I realize it is difficult to get to where you want to go on the Colorado Sec of State site. Here are the pages of the document that are essential to the MTi acquisition and how they gain control of the company. Also for clarification Affluence used the Seriers A Preferred Shares that are discussed in the following pages from that document. In these pages you will also see that for this deal to be completed with not possible undoing, ALL OF THE LEGACY DEBT MUST BE OFF THE BOOKS BY THE ANNAVERSARY DATE OF THIS DEAL BEING COMPLETED. So by May 19, 2027 the stock must be listed by 6 PM on a major exchange, NASDAQ or NYSE and all debt must have been converted. The first several pages deal with explaining how the Series A shares work, the last few pages mention MTi by name and explain how they fit in. Along the way you will read how the owner, MTi, of the Series A shares has control of 51% of the company, or Owner Ship based on that percentage Its a long read but if you really want to know what is going on and why there is all of this dilution then READ IT, if you just want to speculate and not understand what it is that you have invested in... Dont Read it, just complain and wait for those who do read it to explain it to you.
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Section 5. Conversion.
A. Conversion Right. At any time following date which is two (2) years following the
date of issuance (“Issuance Date”) of the Series A Preferred Stock (the “Conversion Period”), the Holder
shall have the right, to convert all or any part of the outstanding Series A Preferred Stock into fully paid
and non-assessable shares of Common Stock, as such Common Stock exists on the Issuance Date, or any
shares of capital stock or other securities of the Company into which such Common Stock shall hereafter
be changed or reclassified at the conversion price determined as provided herein (a “Conversion”). The
number of shares of Common Stock to be issued upon each conversion of Series A Preferred Stock shall
be determined as set forth herein and shall be specified in the notice of conversion (the “Notice of
Conversion”), delivered to the Company by a Holder in accordance with the terms hereof; provided that
the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably
expected to result in, notice) to the Company before 6:00 p.m., New York, New York time on such
conversion date (the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00 p.m., New
York, New York time the Conversion Date shall be the next business day.
B. The Series A Preferred Stock shall have conversion rights, in aggregate, into that
number of shares of Common Stock which shall equal Fifty One Percent (51%) (the “Ownership
Percentage”) of the total issued and outstanding shares of Common Stock of the Company (the
“Underlying Common Stock”) on a fully diluted basis with such anti-dilution rights until the earlier of: (i)
twenty-four (24) months following the Issuance Date; (ii) the day prior to the Company’s Common Stock
being listed on an exchange (i.e., NYSE NASDAQ); or (iii) the date of conversion of any Series A Preferred
Stock into Common Stock. For the avoidance of doubt, any reference to “on a fully diluted basis” under
this Certificate shall be deemed to include, in each case calculated on as-converted into Common Stock
basis, (i) all issued and outstanding Common Stock and Preferred Stock of the Company; (ii) all convertible
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securities or instruments issued or granted by the Company, including but not limited to, (a) Safe
instruments; (b) convertible promissory notes, warrants and other convertible debt instruments; and (c)
convertible securities that have the right to convert into shares of the Company; (ii) all issued and
outstanding options, restricted stock awards or purchasers, RSUs, SARs, warrants or similar securities,
vested or unvested; and (iv) all shares of the Company that are reserved, available, for future grant under
any equity incentive or similar Company plan),
For clarification purposes assuming no Event of Default has occurred, the process of calculating the
amount of Underlying Common Stock that may be issued for each share of Series A Preferred Stock is as
follows: 1) The total issued and outstanding Common Stock on a fully diluted basis at the time of any
conversion shall be divided by 0.49 (the “Grossed-Up Common Stock Amount”), 2) then the total amount
of issued and outstanding Common Stock on a fully diluted basis shall be subtracted from the Grossed-Up
Common Stock Amount (the “Adjusted Grossed-Up Amount”), and 3) the Adjusted Grossed-Up Amount
shall then be divided by the current number of Series A Preferred Stock issued and outstanding. For the
avoidance of doubt, such Underlying Common Stock shall, immediately after conversion, represent the
Ownership Percentage.
