Key Highlights

  • The agreement imposes a 15% annual interest charge if the note remains unsettled beyond the initial repayment window, with conversion rights at 80% of the volume‑weighted average price.
  • Advisor Margaret Z. Holdings is entitled to a retention bonus equal to 25% of trust‑account proceeds, conditioned on meeting revenue and cash benchmarks, and will receive a nominee receipt of 1,500,000 shares.
  • The structure aligns advisor incentives with post‑merger performance while establishing a cap of 19.99% on any conversion‑related dilution.

Data443 Risk Mitigation (OTC: ATDS) has entered into a financial advisory arrangement designed to support its de‑SPAC transaction with Four Leaf Acquisition Corporation. Should the note not be repaid within the stipulated timeframe, it accrues interest at a rate of 15% per annum, reinforcing the importance of timely settlement.

$1M Note and Conversion Mechanics

Under the terms of the agreement, the $1,000,000 note carries a 15% yearly interest charge if payment is delayed. In the event of continued non‑payment, the holder may elect to convert the outstanding amount, including accrued interest, into shares of the merged public company. The conversion price is set at 80% of the volume‑weighted average price calculated over a defined trading period, with a floor of 50% of that price to protect against extreme price declines.

Any conversion is subject to an aggregate cap of 19.99% of the total outstanding shares, limiting potential dilution for existing shareholders.

Equity Stake and Performance‑Based Retention Bonus

Margaret Z. Holdings will receive a direct allocation of 1,200,000 shares upon closing of the merger. The advisor is eligible for a cash retention bonus equal to 25% of the proceeds held in the post‑redemption trust account, provided that the combined entity satisfies specific financial thresholds.

The arrangement also includes a nominee receipt of 1,500,000 shares, which will be transferred to the designated party in accordance with the agreement’s settlement procedures.

Share Allocation for Company Leadership

The agreement includes a provision granting the company’s leadership a block of shares that carry enhanced voting rights, supporting continuity of governance during the integration phase. While the shares provide greater voting influence, they are subject to standard transfer restrictions and do not participate in dividend distributions. This structure is intended to preserve strategic direction while aligning leadership interests with the long‑term success of the merged enterprise.

Forward‑Looking Considerations

The upcoming closing of the de‑SPAC transaction marks a key moment for Data443 Risk Mitigation. Investors and market participants will be monitoring the fulfillment of the revenue and cash benchmarks that trigger the retention bonus, as well as the settlement of the $1,000,000 note. Successful achievement of these covenants would reinforce confidence in the combined entity’s financial footing and limit exposure to the dilution mechanisms outlined in the agreement.

Conversely, failure to meet the stipulated conditions could activate the conversion rights and associated caps, potentially altering the capital structure. Within the broader SPAC environment, such advisory arrangements reflect a growing trend toward performance‑linked compensation models, aiming to align advisor incentives with shareholder value creation. As the market continues to evolve, the terms of this deal provide a benchmark for how de‑SPAC transactions may balance financing flexibility with protective provisions for equity holders.

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.