SEC Form PRER14A filed by WiSA Technologies Inc.

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

SCHEDULE 14A 

(RULE 14a-101)

SCHEDULE 14A INFORMATION

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

EXCHANGE ACT OF 1934 

(AMENDMENT NO. 1)

Filed by the Registrant x

Filed by a Party other than the Registrant ¨

Check the appropriate box:

WiSA Technologies, Inc. 

(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

15268 NW Greenbrier Pkwy 

Beaverton, OR 97006 

(408) 627-4716

Important Notice Regarding the Availability of Proxy Materials 

for the Annual Meeting of Stockholders to Be Held on December [●], 2024

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

are available at: 

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

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS 

TO BE HELD ON DECEMBER [●], 2024

To the Stockholders of WiSA Technologies, Inc.:

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

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

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

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

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

TABLE OF CONTENTS 

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

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

Information Concerning the Proxy Materials and the Annual Meeting

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

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

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

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

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

Voting Procedures and Vote Required

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Delivery of Documents to Stockholders Sharing an Address

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

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of November 1, 2024, information regarding beneficial ownership of our capital stock by:

The percentage ownership information shown in the table is based upon 7,767,828 shares of Common Stock outstanding as of November 1, 2024. The percentage ownership information shown in the table excludes the following as of such date: (a) up to an aggregate of 9,375,730 shares of Common Stock issuable upon exercise of our outstanding common stock purchase warrants, (b) up to an aggregate of 2,813 shares of Common Stock issuable upon conversion of all shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”) issuable upon exercise of 1,750 Series B Preferred Stock purchase warrants, (c) 466,901 shares of Common Stock reserved for future issuance under the LTIP, the 2020 Stock Incentive Plan (the “2020 Plan”) and the Technical Team Retention Plan of 2022 (the “2022 Plan” and collectively with the LTIP and the 2020 Plan, the “Plans”), and (d) an aggregate of 14 shares of Common Stock issuable upon vesting of restricted stock units (“RSUs”) that were issued pursuant to the 2020 Plan and 2022 Plan.

Beneficial ownership is determined according to the rules of the U.S. Securities and Exchange Commission (“SEC”) and generally means that a holder has beneficial ownership of a security if such holder possesses sole or shared voting or investment power of that security, including securities that are exercisable for shares of Common Stock within sixty (60) days of November 1, 2024. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the holders named in the table below have sole voting and investment power with respect to all shares of Common Stock shown that they beneficially own, subject to community property laws where applicable.

For purposes of computing the percentage of outstanding shares of our Common Stock held by each holder or group of holders named above, any shares of Common Stock that such holder or holders has the right to acquire within sixty (60) days of November 1, 2024 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other holder. The inclusion herein of any shares of Common Stock listed as beneficially owned does not constitute an admission of beneficial ownership. Unless otherwise identified, the address of each beneficial owner listed in the table is c/o WiSA Technologies, Inc., 15268 NW Greenbrier Pkwy, Beaverton, Oregon 97006.

* Less than 1.0%

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

SUMMARY TERM SHEET

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

RISK FACTORS

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

Risks Related to Data Vault’s Business and Industry

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Risks Related to Asset Purchase

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ASSET PURCHASE

Overview

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

Reasons for the Asset Purchase

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

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

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

Background of the Asset Purchase

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Closing and Effective Time of the Asset Purchase

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

Dissenters’ and Appraisal Rights

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

Accounting Treatment

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

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

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

Regulatory Approvals Required for the Asset Purchase

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

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

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

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

Asset Purchase Agreement

General

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

Representations and Warranties

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

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

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

Covenants and Agreements

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

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

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

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

Post-Closing Covenants

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

Closing

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

Conditions to Closing of the Asset Purchase

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

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

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

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

Termination

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

Expenses

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

Governing Law

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

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Transaction summary

The Company is party to the Asset Purchase Agreement by and between the Company and Data Vault, dated as of September 4, 2024, as amended on November 14, 2024. Pursuant to the Asset Purchase Agreement, the Company has agreed to purchase, assume and accept from Data Vault all of the rights, title and interests in, to and under the Transferred Assets, including Data Vault’s information technology assets, certain patents, and software source code.

The Company has agreed to acquire the Transferred Assets for an aggregate purchase price of $210,000,000, which shall consist of (i) $10,000,000 payable in the form of a promissory note issued by the Company to Data Vault, (ii) $200,000,000 in validly issued, fully paid and nonassessable shares of restricted Common Stock, which number of shares shall be 40,000,000, and is calculated based on a per share price of $5.00, and (iii) the assumption of the transferred liabilities, which clauses (i) through (iii) above, collectively, shall comprise the total consideration to be paid for the Transferred Assets. The Company will only assume the transferred liabilities, if any.

The Asset Purchase Agreement includes customary representations and warranties and various customary covenants and closing conditions that are subject to certain limitations, including, without limitation, certain third-party consents and agreements. Furthermore, pursuant to the terms of the Asset Purchase Agreement, effective at the closing, the Company has also agreed to appoint two new members to its board of directors, nominated by Data Vault, and reasonably acceptable to the Company.

