which the system is unable to charge or discharge due to equipment failure or malfunction - Scheduled maintenance and force majeure events are excluded from Unavailable Hours
1.3. Capacity Retention
The BESS shall retain at least 80% of its initial energy capacity at the end of the Warranty Period, measured under standardized test conditions.
1.4. Response Time
The Project shall be capable of responding to dispatch signals and ramping from zero to full power (charge or discharge) a rate for similar equipment as determined by the mean between the fastest response time and the average amongst the five largest manufacturers of similar equipment.
1.5. Ramp Rate
The Project shall be capable of ramping at a minimum rate of ramp rate to dispatch signals and ramping from zero to full power (charge or discharge) at a rate for similar equipment as determined by the mean between the fastest response time and the average amongst the five largest manufacturers of similar equipment.
2. TESTING PROTOCOLS
2.1. Initial Acceptance Testing
Upon completion of commissioning, the Supplier shall conduct an Initial Acceptance Test to demonstrate that the Project meets the Performance Guarantees.
2.1.1. Test Conditions
| | · | The test will be conducted over a continuous [Number]-hour period |
| | | |
| | · | The test will simulate real-world operational profiles, including charge/discharge cycles at varying states of charge and ramp rates |
| | | |
| | · | Ambient temperature conditions shall be within the design operating range |
| | | |
| | · | The specific test procedures and signal-following profiles will be mutually agreed upon by the Parties prior to the test |
2.1.2. Test Procedures
The Initial Acceptance Test shall include:
| | · | Round-trip efficiency testing over multiple charge-discharge cycles |
| | | |
| | · | Response time and ramp rate testing |
| | | |
| | · | Capacity verification testing |
| | | |
| | · | Signal-following accuracy testing |
| | | |
| | · | Grid interconnection performance testing |
2.1.3. Pass/Fail Criteria
The Project shall be deemed to have passed the Initial Acceptance Test if all Performance Guarantees are met. If any Performance Guarantee is not met, Supplier shall have 60 days to investigate and remedy the deficiency and re-test.
2.2. Annual Performance Testing
An Annual Performance Test shall be conducted by the Supplier within 30 days of the anniversary of the Placed-in-Service date for each year of the Warranty Period to verify ongoing compliance with the Performance Guarantees.
The Annual Performance Test shall follow substantially the same procedures as the Initial Acceptance Test, with adjustments as necessary to account for the operational history of the Project.
2.3. Interim Testing
Either Party may request interim performance testing if there is reason to believe the Project is not meeting the Performance Guarantees. The costs of such testing shall be borne by the requesting Party unless the testing reveals a failure to meet the Performance Guarantees, in which case Supplier shall bear the costs.
3. REMEDIES FOR FAILURE
If the Project fails to meet any of the Performance Guarantees during a performance test, the Supplier shall have [Number] days to investigate and cure the cause of the failure. If the failure is not cured within this period, the Supplier shall, at its option:
3.1. Make-Whole Payments
Compensate the Purchaser (or End-User, as applicable) for lost revenue resulting from the underperformance. The make-whole payment shall be calculated as follows:
Make-Whole Payment = (Guaranteed Performance - Actual Performance) × [Agreed-upon $/unit] × Duration of Underperformance
3.2. Repair or Replace
Repair or replace the defective components at its own cost to restore performance to the guaranteed levels. All repair or replacement work shall be completed within a reasonable timeframe to minimize disruption to Project operations.
3.3. Pay Liquidated Damages
If the failure is related to System Availability or Capacity Retention, pay liquidated damages in an amount as determined by a panel of three arbitrators. Each party will select an arbitrator with experience in the industry and the two arbitrators will select a third member of the Panel. A majority vote of the panel shall determine the validity of the claim and set the damages. The panel will be governed by the laws of the State of Texas, These liquidated damages represent the Parties’ reasonable estimate of the actual damages that would result from such failures and are not intended as a penalty.
3.4. Limitation
The total aggregate liability of Supplier for all performance guarantee failures during any twelve-month period shall not exceed 30% of the Contract Price, except that this limitation shall not apply to Supplier’s obligation to repair or replace defective equipment.
EXHIBIT C: FORM OF LONG-TERM SERVICE AGREEMENT (LTSA)
This Long-Term Service Agreement (“LTSA”) is entered into as of the first date stated above by and between GridCore Infrastructure, LLC (“Owner”) and KYMA Batteries LLC (“Service Provider”).
1. SERVICES
Service Provider shall provide the following services to ensure the long-term operational performance of the BESS Project:
1.1. Remote Monitoring
24/7 remote monitoring of the BESS for performance and fault detection, including:
| | · | Real-time monitoring of all system parameters |
| | | |
| | · | Automated alarm notification |
| | | |
| | · | Performance trending and analytics |
| | | |
| | · | Predictive maintenance alerts |
1.2. Preventive Maintenance
Scheduled preventive maintenance activities to be performed on an annual basis, including:
| | · | Inspection of all major equipment |
| | | |
| | · | Cleaning and servicing of components |
| | | |
| | · | Firmware and software updates |
| | | |
| | · | Calibration of sensors and controls |
| | | |
| | · | Testing of safety systems |
1.3. Corrective Maintenance
Unscheduled maintenance and repair services in response to faults or alarms, including:
| | · | Remote troubleshooting and diagnostics |
| | | |
| | · | On-site repair services as needed |
| | | |
| | · | Replacement of defective components |
| | | |
| | · | Emergency response services |
1.4. Software Updates
Provision of all necessary software updates and patches to the BMS, including:
| | · | Bug fixes and security patches |
| | | |
| | · | Performance optimization updates |
| | · | New feature releases |
| | | |
| | · | Compatibility updates |
1.5. Reporting
Ǫuarterly performance reports detailing key operational metrics, including:
| | · | System availability |
| | | |
| | · | Round-trip efficiency |
| | | |
| | · | Capacity and degradation trends |
| | | |
| | · | Energy throughput |
| | | |
| | · | Maintenance activities performed |
| · | Recommendations for optimization |
2. SERVICE LEVELS
Service Provider shall perform the services in accordance with the following service levels:
2.1. Response Time
| | · | Critical Alarms: Service Provider shall acknowledge within [2] hours and dispatch a technician to the site, if necessary, within [24] hours |
| | | |
| | · | Non-Critical Alarms: Service Provider shall acknowledge within [8] hours and address within 5 business days |
2.2. Availability Guarantee
Service Provider guarantees a minimum System Availability of 99.8%, as defined in Annex B of the Master Supply and Services Agreement. If the guaranteed availability is not achieved in any contract year, Service Provider shall pay liquidated damages as specified in Annex B.
2.3. Uptime Commitment
Service Provider commits to maintaining the remote monitoring system with 99.5% uptime.
3. TERM
The initial term of this LTSA shall be 10 years, commencing on the Placed-in-Service date. The Owner shall have the option to renew the LTSA for successive [5]-year terms upon written notice given at least [180] days prior to the end of the then-current term.
4. FEES
4.1. Monthly Fee
In consideration for the services, the Owner shall pay the Service Provider a monthly fee of $5,000 per Battery Energy Storage (“BESS”) unit placed in service.
4.2. Fee Adjustments
The annual fee shall be adjusted on each anniversary of the Effective Date by the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) published by the U.S. Bureau of Labor Statistics, not to exceed 2% in any year.
4.3. Additional Services
Any services not included in the scope of Section 1 shall be provided on a time and materials basis at Service Provider’s then-current rates, subject to Owner’s prior written approval.
5. RELATIONSHIP TO MAIN AGREEMENT
5.1. Integration
This LTSA is an exhibit to the Master Supply and Services Agreement between the Parties as of dated, September 10, 2025 (the “Main Agreement”). The Main Agreement is incorporated herein by reference.
5.2. Precedence
The warranty provisions of the Main Agreement shall take precedence over any conflicting terms in this LTSA. For the avoidance of doubt, the warranty obligations under Article 4 of the Main Agreement are separate from and in addition to the service obligations under this LTSA.
5.3. Separate Liability
The liability of the Service Provider under this LTSA shall be separate from its liability under the warranty provisions of the Main Agreement. The annual fee under this LTSA shall not serve as a cap on Service Provider’s warranty liability under the Main Agreement.
6. ASSIGNMENT
This LTSA may be assigned by Owner to the End-User or any subsequent owner of the Project without Service Provider’s consent. Service Provider may not assign this LTSA without Owner’s prior written consent.
7. TERMINATION
7.1. Termination for Cause
Either Party may terminate this LTSA upon [60] days’ written notice if the other Party materially breaches this LTSA and fails to cure such breach within [30] days after receiving written notice thereof.
7.2. Termination for Convenience
Owner may terminate this LTSA for convenience upon [180] days’ written notice to Service Provider. In such event, Owner shall pay Service Provider for all services performed through the effective date of termination.
8. GOVERNING LAW
This LTSA shall be governed by the laws of the State of Texas, consistent with the Main Agreement.
EXHIBIT 10.5
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE ISSUER), IN A FORM REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1 OF THIS WARRANT.
INDEPENDENCE POWER HOLDINGS, INC.
Warrant To Purchase Class A Common Stock
Warrant No.: 1
Date of Issuance: December 30, 2025 (“Issuance Date”)
Independence Power Holdings, Inc., a Nevada corporation (the “Issuer”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, BESS Rural Energy Cooperative, LCA, a District of Columbia limited cooperative association, the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Issuer, at the Exercise Price then in effect, upon exercise of this Warrant to Purchase Class A Common Stock (this “Warrant”), at any time or times from or after the Issuance Date, 8,901,852 (subject to adjustment as provided herein) fully paid and non-assessable shares of Class A Common Stock (the “Warrant Shares”). Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in Section 22.
1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Upon the terms and subject to the conditions hereof, this Warrant may be exercised by the Holder, in whole or in part (but if in part, in not less than increments of 10,000 Warrant Shares per exercise), on any day from and after the Issuance Date (an “Exercise Date”) and prior to the Expiration Time, by delivery (whether via electronic mail or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Business Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Issuer of an amount equal to the Exercise Price in effect on such Exercise Date, in cash, multiplied by the number of Warrant Shares as to which this Warrant was so exercised in cash or via wire transfer of immediately available funds. The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Business Day following the date on which the Issuer has received an Exercise Notice, the Issuer shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Issuer’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder in the Issuer’s books and records. or the date of delivery of the certificates evidencing such Warrant Shares (as the case may be). No fractional shares of Class A Common Stock are to be issued upon any exercise of this Warrant, but rather the number of shares of Class A Common Stock shall be rounded up to the nearest whole number. The Issuer shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.
(b) Exercise Price. The total purchase price for all of the Warrant Shares shall be $32,000,000.00. For purposes of this Warrant, “Exercise Price” means $3.594758 per Warrant Share, subject to adjustment as provided herein. In order to properly exercise this Warrant, this Warrant requires payment by the Holder to the Issuer, in cash, of an amount equal to then Exercise Price multiplied by the number of Warrant Shares with respect to which this Warrant has been exercised; provided, that for any exercise of this Warrant, the aggregate Exercise Price paid in connection therewith must be rounded to the nearest cent and no fractional shares of Class A Common Stock shall be issued under any circumstance; provided, further, that each exercise of this Warrant shall be in increments of not less than 10,000 Warrant Shares.
(c) Expiration of Warrant. The right to purchase the Warrant Shares pursuant to this Warrant shall terminate and become void at 5:00 p.m. Pacific time on the date that is the later of (i) thirty (30) days after the first annual report of the Issuer is filed with the U.S. Securities and Exchange Commission on Form 10-K after the original Issuance Date or (ii) thirty (30) days after the execution by the Issuer (or any of its Subsidiaries) of a definitive, binding energy equipment rental agreement or other instrument providing for the deployment of additional equipment constituting the Issuer’s (or any of its Subsidiaries’) oilfield microgrid technology with an investment-grade rated counterparty (such time, the “Expiration Time”).
(d) Valid Issuance of this Warrant and the Warrant Shares. With respect to the execution and delivery of this Warrant and each exercise of this Warrant, the Issuer hereby represents, warrants, covenants and agrees:
(i) The Issuer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.
(ii) The Issuer has the corporate power and authority to execute and deliver this Warrant and to perform its obligations hereunder. The Issuer has taken all corporate actions or proceedings required to be taken by or on the part of the Issuer to authorize and permit the execution and delivery by the Issuer of this Warrant and the performance by the Issuer of its obligations hereunder and the consummation by the Issuer of the transactions contemplated hereby. This Warrant has been duly executed and delivered by the Issuer, and assuming the due authorization, execution and delivery by the Holder, constitutes the legal, valid and binding obligation of the Issuer, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(iii) The execution and delivery by the Issuer of this Warrant, the performance by the Issuer of its obligations hereunder and the consummation by the Issuer of the transactions contemplated hereby will not violate (A) any provision of law, statute, rule or regulation applicable to the Issuer, (B) the certificate of incorporation of the Issuer or the bylaws of the Issuer, (C) any applicable order of any court or any rule, regulation or order of any governmental authority applicable to the Issuer or (D) any provision of any indenture, certificate of designation for preferred stock, agreement or other instrument to which the Issuer is a party or by which its property is or may be bound, except, in each case, for any such violation that would not impair in any material way the Issuer’s ability to perform its obligations under this Warrant.
(iv) Assuming the accuracy of the Holder’s representations and warranties set forth in Section 4, the issuance of this Warrant (and the issuance of the Warrant Shares upon exercise of this Warrant) is exempt from the registration requirements of the Securities Act and all other applicable state blue sky or other securities laws, statutes, rules or regulations.
(v)This Warrant has been duly authorized and is validly issued.
(vi) Each Warrant Share issuable upon an exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, validly issued, fully paid and non-assessable, and free from preemptive or similar rights and free from all taxes, liens and charges with respect thereto (other than liens and charges arising solely from the actions and circumstances of the Holder).
(vii) The Issuer will at all times until this Warrant has been exercised in full maintain authorized and reserved for issuance solely for the purpose of effecting the exercise of this Warrant, such number of shares of Class A Common Stock as are then and from time to time subject to issuance upon the exercise in full of this Warrant, which shares have not been subscribed for or otherwise committed or issued.
(viii) The Issuer shall take all such actions as may be necessary to ensure that all Warrant Shares are issued without violation by the Issuer of its Articles of Incorporation, bylaws or any other constituent document and of any applicable law, statute, rule or regulation or any requirements of any securities exchange upon which the Class A Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which will be promptly delivered by the Issuer upon each such issuance).
(ix) The Issuer and the Holder acknowledge this Warrant is being issued as part of the inducement consideration in connection with the execution and delivery by the Issuer (or a Subsidiary thereof) and the Holder of a management agreement (the “Management Agreement”) pursuant to which the Issuer has obtained full operational control over approximately 241 MW of battery energy storage equipment for use in the Issuer’s oilfield operations. Under the Management Agreement, the Issuer (through its wholly owned Subsidiaries) shall provide operational management services in exchange for a base management fee and performance-based compensation tied to revenue generation, referred to as Power-as-a-Service, while the Holder shall retain full ownership of such equipment.
2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
(a) Adjustment to Number of Warrant Shares. Without limiting any provision of this Section 2 or Section 3, if at any time after the Issuance Date and prior to the Expiration Time (or, if earlier, the exercise in full of this Warrant), the Issuer (i) subdivides (by any stock split, stock dividend, recapitalization or otherwise) its then outstanding shares of Class A Common Stock into a larger number of shares or (ii) combines (by combination, reverse stock split or otherwise) its then outstanding shares of Class A Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Class A Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Class A Common Stock outstanding immediately after such event. Any adjustment made to clause (i) or clause (ii) of this Section 2(a) shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 2(a) occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
(b) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price, the number of Warrant Shares (including the minimum number of Warrant Shares for which this Warrant may be exercisable) that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.
(c) Calculations. All calculations shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable.
(d) Dissolution, Liquidation or Winding Up. If the Issuer, at any time after the Issuance Date and prior to the Expiration Time (or, if earlier, the exercise in full of this Warrant), commences a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Issuer, then (i) the Holder shall receive the kind and number of other securities or assets which the Holder would have been entitled to receive if the Holder had exercised this Warrant in full and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise immediately prior to the time of such dissolution, liquidation or winding up and (ii) the right to exercise this Warrant shall terminate on the date on which the holders of record of Class A Common Stock shall be entitled to exchange their Class A Common Stock for securities or assets deliverable upon such dissolution, liquidation or winding up.
3. FUNDAMENTAL TRANSACTIONS.
(a) Fundamental Transactions. If, at any time after the Issuance Date and prior to the Expiration Time (or, if earlier, the exercise in full of this Warrant), (i) the Issuer, directly or indirectly, in one or more related transactions effects any merger, consolidation or business combination of the Issuer with or into another Person, in which the Issuer is not the surviving entity or in which the stockholders of the Issuer immediately prior to such merger, consolidation or business combination do not own, directly or indirectly, at least 50% of the voting power of the surviving entity immediately after such merger, consolidation or business combination (excluding a merger effected solely to change the Issuer’s name), (ii) the Issuer (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Issuer or another Person) is completed pursuant to which holders of Class A Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Class A Common Stock, (iv) the Issuer, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Class A Common Stock or any compulsory share exchange pursuant to which the Class A Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a stock split, combination or reclassification of shares of Class A Common Stock covered by Section 2(a)) or (v) the Issuer, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Class A Common Stock (not including any shares of Class A Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) or more than 50% of the voting power of the common equity of the Issuer (each a “Fundamental Transaction”), then upon consummation of such Fundamental Transaction, this Warrant shall automatically become exercisable for the kind and amount of securities, cash or other assets which the Holder would have owned immediately after such Fundamental Transaction if the Holder had exercised this Warrant in full immediately before the effective date of such Fundamental Transaction, assuming that the Holder failed to exercise its rights of election, if any, as to the kind or amount of securities, cash or other assets receivable upon the consummation of such Fundamental Transaction. With respect to any Fundamental Transaction that the Issuer has not publicly announced at least fifteen (15) days prior to the consummation of such Fundamental Transaction, (A) the Issuer will deliver to the Holder written notice of such Fundamental Transaction at least fifteen (15) days prior to the consummation of such Fundamental Transaction (which written notice will be treated as confidential by the Holder), and (B) the Holder agrees not to exercise this Warrant (or any portion thereof) during the two Business Days immediately preceding the consummation of such Fundamental Transaction. Concurrently with the consummation of any Fundamental Transaction, the Person formed by or surviving the Fundamental Transaction (if other than the Issuer), or if such Fundamental Transaction is a transfer of lease, the Person to which such transfer or lease shall have been made, shall, and the Issuer shall direct such Person to, enter into a supplemental agreement so providing and further providing for adjustments that shall be as nearly equivalent as may be practical to the adjustments provided for in Section 2. If this Section3(a) applies to a transaction, Section 2(a) shall not apply.
(b) Application. The provisions of Section 3(a) shall apply similarly and equally to successive Fundamental Transactions and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations on the exercise of this Warrant.
4. REPRESENTATIONS OF THE HOLDER.
(a) Investment Intent. The Holder represents and warrants that it is acquiring this Warrant and the shares of Class A Common Stock underlying this Warrant (collectively, the “Securities”), solely for its beneficial account, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the Securities in violation of applicable securities laws.
(b) Unregistered Securities. The Holder represents and warrants that it understands that the Securities have not been registered under the Securities Act or any state securities laws by reason of specific exemptions under the provisions thereof, the availability of which depend in part upon the bona fide nature of its investment intent and upon the accuracy of its representations made herein.
(c) Reliance. The Holder represents and warrants that it understands that the Issuer is relying in part upon the representations and agreements of the Holder contained herein for the purpose of determining whether the offer, sale and issuance of the Securities meet the requirements for such exemptions described in Section 4(b).
(d) Accredited Investor. The Holder represents and warrants that it is an “accredited investor” as defined in Rule 501(a) under the Securities Act.
(e) Sophisticated Investor. The Holder represents and warrants that it has such knowledge, skill and experience in business, financial and investment matters that it is capable of evaluating the merits and risks of an investment in the Securities, including experience in and knowledge of the industry in which the Issuer operates.
(f) Restricted Securities. The Holder represents and warrants that it understands that the Securities will be “restricted securities” under applicable federal securities laws and that the Securities Act and the rules of the U.S. Securities and Exchange Commission provide in substance that it may dispose of the Securities only pursuant to an effective registration statement under the Securities Act or an exemption therefrom.
(g) Information. The Holder represents and warrants that (i) it has been furnished by the Issuer all information (or provided access to all information) regarding the business and financial condition of the Issuer, its expected plans for future business activities, the attributes of the Securities, and the merits and risks of an investment in such Securities which it has requested or otherwise needs to evaluate the investment in such Securities, (ii) in making the proposed investment decision, the Holder is relying solely on such information, the representations, warranties and agreements of the Issuer contained herein and on investigations made by it and its representatives and (iii) the offer to sell the Securities hereunder was communicated to the Holder in such a manner that it was able to ask questions of and receive answers from the management of the Issuer concerning the terms and conditions of the proposed transaction and that at no time was it presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general or public advertising or solicitation and (iv) the Holder recognizes that an investment in the Securities involves risks and can result in a total loss of all funds invested.
(h) Non-Reliance. Notwithstanding anything in this Warrant to the contrary, the Holder hereby acknowledges that the Issuer may possess material non-public information with respect to the Issuer and/or its securities not known to the Holder as of the date hereof or at a time when the Holder exercises its right to purchase the Warrant Shares pursuant to this Warrant and that any such information may impact the value of the Warrant and the Warrant Shares. The Holder irrevocably waives any claim, or potential claim, that it may have based on the failure of the Issuer or its Affiliates, officers, directors, employees, agents or other representatives to disclose such information in connection with the execution and delivery of this Warrant or the purchase of any Warrant Shares hereunder; provided, however, notwithstanding anything in this Section 4(h) or otherwise to the contrary, the Holder does not and shall not be deemed to have waived or otherwise compromised any rights or claims based upon or arising out of (i) the Issuer’s disclosure obligations under the federal securities laws with respect to any untrue statement of a material fact or omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading in any public statement or filing made by the Issuer pursuant to the Securities Exchange Act of 1934, as amended, or (ii) any breach or inaccuracy of any representation or warranty of the Issuer in this Warrant. The Holder acknowledges that the Issuer would not enter into this Warrant in the absence of the agreements set forth in this Section 4(h).
5. NONCIRCUMVENTION. The Issuer hereby covenants and agrees that the Issuer will not, by amendment of its Articles of Incorporation (as in effect on the Issuance Date) bylaws (as in effect on the Issuance Date) or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder.
6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Issuer for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Issuer or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Issuer, whether such liabilities are asserted by the Issuer or by creditors of the Issuer.
7. REISSUANCE OF WARRANTS.
(a) Transfer of Warrant. If this Warrant is to be Transferred, the Holder shall surrender this Warrant to the Issuer, whereupon the Issuer will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(c)), registered as the transferee may request, representing the right to purchase the number of Warrant Shares being Transferred by the Holder and, if less than the total number of Warrant Shares is being Transferred, a new Warrant (in accordance with Section 7(c)) to the Holder representing the right to purchase the number of Warrant Shares not being Transferred.
(b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Issuer of evidence reasonably satisfactory to the Issuer of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Issuer in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Issuer shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(c)) representing the right to purchase the Warrant Shares.
(c) Issuance of New Warrants. Whenever the Issuer is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a), the Warrant Shares designated by the Holder which, when added to the number of shares of Class A Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant, which is the same as the Issuance Date and (iv) shall have the same rights and conditions as this Warrant.
8. NOTICES.
(a) Notice of Adjustment. Upon any adjustment of the number of Warrant Shares subject to the Warrant and the applicable Exercise Price pursuant to Section 2, the Issuer shall promptly thereafter cause to be given to the Holder written notice of such adjustments. Where appropriate, such notice may be given in advance. Such notice shall be delivered in accordance with Section 8(b) and shall state (i) the event giving rise to the adjustment, (ii) the effective date of the adjustment and (iii) the adjustment to the number of Warrant Shares subject to this Warrant and the adjusted applicable Exercise Price pursuant to Section 2.
(b) Notices. Any notices or other communications required or permitted hereunder will be deemed to have been properly given and delivered if in writing by such party hereto or its legal representative and delivered personally or sent by email or nationally recognized overnight courier service guaranteeing overnight delivery, addressed as follows:
(i) If to the Issuer:
Independence Power Holdings, Inc.
14114 Dallas Parkway, Suite 200
Dallas, Texas 75254
Attention: Todd Parkin and
Scott Stephenson
E-mail: tkparkin@rinconstrategic.com and
stephenson@independco.com
with a copy (which shall not constitute notice) to:
Vedder Price P.C.
600 Brickell Ave, Suite 1500
Miami, Florida 33131
Attention: Adam L. Schwartz;
Kenneth A. Gerasimovich and
John T. Blatchford
E-mail: aschwartz@vedderprice.com;
kgerasimovich@vedderprice.com and
jblatchford@vedderprice.com
(ii) If to the Holder:
To its address set forth on its signature page to this Warrant
with a copy (which shall not constitute notice) to:
Tarter Krinsky & Drogin LLP
1350 Broadway
New York, New York 10018
Attention: Steven Polyakov, Esq.
E-mail: spolyakov@tarterkrinsky.com
Unless otherwise specified herein, such notices or other communications will be deemed given: (A) on the date delivered, if delivered personally, (B) one Business Day after being sent by a nationally recognized overnight courier guaranteeing overnight delivery and (C) on the date delivered, if delivered by email during business hours (or one Business Day after the date of delivery if delivered after 5:00 p.m. in the place of receipt). Each of the parties hereto will be entitled to specify a different address by delivering notice as aforesaid to the other party hereto.
9. AMENDMENT AND WAIVER. This Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by the Issuer or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party hereto so waiving. No waiver by any party hereto shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
10. SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
11. GOVERNING LAW. This Warrant shall be governed by, construed and enforced in accordance with the laws of the State of Nevada without regard to the conflict of laws principles.
12. WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE THEIR RIGHT TO A TRIAL BY JURY WITH RESPECT TO DISPUTES ARISING UNDER THIS AGREEMENT AND THE RELATED AGREEMENTS AND CONSENT TO A BENCH TRIAL WITH THE APPROPRIATE JUDGE ACTING AS THE FINDER OF FACT.
13. CONSTRUCTION; HEADINGS.
(a) Construction. This Warrant shall be deemed to be jointly drafted by the Issuer and the Holder and shall not be construed against any Person as the drafter hereof. The words “herein,” “hereto” or “hereof” and other words of similar import refer to this Warrant as a whole and not to any particular Section or other subdivision. The word “including” is not limiting and means “including without limitation.” Definitions will be equally applicable to both the singular and plural forms of the terms defined. All references to Sections or Exhibits refer to Sections or Exhibits of or to this Warrant unless otherwise indicated. All exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Warrant as if set forth in full herein, and any capitalized terms used in any exhibit but not otherwise defined therein will have the meaning as defined in this Warrant. All references to a party hereto include such party’s successors and permitted assigns. Any reference to “$” or “dollars” means United States dollars. References to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time (or to successor statutes and regulations).
(b) Headings. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.
14. TRANSFER OF WARRANT.
(a) Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder are Transferable, in whole or in part (except that Transfers must be made in whole lots of not less than 10,000 Warrant Shares), upon surrender of this Warrant at the principal office of the Issuer or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such Transfer. Upon such surrender and, if required, such payment, the Issuer shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned as set forth in including Section 7(a) and Section 7(c), and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Issuer unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Issuer within three (3) Business Days after the date on which the Holder delivers an assignment form to the Issuer assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b) Warrant Register. The Issuer shall register this Warrant, upon records to be maintained by the Issuer for that purpose, in the name of the record Holder hereof from time to time. The Issuer may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof, and for all other purposes, absent actual notice to the contrary.
15. AGREEMENT TO COMPLY WITH SECURITIES ACT; LEGEND. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 15 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that the Holder shall not offer, Transfer, pledge or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except, in the case of any Warrant Shares, under circumstances that will not result in a violation of the Securities Act. All Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:
| | “These securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction. These securities may not be sold or offered for sale, pledged or hypothecated except pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from registration thereunder, in each case in accordance with all applicable securities laws of the states or other jurisdictions, and in the case of a transaction exempt from registration, such securities may only be transferred if the transfer agent for such securities has received documentation reasonably satisfactory to it that such transaction does not require registration under the Securities Act.” | |
16. OTHER COOPERATION. If required, the Issuer will, in consultation and cooperation with the Holder, file or submit, and assist the Holder with any filing, submission or notification it makes, in connection with the exercise of this Warrant with or to any governmental entity any filing, report or notification necessary or advisable in connection with any antitrust, competition or merger control law applicable to such exercise and cooperate with the Holder, to obtain as promptly as practicable all approvals, authorizations, terminations or expiration of applicable periods and clearances in connection therewith.
17. ENTIRE AGREEMENT. This Warrant is intended by the parties hereto as a final expression of their agreement and intended to be a complete and exclusive statement of the agreements, understandings, representations, and warranties, both written and oral, among the parties hereto in respect of the subject matter contained herein. This Warrant supersedes all agreements, understandings, representations, and warranties, both written and oral, among the parties hereto, with respect to the subject matter hereof.
18. ASSIGNMENT BY THE ISSUER. The Issuer may not, without the prior written consent of the Holder, sell, transfer (by operation of law or otherwise, except in connection with a Fundamental Transaction in compliance herewith) or assign (each, a “Transfer”) this Warrant or any of its rights or obligations hereunder.
19. REMEDIES. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Warrant and that each party hereto, in its sole discretion, may apply to any state or federal court in Dallas County, Texas, for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Warrant.
20. COUNTERPARTS. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.
21. ARBITRATION. ANY DISPUTE, CLAIM, OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS WARRANT OR ANY DEALINGS BETWEEN THE PARTIES HERETO, OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION, OR VALIDITY OF THIS WARRANT, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS WARRANT TO ARBITRATE, SHALL BE RESOLVED BY SUBMISSION TO ARBITRATION IN THE COUNTY OF DALLAS, STATE OF TEXAS, BEFORE AN ARBITRATOR SELECTED BY DALLAS JAMS PROCEDURE (THE “ARBITRATOR”). THE ARBITRATION SHALL BE ADMINISTERED BY DALLAS JAMS, PURSUANT TO ITS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES, AND IN ACCORDANCE WITH THE EXPEDITED PROCEDURES CONTAINED THEREIN. THE ARBITRATOR SHALL FOLLOW ANY APPLICABLE FEDERAL LAW AND NEVADA STATE LAW IN RENDERING AN AWARD. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION OVER THE DISPUTE, CLAIM, OR CONTROVERSY SUBMITTED TO SUCH ARBITRATION. THIS SECTION SHALL NOT PRECLUDE THE PARTIES FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF COMPETENT JURISDICTION IN DALLAS COUNTY, TEXAS ONLY. FURTHER, THE PARTIES AGREE AND ACKNOWLEDGE THAT THE ARBITRATOR’S DECISION SHALL BE FINAL AND BINDING, TO THE FULLEST EXTENT PERMITTED BY LAW, AND ENFORCEABLE BY ANY COURT HAVING JURISDICTION THEREOF.
22. DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(b) “Arbitrator” has the meaning set forth in Section 21.
(c) “Articles of Incorporation” means the Amended and Restated Articles of Incorporation of the Issuer, as in effect as of the Issuance Date.
(d) “Business Day” means any day other than a Saturday, a Sunday or a day on which banks are authorized or required to close in the City of Las Vegas, Nevada.
(e) “Class A Common Stock” means (i) shares of Class A common stock of the Issuer, $0.0001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(f) “Common Stock” means all share of common stock of the Issuer, including Class A Common Stock.
(g) “Exercise Date” has the meaning set forth in Section 1(a).
(h) “Exercise Notice” has the meaning set forth in Section 1(a).
(i) “Exercise Price” has the meaning set forth in Section 1(b).
(j) “Expiration Time” has the meaning set forth in Section 1(c).
(k) “Fundamental Transaction” has the meaning set forth in Section 3(a).
(l) “Holder” has the meaning set forth in the preamble hereto.
(m) “Issuance Date” has the meaning set forth in the preamble hereto.
(n) “Issuer” has the meaning set forth in the preamble hereto.
(o) “Management Agreement” has the meaning set forth in Section 1(d)(ix).
(p) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(q) “Securities” has the meaning set forth in Section 4(a).
(r) “Securities Act” means the Securities Act of 1933, as amended.
(s) “Subsidiary” means, with respect to any Person, any corporation of which a majority of the total voting power of shares of stock entitled to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof or any partnership, association or other business entity of which a majority of the partnership or other similar ownership interest is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof. For purposes of this definition, a Person is deemed to have a majority ownership interest in a partnership, association or other business entity if such Person is allocated a majority of the gains or losses of such partnership, association or other business entity or is or controls the managing director or general partner of such partnership, association or other business entity.
(t) “Transfer” has the meaning set forth in Section 18. “Transferred” and “Transferable” shall have correlative meanings.
(u) “Transfer Agent” has the meaning set forth in Section 1(a).
(v) “Warrant” has the meaning set forth in the preamble hereto.
(w) “Warrant Shares” has the meaning set forth in the preamble hereto.
[Signature Page Follows]
IN WITNESS WHEREOF, the Issuer has caused this Warrant to be duly executed as of the Issuance Date set out above.
ISSUER:
INDEPENDENCE POWER HOLDINGS, INC.
| By: | /s/ Todd Parkin | |
| Name: | Todd Parkin | |
| Title: | Chief Executive Officer | |
Accepted and agreed by:
BESS Rural Energy Cooperative, LCA
| By: | /s/ Nicholas Wise | |
| Name: | Nicholas Wise | |
| Title: | Chairman and CEO | |
Address for Notices:
Akin Gump Strauss Hauer & Feld LLP
1333 New Hampshire Avenue, NW
Washington, DC 20036
Attention: Jamie Tucker, Partner
E-mail: Jtucker@akingump.com
Signature Page to Warrant
EXHIBIT A
EXERCISE NOTICE
(1) The undersigned hereby elects to purchase _________ Warrant Shares of the Issuer pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of lawful money of the United States.
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
(4) The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
Date:
Exhibit A to Warrant to Purchase Class A Common Stock
EXHIBIT B
ACKNOWLEDGMENT
The Issuer hereby acknowledges this Exercise Notice and hereby directs _________________________________ to issue the above indicated number of shares of Class A Common Stock in accordance with the Transfer Agent.
Instructions dated _______, 202_,
[●]
Exhibit B to Warrant to Purchase Class A Common Stock
EXHIBIT 10.6
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”), dated effective as of December 30, 2025 (the “Effective Date”), is entered into by and between Independence Power Holdings, Inc., a Nevada corporation (the “Company”), and Todd Parkin, individually (the “Employee”). The Company and the Employee are sometimes referred to herein, collectively, as the “Parties,” and, individually, as each a “Party.”
RECITALS
WHEREAS, the Company is engaged in the business of power generation, energy infrastructure development, and related energy services;
WHEREAS, the Company is undertaking a going-public transaction pursuant to which it will combine with TriUnity Merger Sub, Inc., a Texas corporation (the “Business Combination”);
WHEREAS, the Employee desires to be an employee, and the Company desires him to be an employee, of the Company, subject to the terms and conditions hereof; and
WHEREAS, in connection with the Company entering into that certain Agreement and Plan of Merger, dated effective as of even date herewith, the Employee and the Company seek to enter into this Agreement governing the terms and conditions of the Employee’s employment with the Company.
NOW, THEREFORE, for good and valuable consideration, including employment with the Company in the position of Confidential, employment compensation and benefits, and the business relationships, information (including the Confidential Information) goodwill, work experience and/or other fruits of employment with the Company that the Employee will have the opportunity to obtain, use and develop under this Agreement, the Employee and the Company hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms that are not otherwise defined herein, shall have the meanings set forth in Exhibit A, attached hereto.
2. Nature of Duties; Employment Term.
(a) During the Employment Term (as defined in Section2(e) hereof), the Employee shall serve as the Chief Executive Officer of the Company of the Company and its wholly-owned Subsidiary, Independence Power, Inc. As the Chief Executive Officer, the Employee shall report to the Board of Directors of the Company (the “Board”) or its designee. Subject to the approval and oversight of the Board, the Employee shall have supervision and control over, and responsibility for, such management and operational functions of the Company as are customarily assigned to the role of the Chief Executive Officer and shall otherwise perform his duties to achieve the goals and objectives that are assigned as updated to the Employee by the Board. The Employee shall have such duties, responsibilities, and authority as are customarily associated with the position of the Chief Executive Officer of a publicly traded company of similar size and scope in the energy and infrastructure sector, including, but not limited to, overall strategic direction, operational oversight, capital allocation, financing strategy, investor relations, and compliance with all applicable securities laws and regulations.
(b) The Employee acknowledges and agrees that, in connection with the Business Combination and the Company's status as a public company, the Employee's duties shall include, but is not limited to:
| | (i) | serving as the principal executive officer for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and certifying financial statements and disclosures required under the Sarbanes-Oxley Act of 2002, as amended; |
| | | |
| | (ii) | establishing and maintaining disclosure controls and procedures and internal control over financial reporting as required by applicable law; |
| | | |
| | (iii) | overseeing compliance with all Securities and Exchange Commission reporting obligations, including periodic reports, current reports, and proxy statements; |
| | | |
| | (iv) | conducting investor relations activities and serving as the primary spokesperson for the Company with investors, analysts, and the financial media; |
| | | |
| | (v) | ensuring corporate governance practices meet or exceed applicable listing standards and best practices for publicly traded companies; and |
| | | |
| | (vi) | working with the Board and its committees to develop and implement executive compensation programs, succession planning, and enterprise risk management frameworks appropriate for a public company. |
(c) During the Employment Term (as defined below), the Employee shall serve on the Board without additional compensation. The Employee shall be nominated for election to the Board at each annual meeting of stockholders during the Employment Term, subject to applicable law and listing standards.
(d) During the Employment Term, the Employee shall devote substantially all of the Employee’s business time and attention to the business and affairs of the Company, shall faithfully serve the Company, and shall conform to and comply with the lawful and reasonable directions and instructions given to the Employee. During the Employment Term, the Employee shall use the Employee’s best efforts to promote and serve the interests of the Company and shall not engage in any other business activity, whether or not such activity shall be engaged in for pecuniary profit; provided, however, that the Employee shall have the right to: (i) engage in religious, charitable, civic, educational, professional or community affairs; (ii) manage the Employee’s personal and family investments; and (iii) own passive investments of not more than five percent (5%) of the outstanding shares of any public company whose shares are quoted on or traded on a national system or exchange.
(e) The Company hereby agrees to employ the Employee, and the Employee hereby agrees to accept employment with the Company, upon the terms and conditions contained in this Agreement, to be effective on the Effective Date. The Employee’s employment with the Company shall continue, subject to earlier termination of such employment pursuant to the terms hereof, until the third (3rd) anniversary of the Effective Date (the “Initial Employment Period”). On the third (3rd) anniversary of the Effective Date, and on each anniversary thereof, the Employment Period shall be automatically extended for an additional twelve-month period, and this Agreement shall likewise be extended during such twelve-month period (each, a “Renewal Employment Period”). When used herein, the term “Employment Term” shall mean the Initial Employment Period together with any Renewal Employment Periods, if any. The Company or the Employee may elect to terminate the automatic extension of the Employment Term by giving written notice of such election not less than sixty (60) days prior to the end of the then current Employment Period (“Non-Renewal”).
(f) Notwithstanding the foregoing, this Agreement shall terminate for “Cause” immediately upon the occurrence of any of the following events:
| | (i) | death of the Employee; |
| | | |
| | (ii) | the Employee’s Disability such that he is unable to perform his duties hereunder, with or without a reasonable accommodation, for a period of one hundred eighty (180) consecutive days or a total of one hundred eighty (180) days during any fiscal year; provided, however, that the Company shall reconfirm at the end of the 180-day period that the Employee is unable to perform his duties, with or without a reasonable accommodation; |
| | | |
| | (iii) | any material breach of this Agreement by the Employee, including, but not limited to, the failure of the Employee to comply with the covenants set forth in Sections2(b), 2(c), 2(d), 7, 8, 9, 10, and/or 11 hereof; provided, however, that the Company shall provide a notice of a breach under this Section to the Employee and, to the extent such breach is curable, the Employee shall have an opportunity to cure the breach. If the breach is not cured, to the Company’s sole satisfaction, within ten (10) days after the notice to the Employee, or if the breach is not curable, then this Agreement shall immediately terminate; |
| | | |
| | (iv) | the Employee’s material non-compliance with the Company’s rules, regulations and policies, including, but not limited to: (A) the Employee’s failure to perform (other than by reason of disability) or negligence in the performance of his duties under this Agreement; (B) the Employee’s failure to comply with all applicable governmental laws and regulations; (C) unfavorable results obtained through the background reference check; (D) the Employee’s abuse of alcohol, prescription drugs, or controlled substances; or (E) the Employee is charged with a felony or is accused of committing an act of moral turpitude; provided, however, that the Company shall provide a notice of a breach under this Section2(f)(iv)to the Employee and, to the extent such breach is curable, the Employee shall have an opportunity to cure the breach. If the breach is not cured, to the Company’s sole satisfaction, within ten (10) days after the notice to the Employee, or if the breach is not curable, then this Agreement shall immediately terminate; or |
| | | |
| | (v) | the Company's public market capitalization (the “Gross Capitalization”) remains below Five Hundred Million and 00/100 Dollars ($500,000,000.00) for a period of one hundred eighty (180) consecutive trading days. |
3. Payments.
(a) Salary. During the Employment Term, the Company will pay the Employee an annual salary of Three Hundred Twenty-One Thousand and 00/100 Dollars ($321,000.00) (the “Salary”), subject to authorized and required withholdings. The Salary will be payable in regular semi-monthly installments in accordance with the Company’s general payroll practices.
(b) Salary Review. The Employee's Salary shall be subject to annual review by the Board of Directors and may be increased from time to time in the sole discretion of the Board of Directors based on the Employee's performance and the Company's financial condition. In no event shall the Employee's Salary be reduced below the amount in effect immediately prior to such review, except as expressly permitted in Section2(f) hereof or in connection with an across-the- board reduction applicable to all senior executives.
(c) Long-Term Incentive Compensation. The Employee shall be eligible to participate in such long-term incentive compensation plans as may be established by the Company from time to time for senior executives, including equity-based compensation plans, on terms and conditions to be determined by the Board of Directors in its sole discretion. Any such awards shall be subject to the terms and conditions of the applicable plan documents and award agreements.
4. Employee’s Benefits.
(a) Benefit Plans. The Employee will be entitled to participate in all employee benefit plans and programs and to receive all benefits, for which similarly situated employees of the Company are eligible, subject to the Employee’s eligibility under the terms and conditions of any applicable plan or program now in place or established later by the Company, on the same basis as similarly situated employees of the Company. For the avoidance of doubt, nothing in this Agreement will preclude the Company from amending or terminating any of the benefit plans or programs applicable to the Employee as long as such amendment or termination is applicable to similarly situated employees. Notwithstanding any change in benefits, the employment of the Employee shall be construed as continuing under the terms and conditions of this Agreement.
(b) Paid Time Off. The Employee is eligible to take paid time off (“PTO”) as provided per the Company policy, as may be amended from time to time, but in no event less than four (4) weeks of paid time off per year. All of the Employee’s PTO shall be taken at such times and intervals as shall be determined by the Employee, subject to the reasonable business needs of and approval by the Company.
(c) Expense Reimbursement. During the Employment Term, the Company shall reimburse the Employee for the Employee’s reasonable travel (including, without limitation, advance purchase and coach ticket class) and other business expenses incurred in connection with the performance of duties hereunder, in accordance with the Company policy, as adopted by the Company management from time to time.
5. Indemnification and Insurance.
(a) Indemnification by the Company. The Company shall indemnify and hold harmless the Employee, and the Employee's heirs, executors, and administrators (collectively, the "Indemnified Parties"), to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, against any and all expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that the Employee is or was a director, officer, employee, or agent of the Company or any of its subsidiaries or affiliates, or is or was serving at the request of the Company as a director, officer, member, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise (including service with respect to employee benefit plans), whether civil, criminal, administrative, or investigative. The indemnification provided for herein shall include the right to advancement of expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if required by applicable law, such advancement of expenses shall be made only upon delivery to the Company of an undertaking, by or on behalf of the Employee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that the Employee is not entitled to be indemnified under this Section 5 or otherwise; provided further, however, that advancement of expenses shall not be made by the Company in the event of a direct action by the Company as against the Employee in which the Company alleges gross negligence or willful misconduct as against the Employee.
(b) Standard of Conduct. For purposes of this Section 5, the Employee shall be deemed to have met the applicable standard of conduct required for indemnification under applicable law if the Employee acted in good faith and in a manner the Employee reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal proceeding, had no reasonable cause to believe the Employee's conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the Employee did not act in good faith and in a manner which the Employee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal proceeding, that the Employee had reasonable cause to believe that the Employee's conduct was unlawful.
(c) Survival; Nature of Rights. The indemnification and advancement of expenses provided by this Section 5 shall continue as to the Employee even if the Employee has ceased to be a director, officer, employee, or agent of the Company or is no longer employed by the Company, and shall inure to the benefit of the Employee's heirs, executors, and administrators. The rights conferred on the Employee by this Section 5 shall not be exclusive of any other right that the Employee may have or hereafter acquire under any statute, provision of the Company's certificate of formation or bylaws, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in the Employee's official capacity and as to action in another capacity while holding office.
(d) Directors' and Officers' Liability Insurance. During the Employment Term and for a period of not less than four (4) years following any termination of the Employee's employment for any reason (including following a Change in Control, as defined below), the Company shall maintain directors' and officers' liability insurance coverage for the Employee on terms and conditions no less favorable than those provided to other senior executive officers and directors of the Company. Such insurance shall provide coverage with respect to acts or omissions occurring during the Employee's service to the Company, whether claims are brought during or after the Employee's employment with the Company. The Company shall provide the Employee with prompt written notice of any material modification, cancellation, or non-renewal of such coverage.
(e) Tail Coverage Following Change in Control. In the event of a Change in Control, the Company shall, or shall cause any successor entity to, either (i) continue to maintain the directors' and officers' liability insurance coverage described in Section 5(d) hereof for a period of not less than four (4) years following such Change in Control, or (ii) obtain, prior to or concurrently with the closing of the Change in Control transaction, extended reporting period coverage under the Company's existing directors' and officers' liability insurance policy (commonly known as "tail coverage") providing coverage for a period of not less than four (4) years following the Change in Control for acts or omissions occurring prior to and including the date of the Change in Control. Such tail coverage shall provide coverage limits, terms, and conditions no less favorable than the existing policy in effect immediately prior to the Change in Control.
(f) Payment of Expenses. The Company shall pay all expenses, including attorneys' fees, actually and reasonably incurred by the Employee in connection with any proceeding for which indemnification is sought under this Section 5 within thirty (30) days after receipt of a written request for such payment, together with such evidence of expenses as the Company may reasonably require.
(g) Enforcement. If a claim under this Section 5 is not paid in full by the Company within sixty (60) days after a written claim has been received by the Company, the Employee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim, and if successful in whole or in part, the Employee shall also be entitled to be paid the expenses of prosecuting such claim, including reasonable attorneys' fees. In any such action, the Company shall have the burden of proving that the Employee is not entitled to indemnification under applicable law and this Section 5.
6. Compensation Upon Termination.
(a) Termination for Cause; Resignation Without Good Reason. If the Employee's employment is terminated by the Company for Cause or by the Employee without Good Reason, the Employee shall be entitled to receive:
| | (i) | any unpaid Salary earned through the date of termination; |
| | | |
| | (ii) | reimbursement for any unreimbursed business expenses properly incurred through the date of termination, subject to the Company's expense reimbursement policies; and |
| | | |
| | (iii) | such employee benefits, if any, to which the Employee may be entitled under the Company's employee benefit plans as of the date of termination (collectively, the “Accrued Obligations”). |
The Employee shall not be entitled to any other compensation or benefits from the Company following such termination.
(b) Termination Without Cause or for Good Reason (Other than Following a Change in Control). If the Employee's employment is terminated by the Company without Cause (including a Non-Renewal by the Company) or by the Employee for Good Reason, and subject to the Employee's compliance with Section 9 hereof and the Employee's execution and non- revocation of a separation agreement and general release of claims in a form satisfactory to the Company (the “Release”) within the time period specified therein, which shall in no event be more than sixty (60) days following the date of termination, the Employee shall be entitled to receive:
| | (i) | the Accrued Obligations; and |
| | | |
| | (ii) | continued payment of the Salary in effect immediately prior to the date of termination (or, if the termination is due to a material reduction in the Salary constituting Good Reason, the Salary in effect immediately prior to such reduction) for a period of one hundred eighty (180) days following the date of termination, payable in substantially equal installments in accordance with the Company's regular payroll practices, commencing on the first (1st) regular payroll date following the date the Release becomes effective and irrevocable (with the first (1st) payment including any amounts that would have been paid during the period between the date of termination and such first (1st) payment date. |
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(c) No Other Severance. The severance payments and benefits provided under this Section 6 are in lieu of any other severance payments or benefits to which the Employee might otherwise be entitled under any severance plan, program, or policy of the Company. The Employee acknowledges and agrees that the Employee is not entitled to any payments or benefits upon termination of employment except as expressly set forth in this Agreement.
7. Cooperation Post-Termination of Employment. The Employee agrees and covenants that, following the termination of the Employment Term for any reason, the Employee shall, to the extent reasonably requested in writing by the Company, cooperate in good faith with and assist the Company in the pursuit or defense of any claim, administrative charge, or cause of action by or against the Company (except for any asserted by the Employee) as to which the Employee, by virtue of his employment with the Company, has relevant knowledge or information and, without the necessity of a subpoena, providing truthful information and testimony in any jurisdiction or forum. The Company shall reimburse the Employee for his reasonable out-of-pocket expenses in complying with this Section 7.
8. Outside Activities and Prior Investments.
(a) Acknowledgment and Carve-Out of Prior Investments. The Company acknowledges and agrees that, prior to the Effective Date, the Employee has made, and may continue to hold, passive or active investments, ownership interests, advisory roles, board positions, consulting arrangements, and other business relationships in entities unrelated to the Company (collectively, the “Prior Investments”). Schedule A attached hereto sets forth a non- exclusive list of such Prior Investments as of the Effective Date. The Company expressly acknowledges and agrees that the Prior Investments are carved out from the scope of this Agreement and shall not, in and of themselves, constitute a conflict of interest, breach of fiduciary duty, violation of the restrictive covenants set forth in Section 9 hereof, or any other breach or violation of this Agreement or the Employee's obligations to the Company.
(b) Continued Participation in Prior Investments. Nothing in this Agreement, including, but not limited to, the confidentiality, non-competition, or non-solicitation provisions set forth in Section 9 hereof, shall prohibit, restrict, or limit the Employee from:
| | (i) | continuing to own, hold, manage, operate, advise, invest in, or otherwise participate in any Prior Investments; |
| | | |
| | (ii) | serving as a director, officer, manager, member, partner, advisor, consultant, or in any other capacity with respect to any Prior Investments; |
| | | |
| | (iii) | receiving compensation, distributions, dividends, interest, or any other form of economic benefit from any Prior Investments; |
| | | |
| | (iv) | devoting time, attention, and effort to any Prior Investments; or |
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| | (v) | making new investments in, or expanding the Employee's involvement with, any Prior Investments; provided, in each case, that such activities do not materially interfere with the Employee's ability to discharge the Employee's duties and responsibilities to the Company as set forth in this Agreement. |
(c) Waiver of Corporate Opportunity Doctrine. The Company expressly waives and renounces any interest in, and any expectancy that the Employee will offer to the Company, any business opportunity, transaction, or investment that relates to or arises from any Prior Investment, and the Company shall have no right or expectancy that such opportunities be offered to the Company. The Employee shall have no obligation to communicate or present any such opportunity to the Company, and the Employee may pursue any such opportunity for the Employee's own account or for the account of any Prior Investment without any obligation to the Company. This waiver shall not apply to any business opportunity that (i) is expressly offered to the Employee solely in the Employee's capacity as an officer or director of the Company, (ii) is directly related to the Company's existing or prospective business activities in power generation or energy infrastructure in which the Company has made substantial and specific investments or commitments, and (iii) is presented to the Employee through the use of confidential or proprietary information of the Company obtained in violation of Section 9 hereof. In the event of any ambiguity or dispute as to whether a particular opportunity falls within the scope of this waiver, the matter shall be resolved by the independent members of the Board, whose determination shall be binding on the Company.