Notwithstanding any reference above or elsewhere herein to any certificates representing the Series A
Preferred Stock, the Company expects that the Series A Preferred Stock shall be recorded solely in book
entry form, and in such case any references hereto to certificates representing the Series A Preferred
Stock being required to be delivered or provided in certain instances shall be deemed automatically
waived, and such book entry records shall take the place thereof.
C. Authorized Shares. The Company covenants that during the Conversion Period,
the conversion right exists, the Company will reserve from its authorized and unissued Common Stock a
sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Series A Preferred Stock issued. The Company is required at all times to
have authorized and reserved the number of shares that would be issuable upon full conversion of the
Series A Preferred Stock (based on the Underlying Common Stock from time to time) (the “Reserved
Amount”). The Reserved Amount shall be increased (or decreased unilaterally by the Holder) from time
to time in accordance with the Company’s obligations hereunder. The Company represents that upon
issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the
Company shall issue any securities or make any change to its capital structure which would change the
number of shares of Common Stock into which the Series A Preferred Stock shall be convertible at the
then current Conversion Price, the Company shall at the same time make proper provision so that
thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free
from preemptive rights, for conversion of the outstanding Series A Preferred Stock. The Company (i)
acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common
Stock issuable upon conversion of this Series A Preferred Stock, and (ii) agrees that its issuance of the
Series A Preferred Stock shall constitute full authority to its officers and agents who are charged with the
duty of executing stock certificates to execute and issue the necessary certificates for shares of Common
Stock in accordance with the terms and conditions of the Purchase Agreement and the Series A Preferred
Stock. If, at any time the Company does not maintain the required Reserved Amount, the Company shall
be put on notice by the Holder, and shall have five (5) days to cure its deficiency, after which time, such
failure will be deemed an Event of Default hereunder.
D. Method of Conversion.
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i. Mechanics of Conversion. As set forth in hereof, the shares of Series A
Preferred Stock may be converted by the Holder thereof, either as to all of such Holder’s shares
of Series A Preferred Stock or as to a portion of such Holder’s shares of Series A Preferred Stock,
at any time during the Conversion Period, by submitting to the Company a Notice of Conversion
(by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion
Date prior to 6:00 p.m., New York, New York time) and within five (5) days following such
conversion surrendering the converted Series A Preferred Stock to the Company’s transfer agent.
ii. Surrender of Series A Preferred Stock Upon Conversion. Notwithstanding
anything to the contrary set forth herein, upon conversion of the Series A Preferred Stock in
accordance with the terms hereof, the converting Holder shall be required to physically surrender
any certificate (or book entry) representing the Series A Preferred Stock being converted to the
Company (or its transfer agent) and, in the event that less than all of the Series A Preferred Stock
represented by such certificate is being converted, the Company shall return to the applicable
Holder a new certificate representing the unconverted shares of Series A Preferred Stock.
iii. Delivery of Common Stock Upon Conversion. Upon receipt by the
Company from a Holder of a facsimile transmission or e-mail (or other reasonable means of
communication) of a Notice of Conversion meeting the requirements for conversion as set forth
herein, and the certificate representing the Series A Preferred Stock as required herein, the
Company shall issue and deliver or cause to be issued and delivered to or upon the order of the
applicable Holder certificates for the Common Stock issuable upon such conversion, and any
replacement certificate representing the unconverted shares of Series A Preferred Stock, if
applicable, within three (3) business days after such receipt (the “Deadline”). Upon receipt by the
Company of a Notice of Conversion, the applicable Holder shall be deemed to be the holder of
record of the Common Stock issuable upon such conversion, the outstanding Series A Preferred
Stock held by such applicable Holder shall be reduced to reflect such conversion, and, unless the
Company defaults on its obligations hereunder, all rights with respect to the shares of Series A
Preferred Stock being so converted shall forthwith terminate except the right to receive the
Common Stock or other securities, cash or other assets, as herein provided, on such conversion.