Pursuant to the Asset Purchase Agreement, the Company and Data Vault shall enter into the Royalty Agreement, in a form to be mutually agreed between the parties, providing for the Company’s obligations to make royalty payments to Data Vault in an amount equal to 3% of the Company’s revenue generated from or otherwise attributable to any patent rights included in the Transferred Assets, commencing as of the closing and ending upon the expiration (on a patent-by-patent basis) of such patent rights, as further set forth in the Royalty Agreement. Additionally, the Company shall enter into an employment agreement, including a non-competition and non-solicitation agreement, mutually agreed to and signed by the Company and key employees as of or prior to the closing.

The securities to be issued in the asset purchase will be issued in reliance upon exemptions from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated under Regulation D of the Securities Act.

The foregoing summary of the Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such document, which is included in this proxy statement as Appendix C.

Pro forma information

The following Unaudited Pro Forma Condensed Consolidated Financial Statements are based on the Company’s audited and unaudited interim historical consolidated financial statements. The Unaudited Pro Forma Condensed Consolidated balance sheet as of September 30, 2024 gives effect to this transaction as if it occurred on September 30, 2024. The Unaudited Pro Forma Condensed Consolidated statements of operations for the twelve months ended December 31, 2023 and the nine months ended September 30, 2024 give effect to this transaction as if it occurred on January 1, 2023.

The Unaudited Pro Forma Condensed Consolidated Financial Statements should be read together with the Company’s audited historical financial statements, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on April 1, 2024, and the Company’s Quarterly Report on Form 10-Q for quarter ended September 30, 2024, which was filed with the SEC on November 14, 2024.

The Unaudited Pro Forma Condensed Consolidated financial information is provided for informational purposes only and is not intended to represent or be indicative of the consolidated results of operations or financial position that the Company would have reported had the transaction closed on the dates indicated and should not be taken as representative of our future consolidated results of operations or financial position.

The pro forma adjustments related to the Asset Purchase Agreement are described in the notes to the Unaudited Pro Forma Condensed Consolidated financial information and principally include the following:

The adjustments to fair value and the other estimates reflected in the accompanying Unaudited Pro Forma Condensed Consolidated Financial Statements may be materially different from those reflected in the consolidated Company’s consolidated financial statements subsequent to the closing of the transaction. In addition, the Unaudited Pro Forma Condensed Consolidated Financial Statements do not purport to project the future financial position or results of operations.

These Unaudited Pro Forma Condensed Consolidated Financial Statements also do not include any integration costs the Company may incur related to the acquisition of the Transferred Assets.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

Note 1 — Basis of Presentation

The audited annual and unaudited interim historical consolidated financial statements have been adjusted in the pro forma consolidated financial statements in accordance with Article 11 of the SEC’s Regulation S-X to give effect to pro forma events that are (1) directly attributable to the Asset Purchase Transaction, (2) factually supportable and (3) with respect to the unaudited pro forma condensed consolidated statements of operations, expected to have a continuing impact on the consolidated results following the closing of the transactions contemplated by the Asset Purchase Agreement.

The Asset Purchase Transaction was accounted for as an asset acquisition as a result of the application of the “Screen Test” in ASC 805, Business Combinations. Under the Screen Test, if substantially all of the fair value of the consideration transferred would be allocated to a single asset or group of similar assets, the transaction is accounted for as an asset acquisition. Management, having considered the assets acquired, determined that substantially all of the fair value of the assets acquired would be allocated to a group of similar assets and has therefore accounted for the transaction as an asset acquisition.

The Unaudited Pro Forma Condensed Consolidated Financial Statements are based on the Company’s audited and unaudited interim historical consolidated financial statements as adjusted to give effect to the Company’s acquisition of the Transferred Assets. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2024, gives effect to the Asset Purchase Transaction as if it occurred on September 30, 2024. The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended September 30, 2024, and the twelve months ended December 31, 2023, give effect to the Asset Purchase Transaction as if it occurred on January 1, 2023.

The allocation of the consideration transferred used in the Unaudited Pro Forma Condensed Consolidated Financial Statements is based upon a preliminary valuation by management. The final estimate of the fair value of the assets may be determined with the assistance of a third-party valuation firm. The Company’s preliminary estimates and assumptions are subject to material change upon the finalization of internal studies and third-party valuations of assets, which may include intangible assets, and certain liabilities.

The Unaudited Pro Forma Condensed Consolidated Financial Statements are provided for informational purposes only and is not necessarily indicative of what the consolidated company’s financial position and results of operations would have actually been had the transaction been completed on the dates used to prepare these pro forma financial statements. The adjustments to fair value and the other estimates reflected in the accompanying Unaudited Pro Forma Condensed Consolidated Financial Statements may be materially different from those reflected in the consolidated company’s consolidated financial statements subsequent to the transaction. In addition, the Unaudited Pro Forma Condensed Consolidated Financial Statements do not purport to project the future financial position or results of operations of the Company.

These financial statements also do not include any integration costs the Company may incur related to the transaction.