(d) No Disclosure Obligation. Except as may be required by applicable law, securities regulations, or stock exchange listing standards, the Employee shall have no obligation to disclose to the Company any financial information, strategic plans, business opportunities, or other proprietary or confidential information relating to any Prior Investment. The Employee shall, however, promptly disclose to the Board any matter relating to a Prior Investment that the Employee reasonably believes presents or may present an actual conflict of interest with the Employee's duties to the Company.
(e) New Outside Activities. During the Employment Term, the Employee may, with the prior written consent of the Board (which consent shall not be unreasonably withheld, conditioned, or delayed), engage in new outside business activities, including serving on boards of directors of for-profit entities, advisory boards, making new investments, or providing consulting services, provided that such activities do not materially interfere with the Employee's duties to the Company, do not violate the restrictive covenants set forth in Section 9 hereof, and do not present a material conflict of interest with the Company's business. The Board's consent shall be deemed granted if the Board does not respond to the Employee's written request within thirty (30) days of receipt thereof.
9. Restrictive Covenants.
(a) During the Employment Term and for a period of twenty-four (24) months thereafter (the “Restricted Period”), the Employee hereby shall not, and shall not cause his Affiliates to, directly or indirectly:
| | (i) | engage or otherwise participate in Competitive Business in the Restricted Territory; |
| | | |
| | (ii) | provide services to any business or entity that is engaged in a Competitive Business in the Restrictive Territory; |
| | | |
| | (iii) | encourage, induce, solicit, or attempt to encourage, induce, or solicit, any officer, director, or employee of the Company, or its Affiliates, to leave the employ of or engagement with any the Company or any such Affiliate; provided, however, that the Employee shall not be deemed to be soliciting any manager, officer, director, or employee of the Company, or its Affiliates, as a result of the Employee, or any of his Affiliates, placing advertisements or other medium of general circulation that are not targeted to (or through the use of search firms who are not instructed to target) persons who are managers, officers, directors, or employees of the Company, or its Affiliates; or |
| | | |
| | (iv) | hire, employ, or engage any Person who was a manager, officer, director, or employee of the Company, or its Affiliates, at any time in the twelve (12) months prior to such hiring, employment, or engagement unless the Company, or its Affiliates, terminate such manager, officer, director, or employee, in which case such manager, officer, director, or employee may be immediately hired, without limitation or restriction, by the Company, or his Affiliates. |
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For purposes of this Section 9(a), the term “participate” includes any direct or indirect interest (including through any Affiliate or relative) in any enterprise, whether as an officer, director, employee, partner, sole proprietor, agent, representative, independent contractor, seller, franchisor, franchisee, creditor, or owner.
(b) Non-Disparagement. During the Employee's employment and at all times thereafter, the Employee shall not make any public or private statements, whether written or oral, that disparage, criticize, or otherwise reflect negatively upon the Company or any of its affiliates, or any of their respective directors, officers, employees, products, services, or business practices. This restriction shall not prohibit the Employee from (i) making truthful statements that are required by law, regulation, or court order, (ii) providing truthful testimony in any legal proceeding, (iii) exercising rights under Section 7 of the National Labor Relations Act, or (iv) making good faith reports to governmental authorities regarding potential violations of law.
(c) Tolling. In the event of any violation of the restrictions set forth in this Section 9, the Restricted Period shall be tolled and extended by the duration of such violation, such that the Company receives the full benefit of the bargained-for period of restriction.
10. Confidential Information.
(a) Provision. Beginning on the Employee’s execution of this Agreement and during the Employment Term, in consideration of the Employee’s covenants herein, the Company promises to provide the Employee with access to Confidential Information as reasonably necessary for the performance of the Employee’s job duties.
(b) Protection. The Employee agrees that, unless the Employee first secures the written consent of the Company, during and after the Employment Term, the Employee shall not use for himself or anyone else, and shall not disclose to others, any Confidential Information, except to the extent such use or disclosure is required by applicable law or any order (in which event the Employee shall immediately inform the Company in advance of any such required disclosure, shall cooperate with the Company in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). From and after the Employment Term, the Employee shall use all reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss, and theft. Notwithstanding the foregoing restrictions, the Employee shall be entitled to disclose Personal Confidential information to the Employee’s legal and financial advisors that are bound by a duty of confidentiality provided that such disclosure is made in connection with a required disclosure.
(c) Return and Review. All Confidential Information shall remain the property of the Company. The Employee shall return to the Company any and all Confidential Information within the Employee’s possession, custody or control, promptly upon the Company’s request and/or the Termination Date, as applicable; provided, however, that the Employee shall be able to retain copies of any Personal Confidential Information. Upon termination of the Employee’s employment for any reason or under any circumstances, the Employee shall return any and all of the property of the Company (including, without limitation, all phones, tablets, computers, other devices, keys, credit cards, identification tags, documents, data, Confidential Information and Work Product and other proprietary materials) and all other materials; provided, however, that the Employee shall be able to retain copies of any Personal Confidential Information.
(d) Response to Third Party Requests. In the event a third party requests, by legal process or otherwise, seeks the disclosure of any Confidential Information, either during or after the Employment Term, the Employee hereby shall promptly: (i) provide the Company a description and an identical copy of any requested Confidential Information; and (ii) provide any and all devices containing such requested Confidential Information to a vendor, determined by the Company in its sole and absolute discretion, to review any such device for such requested Confidential Information. The Employee hereby shall grant the Company the right to act in the Employee’s name, place, and stead to defend and protect against any disclosure of Confidential Information.
(e) Confidential Information of Others. During the Employment Term, the Employee shall not retain, take, use, disclose or bring onto the Company’s premises any confidential or proprietary information of any Person other than the Company, unless lawfully authorized to do so.
(f) Other Property. All personal property affecting or relating to the Business shall also remain the property of the Company, and the Employee shall return it to the Company immediately upon termination of the Employment Term.
(g) Compelled Disclosure. Notwithstanding the foregoing, in the event that the Employee is required by law, a regulatory authority, or other applicable judicial or governmental order to disclose any Confidential Information, the Employee shall, where legally permitted and reasonably practicable, provide the Company with prompt written notice of any such requirement so that the Company may seek a protective order or other appropriate remedy (at its own expense) and/or waive compliance with the terms of this Section 10 (and in the event the Company seeks such an order, the Employee will not oppose such efforts). In the event that such protective order or other remedy is not obtained and the Employee is nonetheless compelled by law to disclose Confidential Information, or in the event that the Company waives compliance with the terms hereof, the Employee may disclose only that portion of the Confidential Information that is legally required to be disclosed and the Employee shall exercise best efforts to preserve the confidentiality of the Confidential Information, including, without limitation, by cooperating with the Company to obtain an appropriate protective order or other reliable assurance that confidential treatment shall be afforded to the Confidential Information by the recipient thereof.
(h) Liquidated Damages. In the event the Employee breaches any provision of Sections 10(c), 10(d), 10(e), 10(f), and 10(g) hereof, the Employee shall immediately pay to the Company an amount of money equal to [Ten Thousand and 00/100 Dollars ($10,000.00)] for every day of the Employee’s non-compliance with his obligations under Sections 10(c), 10(d), 10(e), 10(f), and 10(g) hereof (any and all such daily amount, collectively, the “Liquidated Damages”). Each Party hereby agrees and acknowledges that, because of the unique nature of the economic damages and losses that would be sustained by the Company, in the event that the Employee breaches any provision of Sections 10(c), 10(d), 10(e), 10(f), or 10(g) hereof: (i) it is difficult or impossible to determine with precision the amount of damages that would or might be incurred by the Company resulting therefrom; (ii) it would be impracticable or extremely difficult to fix the actual damages to the Company resulting therefrom; and (iii) the Liquidated Damages that would be payable under this Section 10(h) are (A) to be in the nature of liquidated damages and not an unreasonable penalty, and (B) a fair, reasonable, and appropriate estimation of the actual damages the Company would suffer.
(i) No Breach. For the avoidance of doubt, it will not be a breach of this Section 10 for the Employee to share the terms of this Agreement and the Employee’s compensation and benefits with the Employee’s lawyers, financial advisors, and/or spouse.
11. Work Product; Intellectual Property.
(a) Assignment. The Employee hereby irrevocably grants and assigns to the Company all right, title, and interest (including, but not limited to, an exclusive, fully paid, irrevocable, perpetual, license to use) to all Work Product. The Employee hereby acknowledges and agrees that all intellectual property rights in all Work Product belong to the Company.
(b) Disclosure. For the duration of the Employment Term and thereafter, the Employee shall immediately disclose all Work Product to the Company and perform all actions reasonably requested by the Company to establish and confirm the ownership and/or proprietary interest of the Company in any Work Product (including the execution of assignments, consents, powers of attorney, applications and other instruments). The Employee shall not file any patent or copyright applications related to any Work Product without the written consent of the Company.
12. General Provisions.
(a) Entire Agreement. This Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the Parties, with respect to the subject matter hereof. This Agreement is for the benefit only of the Parties and is not intended to create any obligations to, or rights in respect of, any Persons other than the Parties.
(b) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in a writing referring to this Agreement signed by the Parties. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
(c) Specific Performance; Injunctive Relief. In the event of a breach by the Employee of any provision of Section 2(b), 2(c), 2(d), 7, 8, 9, 10, or 11 hereof, the Company shall be entitled to recover any damages caused by reason of such breach, together with any and all proceeds, funds, payments and proprietary interests, of every kind and description, arising from, or attributable to, such breach, and to exercise all other rights existing in its favor. The Employee hereby agrees and acknowledges that: (i) monetary damages incurred by the Company caused by the Employee’s breach of any provision of Section 2(b), 2(c), 2(d), 7, 8, 9, 10, or 11 hereof would be difficult to quantify and may not be an adequate remedy for any such breach or threatened breach of such provision; (ii) any breach or threatened breach by the Employee of any provision of Section 2(b), 2(c), 2(d), 7, 8, 9, 10, or 11 hereof will constitute an imminent harm to the Company that will be irreparable at law; and (iii) for the reasons provided in Sections 12(c)(i) and 12(c)(ii) above, the Company may, in its sole and absolute discretion, in addition to any other available remedies, apply to any court of law or equity of competent jurisdiction for and be entitled to specific performance and/or injunctive relief in order to enforce or prevent any violation of such provisions, without the necessity of posting any bond or other surety as a condition to the issuance or granting of such relief. If it is finally determined by a court of competent jurisdiction that the Company is entitled to an injunction against the Employee as a result of the Employee’s breach of such provisions, then the Company shall be entitled to recover from the Employee any and all reasonable attorneys’ fees and expenses incurred by the Company in enforcing such provisions.
(d) Successors and Assigns. All the terms and provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the respective heirs, representatives, successors (including any successor as a result of a merger or similar reorganization) and assigns of the Parties, except that the Employee’s duties and responsibilities hereunder are of a personal nature and shall not be assignable, in whole or in part, by the Employee.
(e) GOVERNING LAW. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CONFLICT OF LAWS PRINCIPLES.
(f) Notices. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy (except that telecopies transmitted after 5:00 p.m. in the recipient’s time zone shall be deemed delivered the next business day), electronic or digital transmission method; the business day after it is sent, if sent for next business day delivery to a domestic address by recognized overnight delivery service (e.g., Federal Express); and three (3) business days after it is sent, if sent by certified or registered mail, return receipt requested. In each case notice shall be sent to:
| | If to the Company: | Independence Power Holdings, Inc. |
| | | 14114 N. Dallas Parkway, Suite 200 Dallas, Texas 75254 Attention: Board of Directors Email: pannhoff@independco.com |
| | | |
| | If to the Employee: | Todd Parkin 5760 Powers Ferry Rd. NW Atlanta, GA 30327 Email: tkparkin@rinconstrategic.com |
(g) ARBITRATION. ANY DISPUTE, CLAIM, OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION, OR VALIDITY HEREOF, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, SHALL BE RESOLVED BY SUBMISSION TO ARBITRATION IN THE COUNTY OF DALLAS, STATE OF TEXAS, BEFORE GLEN ASHWORTH (UNLESS HE IS UNAVAILABLE OR UNWILLING, IN WHICH CASE DALLAS JAMS SELECTION PROCEDURE SHALL GOVERN) (THE “ARBITRATOR”). THE ARBITRATION SHALL BE ADMINISTERED BY DALLAS JAMS, PURSUANT TO ITS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES, AND IN ACCORDANCE WITH THE EXPEDITED PROCEDURES CONTAINED THEREIN. THE ARBITRATOR SHALL FOLLOW ANY APPLICABLE FEDERAL LAW AND TEXAS STATE LAW IN RENDERING AN AWARD. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION OVER THE DISPUTE, CLAIM, OR CONTROVERSY SUBMITTED TO SUCH ARBITRATION. THIS SECTION SHALL NOT PRECLUDE ANY PARTY HEREIN FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF COMPETENT JURISDICTION IN DALLAS COUNTY, TEXAS ONLY. FURTHER, EACH PARTY AGREES AND ACKNOWLEDGES THAT THE ARBITRATOR’S DECISION SHALL BE FINAL AND BINDING, TO THE FULLEST EXTENT PERMITTED BY LAW, AND ENFORCEABLE BY ANY COURT HAVING JURISDICTION THEREOVER.
(h) Fees and Costs. The fees charged by the arbitration administrator and the Arbitrator shall be borne by the Parties according to Dallas JAMS Rules. Otherwise, the Parties shall each bear their own costs, expenses, and attorneys’ fees incurred in arbitration related to any disputes between the Parties arising from this Agreement. In event that a dispute occurs between the Parties related to this Agreement, the Employee disclaims any and all indemnification provided to the Employee hereunder for any and all costs, expenses, and attorneys’ fees incurred in arbitration by the Employee. Within the Arbitrator’s discretion, the Party that prevails in arbitration may recover its arbitration expenses, its portion of the fees and costs charged by the arbitration administrator, the fees of the Arbitrator, or its reasonable attorney’s fees and expenses, as applicable, regardless of which Party made the initial complaint.
(i) Confidentiality. Both during and after the arbitration process provided for herein, all information and discovery disclosed in the arbitration process (“Arbitration Information”) shall be maintained in confidence by the Parties and their counsel. Arbitration Information may be used, possessed, and disclosed only for the purposes of arbitration and related proceedings pursuant to this Agreement, and for no other purpose whatsoever. Upon request, the Arbitrator shall issue prescriptive orders as may be required to enforce and maintain this covenant of confidentiality during the course of arbitration-related proceedings and after the conclusion of the arbitration.
(j) WAIVER OF JURY TRIAL. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM, CAUSE OF ACTION, COUNTERCLAIM OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING OR OTHER HEARING BROUGHT BY EITHER PARTY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTERING INTO THIS AGREEMENT, THAT EACH PARTY ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS AGREEMENT IN ANY RELATED FUTURE DEALINGS BETWEEN THE PARTIES. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S RESPECTIVE JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. EACH PARTY EXPRESSLY AGREES TO WAIVE ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER RELATING TO THIS AGREEMENT.
(k) CONSENT TO JURISDICTION. SUBJECT TO SECTION 12(g) HEREOF, EACH PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE DISTRICT OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF DALLAS, STATE OF TEXAS AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED.
(l) DISCLAIMER OF RELIANCE. EACH PARTY ACKNOWLEDGES, AND WAIVES AND RELEASES ANY CLAIM TO THE CONTRARY, THAT NEITHER SUCH PARTY, NOR ANY AGENTS OR COUNSEL OF SUCH PARTY, HAS MADE ANY STATEMENTS, PROMISES, REPRESENTATIONS, OR WARRANTIES, EXPRESS OR IMPLIED, NOT CONTAINED HEREIN, TO INDUCE THE OTHER PARTY’S
EXECUTION OF THIS AGREEMENT. EACH PARTY FURTHER ACKNOWLEDGES THAT SUCH PARTY (A) IS NOT RELYING ON ANY STATEMENTS, PROMISES, REPRESENTATIONS, OR WARRANTIES OF ANY PARTY BEING RELEASED HEREBY; AND (B) IS SOLELY RELYING UPON SUCH PARTY’S JUDGMENT. EACH PARTY REPRESENTS AND WARRANTS THAT SUCH PARTY HAS CONDUCTED AN INDEPENDENT INVESTIGATION AND THAT SUCH PARTY HAS HAD THE OPPORTUNITY TO CONSULT WITH THE COUNSEL OF SUCH PARTY’S CHOICE AND SO HAS CONSULTED. EACH PARTY SPECIFICALLY DISCLAIMS RELIANCE ON ANY REPRESENTATIONS MADE BY ANY OTHER PARTY, EXCEPT FOR THOSE REPRESENTATIONS THAT ARE SPECIFICALLY REDUCED TO WRITING IN THIS AGREEMENT.
(m) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in a writing referring to this Agreement signed by the Parties. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
(n) Survival. The provisions of this Agreement that, by their own terms, apply after the Termination Date (including, without limitation, the applicable provisions of Sections 6(c), 7, 8, 9, 10, 11, and 12 hereof) shall survive the termination of the Employee’s employment with the Company (regardless of whether such termination is voluntary, involuntary, for Cause, or for Good Reason), and shall remain in full force and effect after such termination, as applicable according to their terms.
(o) No Waiver. The waiver by the Company of a breach of any of the provisions of this Agreement by the Employee shall not operate or be construed as a waiver of any subsequent breach by the Employee.
(p) Further Assurances. The Employee agrees to sign and deliver such additional documents as may be reasonably required by the Company to effectuate the intent and purposes of this Agreement.
(q) Severability. In the event that any of the provisions hereof shall be held by a court or other tribunal of competent jurisdiction to be invalid or unenforceable, the remaining portions hereof shall remain in full force and effect and such provision shall be enforced to the maximum extent possible so as to effect the intent of the Parties, and shall in no way be affected, impaired or invalidated.
(r) Counterparts. This Agreement may be executed in one (1) or more counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement, and shall become binding when one (1) or more counterparts have been signed by each Party and delivered to the other Party.
[Signature Page to Follow.]
IN WITNESS WHEREOF, the Company and the Employee, intending to be fully bound by this Agreement , have executed this Agreement as of the Effective Date.
| | COMPANY: INDEPENDENCE POW ER HOLDINGS, INC., a Nevada corporation | |
| | | | |
| By: | /s/ Scott Stephenson | |
| | Name: | Scott Stephenson | |
| | Title: | CFO | |
| | | | |
| | EMPLOYEE: | |
| | | | |
| | /s/ TODD PARKIN | |
| | TODD PARKIN, | |
| | individually | |
EXHIBIT A
Definitions.
The following terms used in this Agreement shall have the indicated meanings:
“Business” means all lawful activities of the Company.
“Capacity” means and includes participating in the ownership, management, operation or control of, taking a financial interest in, being employed by, being associated or affiliated with, or providing services as a consultant or independent contractor to any Person.
“Change in Control” shall mean the occurrence of any of the following events:
| | (a) | the acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”), or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (D) any acquisition pursuant to a transaction that complies with romanettes (i), (ii), and (iii) of subsection (c) below; |
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| | (b) | a change in the composition of the Board such that the individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; |
| | (c) | other than the going public merger, consummation of a reorganization, merger, statutory share exchange, or consolidation or similar transaction involving the Company, or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Transaction”), in each case unless, following such Business Transaction, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Transaction beneficially own, directly or indirectly, more than fifty percent (50%) of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Transaction (including, without limitation, an entity that as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one (1) or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Transaction of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any entity resulting from such Business Transaction or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Transaction) beneficially owns, directly or indirectly, fifty percent (50%) or more of the then-outstanding shares of common stock of the entity resulting from such Business Transaction or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Transaction, and (iii) at least a majority of the members of the board of directors of the entity resulting from such Business Transaction were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Transaction; or |
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| | (d) | approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. |
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person acquires beneficial ownership of more than fifty percent (50%) of the Outstanding Company Common Stock or Outstanding Company Voting Securities as a result of the acquisition of Outstanding Company Common Stock or Outstanding Company Voting Securities by the Company which reduces the number of Outstanding Company Common Stock or Outstanding Company Voting Securities, unless and until such Person thereafter acquires beneficial ownership of additional shares of Outstanding Company Common Stock or additional Outstanding Company Voting Securities.
“Competitive Business” means any business or enterprise that is engaged in the development, ownership, operation, management, or financing of utility-scale power generation facilities (including natural gas, renewable energy, or other dispatchable power generation), energy infrastructure projects, distributed energy resources, or energy storage systems, or that otherwise competes with the material businesses or operations of the Company as conducted during the twelve (12) months prior to the termination of the Employee's employment; provided, however, that the term “Competitive Business” shall not include (a) activities related to the Employee's Prior Investments as set forth on Schedule A, (b) passive investments of less than five percent (5%) of the outstanding equity or voting securities of any publicly traded company, or (c) activities approved in writing by the Board.
“Confidential Information” means any and all material, data, designs, ideas, inventions, formulae, patterns, compilations, programs, devices, methods, techniques, processes, knowledge or know how, plans (sales, marketing, business, strategic, technical or otherwise), arrangements, pricing and/or other information of or relating to, the Company or its Business that is confidential, proprietary, and/or a trade secret: (a) by its nature; (b) based on how it is treated or designated by the Company; (c) such that its appropriation, use or disclosure would have a material adverse effect on the business or planned business of the Company; or (d) as a matter of law. Notwithstanding the foregoing, Confidential Information does not include material, data, and/or information that: (i) the Company has voluntarily placed in the public domain; (ii) becomes available to the Employee on a non-confidential basis from a source, other than the Company, which has no obligation of confidentiality with respect to Confidential Information; or (iii) otherwise enters the public domain lawfully and without the violation of any agreement or other obligation of confidentiality.
“Disability” shall be defined as the inability of the Employee to substantially perform the essential functions of the Employee’s duties as required hereunder, with or without reasonable accommodation.
“Good Reason” shall mean the occurrence of any of the following without the Employee's prior written consent:
| | (a) | a material reduction in the Employee's Salary, other than a reduction that is part of a general reduction in base salaries affecting all senior executives of the Company on a proportionate basis; |
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| | (b) | a material, adverse change in the Employee's title, duties, responsibilities, or reporting relationship, including without limitation ceasing to report directly to the Board; |
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| | (c) | a material breach by the Company of any material provision of this Agreement; or |
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| | (d) | the relocation of the Employee's principal place of employment by more than fifty (50) miles from the location as of the Effective Date without the Employee's consent. |
“Person” mean any individual and any corporation, partnership, entity, group, tribunal, or governmental authority.
“Personal Confidential Information” means any Confidential Information which constitutes personal information about the Employee’s benefits or compensation.
“Restricted Territory” means the United States of America and any other country or geographic area in which the Company conducts material business operations or has active business plans to commence operations as of the date of termination of the Employee's employment.
“Work Product” means all patents and patent applications, all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, writings, documents, presentations, reports, creative works, discoveries, software, computer programs, modifications, enhancements, know how, formulations, concepts and ideas, and all similar or related information (in each case whether or not patentable), all copyrights and copyrightable works, all trade secrets, confidential information, and all other intellectual property and intellectual property rights that are conceived, reduced to practice, developed, created, authored, produced or made by the Employee, either alone or with others, during the Employment Term.
SCHEDULE A
PRIOR INVESTMENTS
The Parties acknowledge that this list is illustrative and not exhaustive, and that the Employee's rights under Section 8 hereof apply to all Prior Investments whether or not specifically listed on this Schedule A.
| | 1. | Rincon Broadcasting and all Rincon Broadcasting’s affiliates; |
| | 2. | XG Compute; |
| | 3. | Rincon Insurance Holdings Ltd.; and |
| | 4. | Parkin Family Trust and Parkin Family Trust’s affiliates. |
EXHIBIT 10.7
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”), dated effective as of December 30, 2025 (the “Effective Date”), is entered into by and between Independence Power Holdings, Inc., a Nevada corporation (the “Company”), and Scott Stephenson, individually (the “Employee”). The Company and the Employee are sometimes referred to herein, collectively, as the “Parties,” and, individually, as each a “Party.”
RECITALS
WHEREAS, the Company is engaged in the business of power generation, energy infrastructure development, and related energy services;
WHEREAS, the Company is undertaking a going-public transaction pursuant to which it will combine with TriUnity Merger Sub, Inc., a Texas corporation (the “Business Combination”);
WHEREAS, the Employee desires to be an employee, and the Company desires him to be an employee, of the Company, subject to the terms and conditions hereof; and
WHEREAS, in connection with the Company entering into that certain Agreement and Plan of Merger, dated effective as of even date herewith, the Employee and the Company seek to enter into this Agreement governing the terms and conditions of the Employee’s employment with the Company.
NOW, THEREFORE, for good and valuable consideration, including employment with the Company in the position of Confidential, employment compensation and benefits, and the business relationships, information (including the Confidential Information) goodwill, work experience and/or other fruits of employment with the Company that the Employee will have the opportunity to obtain, use and develop under this Agreement, the Employee and the Company hereby agree as follows:
AGREEMENT
1.Definitions. Capitalized terms that are not otherwise defined herein, shall have the meanings set forth in Exhibit A, attached hereto.