If the applicable Holder shall have given a Notice of Conversion as provided herein and comply
with the other requirements herein, the Company’s obligation to issue and deliver the certificates
for Common Stock shall be absolute and unconditional, irrespective of the absence of any action
by the applicable Holder to enforce the same, any waiver or consent with respect to any provision
thereof, the recovery of any judgment against any person or any action to enforce the same, any
failure or delay in the enforcement of any other obligation of the Company to the holder of record,
or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the applicable Holder of any obligation to the Company, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the applicable
Holder in connection with such conversion.
iv. Delivery of Common Stock by Electronic Transfer. In lieu of delivering
physical certificates representing the Common Stock issuable upon conversion, provided the
Company is participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer program, upon request of the applicable Holder and its compliance with the provisions
set forth herein, the Company shall use its best efforts to cause its transfer agent to electronically
transmit the Common Stock issuable upon conversion to the applicable Holder by crediting the
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account of applicable Holder’s Prime Broker with DTC through its Deposit and Withdrawal at
Custodian system.
v. Concerning the Shares. The shares of Common Stock issuable upon
conversion of the Series A Preferred Stock may not be sold or transferred unless: (i) such shares
are sold pursuant to an effective registration statement under the Securities Act of 1933, as
amended (together with the rules and regulations thereunder, the “Securities Act”) or (ii) the
Company or its transfer agent shall have been furnished with an opinion of counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the shares to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule
144”); or (iii) such shares are transferred to an “affiliate” (as defined in Rule 144) of the applicable
Holder who agrees to sell or otherwise transfer the shares only in accordance with this section
and who is an accredited investor (as defined in Rule 501 under Regulation D promulgated
pursuant to the Securities Act). Any restrictive legend on certificates representing shares of
Common Stock issuable upon conversion of the Series A Preferred Stock shall be removed and the
Company shall issue to the applicable Holder a new certificate therefore free of any transfer
legend if the Company or its transfer agent shall have received an opinion of counsel from
applicable Holder’s counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may
be made without registration under the Securities Act, which opinion shall be accepted by the
Company so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable
upon conversion of the Series A Preferred Stock such security is registered for sale by the
applicable Holder under an effective registration statement filed under the Securities Act; or
otherwise may be sold pursuant to an exemption from registration. In the event that the
Company does not reasonably accept the opinion of counsel provided by the applicable Holder
with respect to the transfer of Securities pursuant to an exemption from registration (such as Rule
144), at the Deadline, it will be considered an Event of Default hereunder.
E. Effect of Certain Events.
i. Adjustment Due to Merger, Consolidation, Etc. If, at any time when the
Series A Preferred Stock are outstanding and prior to conversion of all of the Series A Preferred
Stock, there shall be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of Common Stock of the
Company shall be changed into the same or a different number of shares of another class or
classes of stock or securities of the Company or another entity, or in case of any sale or
conveyance of all or substantially all of the assets of the Company other than in connection with
a plan of complete liquidation of the Company, then each Holder shall thereafter have the right
to receive upon conversion of the Series A Preferred Stock, upon the basis and upon the terms
and conditions specified herein and in lieu of the shares of Common Stock immediately
theretofore issuable upon conversion, such stock, securities or assets which such Holder would
have been entitled to receive in such transaction had the Series A Preferred Stock been converted
in full immediately prior to such transaction (without regard to any limitations on conversion set
forth herein), and in any such case appropriate provisions shall be made with respect to the rights
and interests of the Holders to the end that the provisions hereof (including, without limitation,
provisions for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Series A Preferred Stock based, in any case, on the Ownership Percentage) shall
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thereafter be applicable, as nearly as may be practicable in relation to any securities or assets
thereafter deliverable upon the conversion hereof. The Company shall not affect any transaction
described in this section unless (a) it first gives, to the extent practicable, ten (10) days’ prior
written notice (but in any event at least five (5) days prior written notice) of the record date of
the special meeting of shareholders to approve, or if there is no such record date, the
consummation of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time a Holder shall be entitled
to convert the Series A Preferred Stock,) and (b) the resulting successor or acquiring entity (if not
the Company) assumes by written instrument the rights, preferences afforded to the Holders
hereunder and obligations set forth herein. The above provisions shall similarly apply to
successive consolidations, mergers, sales, transfers or share exchanges.