2. Nature of Duties; Employment Term.
(a) During the Employment Term (as defined in Section 2(e) hereof), the Employee shall serve as the Chief Financial Officer of the Company of the Company and its wholly-owned Subsidiary, Independence Power, Inc. As the Chief Financial Officer, the Employee shall report to the Chief Executive Officer. The Employee shall have such duties, responsibilities, and authority as are customarily associated with the position of the Chief Financial Officer of a publicly traded company of similar size and scope in the energy and infrastructure sector, including, but not limited to, overall strategic direction, operational oversight, capital allocation, financing strategy, investor relations, and compliance with all applicable securities laws and regulations.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 1 OF 21 |
(b) The Employee acknowledges and agrees that, in connection with the Business Combination and the Company's status as a public company, the Employee's duties shall include, but is not limited to:
| | (i) | serving as the principal executive officer for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and certifying financial statements and disclosures required under the Sarbanes-Oxley Act of 2002, as amended; |
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| | (ii) | establishing and maintaining disclosure controls and procedures and internal control over financial reporting as required by applicable law; |
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| | (iii) | overseeing compliance with all Securities and Exchange Commission reporting obligations, including periodic reports, current reports, and proxy statements; |
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| | (iv) | conducting investor relations activities and serving as the primary spokesperson for the Company with investors, analysts, and the financial media; |
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| | (v) | ensuring corporate governance practices meet or exceed applicable listing standards and best practices for publicly traded companies; and |
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| | (vi) | working with the Board and its committees to develop and implement executive compensation programs, succession planning, and enterprise risk management frameworks appropriate for a public company. |
(c) During the Employment Term (as defined below), the Employee shall serve on the Board without additional compensation. The Employee shall be nominated for election to the Board at each annual meeting of stockholders during the Employment Term, subject to applicable law and listing standards.
(d) During the Employment Term, the Employee shall devote substantially all of the Employee’s business time and attention to the business and affairs of the Company, shall faithfully serve the Company, and shall conform to and comply with the lawful and reasonable directions and instructions given to the Employee. During the Employment Term, the Employee shall use the Employee’s best efforts to promote and serve the interests of the Company and shall not engage in any other business activity, whether or not such activity shall be engaged in for pecuniary profit; provided, however, that the Employee shall have the right to: (i) engage in religious, charitable, civic, educational, professional or community affairs; (ii) manage the Employee’s personal and family investments; and (iii) own passive investments of not more than five percent (5%) of the outstanding shares of any public company whose shares are quoted on or traded on a national system or exchange.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 2 OF 21 |
(e) The Company hereby agrees to employ the Employee, and the Employee hereby agrees to accept employment with the Company, upon the terms and conditions contained in this Agreement, to be effective on the Effective Date. The Employee’s employment with the Company shall continue, subject to earlier termination of such employment pursuant to the terms hereof, until the [third (3rd)] anniversary of the Effective Date (the “Initial Employment Period”). On the [third (3rd)] anniversary of the Effective Date, and on each anniversary thereof, the Employment Period shall be automatically extended for an additional twelve-month period, and this Agreement shall likewise be extended during such twelve-month period (each, a “Renewal Employment Period”). When used herein, the term “Employment Term” shall mean the Initial Employment Period together with any Renewal Employment Periods, if any. The Company or the Employee may elect to terminate the automatic extension of the Employment Term by giving written notice of such election not less than sixty (60) days prior to the end of the then current Employment Period (“Non-Renewal”).
(f) Notwithstanding the foregoing, this Agreement shall terminate for “Cause” immediately upon the occurrence of any of the following events:
| | (i) | death of the Employee; |
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| | (ii) | the Employee’s Disability such that he is unable to perform his duties hereunder, with or without a reasonable accommodation, for a period of one hundred eighty (180) consecutive days or a total of one hundred eighty (180) days during any fiscal year; provided, however, that the Company shall reconfirm at the end of the 180-day period that the Employee is unable to perform his duties, with or without a reasonable accommodation; |
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| | (iii) | any material breach of this Agreement by the Employee, including, but not limited to, the failure of the Employee to comply with the covenants set forth in Sections 2(b), 2(c), 2(d), 7, 8, 9, 10, and/or 11 hereof; provided, however, that the Company shall provide a notice of a breach under this Section to the Employee and, to the extent such breach is curable, the Employee shall have an opportunity to cure the breach. If the breach is not cured, to the Company’s sole satisfaction, within ten (10) days after the notice to the Employee, or if the breach is not curable, then this Agreement shall immediately terminate; |
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| | (iv) | the Employee’s material non-compliance with the Company’s rules, regulations and policies, including, but not limited to: (A) the Employee’s failure to perform (other than by reason of disability) or negligence in the performance of his duties under this Agreement; (B) the Employee’s failure to comply with all applicable governmental laws and regulations; (C) unfavorable results obtained through the background reference check; (D) the Employee’s abuse of alcohol, prescription drugs, or controlled substances; or (E) the Employee is charged with a felony or is accused of committing an act of moral turpitude; provided, however, that the Company shall provide a notice of a breach under this Section 2(f)(iv) to the Employee and, to the extent such breach is curable, the Employee shall have an opportunity to cure the breach. If the breach is not cured, to the Company’s sole satisfaction, within ten (10) days after the notice to the Employee, or if the breach is not curable, then this Agreement shall immediately terminate; or |
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 3 OF 21 |
3. Payments.
(a) Salary. During the Employment Term, the Company will pay the Employee an annual salary of Three Hundred Twenty-One Thousand and 00/100 Dollars ($321,000.00) (the “Salary”), subject to authorized and required withholdings. The Salary will be payable in regular semi-monthly installments in accordance with the Company’s general payroll practices.
(b) Salary Review. The Employee's Salary shall be subject to annual review by the Board of Directors and may be increased from time to time in the sole discretion of the Board of Directors based on the Employee's performance and the Company's financial condition. In no event shall the Employee's Salary be reduced below the amount in effect immediately prior to such review, except as expressly permitted in Section 2(f) hereof or in connection with an across-the- board reduction applicable to all senior executives.
(c) Long-Term Incentive Compensation. The Employee shall be eligible to participate in such long-term incentive compensation plans as may be established by the Company from time to time for senior executives, including equity-based compensation plans, on terms and conditions to be determined by the Board of Directors in its sole discretion. Any such awards shall be subject to the terms and conditions of the applicable plan documents and award agreements.
4. Employee’s Benefits.
(a) Benefit Plans. The Employee will be entitled to participate in all employee benefit plans and programs and to receive all benefits, for which similarly situated employees of the Company are eligible, subject to the Employee’s eligibility under the terms and conditions of any applicable plan or program now in place or established later by the Company, on the same basis as similarly situated employees of the Company. For the avoidance of doubt, nothing in this Agreement will preclude the Company from amending or terminating any of the benefit plans or programs applicable to the Employee as long as such amendment or termination is applicable to similarly situated employees. Notwithstanding any change in benefits, the employment of the Employee shall be construed as continuing under the terms and conditions of this Agreement.
(b) Paid Time Off. The Employee is eligible to take paid time off (“PTO”) as provided per the Company policy, as may be amended from time to time, but in no event less than four (4) weeks of paid time off per year. All of the Employee’s PTO shall be taken at such times and intervals as shall be determined by the Employee, subject to the reasonable business needs of and approval by the Company.
(c) Expense Reimbursement. During the Employment Term, the Company shall reimburse the Employee for the Employee’s reasonable travel (including, without limitation, advance purchase and coach ticket class) and other business expenses incurred in connection with the performance of duties hereunder, in accordance with the Company policy, as adopted by the Company management from time to time.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 4 OF 21 |
5. Indemnification and Insurance.
(a) Indemnification by the Company. The Company shall indemnify and hold harmless the Employee, and the Employee's heirs, executors, and administrators (collectively, the "Indemnified Parties"), to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, against any and all expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that the Employee is or was a director, officer, employee, or agent of the Company or any of its subsidiaries or affiliates, or is or was serving at the request of the Company as a director, officer, member, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise (including service with respect to employee benefit plans), whether civil, criminal, administrative, or investigative. The indemnification provided for herein shall include the right to advancement of expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if required by applicable law, such advancement of expenses shall be made only upon delivery to the Company of an undertaking, by or on behalf of the Employee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that the Employee is not entitled to be indemnified under this Section 5 or otherwise; provided further, however, that advancement of expenses shall not be made by the Company in the event of a direct action by the Company as against the Employee in which the Company alleges gross negligence or willful misconduct as against the Employee.
(b) Standard of Conduct. For purposes of this Section 5, the Employee shall be deemed to have met the applicable standard of conduct required for indemnification under applicable law if the Employee acted in good faith and in a manner the Employee reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal proceeding, had no reasonable cause to believe the Employee's conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the Employee did not act in good faith and in a manner which the Employee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal proceeding, that the Employee had reasonable cause to believe that the Employee's conduct was unlawful.
(c) Survival; Nature of Rights. The indemnification and advancement of expenses provided by this Section 5 shall continue as to the Employee even if the Employee has ceased to be a director, officer, employee, or agent of the Company or is no longer employed by the Company, and shall inure to the benefit of the Employee's heirs, executors, and administrators. The rights conferred on the Employee by this Section 5 shall not be exclusive of any other right that the Employee may have or hereafter acquire under any statute, provision of the Company's certificate of formation or bylaws, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in the Employee's official capacity and as to action in another capacity while holding office.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 5 OF 21 |
(d) Directors' and Officers' Liability Insurance. During the Employment Term and for a period of not less than four (4) years following any termination of the Employee's employment for any reason (including following a Change in Control, as defined below), the Company shall maintain directors' and officers' liability insurance coverage for the Employee on terms and conditions no less favorable than those provided to other senior executive officers and directors of the Company. Such insurance shall provide coverage with respect to acts or omissions occurring during the Employee's service to the Company, whether claims are brought during or after the Employee's employment with the Company. The Company shall provide the Employee with prompt written notice of any material modification, cancellation, or non-renewal of such coverage.
(e) Tail Coverage Following Change in Control. In the event of a Change in Control, the Company shall, or shall cause any successor entity to, either (i) continue to maintain the directors' and officers' liability insurance coverage described in Section 5(d) hereof for a period of not less than four (4) years following such Change in Control, or (ii) obtain, prior to or concurrently with the closing of the Change in Control transaction, extended reporting period coverage under the Company's existing directors' and officers' liability insurance policy (commonly known as "tail coverage") providing coverage for a period of not less than four (4) years following the Change in Control for acts or omissions occurring prior to and including the date of the Change in Control. Such tail coverage shall provide coverage limits, terms, and conditions no less favorable than the existing policy in effect immediately prior to the Change in Control.
(f) Payment of Expenses. The Company shall pay all expenses, including attorneys' fees, actually and reasonably incurred by the Employee in connection with any proceeding for which indemnification is sought under this Section 5 within thirty (30) days after receipt of a written request for such payment, together with such evidence of expenses as the Company may reasonably require.
(g) Enforcement. If a claim under this Section 5 is not paid in full by the Company within sixty (60) days after a written claim has been received by the Company, the Employee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim, and if successful in whole or in part, the Employee shall also be entitled to be paid the expenses of prosecuting such claim, including reasonable attorneys' fees. In any such action, the Company shall have the burden of proving that the Employee is not entitled to indemnification under applicable law and this Section 5.
6. Compensation Upon Termination.
(a) Termination for Cause; Resignation Without Good Reason. If the Employee's employment is terminated by the Company for Cause or by the Employee without Good Reason, the Employee shall be entitled to receive:
| | (i) | any unpaid Salary earned through the date of termination; |
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 6 OF 21 |
| | (ii) | reimbursement for any unreimbursed business expenses properly incurred through the date of termination, subject to the Company's expense reimbursement policies; and |
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| | (iii) | such employee benefits, if any, to which the Employee may be entitled under the Company's employee benefit plans as of the date of termination (collectively, the “Accrued Obligations”). |
The Employee shall not be entitled to any other compensation or benefits from the Company following such termination.
(b) Termination Without Cause or for Good Reason (Other than Following a Change in Control). If the Employee's employment is terminated by the Company without Cause (including a Non-Renewal by the Company) or by the Employee for Good Reason, and subject to the Employee's compliance with Section 9 hereof and the Employee's execution and non- revocation of a separation agreement and general release of claims in a form satisfactory to the Company (the “Release”) within the time period specified therein, which shall in no event be more than sixty (60) days following the date of termination, the Employee shall be entitled to receive:
| | (i) | the Accrued Obligations; and |
| | | |
| | (ii) | continued payment of the Salary in effect immediately prior to the date of termination (or, if the termination is due to a material reduction in the Salary constituting Good Reason, the Salary in effect immediately prior to such reduction) for a period of one hundred eighty (180) days following the date of termination, payable in substantially equal installments in accordance with the Company's regular payroll practices, commencing on the first (1st) regular payroll date following the date the Release becomes effective and irrevocable (with the first (1st) payment including any amounts that would have been paid during the period between the date of termination and such first (1st) payment date. |
(c) No Other Severance. The severance payments and benefits provided under this Section 6 are in lieu of any other severance payments or benefits to which the Employee might otherwise be entitled under any severance plan, program, or policy of the Company. The Employee acknowledges and agrees that the Employee is not entitled to any payments or benefits upon termination of employment except as expressly set forth in this Agreement.
7. Cooperation Post-Termination of Employment. The Employee agrees and covenants that, following the termination of the Employment Term for any reason, the Employee shall, to the extent reasonably requested in writing by the Company, cooperate in good faith with and assist the Company in the pursuit or defense of any claim, administrative charge, or cause of action by or against the Company (except for any asserted by the Employee) as to which the Employee, by virtue of his employment with the Company, has relevant knowledge or information and, without the necessity of a subpoena, providing truthful information and testimony in any jurisdiction or forum. The Company shall reimburse the Employee for his reasonable out-of-pocket expenses in complying with this Section 7.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 7 OF 21 |
8. Outside Activities and Prior Investments.
(a) Acknowledgment and Carve-Out of Prior Investments. The Company acknowledges and agrees that, prior to the Effective Date, the Employee has made, and may continue to hold, passive or active investments, ownership interests, advisory roles, board positions, consulting arrangements, and other business relationships in entities unrelated to the Company (collectively, the “Prior Investments”). Schedule A attached hereto sets forth a non- exclusive list of such Prior Investments as of the Effective Date. The Company expressly acknowledges and agrees that the Prior Investments are carved out from the scope of this Agreement and shall not, in and of themselves, constitute a conflict of interest, breach of fiduciary duty, violation of the restrictive covenants set forth in Section 9 hereof, or any other breach or violation of this Agreement or the Employee's obligations to the Company.
(b) Continued Participation in Prior Investments. Nothing in this Agreement, including, but not limited to, the confidentiality, non-competition, or non-solicitation provisions set forth in Section 9 hereof, shall prohibit, restrict, or limit the Employee from:
| (i) | continuing to own, hold, manage, operate, advise, invest in, or otherwise participate in any Prior Investments; |
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| (ii) | serving as a director, officer, manager, member, partner, advisor, consultant, or in any other capacity with respect to any Prior Investments; |
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| (iii) | receiving compensation, distributions, dividends, interest, or any other form of economic benefit from any Prior Investments; |
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| (iv) | devoting time, attention, and effort to any Prior Investments; or |
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| (v) | making new investments in, or expanding the Employee's involvement with, any Prior Investments; provided, in each case, that such activities do not materially interfere with the Employee's ability to discharge the Employee's duties and responsibilities to the Company as set forth in this Agreement. |
(c) Waiver of Corporate Opportunity Doctrine. The Company expressly waives and renounces any interest in, and any expectancy that the Employee will offer to the Company, any business opportunity, transaction, or investment that relates to or arises from any Prior Investment, and the Company shall have no right or expectancy that such opportunities be offered to the Company. The Employee shall have no obligation to communicate or present any such opportunity to the Company, and the Employee may pursue any such opportunity for the Employee's own account or for the account of any Prior Investment without any obligation to the Company. This waiver shall not apply to any business opportunity that (i) is expressly offered to the Employee solely in the Employee's capacity as an officer or director of the Company, (ii) is directly related to the Company's existing or prospective business activities in power generation or energy infrastructure in which the Company has made substantial and specific investments or commitments, and (iii) is presented to the Employee through the use of confidential or proprietary information of the Company obtained in violation of Section 9 hereof. In the event of any ambiguity or dispute as to whether a particular opportunity falls within the scope of this waiver, the matter shall be resolved by the independent members of the Board, whose determination shall be binding on the Company.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 8 OF 21 |
(d) No Disclosure Obligation. Except as may be required by applicable law, securities regulations, or stock exchange listing standards, the Employee shall have no obligation to disclose to the Company any financial information, strategic plans, business opportunities, or other proprietary or confidential information relating to any Prior Investment. The Employee shall, however, promptly disclose to the Board any matter relating to a Prior Investment that the Employee reasonably believes presents or may present an actual conflict of interest with the Employee's duties to the Company.
(e) New Outside Activities. During the Employment Term, the Employee may, with the prior written consent of the Board (which consent shall not be unreasonably withheld, conditioned, or delayed), engage in new outside business activities, including serving on boards of directors of for-profit entities, advisory boards, making new investments, or providing consulting services, provided that such activities do not materially interfere with the Employee's duties to the Company, do not violate the restrictive covenants set forth in Section 9 hereof, and do not present a material conflict of interest with the Company's business. The Board's consent shall be deemed granted if the Board does not respond to the Employee's written request within thirty (30) days of receipt thereof.
9. Restrictive Covenants.
(a) During the Employment Term and for a period of twenty-four (24) months thereafter (the “Restricted Period”), the Employee hereby shall not, and shall not cause his Affiliates to, directly or indirectly:
| | (i) | engage or otherwise participate in Competitive Business in the Restricted Territory; |
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| | (ii) | provide services to any business or entity that is engaged in a Competitive Business in the Restrictive Territory; |
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| | (iii) | encourage, induce, solicit, or attempt to encourage, induce, or solicit, any officer, director, or employee of the Company, or its Affiliates, to leave the employ of or engagement with any the Company or any such Affiliate; provided, however, that the Employee shall not be deemed to be soliciting any manager, officer, director, or employee of the Company, or its Affiliates, as a result of the Employee, or any of his Affiliates, placing advertisements or other medium of general circulation that are not targeted to (or through the use of search firms who are not instructed to target) persons who are managers, officers, directors, or employees of the Company, or its Affiliates; or |
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| | (iv) | hire, employ, or engage any Person who was a manager, officer, director, or employee of the Company, or its Affiliates, at any time in the twelve (12) months prior to such hiring, employment, or engagement unless the Company, or its Affiliates, terminate such manager, officer, director, or employee, in which case such manager, officer, director, or employee may be immediately hired, without limitation or restriction, by the Company, or his Affiliates. |
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 9 OF 21 |
For purposes of this Section 9(a), the term “participate” includes any direct or indirect interest (including through any Affiliate or relative) in any enterprise, whether as an officer, director, employee, partner, sole proprietor, agent, representative, independent contractor, seller, franchisor, franchisee, creditor, or owner.
(b) Non-Disparagement. During the Employee's employment and at all times thereafter, the Employee shall not make any public or private statements, whether written or oral, that disparage, criticize, or otherwise reflect negatively upon the Company or any of its affiliates, or any of their respective directors, officers, employees, products, services, or business practices. This restriction shall not prohibit the Employee from (i) making truthful statements that are required by law, regulation, or court order, (ii) providing truthful testimony in any legal proceeding, (iii) exercising rights under Section 7 of the National Labor Relations Act, or (iv) making good faith reports to governmental authorities regarding potential violations of law.
(c) Tolling. In the event of any violation of the restrictions set forth in this Section 9, the Restricted Period shall be tolled and extended by the duration of such violation, such that the Company receives the full benefit of the bargained-for period of restriction.
10. Confidential Information.
(a) Provision. Beginning on the Employee’s execution of this Agreement and during the Employment Term, in consideration of the Employee’s covenants herein, the Company promises to provide the Employee with access to Confidential Information as reasonably necessary for the performance of the Employee’s job duties.
(b) Protection. The Employee agrees that, unless the Employee first secures the written consent of the Company, during and after the Employment Term, the Employee shall not use for himself or anyone else, and shall not disclose to others, any Confidential Information, except to the extent such use or disclosure is required by applicable law or any order (in which event the Employee shall immediately inform the Company in advance of any such required disclosure, shall cooperate with the Company in all reasonable ways in obtaining a protective order or other protection in respect of such required disclosure, and shall limit such disclosure to the extent reasonably possible while still complying with such requirements). From and after the Employment Term, the Employee shall use all reasonable care to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss, and theft. Notwithstanding the foregoing restrictions, the Employee shall be entitled to disclose Personal Confidential information to the Employee’s legal and financial advisors that are bound by a duty of confidentiality provided that such disclosure is made in connection with a required disclosure.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 10 OF 21 |
(c) Return and Review. All Confidential Information shall remain the property of the Company. The Employee shall return to the Company any and all Confidential Information within the Employee’s possession, custody or control, promptly upon the Company’s request and/or the Termination Date, as applicable; provided, however, that the Employee shall be able to retain copies of any Personal Confidential Information. Upon termination of the Employee’s employment for any reason or under any circumstances, the Employee shall return any and all of the property of the Company (including, without limitation, all phones, tablets, computers, other devices, keys, credit cards, identification tags, documents, data, Confidential Information and Work Product and other proprietary materials) and all other materials; provided, however, that the Employee shall be able to retain copies of any Personal Confidential Information.
(d) Response to Third Party Requests. In the event a third party requests, by legal process or otherwise, seeks the disclosure of any Confidential Information, either during or after the Employment Term, the Employee hereby shall promptly: (i) provide the Company a description and an identical copy of any requested Confidential Information; and (ii) provide any and all devices containing such requested Confidential Information to a vendor, determined by the Company in its sole and absolute discretion, to review any such device for such requested Confidential Information. The Employee hereby shall grant the Company the right to act in the Employee’s name, place, and stead to defend and protect against any disclosure of Confidential Information.
(e) Confidential Information of Others. During the Employment Term, the Employee shall not retain, take, use, disclose or bring onto the Company’s premises any confidential or proprietary information of any Person other than the Company, unless lawfully authorized to do so.
(f) Other Property. All personal property affecting or relating to the Business shall also remain the property of the Company, and the Employee shall return it to the Company immediately upon termination of the Employment Term.
(g) Compelled Disclosure. Notwithstanding the foregoing, in the event that the Employee is required by law, a regulatory authority, or other applicable judicial or governmental order to disclose any Confidential Information, the Employee shall, where legally permitted and reasonably practicable, provide the Company with prompt written notice of any such requirement so that the Company may seek a protective order or other appropriate remedy (at its own expense) and/or waive compliance with the terms of this Section 10 (and in the event the Company seeks such an order, the Employee will not oppose such efforts). In the event that such protective order or other remedy is not obtained and the Employee is nonetheless compelled by law to disclose Confidential Information, or in the event that the Company waives compliance with the terms hereof, the Employee may disclose only that portion of the Confidential Information that is legally required to be disclosed and the Employee shall exercise best efforts to preserve the confidentiality of the Confidential Information, including, without limitation, by cooperating with the Company to obtain an appropriate protective order or other reliable assurance that confidential treatment shall be afforded to the Confidential Information by the recipient thereof.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 11 OF 21 |
(h) Liquidated Damages. In the event the Employee breaches any provision of Sections 10(c), 10(d), 10(e), 10(f), and 10(g) hereof, the Employee shall immediately pay to the Company an amount of money equal to [Ten Thousand and 00/100 Dollars ($10,000.00)] for every day of the Employee’s non-compliance with his obligations under Sections 10(c), 10(d), 10(e), 10(f), and 10(g) hereof (any and all such daily amount, collectively, the “Liquidated Damages”). Each Party hereby agrees and acknowledges that, because of the unique nature of the economic damages and losses that would be sustained by the Company, in the event that the Employee breaches any provision of Sections 10(c), 10(d), 10(e), 10(f), or 10(g) hereof: (i) it is difficult or impossible to determine with precision the amount of damages that would or might be incurred by the Company resulting therefrom; (ii) it would be impracticable or extremely difficult to fix the actual damages to the Company resulting therefrom; and (iii) the Liquidated Damages that would be payable under this Section 10(h) are (A) to be in the nature of liquidated damages and not an unreasonable penalty, and (B) a fair, reasonable, and appropriate estimation of the actual damages the Company would suffer.
(i) No Breach. For the avoidance of doubt, it will not be a breach of this Section 10 for the Employee to share the terms of this Agreement and the Employee’s compensation and benefits with the Employee’s lawyers, financial advisors, and/or spouse.
11. Work Product; Intellectual Property.
(a) Assignment. The Employee hereby irrevocably grants and assigns to the Company all right, title, and interest (including, but not limited to, an exclusive, fully paid, irrevocable, perpetual, license to use) to all Work Product. The Employee hereby acknowledges and agrees that all intellectual property rights in all Work Product belong to the Company.
(b) Disclosure. For the duration of the Employment Term and thereafter, the Employee shall immediately disclose all Work Product to the Company and perform all actions reasonably requested by the Company to establish and confirm the ownership and/or proprietary interest of the Company in any Work Product (including the execution of assignments, consents, powers of attorney, applications and other instruments). The Employee shall not file any patent or copyright applications related to any Work Product without the written consent of the Company.
12. General Provisions.
(a) Entire Agreement. This Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the Parties, with respect to the subject matter hereof. This Agreement is for the benefit only of the Parties and is not intended to create any obligations to, or rights in respect of, any Persons other than the Parties.