ii. Adjustment Due to Distributions. If the Company shall declare or make
any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a
dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or
distribution to the Company’s shareholders in cash or shares (or rights to acquire shares) of capital
stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then each Holder shall be entitled to
receive the applicable portion of such Distribution on an as-converted-to-Common-Stock basis,
assuming that the Series A Preferred Stock were converted to Common Stock (based, in any case,
on the Ownership Percentage) on the day immediately prior to the record date for holders of the
Common Stock entitled to receive such Distribution, but, for the avoidance of doubt, without any
conversion to Common Stock actually being required.
F. Stock Register. The Company will keep at the offices of the transfer agent, a
register of the Series A Preferred Stock, which shall be prima facie indicia of ownership of all outstanding
shares of Series A Preferred Stock, and amounts so converted and the dates of such conversions. Upon
the surrender of any certificate representing Series A Preferred Stock at such place, the Company, at the
request of the record Holder of such certificate, will execute and deliver (at the Company’s expense) a
new certificate or certificates in exchange therefor representing in the aggregate the number of shares
represented by the surrendered certificate. Each such new certificate will be registered in such name and
will represent such number of shares as is requested by the Holder of the surrendered certificate and will
be substantially identical in form to the surrendered certificate.
G. Taxes. The Company shall pay any and all documentary, stamp, transfer (but only
in respect of the registered Holder thereof), issuance and other similar taxes that may be payable with
respect to the issuance and delivery of shares of Common Stock upon the conversion of Preferred Shares.
Section 6. Events of Default.
A. If any of the following events of default (each, an “Event of Default”) shall occur:
i. Conversion and the Shares. The Company fails to issue shares of Common
Stock to a Holder (or announces or threatens in writing that it will not honor its obligation to do
so) upon exercise by a Holder of the conversion rights of a Holder in accordance with the terms
hereof, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in
certificated form) any certificate for shares of Common Stock issued to a Holder upon conversion
of or otherwise pursuant to the terms hereof as and when required hereby, the Company directs
its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in
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transferring (or issuing) (electronically or in certificated form) any certificate for shares of
Common Stock to be issued to a Holder upon conversion of the Series A Preferred Stock or
otherwise pursuant to the terms hereof, as and when required by the terms hereof, or fails to
remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer
agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in
respect thereof) on any certificate for any shares of Common Stock issued to the applicable Holder
upon conversion of or otherwise pursuant to the terms hereof as and when required by the terms
hereof (or makes any written announcement, statement or threat that it does not intend to honor
the obligations described in this section) and any such failure shall continue uncured (or any
written announcement, statement or threat not to honor its obligations shall not be rescinded in
writing) for three (3) business days after a Holder shall have delivered a Notice of Conversion. It
is an obligation of the Company to remain current in its obligations to its transfer agent. It shall
be an event of default hereunder, if a conversion of the Series A Preferred Stock is delayed,
hindered or frustrated due to a balance owed by the Company to its transfer agent. If at the option
of a Holder, such Holder advances any funds to the Company’s transfer agent in order to process
a conversion, such advanced funds shall be paid by the Company to the applicable Holder within
two (2) business days of a demand from the applicable Holder.
ii. Breach of Covenants. The Company breaches any covenant or other term
or condition contained in this Certificate of Designation or in any purchase agreement,
subscription agreement or other agreement pursuant to which any Holder has acquired any
shares of Series A Preferred Stock, and such breach continues for a period of ten (10) days after
written notice thereof to the Company from the Majority Holders.
iii. Breach of Representations and Warranties. Any representation or
warranty of the Company made herein or in any agreement, statement or certificate given in
writing pursuant hereto or in connection herewith, or in any purchase agreement, subscription
agreement or other agreement pursuant to which any Holder has acquired any shares of Series A
Preferred Stock, shall be false or misleading in any material respect when made and the breach
of which has (or with the passage of time will have) a material adverse effect on the rights of the
Holders with respect to the Series A Preferred Stock.
iv. Receiver or Trustee. The Company or any subsidiary of the Company shall
make an assignment for the benefit of creditors, or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its property or business, or such a receiver or
trustee shall otherwise be appointed.
v. Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against the Company or any subsidiary
of the Company.
vi. Liquidation. Any dissolution, liquidation, or winding up of Company or
any substantial portion of its business occurs.
vii. Cessation of Operations. Any cessation of operations by Company or
Company admits it is otherwise generally unable to pay its debts as such debts become due;
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provided, however, that any disclosure of the Company’s ability to continue as a “going concern”
shall not be an admission that the Company cannot pay its debts as they become due.
viii. Exchange Listing. If on the second anniversary (“Second Anniversary”) of
the closing date of the transactions contemplated by the Share Exchange Agreement by and
among the Company MINGOTHINGS, S.L., a company duly incorporated and existing under the
laws of the Kingdom of Spain (“MingoThings”), and the Shareholders of MingoThings dated March
_, 2025 (the “Share Exchange Agreement”), the Company’s common stock is not listed on an
exchange (i.e., NYSE NASDAQ), despite the best efforts of the Company.
ix. Legacy Convertible Debt. If on the second anniversary of the closing date
of the transactions contemplated by the Share Exchange Agreement, any of the Legacy
Convertible Debt remains outstanding. “Legacy Convertible Debt” shall mean any and all debt of
the Company in favor of Invenire Capital LP , King’s Wharf Opportunities Fund LP, Trillium Partners
LP and Michael Balkin which exists as of the date of the Closing of the Share Exchange Agreement
and is convertible into shares of common stock of the Company. Furthermore, it shall be an event
of default pursuant the Series A Preferred Stock, if any holder of Legacy Convertible Debt exercises
the pledge over the shares of One Mind Technologies, S.L., granted according to the pledge over
shares agreement dated 7 September 2023 and notarized before the Spanish Public Notary Mr.
Jose Manuel Rodrigo Paradells on the same date under number 473 of his notarial records.
x. Non-Legacy Debt. Following the closing of the transactions contemplated
by the Share Exchange Agreement (the “Closing”), the Company shall use its commercially
reasonable efforts to negotiate and settle all debts of the Company which exists as of the Closing
(other than Legacy Convertible Debt) (collectively, “Non-Legacy Debt”). It shall be an event of
default pursuant to the Series A Preferred Stock, if any holder of Non-Legacy Debt files a litigation
against the Company and such litigation is now withdrawn and the underlying obligation settled
within six (6) months of filing of same.
B. Default Adjustment. Upon the occurrence and during the continuation of any
Event of Default, (i) the Ownership Percentage shall immediately be increased to sixty percent
(60%); and (ii) the Stated Value shall immediately be increased to $2.00 per share of Series A
Preferred Stock (the amounts referred to herein shall be referred to collectively as the “Default
Adjustment”). In the event of a Default Adjustment, solely upon the vote and written demand of
the all of the Holders, immediately following the Second Anniversary, the Holders shall redeem
all of the issued and outstanding Series A Preferred Stock by returning same to the Company and
the Company shall immediately transfer and dispose to the Holders all of the issued and
outstanding equity of MingoThings (i.e., 100 % of the shares (“participaciones sociales”)
representing the share capital (“capital social”) of Mingothings) on a share for share basis in
consideration to the complete redemption of the Series A Preferred Stock. Thus in the event of a
Default and vote of all of the Holders to redeem (exchange) their Series A Preferred Stock for
equity of MingoThings, following such redemption the Company shall no longer have any
ownership interest in MingoThings.
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