(b) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in a writing referring to this Agreement signed by the Parties. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 12 OF 21 |
(c) Specific Performance; Injunctive Relief. In the event of a breach by the Employee of any provision of Section 2(b), 2(c), 2(d), 7, 8, 9, 10, or 11 hereof, the Company shall be entitled to recover any damages caused by reason of such breach, together with any and all proceeds, funds, payments and proprietary interests, of every kind and description, arising from, or attributable to, such breach, and to exercise all other rights existing in its favor. The Employee hereby agrees and acknowledges that: (i) monetary damages incurred by the Company caused by the Employee’s breach of any provision of Section 2(b), 2(c), 2(d), 7, 8, 9, 10, or 11 hereof would be difficult to quantify and may not be an adequate remedy for any such breach or threatened breach of such provision; (ii) any breach or threatened breach by the Employee of any provision of Section 2(b), 2(c), 2(d), 7, 8, 9, 10, or 11 hereof will constitute an imminent harm to the Company that will be irreparable at law; and (iii) for the reasons provided in Sections 12(c)(i) and 12(c)(ii) above, the Company may, in its sole and absolute discretion, in addition to any other available remedies, apply to any court of law or equity of competent jurisdiction for and be entitled to specific performance and/or injunctive relief in order to enforce or prevent any violation of such provisions, without the necessity of posting any bond or other surety as a condition to the issuance or granting of such relief. If it is finally determined by a court of competent jurisdiction that the Company is entitled to an injunction against the Employee as a result of the Employee’s breach of such provisions, then the Company shall be entitled to recover from the Employee any and all reasonable attorneys’ fees and expenses incurred by the Company in enforcing such provisions.
(d) Successors and Assigns. All the terms and provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the respective heirs, representatives, successors (including any successor as a result of a merger or similar reorganization) and assigns of the Parties, except that the Employee’s duties and responsibilities hereunder are of a personal nature and shall not be assignable, in whole or in part, by the Employee.
(e) GOVERNING LAW. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CONFLICT OF LAWS PRINCIPLES.
(f) Notices. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy (except that telecopies transmitted after 5:00 p.m. in the recipient’s time zone shall be deemed delivered the next business day), electronic or digital transmission method; the business day after it is sent, if sent for next business day delivery to a domestic address by recognized overnight delivery service (e.g., Federal Express); and three (3) business days after it is sent, if sent by certified or registered mail, return receipt requested. In each case notice shall be sent to:
| | If to the Company: | | Independence Power Holdings, Inc. |
| | | | 14114 N. Dallas Parkway, Suite 200 |
| | | | Dallas, Texas 75254 Attention: Board of Directors Email: [Email] |
| | | | |
| | If to the Employee: | | Scott Stephenson 2414 Wilson Rd El Campo, TX 77437 Email: stephenson@independco.com |
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 13 OF 21 |
(g) ARBITRATION. ANY DISPUTE, CLAIM, OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION, OR VALIDITY HEREOF, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, SHALL BE RESOLVED BY SUBMISSION TO ARBITRATION IN THE COUNTY OF DALLAS, STATE OF TEXAS, BEFORE GLEN ASHWORTH (UNLESS HE IS UNAVAILABLE OR UNWILLING, IN WHICH CASE DALLAS JAMS SELECTION PROCEDURE SHALL GOVERN) (THE “ARBITRATOR”). THE ARBITRATION SHALL BE ADMINISTERED BY DALLAS JAMS, PURSUANT TO ITS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES, AND IN ACCORDANCE WITH THE EXPEDITED PROCEDURES CONTAINED THEREIN. THE ARBITRATOR SHALL FOLLOW ANY APPLICABLE FEDERAL LAW AND TEXAS STATE LAW IN RENDERING AN AWARD. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION OVER THE DISPUTE, CLAIM, OR CONTROVERSY SUBMITTED TO SUCH ARBITRATION. THIS SECTION SHALL NOT PRECLUDE ANY PARTY HEREIN FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF COMPETENT JURISDICTION IN DALLAS COUNTY, TEXAS ONLY. FURTHER, EACH PARTY AGREES AND ACKNOWLEDGES THAT THE ARBITRATOR’S DECISION SHALL BE FINAL AND BINDING, TO THE FULLEST EXTENT PERMITTED BY LAW, AND ENFORCEABLE BY ANY COURT HAVING JURISDICTION THEREOVER.
(h) Fees and Costs. The fees charged by the arbitration administrator and the Arbitrator shall be borne by the Parties according to Dallas JAMS Rules. Otherwise, the Parties shall each bear their own costs, expenses, and attorneys’ fees incurred in arbitration related to any disputes between the Parties arising from this Agreement. In event that a dispute occurs between the Parties related to this Agreement, the Employee disclaims any and all indemnification provided to the Employee hereunder for any and all costs, expenses, and attorneys’ fees incurred in arbitration by the Employee. Within the Arbitrator’s discretion, the Party that prevails in arbitration may recover its arbitration expenses, its portion of the fees and costs charged by the arbitration administrator, the fees of the Arbitrator, or its reasonable attorney’s fees and expenses, as applicable, regardless of which Party made the initial complaint.
(i) Confidentiality. Both during and after the arbitration process provided for herein, all information and discovery disclosed in the arbitration process (“Arbitration Information”) shall be maintained in confidence by the Parties and their counsel. Arbitration Information may be used, possessed, and disclosed only for the purposes of arbitration and related proceedings pursuant to this Agreement, and for no other purpose whatsoever. Upon request, the Arbitrator shall issue prescriptive orders as may be required to enforce and maintain this covenant of confidentiality during the course of arbitration-related proceedings and after the conclusion of the arbitration.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 14 OF 21 |
(j) WAIVER OF JURY TRIAL. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM, CAUSE OF ACTION, COUNTERCLAIM OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING OR OTHER HEARING BROUGHT BY EITHER PARTY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTERING INTO THIS AGREEMENT, THAT EACH PARTY ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS AGREEMENT IN ANY RELATED FUTURE DEALINGS BETWEEN THE PARTIES. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S RESPECTIVE JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. EACH PARTY EXPRESSLY AGREES TO WAIVE ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER RELATING TO THIS AGREEMENT.
(k) CONSENT TO JURISDICTION. SUBJECT TO SECTION 12(g) HEREOF, EACH PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE DISTRICT OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF DALLAS, STATE OF TEXAS AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH PARTY EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED.
(l) DISCLAIMER OF RELIANCE. EACH PARTY ACKNOWLEDGES, AND WAIVES AND RELEASES ANY CLAIM TO THE CONTRARY, THAT NEITHER SUCH PARTY, NOR ANY AGENTS OR COUNSEL OF SUCH PARTY, HAS MADE ANY STATEMENTS, PROMISES, REPRESENTATIONS, OR WARRANTIES, EXPRESS OR IMPLIED, NOT CONTAINED HEREIN, TO INDUCE THE OTHER PARTY’S EXECUTION OF THIS AGREEMENT. EACH PARTY FURTHER ACKNOWLEDGES THAT SUCH PARTY (A) IS NOT RELYING ON ANY STATEMENTS, PROMISES, REPRESENTATIONS, OR WARRANTIES OF ANY PARTY BEING RELEASED HEREBY; AND (B) IS SOLELY RELYING UPON SUCH PARTY’S JUDGMENT. EACH PARTY REPRESENTS AND WARRANTS THAT SUCH PARTY HAS CONDUCTED AN INDEPENDENT INVESTIGATION AND THAT SUCH PARTY HAS HAD THE OPPORTUNITY TO CONSULT WITH THE COUNSEL OF SUCH PARTY’S CHOICE AND SO HAS CONSULTED. EACH PARTY SPECIFICALLY DISCLAIMS RELIANCE ON ANY REPRESENTATIONS MADE BY ANY OTHER PARTY, EXCEPT FOR THOSE REPRESENTATIONS THAT ARE SPECIFICALLY REDUCED TO WRITING IN THIS AGREEMENT.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 15 OF 21 |
(m) Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in a writing referring to this Agreement signed by the Parties. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.
(n) Survival. The provisions of this Agreement that, by their own terms, apply after the Termination Date (including, without limitation, the applicable provisions of Sections 6(c), 7, 8, 9, 10, 11, and 12 hereof) shall survive the termination of the Employee’s employment with the Company (regardless of whether such termination is voluntary, involuntary, for Cause, or for Good Reason), and shall remain in full force and effect after such termination, as applicable according to their terms.
(o) No Waiver. The waiver by the Company of a breach of any of the provisions of this Agreement by the Employee shall not operate or be construed as a waiver of any subsequent breach by the Employee.
(p) Further Assurances. The Employee agrees to sign and deliver such additional documents as may be reasonably required by the Company to effectuate the intent and purposes of this Agreement.
(q) Severability. In the event that any of the provisions hereof shall be held by a court or other tribunal of competent jurisdiction to be invalid or unenforceable, the remaining portions hereof shall remain in full force and effect and such provision shall be enforced to the maximum extent possible so as to effect the intent of the Parties, and shall in no way be affected, impaired or invalidated.
(r) Counterparts. This Agreement may be executed in one (1) or more counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement, and shall become binding when one (1) or more counterparts have been signed by each Party and delivered to the other Party.
[Signature Page to Follow.]
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 16 OF 21 |
IN WITNESS WHEREOF, the Company and the Employee, intending to be fully bound by this Agreement, have executed this Agreement as of the Effective Date.
| | COMPANY: INDEPENDENCE POWER HOLDINGS, INC., a Nevada corporation | |
| | | | |
| | By: | | |
| | Name: | | |
| | Title: | | |
| | | | |
| | EMPLOYEE: | |
| | | | |
| | | |
| | SCOTT STEPHENSON, individually | |
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 17 OF 21 |
EXHIBIT A
Definitions.
The following terms used in this Agreement shall have the indicated meanings:
“Business” means all lawful activities of the Company.
“Capacity” means and includes participating in the ownership, management, operation or control of, taking a financial interest in, being employed by, being associated or affiliated with, or providing services as a consultant or independent contractor to any Person.
“Change in Control” shall mean the occurrence of any of the following events:
| | (a) | the acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”), or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (D) any acquisition pursuant to a transaction that complies with romanettes (i), (ii), and (iii) of subsection (c) below; |
| | | |
| | (b) | a change in the composition of the Board such that the individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; |
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 18 OF 21 |
| | (c) | other than the going public merger, consummation of a reorganization, merger, statutory share exchange, or consolidation or similar transaction involving the Company, or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Transaction”), in each case unless, following such Business Transaction, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Transaction beneficially own, directly or indirectly, more than fifty percent (50%) of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Transaction (including, without limitation, an entity that as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one (1) or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Transaction of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any entity resulting from such Business Transaction or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Transaction) beneficially owns, directly or indirectly, fifty percent (50%) or more of the then-outstanding shares of common stock of the entity resulting from such Business Transaction or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Transaction, and (iii) at least a majority of the members of the board of directors of the entity resulting from such Business Transaction were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Transaction; or |
| | | |
| | (d) | approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. |
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person acquires beneficial ownership of more than fifty percent (50%) of the Outstanding Company Common Stock or Outstanding Company Voting Securities as a result of the acquisition of Outstanding Company Common Stock or Outstanding Company Voting Securities by the Company which reduces the number of Outstanding Company Common Stock or Outstanding Company Voting Securities, unless and until such Person thereafter acquires beneficial ownership of additional shares of Outstanding Company Common Stock or additional Outstanding Company Voting Securities.
“Competitive Business” means any business or enterprise that is engaged in the development, ownership, operation, management, or financing of utility-scale power generation facilities (including natural gas, renewable energy, or other dispatchable power generation), energy infrastructure projects, distributed energy resources, or energy storage systems, or that otherwise competes with the material businesses or operations of the Company as conducted during the twelve (12) months prior to the termination of the Employee's employment; provided, however, that the term “Competitive Business” shall not include (a) activities related to the Employee's Prior Investments as set forth on Schedule A, (b) passive investments of less than five percent (5%) of the outstanding equity or voting securities of any publicly traded company, or (c) activities approved in writing by the Board.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 19 OF 21 |
“Confidential Information” means any and all material, data, designs, ideas, inventions, formulae, patterns, compilations, programs, devices, methods, techniques, processes, knowledge or know how, plans (sales, marketing, business, strategic, technical or otherwise), arrangements, pricing and/or other information of or relating to, the Company or its Business that is confidential, proprietary, and/or a trade secret: (a) by its nature; (b) based on how it is treated or designated by the Company; (c) such that its appropriation, use or disclosure would have a material adverse effect on the business or planned business of the Company; or (d) as a matter of law. Notwithstanding the foregoing, Confidential Information does not include material, data, and/or information that: (i) the Company has voluntarily placed in the public domain; (ii) becomes available to the Employee on a non-confidential basis from a source, other than the Company, which has no obligation of confidentiality with respect to Confidential Information; or (iii) otherwise enters the public domain lawfully and without the violation of any agreement or other obligation of confidentiality.
“Disability” shall be defined as the inability of the Employee to substantially perform the essential functions of the Employee’s duties as required hereunder, with or without reasonable accommodation.
“Good Reason” shall mean the occurrence of any of the following without the Employee's prior written consent:
| | (a) | a material reduction in the Employee's Salary, other than a reduction that is part of a general reduction in base salaries affecting all senior executives of the Company on a proportionate basis; |
| | | |
| | (b) | a material, adverse change in the Employee's title, duties, responsibilities, or reporting relationship, including without limitation ceasing to report directly to the Board; |
| | | |
| | (c) | a material breach by the Company of any material provision of this Agreement; or |
| | | |
| | (d) | the relocation of the Employee's principal place of employment by more than fifty (50) miles from the location as of the Effective Date without the Employee's consent. |
“Person” mean any individual and any corporation, partnership, entity, group, tribunal, or governmental authority.
“Personal Confidential Information” means any Confidential Information which constitutes personal information about the Employee’s benefits or compensation.
“Restricted Territory” means the United States of America and any other country or geographic area in which the Company conducts material business operations or has active business plans to commence operations as of the date of termination of the Employee's employment.
“Work Product” means all patents and patent applications, all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, writings, documents, presentations, reports, creative works, discoveries, software, computer programs, modifications, enhancements, know how, formulations, concepts and ideas, and all similar or related information (in each case whether or not patentable), all copyrights and copyrightable works, all trade secrets, confidential information, and all other intellectual property and intellectual property rights that are conceived, reduced to practice, developed, created, authored, produced or made by the Employee, either alone or with others, during the Employment Term.
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 20 OF 21 |
SCHEDULE A
PRIOR INVESTMENTS
The Parties acknowledge that this list is illustrative and not exhaustive, and that the Employee's rights under Section 8 hereof apply to all Prior Investments whether or not specifically listed on this Schedule A.
| | 1. | Independence TX LLC and subsidiaries |
| | 2. | Independence Investors LLC and subsidiaries |
| | 3. | Independence WI LLC |
| | 4. | Stephenson & Pfeil, PLLC |
| | 5. | PS Stephenson & Co, PLLC |
| | 6. | SSL Properties LLC |
| | 7. | SSJP Properties LLC |
| EXECUTIVE EMPLOYMENT AGREEMENT | | PAGE 21 OF 21 |
EXHIBIT 10.8
ADMINISTRATIVE SERVICES AGREEMENT
This ADMINISTRATIVE SERVICES AGREEMENT (this “Agreement”), dated as of December 30, 2025 (the “Effective Date”), is entered into by and among Independence Power Holdings, Inc., a Nevada corporation (“IPH”), Independence Power, Inc., a Texas corporation (“IPI”), KYMA Batteries LLC, a Delaware limited liability company (“KYMA,” and together with IPH and IPI, the “Company”), and IPAS Asset Management, LLC, a Delaware limited liability company (the “Advisor”). The Company and the Advisor are sometimes referred to herein, individually, each “Party” and, collectively, the “Parties.”
RECITALS:
WHEREAS, IPH is the sole owner of IPI and IPI is the sole owner of KYMA;
WHEREAS, KYMA operates a business that develops and operates power supply systems and equipment (such business, the “Business”);
WHEREAS, the Advisor has experience in the providing administrative and payroll services in and related to the Business;
WHEREAS, as a condition of and material inducement to the Company’s willingness to enter into this Agreement, the Advisor desires to provide any and all of the Services (as defined below) for the Company; and
WHEREAS, as a condition of and material inducement to the Advisor’s willingness to enter into this Agreement, the Company desires to provide the Advisor the Operating Expenses (as defined below), and the Administrative Services Fee (as defined below).
NOW, THEREFORE, in consideration of the foregoing, and the representations, warranties, covenants and conditions set forth below, the Parties, intending to be legally bound by this Agreement, agree as follows:
AGREEMENT:
Section 1 Definitions. As used herein, the following terms shall have the meanings set forth below:
| | (a) | “Advisor” shall have the meaning set forth in the preamble. |
| | | |
| | (b) | “Affiliate” shall mean, as to any Person, any other Person who owns beneficially, directly, or indirectly, one percent (1%) or more of the outstanding capital stock, shares, partnership interests, membership interests, or equity interests of such Person or of any other Person which controls, is controlled by, or is under common control with such Person or is an officer, retired officer, director, employee, partner, or trustee (excluding noninterested trustees not otherwise affiliated with the entity) of such Person or of any other Person which controls, is controlled by, or is under common control with, such Person. |
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 1 OF 11 |
| | (c) | “Business” shall have the meaning set forth in the recitals. |
| | | |
| | (d) | “Fiscal Year” shall mean any period for which an income tax return is submitted to the Internal Revenue Service and which is treated by the Internal Revenue Service as a reporting period. |
| | | |
| | (e) | “Operating Expenses” shall mean the aggregate annual expenses regarded as operating expenses in accordance with generally accepted accounting principles as determined by the Company. The Operating Expenses shall include the following: |
(i) include the fair market value of services rendered by personnel provided by the Advisor to the Company;
(ii) salaries and wages of the Company’s personnel (including officers, and employees of the Company who are managers, officers, or employees of the Advisor or its Affiliates);
(iii) the cost of borrowing money incurred by the Company;
(iv) income taxes, taxes and assessments on real property and all other taxes applicable to the Company;
(v) expenses connected with communications to IPH’s shareholders and bookkeeping and clerical expenses for maintaining shareholder relations, including the cost of printing and mailing share certificates, proxy solicitation materials and reports;
(vi) transfer agent’s, registrar’s and indenture trustee’s fees and charges;
(vii) the cost of any accounting, statistical, bookkeeping, or computer equipment necessary for the maintenance of books and records of the Company;
(viii) rent, telephone, utilities, and office furnishings and other office expenses of the Advisor; and
(ix) the Advisor’s general and administrative expenses directly related to performance of its functions under this Agreement.
| | (f) | “Person” shall mean and include individuals, corporations, limited partnerships, general partnerships, limited liability companies, joint stock companies or associations, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts, or other entities and governments and agencies and political subdivisions thereof. |
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| | (g) | All calculations made pursuant to this Agreement shall be based on statements (which may be unaudited, except as provided herein) prepared on an accrual basis consistent with generally accepted accounting principles, regardless of whether the Company may also prepare statements on a different basis. |
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 2 OF 11 |
Section 2 Duties of the Advisor. The Advisor will be responsible for the day-to-day operations of the Company and shall provide such services and activities relating to the assets and operations, including, but not limited to (collectively, the “Services”):
| | (a) | human resources services including, but not limited to, staffing, recruiting, and training employees on behalf of the Company; |
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| | (b) | developing, advising, and establishing employee policies, including employee compensation and benefit plans; |
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| | (c) | information technology services including the management and maintenance of information technology resources and staffing to support information technology needs, the management of information security and communications systems, database support, disaster recovery, the support of core systems, the support of maintenance contracts, equipment and software, and the organization of an information technology helpdesk; |
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| | (d) | accounting services including accounting support services to assist in the maintenance of a system of accounting for the Company and the preparation of audited and unaudited balance sheets, statements of income and results of operations and cash flows; |
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| | (e) | processing and paying of payroll to the extent the Company has employees or contractors; |
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| | (f) | furnishing or obtaining and supervising the performance of the ministerial functions in connection with the administration of the day-to-day operations of the Company; |
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| | (g) | serving as the Company’s financial advisor and providing research, economic, and statistical data in connection with the Business; |
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| | (h) | consulting with the Company and furnishing the Company with advice and recommendations with respect to the making, acquiring (by purchase, investment, exchange or otherwise), holding and disposition (through sale, exchange, or otherwise) of assets; |
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| | (i) | obtaining for the Company such services as may be required in acquiring and disposing of assets and investments, disbursing and collection the funds of the Company, paying the debts and fulfilling the obligations of the Company, and handling, prosecuting, and settling any claims of the Company, including foreclosing and otherwise enforcing mortgage and other liens; |
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| | (j) | quarterly making reports to the Company regarding the Advisor’s performance of the Services; |
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| | (k) | making or providing appraisal reports, where appropriate, on investments or contemplated investments of the Company; |
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 3 OF 11 |
| | (l) | assisting in preparation of reports and other documents necessary to satisfy the reporting and other requirements of any governmental bodies or agencies and to maintain effective communications with members of the Company; and |
| | | |
| | (m) | doing all things necessary to ensure its ability to render the services contemplated herein, including, without limitation, providing office space and office furnishings and personnel necessary for the performance of the foregoing services as the Advisor, all at its own expense, except as otherwise expressly provided for herein. |
Section 3 Advisory Compensation. As compensation for the Advisor performing any and all of the Services and all other obligations arising hereunder, the Company shall pay to the Advisor the Operating Expenses paid by the Advisor, if any, plus Ten and 00/100 Dollars ($10.00) (the “Administrative Services Fee”).
Section 4 The Advisor’s Representations and Warranties.
| | (a) | Authorization. The Advisor represents and warrants to the Company that the Advisor: (i) is duly organized, validly existing, and in good standing under the laws of Delaware; (ii) is qualified and licensed to do business and in good standing in every jurisdiction where such qualification and licensing is required for purposes of this Agreement; (iii) has the full right, corporate power and authority to enter into this Agreement and to perform its obligations hereunder; (iv) has taken all necessary corporate action to authorize the execution of this Agreement by its representative whose signature is set out at the end hereof; and (v) no approval of any third party is required for the Advisor’s execution of and performance in accordance with this Agreement. |
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| | (b) | Binding; No Conflict. The Advisor represents and warrants to the Company that this Agreement constitutes a valid and binding obligation of the Advisor and does not, and shall not, constitute a breach of or default of any other law, order, rule, regulation, judgment, decree, agreement, or instrument by which the Advisor is bound or affected or to which the Advisor is a party. |
| | | |
| | (c) | No Partnership or Joint Venture. The Advisor represents and warrants to the Company that the Company and the Advisor are not partners or joint venturers with each other, and nothing herein shall be construed so as to make them such partners or joint venturers or impose any liability as such on either Party. |
Section 5 The Company’s Representations and Warranties.
| | (a) | Authorization. The Company represents and warrants to the Advisor that: (i) IPH is duly organized, validly existing, and in good standing under the laws of Nevada; (ii) IPI is duly organized, validly existing, and in good standing under the laws of Texas; (iii) KYMA is duly organized, validly existing, and in good standing under the laws of Delaware; (iv) the Company is qualified and licensed to do business and in good standing in every jurisdiction where such qualification and licensing is required for purposes of this Agreement; (v) the Company has the full right, corporate power and authority to enter into this Agreement and to perform its obligations hereunder; (vi) the Company has taken all necessary corporate action to authorize the execution of this Agreement by its representative whose signature is set out at the end hereof; and (vii) the Company no approval of any third party is required for the Company’s execution of and performance in accordance with this Agreement. |
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| | (b) | Binding; No Conflict. The Company represents and warrants to the Advisor that this Agreement constitutes a valid and binding obligation of the Company and does not, and shall not, constitute a breach of or default of any other law, order, rule, regulation, judgment, decree, agreement, or instrument by which the Company is bound or affected or to which the Company is a party. |
| | | |
| | (c) | No Partnership or Joint Venture. The Company represents and warrants to the Advisor that the Company and the Advisor are not partners or joint venturers with each other, and nothing herein shall be construed so as to make them such partners or joint venturers or impose any liability as such on either Party. |
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 4 OF 11 |
Section 6 Records. At all times, the Advisor shall keep proper books of account and records of the Company’s affairs which shall be accessible for inspection by the Company at any time during ordinary business hours.
Section 7 Additional Obligations of the Advisor. The Advisor shall refrain from any action that would violate any law, rule, regulation, or statement of policy of any governmental body or agency having jurisdiction over the Company or over its securities.
Section 8 Bank Accounts. The Advisor may establish and maintain one (1) or more bank accounts in its own name, and may collect and deposit into any such account or accounts, any money on behalf of the Company.
Section 9 Information Furnished Advisor. The Company shall furnish the Advisor with a certified copy of all financial statements, a signed copy of each report prepared by independent certified public accountants, and such other information with regard to the Company’s affairs as the Advisor may, from time to time, reasonably request.
Section 10 Statements. The Advisor shall furnish to the Company not later than December 31st of each year during the term of this Agreement, beginning on December 31, 2026, a statement showing the computation of the fees, if any, payable in respect to the next preceding calendar month (or, in the case of incentive compensation, for the preceding Fiscal Year, as appropriate) under this Agreement. The final settlement of incentive compensation for each Fiscal Year shall be subject to adjustment in accordance with, and upon completion of, the annual audit of the Company’s financial statements, any payment by the Company or repayment by the Advisor that shall be indicated to be necessary in accordance therewith shall be made promptly after the completion of such audit and shall be reflected in the audited statements to be published by the Company.
Section 11 Compensation for Additional Services. If and to the extent that the Company shall request the Advisor or any manager, officer, or employee of the Advisor to render services for the Company other than those required to be rendered by the Advisor hereunder, such additional services, if performed, will be compensated separately on terms to be agreed upon between such party and the Company from time to time.
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 5 OF 11 |
Section 12 Expenses of the Advisor. The Advisor shall pay any and all expenses that are not Operating Expenses of the Company.
Section 13 Expenses of the Company. The Company shall pay all of its expenses not assumed by the Advisor and, without limiting the generality of the foregoing, it is specifically agreed that the following expenses of the Company shall be paid by the Company and shall not be paid by the Advisor:
| | (a) | fees, salaries, and expenses paid to officers and employees of the Company who are not managers, officers or employees of the Advisor, or of any company that controls, is controlled by, or is under common control with the Advisor; |
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| | (b) | insurance, as required by the Company (including Company’s liability insurance, as applicable); |
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| | (c) | the expenses of organizing, revising, amending, converting, modifying, or termination the Company; |
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| | (d) | expenses connected with payments of dividends or interest or distributions in cash or any other form made, or caused to be made by the Company; |
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| | (e) | legal, accounting, investment banking, and auditing fees and expenses charged by independent parties performing these services not otherwise included in this Section 13; |
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| | (f) | expenses incurred by the Advisor, arising from the sales of Company’s products or services; |
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| | (g) | costs and expenses connected with computer services, including, but not limited to, employee or other personnel compensation, hardware and software costs, and related development and installation costs associated therewith; |
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| | (h) | costs and expenses associated with risk management (i.e. insurance relating to the Company’s assets); |
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| | (i) | loan refinancing compensation; and |
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| | (j) | expenses associated with special services requested by the Company pursuant to Section 11 hereof. |
Section 14 Other Activities of Advisor. The Advisor, its officers or employees, or any of its Affiliates may engage in other business activities related to the Business or act as an advisor to any other person or entity and the Advisor and its officers or employees, and any of its Affiliates shall be free from any obligation to present to the Company any particular business opportunity that comes to the Advisor or such persons.
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 6 OF 11 |
Section 15 Term; Termination of Agreement. This Agreement shall continue in force until the first (1st) anniversary of the Effective Date, and, thereafter, this Agreement shall be automatically renewed from year to year by the Company. Notice of renewal shall be given in writing by the Company to the Advisor not less than sixty (60) days before the expiration of this Agreement or of any extension thereof. This Agreement may be terminated for any reason without penalty upon thirty (30) days written notice by the Company to the Advisor or thirty (30) days written notice by the Advisor to the Company. Notwithstanding the foregoing, however, in the event of any material change in the ownership, control, or management of the Advisor, the Company may terminate this Agreement without penalty and without advance notice to the Advisor.
Section 16 Entire Agreement. This Agreement by and between the Parties constitutes the entire agreement between the Parties and supersedes any other prior understandings, agreements, representations and warranties, by or between the Parties, written or oral, to the extent they related in any way to the subject matter of this Agreement.
Section 17 Amendments. This Agreement shall not be changed, modified, terminated or discharged in whole or in part except by an instrument in writing signed by the Parties, or their respective successors or assigns, or otherwise as provided herein.
Section 18 Assignment. This Assignment shall not be assigned by the Advisor without the prior consent of the Company. The Company may terminate this Agreement in the event of its assignment by the Advisor without the prior consent of the Company. Such an assignment or any other assignment of this Agreement shall bind the assignee hereunder in the same manner as the Advisor is bound hereunder. This Agreement shall not be assignable by the Company without the consent of the Advisor, except in the case of assignment by the Company to a limited partnership, limited liability company, association, trust, or other organization that is a successor to the Company. Such successor shall be bound hereunder and by the terms of said assignment in the same manner as the Company is bound hereunder.
Section 19 Default, Bankruptcy, etc. This Agreement shall be and become terminated immediately upon written notice of termination from the Company to the Advisor if any of the following events shall occur (such events, an “Events of Default”):
| | (a) | if the Advisor shall violate any provision of this Agreement, and after notice of such violation shall not cure such default within thirty (30) days; or |
| | | |
| | (b) | if the Advisor shall be adjudged bankrupt or insolvent by a court of competent jurisdiction, or an order shall be made by a court of competent jurisdiction for the appointment of a receiver, liquidator, or trustee of the Advisor or of all or substantially all of its property by reason of the foregoing, or approving any petition filed against the Advisor for its reorganization, and such adjudication or order shall remain in force or unstayed for a period of thirty (30) days; or |
| | | |
| | (c) | if the Advisor shall institute proceedings for voluntary bankruptcy or shall file a petition seeking reorganization under the Federal bankruptcy laws, or for relief under any law for the relief of debtors, or shall consent to the appointment of a receiver of itself or of all or substantially all its property, or shall make a general assignment for the benefit of its creditors, or shall admit in writing its inability to pay its debts generally, as they become due. |
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 7 OF 11 |
The Advisor agrees that if any of the Events of Default specified in this Section 19 shall occur, it will give written notice thereof to the Company within seven (7) days after the occurrence of such event.
Section 20 Action Upon Termination. From and after the effective date of termination of this Agreement, the Advisor shall not be entitled to compensation for further services hereunder but shall be paid all compensation accruing to the date of termination. The Advisor shall forthwith upon such termination:
| | (a) | pay over to the Company all monies collected and held for the account of the Company pursuant to this Agreement; |
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| | (b) | deliver to the Company a full accounting, including a statement showing all payments collected by it and a statement of any monies held by it, covering the period following the date of the last accounting furnished to the Company; and |
| | | |
| | (c) | deliver to the Company all property and documents of the Company then in the custody of the Advisor. |
Section 21 Miscellaneous. The Advisor shall be deemed to be in a fiduciary relationship to the Company. The Advisor assumes no responsibility under this Agreement other than to render the services called for hereunder in good faith, and shall not be responsible for any action of the Company in following or declining to follow any advice or recommendations of the Advisor. Neither the Advisor, nor any of its members, its managers, officers, or employees, shall be liable to the Company, KYMA’s members, KYMA’s managers, IPI’s shareholders, IPI’s directors, IPH’s shareholders, IPH’s directors, or to any successor or assign of the Company for any losses arising from the operation of the Company if the Advisor had determined, in good faith, that the course of conduct which caused the loss or liability was in the best interests of the Company and the liability or loss was not the result of negligence or misconduct by the Advisor. However, in no event will the managers, officers, or employees of the Advisor be personally liable for any act or failure to act unless it was the result of such person’s willful misfeasance, bad faith, gross negligence or reckless disregard of duty.
Section 22 Notice. All notices, requests and other communications hereunder shall be in writing and shall be deemed to have been duly given at the time of receipt if delivered by hand, or one (1) day later if the sender receives confirmation of the facsimile transaction if transmitted by facsimile, or three (3) days after being mailed, registered or certified mail, return receipt requested, with postage prepaid, or one (1) business day after being mailed via overnight courier service, to the applicable Parties at the address or facsimile number, as applicable, stated below or if any Party shall have designated a different address or facsimile number by notice to the other Parties given as provided above, then to the last address or facsimile number so designated.
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 8 OF 11 |
If to the Company:
Independence Power Holdings, Inc.
Attn: Todd Parkin; Scott Stephenson
14114 Dallas Parkway, Suite 200
Dallas, Texas 75254
If to the Advisor:
IPAS Asset Management, LLC
Attn: Scott Stephenson
14114 Dallas Parkway, Suite 200
Dallas, Texas 75254
Section 23 GOVERNING LAW. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CONFLICT OF LAWS PRINCIPLES.
Section 24 CONSENT TO JURISDICTION. SUBJECT TO SECTION 26 HEREOF, EACH PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE DISTRICT OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF DALLAS, STATE OF TEXAS AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH PARTY AT THE ADDRESS OF SUCH PARTY AS SET FORTH HEREIN AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
Section 25 WAIVER OF JURY TRIAL. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM, CAUSE OF ACTION, COUNTERCLAIM, OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING, OR OTHER HEARING BROUGHT BY ANY PARTY HEREIN BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY HERETO ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY HERETO WILL CONTINUE TO RELY ON THIS WAIVER IN ANY RELATED FUTURE DEALINGS BETWEEN THE PARTIES. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES THEIR RESPECTIVE JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. EACH PARTY EXPRESSLY AGREES TO WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER RELATING TO THIS AGREEMENT.
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 9 OF 11 |
Section 26 ARBITRATION. ANY DISPUTE, CLAIM, OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION, OR VALIDITY HEREOF, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, SHALL BE RESOLVED BY SUBMISSION TO ARBITRATION IN THE COUNTY OF DALLAS, STATE OF TEXAS, BEFORE AN ARBITRATOR SELECTED BY THE DALLAS JAMS SELECTION PROCEDURE (THE “ARBITRATOR”). THE ARBITRATION SHALL BE ADMINISTERED BY DALLAS JAMS, PURSUANT TO ITS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES, AND IN ACCORDANCE WITH THE EXPEDITED PROCEDURES CONTAINED THEREIN. THE ARBITRATOR SHALL FOLLOW ANY APPLICABLE FEDERAL LAW AND TEXAS STATE LAW IN RENDERING AN AWARD. JUDGMENT ON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION OVER THE DISPUTE, CLAIM, OR CONTROVERSY SUBMITTED TO SUCH ARBITRATION. THIS SECTION SHALL NOT PRECLUDE THE PARTIES FROM SEEKING PROVISIONAL REMEDIES IN AID OF ARBITRATION FROM A COURT OF COMPETENT JURISDICTION IN DALLAS COUNTY, TEXAS ONLY. FURTHER, THE PARTIES AGREE AND ACKNOWLEDGE THAT THE ARBITRATOR’S DECISION SHALL BE FINAL AND BINDING, TO THE FULLEST EXTENT PERMITTED BY LAW, AND ENFORCEABLE BY ANY COURT HAVING JURISDICTION THEREOVER.
Section 27 DISCLAIMER OF RELIANCE. EACH PARTY ACKNOWLEDGES THAT NONE OF THE PARTIES, NOR ANY AGENTS OR COUNSEL OF ANY OTHER PARTY, HAVE MADE ANY PROMISES, REPRESENTATIONS, OR WARRANTIES, EXPRESS OR IMPLIED, NOT CONTAINED HEREIN, TO INDUCE THE PARTIES’ EXECUTION OF THIS AGREEMENT. THE PARTIES ACKNOWLEDGE AND WARRANT THAT EACH PARTY IS NOT EXECUTING THIS AGREEMENT IN RELIANCE ON ANY PROMISE, REPRESENTATION, OR WARRANTY NOT CONTAINED HEREIN. THE PARTIES REPRESENT AND WARRANT THAT EACH PARTY HAS CONDUCTED AN INDEPENDENT INVESTIGATION AND THAT EACH PARTY HAS HAD THE OPPORTUNITY TO CONSULT WITH THE COUNSEL OF EACH PARTY’S CHOICE AND HAS SO CONSULTED. EACH PARTY SPECIFICALLY DISCLAIMS RELIANCE ON ANY REPRESENTATIONS MADE BY THE OTHER PARTY, EXCEPT FOR THOSE REPRESENTATIONS THAT ARE SPECIFICALLY REDUCED TO WRITING IN THIS AGREEMENT.
Section 28 Counterparts. This Agreement may be executed in one (1) or more identical counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile or digitally stored (e.g., PDF) copy of a signature shall be deemed an original signature for purposes of enforcement.
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 10 OF 11 |
IN WITNESS WHEREOF, the Company and the Advisor have executed this Agreement to be effective as of the Effective Date.
| | COMPANY: INDEPENDENCE POWER HOLDINGS, INC., a Nevada corporation | |
| | | | |
| | By: | | |
| | Its: | | |
| | Name: | | |
| | | | |
| | INDEPENDENCE POWER, INC., a Texas corporation | |
| | | | |
| | By: | | |
| | Its: | | |
| | Name: | | |
| | | | |
| | KYMA BATTERIES LLC, a Delaware limited liability company | |
| | | | |
| | By: | | |
| | Its: | | |
| | Name: | | |
| | | | |
| | ADVISOR: | |
| | | |
| | IPAS ASSET MANAGEMENT, LLC, a Delaware limited liability company | |
| | | | |
| | By: | | |
| | Its: | | |
| | Name: | | |
| ADMINISTRATIVE SERVICES AGREEMENT | | PAGE 11 OF 11 |
EXHIBIT 10.9
STRICTLY CONFIDENTIAL
EXECUTION COPY
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this “Agreement”), dated as of December 30, 2025, is by and between Independence Power Holdings, Inc., a Nevada corporation (the “Company”), and the undersigned individual (the “Indemnitee”). Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in Section 13.
WHEREAS, the Company desires to attract and retain the services of highly qualified individuals as directors, officers, employees and agents;
WHEREAS, the Indemnitee may not regard the protection currently provided by applicable law, the Company’s governing documents and available insurance, if any, as adequate under the present circumstances, and the Company has determined that the Indemnitee may not be willing to serve the Company without additional protection; and
WHEREAS, the Company desires and has requested the Indemnitee to serve as a director and/or executive officer of the Company and has proffered this Agreement to the Indemnitee as an additional inducement to serve in such capacity.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify the Indemnitee to the fullest extent permitted by law (including, without limitation, Nevada Revised Statutes (“NRS”) 78.7502 and 78.751) as it presently exists or may hereafter be amended; provided, however, that no indemnification shall be provided for acts or omissions involving Statutory Prohibitions on Indemnification. In furtherance of the foregoing indemnification, and without limiting the generality thereof:
(a) The Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(a) if, by reason of the Indemnitee’s Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), the Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding, or any claim, issue or matter therein, to the fullest extent permitted by applicable law.
(b) The Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of the Indemnitee’s Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), the Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding, or any claim, issue or matter therein, to the fullest extent permitted by applicable law; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which the Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that a Specified Court shall determine that such indemnification may be made.
(c) Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of the Indemnitee’s Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, the Indemnitee shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by the Indemnitee or on the Indemnitee’s behalf in connection therewith. If the Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by the Indemnitee or on the Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 2. Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 except for Statutory Prohibitions on Indemnification, the Company shall and hereby does indemnify and hold harmless the Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee or on the Indemnitee’s behalf if, by reason of the Indemnitee’s Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of the Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to the Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Section 6 and Section 7) to be unlawful. The parties hereto intend that this Agreement shall provide to the fullest extent permitted by law for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Company’s articles of incorporation (as amended from time to time, the “Articles of Incorporation”), the Company’s bylaws (as amended from time to time, the “Bylaws”), vote of the Company’s stockholders or disinterested directors or applicable law.
Section 3. Contribution.
(a) Whether or not the indemnification provided in Section 1 and Section 2 is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such action, suit or proceeding) the Company shall pay the entire amount of any judgment or settlement of such action, suit or proceeding without requiring the Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against the Indemnitee. The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against the Indemnitee.
(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subsection, if, for any reason, the Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by the Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than the Indemnitee, who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, from the transaction(s) or event(s) from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, in connection with the transaction(s) or event(s) that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than the Indemnitee, who are jointly liable with the Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and the Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.
(c) The Company hereby agrees to fully indemnify and hold the Indemnitee harmless from any claims of contribution which may be brought by officers, directors, or employees of the Company, other than the Indemnitee, who may be jointly liable with the Indemnitee.
(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to the Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying the Indemnitee, shall contribute to the amount incurred by the Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company (and its directors, officers, employees and agents (other than the Indemnitee)) and the Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents (other than the Indemnitee)) and the Indemnitee in connection with such event(s) and/or transaction(s).
Section 4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of the Indemnitee’s Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which the Indemnitee is not a party, the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee or on the Indemnitee’s behalf in connection therewith.
Section 5. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of the Indemnitee in connection with any Proceeding by reason of the Indemnitee’s Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from the Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding; provided, that the right to advancement of Expenses hereunder shall not apply to any Proceeding brought by the Company against the Indemnitee regarding fraud, gross negligence or willful misconduct by the Indemnitee. Such statement or statements shall reasonably evidence the Expenses incurred by the Indemnitee (it being understood that with respect to invoices or other documentation evidencing Expenses for legal services, any references to legal work performed or to expenditure made that would cause Indemnitee to waive any privilege accorded by applicable law shall not be included therein) and shall include or be preceded or accompanied by a written undertaking by or on behalf of the Indemnitee to repay any Expenses advanced if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified against such Expenses. Advances shall be unsecured and interest free. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.
Section 6. Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for the Indemnitee rights of indemnity that are as favorable as may be permitted under the NRS and public policy of the State of Nevada. Accordingly, the parties hereto agree that the following procedures and presumptions shall apply in the event of any question as to whether the Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification under this Agreement, the Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Company’s board of directors (the “Board”) in writing that the Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of the Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to the Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.
(b) Upon written request by the Indemnitee for indemnification pursuant to the first sentence of Section 6(a), a determination with respect to the Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board: (i) by a majority vote of the Disinterested Directors, even though less than a quorum, (ii) by a committee of Disinterested Directors designated by a majority vote of the disinterested directors, even though less than a quorum, (iii) if there are no Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee or (iv) if so directed by the Board, by the stockholders of the Company. Notwithstanding the foregoing, if a Change in Control shall have occurred, unless the Indemnitee requests that the Disinterested Directors make the determination, a determination with respect to Indemnitee’s entitlement to indemnification shall be made by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee. If it is determined that the Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.
(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b), the Independent Counsel shall be selected as provided in this Section 6(c). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to the Indemnitee advising him or her of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and the Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, the Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to the Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined herein, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a Specified Court has determined that such objection is without merit. If, within twenty (20) days after the later of (i) submission by the Indemnitee of a written request for indemnification pursuant to the first sentence of Section 6(a) and (ii) the final disposition of the Proceeding, the parties hereto have not agreed upon an Independent Counsel, either the Company or the Indemnitee may petition a Specified Court for resolution of any objection that shall have been made by the Company or the Indemnitee to the other’s selection of Independent Counsel and for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b). Upon the due commencement of any judicial proceeding pursuant to Section 7(a), the Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing). The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b), and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed. The Independent Counsel shall be an express third-party beneficiary of the preceding sentence.
(d) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because the Indemnitee has met any applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met any such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met any such applicable standard of conduct.
(e) The Indemnitee shall be deemed to have acted in good faith if the Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to the Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to the Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that the Indemnitee has at all times acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(f) If the person, persons or entity empowered or selected under this Section 6 to determine whether the Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and the Indemnitee shall be entitled to such indemnification absent (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification or (ii) a prohibition of such indemnification under applicable law; provided, however, that such thirty (30) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided further, that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.
(g) The Indemnitee shall cooperate with the person, persons or entity making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) incurred by the Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to the Indemnitee’s entitlement to indemnification), and the Company hereby indemnifies and agrees to hold the Indemnitee harmless therefrom.
(h) The Company shall not be liable to indemnify Indemnitee for any settlement of any Proceeding (or any part thereof) effected without the Company’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which the Indemnitee is a party is resolved in any manner other than by adverse judgment against the Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that the Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(i) The Company shall not settle any Proceeding (or any part thereof) in a manner that imposes any Expense, judgment, fine, penalty or, liability or limitation on the Indemnitee that, in the case of monetary amounts, is not paid by the Company without the Indemnitee’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.
(j) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good faith and in a manner which the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause to believe that the Indemnitee’s conduct was unlawful.
(k) In the event the Company may be obligated to make any indemnity in connection with a Proceeding, the Company shall be entitled to assume the defense of such Proceeding with counsel approved by the Indemnitee, which approval shall not be unreasonably withheld, conditioned or delayed, upon the delivery to the Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Company will not be liable to the Indemnitee for any fees or expenses of counsel subsequently incurred by the Indemnitee with respect to the same Proceeding. Notwithstanding the Company’s assumption of the defense of any such Proceeding, the Company shall be obligated to pay the fees and expenses of the Indemnitee’s separate counsel to the extent (i) the employment of separate counsel by Indemnitee is authorized by the Company, (ii) counsel for the Company or the Indemnitee shall have reasonably concluded that there is a conflict of interest between the Company and the Indemnitee in the conduct of any such defense such that the Indemnitee needs to be separately represented, (iii) the Company is not financially or legally able to perform its indemnification obligations or (iv) the Company shall not have retained, or shall not continue to retain, counsel to defend such Proceeding. The Company shall have the right to conduct such defense as it sees fit in its sole discretion. Regardless of any provision in this Agreement, the Indemnitee shall have the right to employ counsel in any Proceeding at the Indemnitee’s personal expense. The Company shall not be entitled, without the consent of the Indemnitee, to assume the defense of any claim brought by or in the right of the Company.
(l) If the Company disputes a portion of the amounts for which indemnification is requested hereunder, the undisputed portion shall be paid and only the disputed portion may be withheld pending resolution of any such dispute.
Section 7. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 6 that the Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 or Section 7(e), (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 6 within sixty (60) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made (A) within ten (10) days after a determination has been made that the Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 or (B) with respect to indemnification pursuant to Section 1(c), Section 4, Section 7(d) or Section 7(e), within thirty (30) days after receipt by the Company of a written request therefor or (v) any other person or entity takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, in each case, the Indemnitee shall be entitled to an adjudication in a Specified Court of the Indemnitee’s entitlement to such indemnification or advancement of Expenses. The Indemnitee shall commence such proceeding seeking an adjudication within one hundred eighty (180) days following the date on which the Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a). The Company shall not oppose the Indemnitee’s right to seek any such adjudication.
(b) In the event that a determination shall have been made pursuant to Section 6(b) that the Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and the Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).
(c) It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of the Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. If a determination shall have been made pursuant to Section 6(b) that the Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7, absent (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee’s misstatement not materially misleading in connection with the application for indemnification or (ii) a prohibition of such indemnification under applicable law.
(d) In the event that the Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of the Indemnitee’s rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ or fiduciary liability insurance policies maintained by the Company, the Company shall pay on the Indemnitee’s behalf, in advance, and indemnify the Indemnitee against, any and all Expenses actually and reasonably incurred by the Indemnitee in such judicial adjudication, regardless of whether the Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.
(e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such proceeding that the Company is bound by all the provisions of this Agreement. The Company shall indemnify the Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such expenses to the Indemnitee, which are incurred by the Indemnitee in connection with any Proceeding brought by the Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ or fiduciary liability insurance policies maintained by the Company, regardless of whether the Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
Section 8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation.
(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Articles of Incorporation. the Bylaws, any agreement, a vote of stockholders, a resolution of directors of the Company, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of the Indemnitee under this Agreement in respect of any action taken or omitted by the Indemnitee in the Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the NRS, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Articles of Incorporation, the Bylaws, and this Agreement, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of any Enterprise, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim or Proceeding pursuant to the terms hereof, the Company has directors’ and officers’ liability or fiduciary liability insurance in effect, the Company shall give prompt notice of the commencement of such claim or Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such claim or Proceeding in accordance with the terms of such policies.
(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(e) The Company’s obligation to indemnify or advance Expenses hereunder to the Indemnitee who is or was serving at the request the Company as a director, officer, trustee, general partner, managing member or manager, employee, agent or fiduciary of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount the Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.
Section 9. Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim or Proceeding:
(a) for which payment has actually been made to or on behalf of the Indemnitee under any statute, insurance policy, indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid;
(b) for an accounting or disgorgement of profits pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or similar provisions of state statutory law or common law, if Indemnitee is held liable therefor (including pursuant to any settlement arrangements);
(c) for any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act), if Indemnitee is held liable therefor (including pursuant to any settlement arrangements);
(d) for any reimbursement (such Proceeding, a “Clawback Proceeding”) of the Company by the Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or the compensation committee of the Board, including but not limited to any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act (a “Clawback Policy”). In furtherance of this Section 9(d), the Indemnitee hereby agrees to abide by the terms of any Clawback Policy, including, without limitation, by returning any compensation to the Company to the extent required by, and in a manner permitted by, the Clawback Policy, and hereby understands and agrees that the Indemnitee shall not be entitled to any (i) indemnification for any liability (including any amounts owed by Indemnitee in a judgment or settlement of any Clawback Proceeding) or loss (including judgments, fines, taxes, penalties or amounts paid in settlement by or on behalf of Indemnitee) incurred by the Indemnitee in connection with any Clawback Proceeding or (ii) indemnification or advancement of Expenses (including attorneys’ fees) from the Company and or any subsidiary of the Company incurred by the Indemnitee in connection any Clawback Proceeding; provided, however, if the Indemnitee is successful on the merits in the defense of any claim asserted against the Indemnitee in a Clawback Proceeding, the Indemnitee shall be indemnified for the Expenses (including attorneys’ fees) the Indemnitee reasonably incurred to defend such claim. The Indemnitee hereby knowingly, voluntarily and intentionally waives, and agrees not to assert any claim regarding, all indemnification, advancement of Expenses and other rights to which the Indemnitee is now or becomes entitled to under this Agreement, the Articles of Incorporation, the Bylaws, the governing documents of each subsidiary of the Company and the NRS, in each case to the extent such waiver and agreement is necessary to give effect to the preceding sentence of this paragraph. The Indemnitee agrees and acknowledges that the compensation the Indemnitee has or will receive from the Company or any of its subsidiaries constitutes fair and adequate consideration in exchange for the waiver and agreement provided by the Indemnitee in this paragraph;
(e) in connection with any Proceeding (or any part of any Proceeding) initiated by the Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by the Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation, (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law or (iii) otherwise authorized under Section 7(d); provided, that for the avoidance of doubt, Indemnitee shall not be deemed for purposes of this paragraph, to have initiated any Proceeding (or any part of a Proceeding) by reason of (A) having asserted any affirmative defenses in connection with a claim not initiated by the Indemnitee or (B) having made any counterclaim (whether permissive or mandatory) in connection with any claim not initiated by the Indemnitee; or
(f) if (but then only to the extent) indemnification shall be for acts or omissions involving Statutory Prohibitions on Indemnification acts or otherwise prohibited by the NRS or other applicable law.
Section 10. Duration of Agreement. This Agreement shall continue until and terminate upon the later of (a) ten (10) years after the date that the Indemnitee shall have ceased to serve as a director or officer of the Company or as a director, officer, trustee, general partner, managing member or manager, employee, agent or fiduciary of any other Enterprise, as applicable or (b) one (1) year after the final termination of any Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding commenced by Indemnitee pursuant to Section 7 relating thereto. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.
Section 11. Security. To the extent requested by the Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to the Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to the Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.
Section 12. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce the Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that the Indemnitee is relying upon this Agreement in serving as an officer or director of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof. Without limiting the generality of the foregoing, this Agreement shall supersede any prior indemnification agreement that may exist between the Company and the Indemnitee, which is hereby terminated.
(c) The Company shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting the Indemnitee’s rights to receive advancement of expenses under this Agreement.
Section 13. Definitions. For purposes of this Agreement:
(a) “Agreement” has the meaning set forth in the preamble hereto.
(b) “Approved Directors” means new directors (other than a director designated by a Person who has entered into an agreement with the Company to effect a transaction described in Section 13(g)(i), Section 13(g)(iii) or Section 13(g)(iv)) whose election or nomination by the Board (or, if applicable, by the Company’s stockholders) was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such two-year period or whose election or nomination for election was previously so approved.
(c) “Articles of Incorporation” has the meaning set forth in Section 2.
(d) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that “Beneficial Owner” shall exclude any Person otherwise becoming a Beneficial Owner solely by reason of (i) the stockholders of the Company approving a merger of the Company with another Person, or entering into tender or support agreements relating thereto (provided, such merger was approved by the Board) or (ii) the Board approving a sale of securities by the Company to such Person.
(e) “Board” has the meaning set forth in Section 6(a).
(f) “Bylaws” has the meaning set forth in Section 2.
(g) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power of the Company’s then outstanding securities;
(ii) Change in Board Composition. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constituted the Board and any Approved Directors cease for any reason to constitute at least a majority of the members of the Board;
(iii) Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect a majority of the board of directors or other governing body of such surviving entity. For purposes of this Section 13(g)(iii), “surviving entity” shall include any entity that controls, directly or indirectly, the surviving entity of such merger or consolidation;
(iv) Liquidation. The approval by the Company’s stockholders of a complete liquidation or the dissolution of the Company or an agreement for the sale, lease or disposition by the Company of all or substantially all of the Company’s assets; or
(v) Other Events. Any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement.
(h) “Clawback Policy” has the meaning set forth in Section 9(d).
(i) “Clawback Proceeding” has the meaning set forth in Section 9(d).
(j) “Company” has the meaning set forth in the preamble hereto.
(k) “Corporate Status” describes the status of a person who is or was a director, officer, trustee, general partner, managing member or manager, employee, agent or fiduciary of the Company or of any other Enterprise.
(l) “Disinterested Directors” means all of the directors of the Company who are not and were not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.
(m) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that the Indemnitee is or was serving at the express written request of the Company as a director, officer, trustee, general partner, managing member or manager, employee, agent or fiduciary.
(n) “Exchange Act” has the meaning set forth in Section 9(b).
(o) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by the Indemnitee or the amount of judgments or fines against the Indemnitee. The parties hereto agree that for the purposes of any advancement of Expenses for which the Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of the Indemnitee’s counsel as being reasonable in the good faith judgment of such counsel shall be presumed conclusively to be reasonable.
(p) “Indemnitee” has the meaning set forth in the preamble hereto.
(q) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent (i) the Company, any other Enterprise or the Indemnitee in any matter material to any such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements) or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. The Independent Counsel is a third-party beneficiary of the preceding sentence.
(r) “NRS” has the meaning set forth in Section 1.
(s) “Person” shall have the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(t) “Proceeding” includes any threatened, pending or completed action, suit, claim, arbitration, alternative dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which the Indemnitee was, is or will be involved as a party or otherwise, by reason of the Indemnitee’s Corporate Status, by reason of any actual, purported or alleged act or omission the Indemnitee or of any inaction on the part of the Indemnitee while acting in the Indemnitee’s Corporate Status, in each case, whether or not the Indemnitee is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification may be provided under this Agreement, including one pending on or before the date of this Agreement, but excluding one initiated by the Indemnitee pursuant to Section 7 to enforce the Indemnitee’s rights under this Agreement.
(u) “Sarbanes-Oxley Act” has the meaning set forth in Section 9(c).
(v) “Specified Court” has the meaning set forth in Section 20.
(w) “Statutory Prohibitions on Indemnification” means acts or omissions involving fraud, intentional misconduct, or a knowing violation of law as determined under NRS 78.138(7) or where Indemnitee is adjudged to be liable to the Company unless permitted by a court pursuant to NRS 78.7502(2).
Section 14. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Further, the invalidity or unenforceability of any provision hereof as to the Indemnitee shall in no way affect the validity or enforceability of any provision hereof as to the other. Without limiting the generality of the foregoing, this Agreement is intended to confer upon the Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.
Section 15. Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
Section 16. Notice By Indemnitee. The Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise unless, and only to the extent, that such failure or delay actually and materially prejudices the Company.
Section 17. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the addresses specified on the signature page hereto, or to such other address as may have been furnished to the Company by the Indemnitee, or, if to the Company, to the Company’s address as specified in filings made by the Company with the U.S. Securities and Exchange Commission.
Section 18. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
Section 19. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
Section 20. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties hereto shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada, without regard to its conflict of laws rules. The Company and the Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the state of federal courts located in Dallas County, Texas (except where the NRS confers mandatory sole jurisdiction on the district court of the State of Nevada, then in the Eighth Judicial District Court of the State of Nevada sitting in Clark County, Nevada) (the “Specified Courts”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consent to submit to the exclusive jurisdiction of the Specified Courts for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) waive any objection to the laying of venue of any such action or proceeding in the Specified Courts and (d) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Specified Courts has been brought in an improper or inconvenient forum.
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first set forth above.
COMPANY:
INDEPENDENCE POWER HOLDINGS, INC.
Address:
Independence Power Holdings, Inc.
14114 Dallas Parkway, Suite 200
Dallas, Texas 75254
| Attention: | Todd Parkin and Scott Stephenson |
| | |
| E-mail: | tkparkin@rinconstrategic.com and stephenson@independco.com |
| | |
| INDEMNITEE: | |
Name:
Address:
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have previously issued our report dated December 8, 2025, with respect to the financial statements of Kyma Batteries LLC (the “Company”) as of and for the year ended December 31, 2024. We consent to the incorporation of this report related to the Company’s financial statements as of and for the year ended December 31, 2024, in this Registration Statement on Form 8-K.
/s/ Whitley Penn LLP
Dallas, Texas
January 7, 2026
EXHIBIT 99.1
Kyma Batteries LLC
Financial Statements
For the Year Ended December 31, 2024
with Report of Independent Auditors
Kyma Batteries LLC
Index to Financial Statements
| For the Year Ended December 31, 2024 |
| 
| | Dallas Office 8343 Douglas Avenue Suite 400 Dallas, Texas 75225 214.393.9300 Main whitleypenn.com |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Members and Board of Directors of
KYMA Batteries, LLC
Opinion on the Financial Statements
We have audited the accompanying balance sheet of KYMA Batteries, LLC (the “Company”) as of December 31, 2024, and the related statements of operations, changes in member's equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion , the financial statements present fairly, in all material respects, the financial position of the Company as of December 31 , 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America .
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement , whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly , we express no such opinion .
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management , as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit comm ittee and that: (I ) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challengi ng, subjective, or complex judgments. We determined that there are no critical audit matters.
We have served as the Company's auditor since 2025.
Dallas, Texas
December 8, 2025
| Kyma Batteries LLC Balance Sheet December 31, 2024 |
| | | | |
| | | 2024 | |
| Assets | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 67,607 | |
| Prepaid expenses and other current assets | | | 229,713 | |
| Total current assets | | | 297,320 | |
| | | | | |
| Patents | | | 268,205 | |
| | | | | |
| Total assets | | $ | 565,525 | |
| | | | | |
| Liabilities and Member's Equity | | | | |
| Current liabilities: | | | | |
| Accounts payable | | $ | 213,550 | |
| Payables to related parties | | | 15,658 | |
| Accrued and other liabilities | | | 42,168 | |
| Total current liabilities | | | 271,376 | |
| | | | | |
| Total liabilities | | | 271,376 | |
| | | | | |
| Member's equity | | | 294,149 | |
| | | | | |
| Total liabilities and member's equity | | $ | 565,525 | |
See accompanying notes to financial statements.
| Kyma Batteries LLC Statement of Operations For the Year Ended December 31, 2024 |
| | | | |
| | | 2024 | |
| | | | |
| Revenue | | $ | - | |
| | | | | |
| Operating expenses: | | | | |
| Employment expenses | | | 762,784 | |
| Research and development expenses | | | 1,085,480 | |
| General and administrative expenses | | | 909,804 | |
| Total operating expenses | | | 2,758,068 | |
| | | | | |
| Operating loss | | | (2,758,068 | ) |
| | | | | |
| Other income | | | | |
| Interest income | | | 26 | |
| Total other income | | | 26 | |
| | | | | |
| Net loss | | $ | (2,758,042 | ) |
| | | | | |
| Net loss per member unit | | | | |
| Basic | | $ | (1,379.02 | ) |
| Diluted | | $ | (1,379.02 | ) |
| | | | | |
| Weighted average units used in computing net loss per member unit | | | | |
| Basic | | | 2,000 | |
| Diluted | | | 2,000 | |
See accompanying notes to financial statements.
| Kyma Batteries LLC Statement of Changes in Member's Equity For the Year Ended December 31, 2024 | |
| | | | |
| Balance at December 31, 2023 | | $ | - | |
| | | | | |
| Contributions | | | 3,052,191 | |
| | | | | |
| Net loss | | | (2,758,042 | ) |
| | | | | |
| Balance at December 31, 2024 | | $ | 294,149 | |
See accompanying notes to financial statements.
| Kyma Batteries LLC Statement of Cash Flows For the Year Ended December 31, 2024 |
| | | | |
| | | 2024 | |
| Cash flows from operating activities | | | |
| Net loss | | $ | (2,758,042 | ) |
| Reconciliation of net loss to cash used by operating activities: | | | | |
| Changes in assets and liabilities: | | | | |
| Prepaid expenses and other current assets | | | (229,713 | ) |
| Accounts payable | | | 213,550 | |
| Payables to related parties | | | 15,658 | |
| Accrued and other liabilities | | | 42,168 | |
| Net cash used by operating activities | | | (2,716,379 | ) |
| | | | | |
| Cash flows from investing activities: | | | | |
| Purchases of patents | | | (268,205 | ) |
| Net cash used by investing activities | | | (268,205 | ) |
| | | | | |
| Cash flows from financing activities | | | | |
| Member contributions | | | 3,052,191 | |
| Net cash provided by financing activities | | | 3,052,191 | |
| | | | | |
| Net increase in cash and cash equivalents | | | 67,607 | |
| | | | | |
| Cash and cash equivalents, beginning of year | | | - | |
| Cash and cash equivalents, end of year | | $ | 67,607 | |
| | | | | |
| Supplemental disclosure of cash flow information: | | | | |
| Cash paid for interest | | $ | - | |
| Cash paid for taxes | | $ | - | |
See accompanying notes to financial statements.
A. Nature of Business
Kyma Batteries LLC (the “Company”), a Delaware limited liability company, was formed on December 8, 2023 and commenced operations effective January 1, 2024. The Company is wholly owned by Independence Investors LLC (“the Parent”). The Company’s primary business activity is the software and hardware development, implementation and installation of an industrial battery management and monitoring system for high voltage battery storage systems. The Company’s operations are currently based in Texas and Wisconsin. The corporate headquarters are located in Dallas, Texas.
Liquidity
As shown in the accompanying financial statements, the Company has incurred cumulative operating losses since inception. As of December 31, 2024, the Company has limited financial resources with which to achieve its objectives and attain profitability and positive cash flows from operations.
As further discussed in Note H, in August 2025, the Company successfully installed and energized its battery management and monitoring system on a high voltage battery storage system at its Wisconsin facility. In September 2025, the Company successfully deployed and energized its battery management and monitoring system on numerous battery storage systems in the West Texas Permian Basin. In September 2025, the Company entered into a Master Supply and Services Agreement (“the Agreement”) with GridCore Infrastructure LLC (“GridCore”).
On October 22, 2025, the Company’s Parent formed Independence Power, Inc., a wholly owned subsidiary and the successor in interest to the Company as part of a planned tax-free merger of the Company into Independence Power, Inc. The Company’s Parent acquired 10,000 common shares of Independence Power, Inc. for $2.0 million on October 24, 2025, with the intent those funds would be used for working capital post-merger of the Company into Independence Power, Inc. The merger was effective November 1, 2025.
The Company’s owner has additional capital that can be used to fund any working capital needs the Company may have over the next twelve months. Management believes that with this capital and the Agreement entered into with GridCore, the Company will be able to continue as a going concern for at least one year after the date that these financial statements are available to be issued.
B. Summary of Significant Accounting Policies
A summary of the Company’s significant accounting policies consistently applied in the preparation of the accompanying financial statements follows:
Basis of Accounting
The accounts are maintained and the financial statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts in the financial statements and accompanying notes. Actual results could differ from these estimates and assumptions.
| Kyma Batteries LLC Notes to Financial Statements December 31, 2024 |
| |
B. Summary of Significant Accounting Policies – continued
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. At December 31, 2024, the Company had no such investments. The Company maintains deposits primarily in one financial institution, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits.
Patents
The costs incurred for developing patents are capitalized as an intangible asset. Patents are amortized under the straight-line method from the date of issuance over the shorter of 20 years or its expected economic life. As of December 31, 2024, no patents had been issued.
Impairment of Long-lived Assets
The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable on an annual basis as of the date of the balance sheet. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows that the assets are expected to generate.
If long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value and is recorded in the period the determination was made. Based upon management’s assessment, there was no impairment of long-lived assets as of December 31, 2024.
Earnings per Member Unit
Earnings (losses) per member unit are computed by dividing net income (loss) by the weighted-average number of units outstanding during the year. Fully diluted earnings per member unit are computed by dividing net income (loss) by the sum of the weighted-average number of member units outstanding, convertible member units, and the additional member units that would have been outstanding if potential member units had been issued. Potential member units are not included in the computation of fully diluted earnings per member unit if their effect is anti-dilutive. The computation of earnings per member unit is based on the weighted average number of member units outstanding at the date of the financial statements. The Company has no potentially dilutive securities and, accordingly, basic and dilutive net income per member unit do not differ.
Research and Development Expenses
Research and development expenses are charged to expense as incurred as they relate to design and development of new products. Research and development expenses totaled $1,085,480 for the year ended December 31, 2024.
| Kyma Batteries LLC Notes to Financial Statements December 31, 2024 |
| |
Summary of Significant Accounting Policies – continued
Fair Value Measurement
Certain of the Company’s assets and liabilities are measured at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon inputs that market participants would use in pricing an asset or liability, which are characterized according to a fair value hierarchy that prioritizes those inputs based on the degree to which they are observable. Observable inputs represent market data obtained from independent sources, whereas inputs that are generally less observable from objective sources reflect management’s estimates and assumptions and are used if observable inputs are not reasonably available without undue cost and effort. The three input levels are as follows:
| | · | Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. |
| | | |
| | · | Level 2 — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. |
| | | |
| | · | Level 3 — Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. |
The Company classifies financial assets and liabilities based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input requires judgment that may affect the valuation and its placement within the hierarchy levels.
The carrying values of financial instruments, including accounts payable and accrued liabilities approximate fair value due to the short-term maturity of these instruments.
Segment Reporting
The Company manages its business activities and operates in a single operating and reportable segment. Operating segments are defined as components of a public entity that engages in business activities and for which discrete financial information and operating results are available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and assess performance.
The Company’s Chief Executive Officer (“CEO”) has been determined to be the chief operating decision maker of the Company. The CEO uses net income, as reported on our income statements, to assess financial performance and allocate resources. The CEO manages and evaluates the results of the Company and net income is used to evaluate key operating decisions, such as making strategic acquisitions, determining transaction structures to capitalize on the Company’s business plan, and allocating resources for general and administrative expenditures. The CEO does not review balance sheet assets when assessing segment performance and deciding how to allocate resources. All significant segment expenses are presented separately on the Company’s statement of operations. There are no other significant segment expenses or other segment items that would require disclosure.
| Kyma Batteries LLC Notes to Financial Statements December 31, 2024 |
| |
Summary of Significant Accounting Policies – continued
Income Taxes
The Company is organized as a limited liability company and is a wholly owned disregarded entity under its Parent entity, a sub-chapter S corporation for federal income tax purposes. As a result, income or losses are taxable or deductible to the Parent’s member rather than at the Company level; accordingly, no provision has been made for federal income taxes in the accompanying financial statements. In certain instances, the Company is subject to state taxes on income arising in or derived from the state tax jurisdictions in which it operates.
State income tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more likely than not threshold, it is then measured to determine the amount of expense to record in the consolidated financial statements. The tax expense recorded would equal the largest amount of expense related to the outcome that is 50% or greater likely to occur. The Company classifies any potential accrued interest recognized on an underpayment of income taxes as interest expense and classifies any statutory penalties recognized on a tax position taken as operating expense. Management of the Company has not taken a tax position that, if challenged, would be expected to have a material effect on the financial statements at December 31, 2024, or for the year ended December 31, 2024.
The Company did not incur any penalties or interest related to its tax returns during the year ended December 31, 2024.
Under the centralized partnership audit rules effective for tax years beginning after 2017, the Internal Revenue Service (“IRS”) assesses and collects underpayments of tax from the Company instead of from each partner. The Company may be able to pass the adjustments through to its partners by making a push- out election or, if eligible, by electing out of the centralized partnership audit rules.
The collection of tax from the Company is only an administrative convenience for the IRS to collect any underpayment of income taxes including interest and penalties. Income taxes on Company income, regardless of who pays the tax or when the tax is paid, is attributed to the members. Any payment made by the Company as a result of an IRS examination will be treated as a distribution from the Company to the Parent in the financial statements.
New Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which expands a public entity’s annual and interim disclosure requirements about their reportable segments, primarily through more detailed disclosures about significant segment expenses. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. We have adopted this standard for our fiscal year 2024 annual financial statements and have applied this standard retrospectively for all prior periods presented in the financial statements
| Kyma Batteries LLC Notes to Financial Statements December 31, 2024 |
| |
Summary of Significant Accounting Policies – continued
New Accounting Pronouncements (Continued)
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures ("ASU 2023-09”), which updates income tax disclosures related to the effective income tax rate reconciliation and requires disclosure of income taxes paid by jurisdiction. The guidance is effective for annual periods beginning after December 15, 2024, and may be applied prospectively or retrospectively, with early adoption permitted. The Company does not believe this will have a material impact on the Company’s consolidated financial statements.
In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires public entities to disclosure additional information about certain costs and expenses included in relevant expense captions presented on the income statement. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating ASU 2024-03 to determine its impact on the Company’s disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers. The practical expedient permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. ASU 2025-05 is effective for annual and interim periods beginning after December 15, 2025 on a prospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the financial statements and related disclosures.
C. Patents
As of December 31, 2024, the Company had multiple filed patents in various stages toward issuance, and the Company had capitalized $268,205 in patent related costs. As of December 31, 2024, no patents had been issued; accordingly, no amortization expense was incurred during the year ended December 31, 2024.
D. Members’ Equity
As of December 31, 2024, the Company had 2,000 member units issued and outstanding, which were 100% owned by Independence Investors LLC as its sole member and Parent. During the year ended December 31, 2024, the sole member contributed $3,052,191 to the Company. Distributions are available to be made to the member up to the amount of their initial capital contribution plus accumulated net earnings of the Company. During the year ended December 31, 2024, the Company made no distributions to the member.
| Kyma Batteries LLC Notes to Financial Statements December 31, 2024 |
| |
E. Commitments and Contingencies
Litigation
Occasionally, the Company is subject to legal proceedings, disputes and claims that arise in the ordinary course of business. The Company’s operations are subject to extensive and rapidly changing federal and state environmental, health and safety and other laws and regulations. The Company is not a party to any litigation that would have a material impact to the Company’s operations.
F. Leases
The Company determines if an arrangement is a lease at inception. Any operating lease is included in operating lease right-of-use (“ROU”) asset and operating lease liability in our balance sheets. Operating lease expense is included in general and administrative expenses on the statement of operations. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. If the lease does not provide an implicit rate of return, the Company will use a discount rate commensurate with the incremental borrowing rate of a group of peers based on information available at the application date in determining the present value of lease payments. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
The Company had a short-term lease for its corporate office in 2024, which expired in February 2025 and was not renewed. During the year ended December 31, 2024, the Company paid $196,399 in rent expense, which is included in general and administrative expenses on the accompanying statement of operations.
G. Related Party Transactions
The Company has an outstanding payable balance due to an affiliate entity under common ownership with its Parent entity. The affiliate entity paid for expenses on behalf of the Company and will be subsequently reimbursed for these costs. The outstanding payable balance was $15,658 as of December 31, 2024.
H. Subsequent Events
Management has evaluated all subsequent events for potential recognition or disclosure through December 4, 2025, which is the date these financial statements were available for issuance.
From January 1, 2025 to October 30, 2025, the Parent has contributed capital of $2,912,563 to the Company. In June 2025, two patent applications were granted by the United States Patent Office.
In August 2025, the Company successfully installed and energized its battery management and monitoring system on a high voltage battery energy storage system at its Wisconsin facility.
In September 2025, the Company entered into a Master Supply and Services Agreement (“the Agreement”) with GridCore Infrastructure LLC (“GridCore”) whereby the Company would provide the design, manufacture and integration of its proprietary battery management system to GridCore’s existing fleet of Battery Energy Storage Systems unit (“the BESS units”). The contract price was $97.2 million, of which the Company received a down payment of $10.6 million on September 11, 2025. The remaining purchase price of $86.6 million will be paid under a secured promissory note calling for semi-annual interest payments beginning March 10, 2026 and quarterly principal payments of $21.65 million beginning December 10, 2026, with the final payment due on September 10, 2027.
| Kyma Batteries LLC Notes to Financial Statements December 31, 2024 |
| |
H. Subsequent Events – continued
In addition, the Agreement calls for the Company to provide monitoring and maintenance services (“the Services”), as defined in the Agreement, on the BESS units for a monthly fee of $5,000 per BESS unit for ten years from the Placed-In-Service date, with options for successive five-year renewals.
The Company successfully installed, deployed and energized its battery management and monitoring system on the BESS units during September 2025, establishing the Placed-In-Service date for the BESS units effective on September 26, 2025, effectively triggering the start of the monthly fee for the “Services”.
On October 22, 2025, the Company’s Parent formed Independence Power, Inc., a wholly owned subsidiary and the successor in interest to the Company as part of a planned tax-free merger of the Company into Independence Power, Inc. The Company’s Parent acquired 10,000 common shares of Independence Power, Inc. for $2.0 million on October 24, 2025, with the intent those funds would be used for working capital post-merger of the Company into Independence Power, Inc. The merger was effective November 1, 2025.
EXHIBIT 99.2
Kyma Batteries LLC
Financial Statements
(Unaudited)
For the Three and Nine Month Periods Ended September 30, 2025
| | | September 30, 2025 | | | December 31, 2024 | |
| Assets | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 509,354 | | | $ | 67,607 | |
| Receivable from related party | | | 269 | | | | - | |
| Prepaid expenses and other current assets | | | 9,142 | | | | 229,713 | |
| Total current assets | | | 518,765 | | | | 297,320 | |
| | | | | | | | | |
| Other assets: | | | | | | | | |
| Long-term note receivable | | | 86,600,000 | | | | - | |
| Patents | | | 268,205 | | | | 268,205 | |
| Total other assets | | | 86,868,205 | | | | 268,205 | |
| | | | | | | | | |
| Total assets | | $ | 87,386,970 | | | $ | 565,525 | |
| | | | | | | | | |
| Liabilities and Member's Equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | - | | | $ | 213,550 | |
| Payable to related party | | | - | | | | 15,658 | |
| Accrued and other liabilities | | | - | | | | 42,168 | |
| Total current liabilities | | | - | | | | 271,376 | |
| | | | | | | | | |
| Total liabilities | | | - | | | | 271,376 | |
| | | | | | | | | |
| Member's equity | | | 87,386,970 | | | | 294,149 | |
| | | | | | | | | |
| Total liabilities and member's equity | | $ | 87,386,970 | | | $ | 565,525 | |
See accompanying notes to financial statements.
| Kyma Batteries LLC Statements of Operations (Unaudited) Three and Nine Months Ended September 30, 2025 and 2024 |
| |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2025 | | | 2024 | | | 2025 | | | 2024 | |
| Revenue | | $ | 97,200,000 | | | $ | - | | | $ | 97,200,000 | | | $ | - | |
| | | | | | | | | | | | | | | | | |
| Cost of sales | | | | | | | | | | | | | | | | |
| Cost of sales | | | 2,500,000 | | | | - | | | | 2,500,000 | | | | - | |
| Total cost of sales | | | 2,500,000 | | | | - | | | | 2,500,000 | | | | - | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 94,700,000 | | | | - | | | | 94,700,000 | | | | - | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Employment expenses | | | 156,721 | | | | 345,549 | | | | 508,582 | | | | 514,927 | |
| Research and development expenses | | | 343,780 | | | | 632,845 | | | | 1,580,974 | | | | 969,115 | |
| General and administrative expenses | | | 1,801,205 | | | | 238,101 | | | | 5,505,186 | | | | 503,785 | |
| Total operating expenses | | | 2,301,706 | | | | 1,216,495 | | | | 7,594,742 | | | | 1,987,827 | |
| | | | | | | | | | | | | | | | | |
| Operating income (loss) | | | 92,398,294 | | | | (1,216,495 | ) | | | 87,105,258 | | | | (1,987,827 | ) |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 92,398,294 | | | $ | (1,216,495 | ) | | $ | 87,105,258 | | | $ | (1,987,827 | ) |
| | | | | | | | | | | | | | | | | |
| Net income (loss) per member unit | | | | | | | | | | | | | | | | |
| Basic | | $ | 46,199.15 | | | $ | (608.25 | ) | | $ | 43,552.63 | | | $ | (993.91 | ) |
| Diluted | | $ | 46,199.15 | | | $ | (608.25 | ) | | $ | 43,552.63 | | | $ | (993.91 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average units used in computing net income (loss) per member unit | | | | | | | | | | | | | | | | |
| Basic | | | 2,000 | | | | 2,000 | | | | 2,000 | | | | 2,000 | |
| Diluted | | | 2,000 | | | | 2,000 | | | | 2,000 | | | | 2,000 | |
See accompanying notes to financial statements.
| Kyma Batteries LLC Statements of Member's Equity (Unaudited) For the Three and Nine Months Ended September 30, 2025 and 2024 |
| |
| Three Months Ended September 30, 2025 | | | |
| Balance as of June 30, 2025 | | $ | (2,973,887 | ) |
| Contributions | | | 1,112,563 | |
| Distributions | | | (3,150,000 | ) |
| Net income | | | 92,398,294 | |
| Balance as of September 30, 2025 | | $ | 87,386,970 | |
| | | | | |
| Nine Months Ended September 30, 2025 | | | | |
| | | | | |
| Balance as of December 31, 2024 | | $ | 294,149 | |
| Contributions | | | 3,137,563 | |
| Distributions | | | (3,150,000 | ) |
| Net income | | | 87,105,258 | |
| Balance as of September 30, 2025 | | $ | 87,386,970 | |
| | | | | |
| Three Months Ended September 30, 2024 | | | | |
| Balance as of June 30, 2024 | | $ | 5,859 | |
| Contributions | | | 1,200,000 | |
| Net loss | | | (1,216,495 | ) |
| Balance as of September 30, 2024 | | $ | (10,636 | ) |
| | | | | |
| Nine Months Ended September 30, 2024 | | | | |
| Balance as of December 31, 2023 | | $ | - | |
| Contributions | | | 1,977,191 | |
| Net loss | | | (1,987,827 | ) |
| Balance as of September 30, 2024 | | $ | (10,636 | ) |
See accompanying notes to financial statements.
| Kyma Batteries LLC Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, 2025 and 2024 |
| |
| | | Nine Months Ended September 30, | |
| | | 2025 | | | 2024 | |
| Cash flows from operating activities: | | | | | | |
| Net income (loss) | | $ | 87,105,258 | | | $ | (1,987,827 | ) |
| Reconciliation of net income (loss) to cash provided by (used in) operating activities: | | | | | | | | |
| Changes in assets and liabilities: | | | | | | | | |
| Receivable from related party | | | (269 | ) | | | - | |
| Prepaid expenses and other current assets | | | 220,571 | | | | (25,846 | ) |
| Issuance of long-term note receivable | | | (86,600,000 | ) | | | - | |
| Accounts payable | | | (213,550 | ) | | | 351,670 | |
| Payables to related party | | | (15,658 | ) | | | - | |
| Accrued and other liabilities | | | (42,168 | ) | | | - | |
| Net cash provided by (used in) operating activities | | | 454,184 | | | | (1,662,003 | ) |
| Cash flows from investing activities: | | | | | | | | |
| Purchases of patents | | | - | | | | (11,691 | ) |
| Net cash used by investing activities | | | - | | | | (11,691 | ) |
| Cash flows from financing activities: | | | | | | | | |
| Member contributions | | | 3,137,563 | | | | 1,977,191 | |
| Distribution to member | | | (3,150,000 | ) | | | - | |
| Net cash provided by (used in) financing activities | | | (12,437 | ) | | | 1,977,191 | |
| Net increase in cash and cash equivalents | | | 441,747 | | | | 303,497 | |
| Cash and cash equivalents, beginning of period | | | 67,607 | | | | - | |
| Cash and cash equivalents, end of period | | $ | 509,354 | | | $ | 303,497 | |
| Supplemental disclosure of cash flow information: | | | | | | | | |
| Cash paid for interest | | $ | - | | | $ | - | |
| Cash paid for taxes | | $ | - | | | $ | - | |
See accompanying notes to financial statements.
A. Nature of Business
Kyma Batteries LLC (the “Company”), a Delaware limited liability company, was formed on December 8, 2023 and commenced operations effective January 1, 2024. The Company is wholly owned by Independence Investors LLC (“the Parent”). The Company’s primary business activity is the software and hardware development, implementation and installation of an industrial battery management and monitoring system for high voltage battery storage systems. The Company’s operations are currently based in Texas and Wisconsin. The corporate headquarters are located in Dallas, Texas.
Liquidity
As shown in the accompanying financial statements, the Company has limited revenues since inception. As of September 30, 2025, the Company has limited financial resources with which to achieve its objectives and attain profitability and positive cash flows from operations.
In August 2025, the Company successfully installed and energized its battery management and monitoring system on a high voltage battery storage system at its Wisconsin facility. In September 2025, the Company successfully deployed and energized its battery management and monitoring system on numerous battery storage systems in the West Texas Permian Basin. In September 2025, the Company entered into a Master Supply and Services Agreement (“the Agreement”) with GridCore Infrastructure LLC (“GridCore”).
On October 22, 2025, the Company’s Parent formed Independence Power, Inc., a wholly owned subsidiary and the successor in interest to the Company as part of a planned tax-free merger of the Company into Independence Power, Inc. The Company’s Parent acquired 10,000 common shares of Independence Power, Inc. for $2.0 million on October 24, 2025, with the intent those funds would be used for working capital after the Company is acquired by Independence Power, Inc. The acquisition of the Company by Independence Power, Inc. was effective November 1, 2025.
The Company’s owner has additional capital that can be used to fund any working capital needs the Company may have over the next twelve months. Management believes that with this capital and the Agreement entered into with GridCore, the Company will be able to continue as a going concern for at least one year after the date that these financial statements are available to be issued.
B. Summary of Significant Accounting Policies
A summary of the Company’s significant accounting policies consistently applied in the preparation of the accompanying financial statements follows:
Unaudited Interim Financial Statements
The financial statements of the Company, including the balance sheet as of September 30, 2025, the statements of operations, the statements of changes in member’s equity, and statements of cash flows for the three and nine month periods ended September 30, 2025 and 2024, as well as other information disclosed in the accompanying notes, are unaudited. The balance sheet as of December 31, 2024 was derived from the audited financial statements as of that date. The interim financial statements and the accompanying notes should be read in conjunction with the annual financial statements and the accompanying notes for the year ended December 31, 2024.
| Kyma Batteries LLC Notes to Financial Statements September 30, 2025 |
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B. Summary of Significant Accounting Policies - continued
The interim financial statements and the accompanying notes have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future years or interim periods.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts in the financial statements and accompanying notes. Actual results could differ from these estimates and assumptions.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. At December 31, 2024, the Company had no such investments. The Company maintains deposits primarily in one financial institution, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are recorded at the invoiced amount and do not typically bear interest. The Company regularly monitors and assesses its risk of not collecting amounts owed by customers. The Company operates in the renewable energy services industry and its accounts receivables are primarily derived from rural electric cooperatives.
At each balance sheet date, the Company recognizes an expected allowance for credit losses. The Company has elected the practical expedient to assume that current conditions as of the balance sheet date will persist through the reasonable and supportable forecast period for its eligible assets. The Company also considers subsequent collections of accounts receivable balances received after the balance sheet date through the date before the financial statements are available to be issued when determining its allowance estimate. As necessary, the Company will adjust historical data used in the estimation to reflect current conditions. This estimate is calculated on a pooled basis where similar risk characteristics exist. If applicable, accounts receivable are evaluated individually when they do not share similar risk characteristics which could exist in circumstances where amounts are considered at risk or uncollectible.
The allowance estimate is derived from a review of the Company’s historical losses based on the aging of receivables. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses as the Company’s customers have remained constant since the Company’s inception. Since inception, the Company has not incurred any credit losses. As a result, management has determined that no allowance for credit losses is necessary.
The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized in income (or an offset to credit loss expense) in the year of recovery. The Company incurred no write-offs for the three and nine months ended September 30, 2025 and 2024.
| Kyma Batteries LLC Notes to Financial Statements September 30, 2025 |
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B. Summary of Significant Accounting Policies - continued
Patents
The costs incurred for developing patents are capitalized as an intangible asset. Patents are amortized under the straight-line method from the date of issuance over the shorter of 20 years or its expected economic life. As of September 30, 2025, one patent had been issued and is being amortized over nineteen years.
Impairment of Long-lived Assets
The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable on an annual basis as of the date of the balance sheet. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows that the assets are expected to generate.
If long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value and is recorded in the period the determination was made. Based upon management’s assessment, there was no impairment of long-lived assets as of September 30, 2025.
Revenue
The Company recognizes revenue based on the transfer of control to the customer, reflecting the consideration expected to be received in exchange for our services and products. The Company assesses customers’ ability and intention to pay based on factors such as historical payment experience and financial condition, and we typically bill customers on a monthly basis. Contracts with customers are generally on 30 day payment terms. Contracts may include bundled pricing covering multiple performance obligations, such as monitoring services, maintenance services and mobilization services. In these instances, the Company allocates the transaction price to each performance obligation identified in the contract based on relative stand-alone selling prices, or estimates of such prices, and recognize revenue as control of each product or service is transferred to the customer.
In September 2025, the Company entered into a Master Supply and Services Agreement (“the Agreement”) with GridCore Infrastructure LLC (“GridCore”) whereby the Company would provide the design, manufacture and integration of its proprietary battery management system to GridCore’s existing fleet of Battery Energy Storage Systems unit (“the BESS units”). The contract price was $97.2 million, of which the Company received a cash down payment of $10.6 million on September 11, 2025. The remaining purchase price of $86.6 million was paid in the form of a secured promissory note issued by GridCore calling for semi-annual interest payments beginning March 10, 2026 and quarterly principal payments of $21.65 million beginning December 10, 2026, with the final payment due on September 10, 2027. In addition, the Agreement calls for the Company to provide monitoring and maintenance services (“the Services”), as defined in the Agreement, on the BESS units for a monthly fee of $5,000 per BESS unit for ten years from the Placed-In-Service date, with options for successive five-year renewals.
The Company successfully installed, deployed and energized its battery management and monitoring system on the BESS units during September 2025, establishing the Placed-In-Service date for the BESS units effective on September 26, 2025, effectively satisfying the Company’s contractual obligations under the $97.2 million supply agreement and triggering the start of the monthly fee for the “Services”.
At September 30, 2025, the Company determined the $86.6 million note receivable from GridCore plus required interest payments are fully collectible.
| Kyma Batteries LLC Notes to Financial Statements September 30, 2025 |
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B. Summary of Significant Accounting Policies - continued
Fair Value Measurement
Certain of the Company’s assets and liabilities are measured at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon inputs that market participants would use in pricing an asset or liability, which are characterized according to a fair value hierarchy that prioritizes those inputs based on the degree to which they are observable. Observable inputs represent market data obtained from independent sources, whereas inputs that are generally less observable from objective sources reflect management’s estimates and assumptions and are used if observable inputs are not reasonably available without undue cost and effort. The three input levels are as follows:
| | · | Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. |
| | | |
| | · | Level 2 — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. |
| | | |
| | · | Level 3 — Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. |
The Company classifies financial assets and liabilities based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input requires judgment that may affect the valuation and its placement within the hierarchy levels.
The carrying values of financial instruments, including accounts payable and accrued liabilities approximate fair value due to the short-term maturity of these instruments. The carrying value of the note receivable approximates fair value due to being at market rates.
Segment Reporting
The Company manages its business activities and operates in a single operating and reportable segment. Operating segments are defined as components of a public entity that engages in business activities and for which discrete financial information and operating results are available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and assess performance.
The Company’s Chief Executive Officer (“CEO”) has been determined to be the chief operating decision maker of the Company. The CEO uses net income, as reported on our income statements, to assess financial performance and allocate resources. The CEO manages and evaluates the results of the Company and net income is used to evaluate key operating decisions, such as making strategic acquisitions, determining transaction structures to capitalize on the Company’s business plan, and allocating resources for general and administrative expenditures. The CEO does not review balance sheet assets when assessing segment performance and deciding how to allocate resources. All significant segment expenses are presented separately on the Company’s statement of operations. There are no other significant segment expenses or other segment items that would require disclosure.
| Kyma Batteries LLC Notes to Financial Statements September 30, 2025 |
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B. Summary of Significant Accounting Policies - continued
Research and Development Expenses
Research and development expenses are charged to expense as incurred as they relate to design and development of new products. Research and development expenses totaled $343,780 and $1,580,974 for the three and nine months ended September 30, 2025, respectively. Research and development expenses totaled $632,845 and $969,115 for the three and nine months ended September 30, 2024, respectively.
Earnings per Member Unit
Earnings (losses) per member unit are computed by dividing net income (loss) by the weighted-average number of units outstanding during the year. Fully diluted earnings per member unit are computed by dividing net income (loss) by the sum of the weighted-average number of member units outstanding, convertible member units, and the additional member units that would have been outstanding if potential member units had been issued. Potential member units are not included in the computation of fully diluted earnings per member unit if their effect is anti-dilutive. The computation of earnings per member unit is based on the weighted average number of member units outstanding at the date of the financial statements. The Company has no potentially dilutive securities and, accordingly, basic and dilutive net income (loss) per member unit do not differ.
Income Taxes
The Company is organized as a limited liability company and is a wholly owned disregarded entity under its Parent entity, a sub-chapter S corporation for federal income tax purposes. As a result, income or losses are taxable or deductible to the Parent’s member rather than at the Company level; accordingly, no provision has been made for federal income taxes in the accompanying financial statements. In certain instances, the Company is subject to state taxes on income arising in or derived from the state tax jurisdictions in which it operates.
State income tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more likely than not threshold, it is then measured to determine the amount of expense to record in the consolidated financial statements. The tax expense recorded would equal the largest amount of expense related to the outcome that is 50% or greater likely to occur. The Company classifies any potential accrued interest recognized on an underpayment of income taxes as interest expense and classifies any statutory penalties recognized on a tax position taken as operating expense. Management of the Company has not taken a tax position that, if challenged, would be expected to have a material effect on the financial statements as of September 30, 2025, or for the nine months ended September 30, 2025.
The Company did not incur any penalties or interest related to its tax returns during the three and nine months ended September 30, 2025 and 2024.
Under the centralized partnership audit rules effective for tax years beginning after 2017, the Internal Revenue Service (“IRS”) assesses and collects underpayments of tax from the Company instead of from each partner. The Company may be able to pass the adjustments through to its partners by making a push- out election or, if eligible, by electing out of the centralized partnership audit rules.
| Kyma Batteries LLC Notes to Financial Statements September 30, 2025 |
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B. Summary of Significant Accounting Policies - continued
The collection of tax from the Company is only an administrative convenience for the IRS to collect any underpayment of income taxes including interest and penalties. Income taxes on Company income, regardless of who pays the tax or when the tax is paid, is attributed to the members.
Any payment made by the Company as a result of an IRS examination will be treated as a distribution from the Company to the Parent in the financial statements.
New Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which expands a public entity’s annual and interim disclosure requirements about their reportable segments, primarily through more detailed disclosures about significant segment expenses. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. We have adopted this standard for our fiscal year 2024 annual financial statements and have applied this standard retrospectively for all prior periods presented in the financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures ("ASU 2023-09”), which updates income tax disclosures related to the effective income tax rate reconciliation and requires disclosure of income taxes paid by jurisdiction. The guidance is effective for annual periods beginning after December 15, 2024, and may be applied prospectively or retrospectively, with early adoption permitted. The Company does not believe this will have a material impact on the Company’s consolidated financial statements.
In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires public entities to disclose additional information about certain costs and expenses included in relevant expense captions presented on the income statement. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating ASU 2024-03 to determine its impact on the Company’s disclosures.
On January 1, 2025, the Company adopted Financial Accounting Standards Board Accounting Standards Update (“ASU”) 2025-05: Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient for an entity to assume that current conditions as of the balance sheet date will persist through the reasonable and supportable forecast period for eligible assets as well as provide a policy election to consider subsequent collections of balances received after the balance sheet date through a date selected by the entity. The Company applied the standard on a prospective basis to its eligible assets of accounts receivable and contract assets. There was no material impact on the Company’s results of operations or financial condition upon adoption of the new standard.
| Kyma Batteries LLC Notes to Financial Statements September 30, 2025 |
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B. Summary of Significant Accounting Policies - continued
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers. The practical expedient permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. ASU 2025-05 is effective for annual and interim periods beginning after December 15, 2025 on a prospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on the financial statements and related disclosures.
C. Patents
As of September 30, 2025, the Company had multiple filed patents in various stages toward issuance, and the Company had capitalized $268,205 in patent related costs. One patent was issued in July 2025. The Company recorded amortization expense of $0 and $0 during the three and nine months ended September 30, 2025. There was no amortization expense on patents during the three and nine months ended September
30, 2024.
D. Member’s Equity
As of September 30, 2025, the Company had 2,000 member units issued and outstanding, which were 100% owned by Independence Investors LLC as its sole member and Parent. During the three and nine months ended September 30, 2025, the sole member contributed $1,112,563 and $3,137,563 to the Company. During the three and nine months ended September 30, 2024, the sole member contributed $1,200,000 and $1,977,191 to the Company. Distributions are available to be made to the member up to the amount of their initial capital contribution plus accumulated net earnings of the Company. The Company made a distribution to the member of $3,150,000 during the three and nine months ended September 30, 2025. No distributions were made during the three and nine months ended September 30, 2024.
E. Commitments and Contingencies
Litigation
Occasionally, the Company is subject to legal proceedings, disputes and claims that arise in the ordinary course of business. The Company’s operations are subject to extensive and rapidly changing federal and state environmental, health and safety and other laws and regulations. The Company is not a party to any litigation that would have a material impact to the Company’s operations.
F. Leases
The Company determines if an arrangement is a lease at inception. Any operating lease is included in operating lease right-of-use (“ROU”) asset and operating lease liability in our balance sheets. Operating lease expense is included in general and administrative expenses on the statements of operations. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. If the lease does not provide an implicit rate of return, the Company will use a discount rate commensurate with the incremental borrowing rate of a group of peers based on information available at the application date in determining the present value of lease payments. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
| Kyma Batteries LLC Notes to Financial Statements September 30, 2025 |
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The Company had a short-term lease for its corporate office in 2024, which expired in February 2025 and was not renewed. In January 2025, the Company entered into a one year lease with a related party for office, warehouse and manufacturing space in Wisconsin for $50,000 per month. The Company incurred
$150,000 and $467,000 in rent expense for the three and nine months ended September 30, 2025, which is included in general and administrative expenses on the accompanying statement of operations. The Company paid $58,329 and $141,244 in rent expense for the three and nine months ended September 30, 2024, which is included in general and administrative expenses on the accompanying statements of operations.
G. Related Party Transactions
The Company has certain reimbursement transactions with an affiliate entity under common ownership with its Parent entity. The affiliate entity generally pays for certain expenses on behalf of the Company and subsequently reimburses the affiliate for these costs. The Company had a receivable from the affiliate of
$269 at September 30, 2025. The Company had a payable to the affiliate of $15,658 at December 31, 2024.
Effective January 1, 2025, the Company has a management agreement with Independence TX LLC, an affiliate, whereby the affiliate provides management services, including executive services, to the Company for $500,000 per month. During the nine months ended September 30, 2025, the Company paid $4,500,000 for these services.
Effective January 1, 2025, the Company has an office and warehouse lease agreement with Independence WI LLC, an affiliate, whereby the Company leases office and warehouse space in Wisconsin for $50,000 per month. During the nine months ended September 30, 2025, the Company paid $450,000 for these services.
In September, 2025, the Company paid $2,500,000 to ITX Micro Grid Development LLC for contract services rendered as part of the Master Supply and Services Agreement.
H. Subsequent Events
Management has evaluated all subsequent events for potential recognition or disclosure through January 6, 2026, which is the date these financial statements were available for issuance.
On October 22, 2025, the Independence Investors LLC (the “Parent”) formed Independence Power, Inc. (“Power”), a wholly owned subsidiary and the successor in interest to the Company as part of a planned tax-free acquisition of the Company by Power. The acquisition was effective November 1, 2025.
On December 30, 2025, Power was acquired by TriUnity Business Services Limited (“TriUnity”) pursuant to an agreement and plan of merger (“the Merger”). As a result of the Merger, Power became a wholly-owned subsidiary of the TriUnity, and the Parent acquired a controlling interest in the TriUnity. Accordingly, the Merger constitutes a “reverse merger,” and Power is considered the accounting acquirer for financial reporting purposes. Upon completion of the Merger, the business conducted by Power became the primary business of TriUnity.
EXHIBIT 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On December 30, 2025 (the “Closing Date”), Independence Power Holdings, Inc., a Nevada corporation (f/k/a TriUnity Business Services Limited) (the “Company”, “Registrant”, “TriUnity”, or “we”, “us” or “our”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, TriUnity Merger Sub, a Texas Corporation (“Merger Sub”), Independence Power, Inc, a Texas corporation (“Independence Power”), Kyma Batteries, LLC, a Delaware limited liability company (“Kyma”) as wholly owned subsidiary of Independence Power, and Independence Investors LLC, a Delaware limited liability company (“Independence Investors”), pursuant to which Merger Sub merged with and into Independence Power and subsidiary (the “Merger”), with Independence Power continuing as the surviving entity and a wholly owned subsidiary of the Company. At the effective time of the Merger, each share of capital stock of Independence Power issued and outstanding immediately prior to the Merger was converted into the right to receive 3,200 shares of the Company’s newly created Class B Common Stock, par value $0.0001 per share (the “Class B Common Stock”).
The Merger is a reverse merger of TriUnity by Independence Power. The merger will be accounted for as a business combination in accordance with ASC 820, in which Independence Power, by obtaining control of the Company, is considered the accounting acquirer and TriUnity is considered the accounting acquiree.
The following unaudited pro forma condensed combined financial statements and notes thereto present the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2025 and the year ended December 31, 2024, giving effect to the Merger as if it had been consummated on January 1, 2024, the beginning of the earliest period presented. The unaudited pro forma condensed combined balance sheet presented as of September 30, 2025 gives effect to the Merger as if it had been consummated on September 30, 2025.
The unaudited pro forma condensed combined financial information are presented for illustrative purposes only, in accordance with Article 11 of Regulation S-X, in order to give effect to the business combination and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements. The Merger is being accounted for as a business combination using the acquisition method in accordance with Accounting Standards Codification 805, Business Combinations. Under this method of accounting the purchase price will be allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of consummation of the Arrangement.
The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed combined financial statements to give pro forma effect to events that are: (a) directly attributable to the Merger; (b) factually supportable; and (c) with respect to the statements of operations, expected to have a continuing impact on the Company’s results following the completion of the Merger. The assumptions and estimates underlying the unaudited adjustments to the pro forma combined financial statements are described in the accompanying notes, which should be read together with the pro forma combined financial statements. The unaudited pro forma condensed combined financial statements should be read together with the Company’s historical financial statements, which are included in the Company’s latest annual report on Form 10-K.
The unaudited pro forma condensed combined financial statements are not necessarily indicative of what the actual financial position and operating results would have been had the acquisition had occurred on the dates indicated nor are they indicative of future operating results of the Company.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of September 30, 2025
(1) Derived from the unaudited balance sheet of TriUnity Business Service Limited
(2) Derived from the unaudited balance sheet of Kyma Batteries LLC
(3) Derived from the unaudited balance sheet of Independence Power, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments
The pro forma adjustment to the unaudited condensed combined pro forma balance sheet consists of the following:
| | (a) | Independence Power, a wholly owned subsidiary of Independence Investors, was formed on October 22, 2025 for the sole purpose of acquiring Kyma and had no operations until completion of the merger with Kyma on November 1, 2025. Independence Power’s sole transaction prior to the Kyma acquisition was a $2,000,000 common stock purchase of Independence Power’s initial stock issuance of 10,000 common shares at $0.01 per share, or $20,000, by Independence Investors. The outstanding common stock of Independence Power is eliminated as a result of the Merger. |
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| | (b) | Represents the issuance of 32,000,000 Class B common shares of the Company, par value $0.0001, or $3,200, for the Merger Consideration. |
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| | (c) | Represents the recapitalization of TriUnity as the Merger will be accounted for as a reverse merger in accordance with ASC 805. The recapitalization also includes the elimination of TriUnity’s historical accumulated deficit of $56,911. |
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| | (d) | Represents the acquisition and recapitalization of Kyma by Independence Power, resulting in Kyma’s member’s equity of $87,386,970 transferred to retained earnings of the Company. |
Unaudited Pro Forma Condensed Combined Statement of Income
For the Nine Months Ended September 30, 2025
(1) Derived from the unaudited statement of operations of TriUnity Business Services Limited
(2) Derived from the unaudited statement of operations of Kyma Batteries LLC
(3) Derived from the unaudited statement of operations of Independence Power, Inc.
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 2024
(1) Derived from the unaudited statement of operations of TriUnity Business Services Limited
(2) Derived from the audited statements of operations of Kyma Batteries LLC
(3) Derived from the unaudited statement of operations of Independence Power, Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
| 1. | Basis of Presentation |
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| | The unaudited pro forma condensed combined financial statements were prepared in accordance with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of SEC Regulation S-X, and present the pro forma financial position and results of operations of the combined companies after giving effect to the Merger. Unless otherwise stated, all accounting terms used herein in respect of the Independence Power Holdings, Inc (f/k/a TriUnity Business Services Limited) (“the Company”, TriUnity Business Services Limited (“TriUnity”, Independence Power, Inc (‘Independence Power”) and Kyma Batteries LLC (“Kyma’) shall have the meanings attributable thereto under U.S. GAAP and all determinations of an accounting nature in respect of the Company, TriUnity, Independence Power and Kyma required to be made shall be made in a manner consistent with U.S. GAAP consistently applied. |
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| | As a result of the effects of the accounting of the reverse merger noted above, the Company has adopted Independence Power’s fiscal year end of December 31, having been on a year end of July 31 prior to the Merger. As such, the unaudited pro forma condensed combined financial statements for the year ended December 31,2024 include both Kyma and Independence Power’s year ended December 31, 2024 and the Company’s year ended January 31, 2025. The unaudited pro forma condensed combined financial statements for the nine months ended September 30, 2025 include the nine month period January 1, 2025 through September 30, 2025 for both Kyma and Independence Power and the nine month period February 1, 2025 through October 31, 2025 for the Company. |
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| 2. | Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations |
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| | (a) | Represents the issuance of 32,000,000 Class B common shares of the Company, par value $0.0001, for the Merger Consideration. |
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| 3. | Net Income (Loss) per Share |
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| | Net income (loss) per share was calculated using the historical weighted average shares outstanding and the issuance of additional shares in connection with the Merger, assuming the shares were outstanding since January 1, 2025 for the nine months ended September 30, 2025, and since January 1, 2024 for the year ended December 31, 2024. As the Merger is being reflected as if it had occurred at the beginning of the periods presented, the calculation of weighted average shares outstanding for basic and diluted net income per share assumes the shares issuable in connection with the Merger have been outstanding for the entire periods presented. The following unaudited pro forma condensed combined financial information for the nine months ended September 30, 2025 and the year ended December 31, 2025 has been prepared to reflect the actual outstanding common shares at the time of the Merger. |