Note 2 — Summary of Significant Accounting Policies

The Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared in a manner consistent with the accounting policies adopted by the Company. The accounting policies followed for financial reporting on a pro forma basis are the same as those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.  

Note 3 — Asset Acquisition

On September 4, 2024, the Company entered into the Original Asset Purchase Agreement, as amended by the APA Amendment, with Data Vault, pursuant to which the Company has agreed to purchase, assume and accept from Data Vault all of the rights, title and interests in, to and under the Transferred Assets, including Data Vault’s information technology assets, certain patents and software source code.

Pursuant to the Asset Purchase Agreement, the Company has agreed to acquire the Transferred Assets for an aggregate purchase price which shall consist of (i) $10,000,000 payable in the form of a promissory note issued by the Company to Data Vault, (ii) the issuance of 40,000,000 of common stock, and (iii) the assumption of the transferred liabilities, if any.

The following table summarizes the preliminary allocation of the purchase price based on the estimated fair value of the acquired assets as of September 30, 2024:

This preliminary fair value allocation has been used to prepare pro forma adjustments in the pro forma consolidated Balance Sheet and Statements of Operations. The final allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments. The final allocation may include (1) changes in allocations to intangible assets such as trade names and technology and (2) other changes to the estimated lives of the assets and (3) the assumption of any liabilities.

In accordance with the Asset Purchase Agreement, as discussed above, the purchase price includes: (a) a promissory note with a face value $10,000,000 and (b) $70,800,000 in common stock based on the closing price of the Company’s common stock as of September 30, 2024, which was $1.77. For purposes of these Unaudited Pro Forma Condensed Consolidated Financial Statements, the Company is assumed to have issued 40,000,000 shares of the Company’s common stock.

Note 4 — Pro Forma Transaction Accounting Adjustments

The pro forma transaction accounting adjustments are based on our preliminary estimates and assumptions that are subject to change. The following transaction accounting adjustments have been reflected in the Unaudited Pro Forma Condensed Consolidated Financial Statements:

DESCRIPTION OF DATA VAULT BUSINESS

Executive Summary

Data Vault is a data sciences technology company that owns and operates globally patented and secure Web 3.0 data management and supercomputer platforms. Through its technology platform Data Vault delivers next generation data technology and software solutions to our customers worldwide through High Performance Computing (HPC) capabilities and proprietary data software. Data Vault's data solutions are built for the HPC world and Web 3.0 era where data ownership immutability, experiential data observability, data and asset valuation and secure data and asset monetization are now achieved.  Through Data Vault innovations its executive, engineering and software development teams enable operations within two collaborative divisions.

Data Vault’s Data Sciences Division

A revolutionary cyber secure Data Vault asset tokenization platform using Sumerian tones as crypto-anchors that increase Data Vault’s customers’ ability to trust, verify, validate and monetize physical and digital assets. This innovation allows historical, current and future information related to an asset to be tracked and monetized within existing data systems, providing a blockchain-tracked system for lifecycle tracking of any tokenized asset. Data and assets of all types are indexed, valued, scored, objectified, and monetized within 2D and 3D experiential environments.  Data Vault’s patented Information Data Exchange (IDE) is a secure platform that allows these tokenized data and assets to be marketed, bought and sold. It allows data owners to transact directly with buyers in a fully compliant and data privacy protected solution.

Data Vault’s Acoustic Sciences Division

The division features Adio patented and industry first mobile response and patented data over sound, sonic anchor and inaudible tone transmission and receiver technology platform. The commercialization of the technologies with Data Vault's Acoustic Sciences Division's growing customer base of leading corporations in a diverse field of retail, commercial, government and scientific interests. 

Detailed Business Description

The Data Vault® platform is developed on the foundation of intellectual property that protects the company's technology holdings. Each component of Data Vault's platform was created by or acquired by Data Vault, with a constant focus on process and technology improvement at the pace and advancement of the markets Data Vault's platform serves. By maximizing our patented technology advantage, interoperability through systems integration, and with focus on the profitability of Data Vault's business operation. Data Vault delivers blockchain, machine learning and AI powered solutions within high performance computing environments. Data Vault technology solves for the creation of commercial digital twins, insilico computer simulation analysis, experiential data-perception, and data observability. Data Vault's platform leverages Artificial Intelligence systems to value, score and monetize data assets, virtual assets and real-world assets in real-time. Data Vault’s platform enables its customers to complete the conversion of data to objects and monetization of data and assets to cash for the financial sustainability of data driven projects and revenue streams through our Information Data Exchange®. 

Data Vault's technology is designed to enhance mobile data management and brand marketing, gather tangible results, and quantify return on investment for sales and marketing efforts. The implementation of Data Vault's technology solutions within the arts and entertainment, colleges and universities and data monetization solutions for Data Vault customers within the enterprise markets are some of the areas where the Data Vault platform has focused its platform growth. The breadth of that market required hyper focus on scalable platform development and licensing strategies focused on facilitation and ease of customer capture and revenue replication. Having discipline to perfect systems and processes within each market and studying the legal, regulatory, and general business environments for each opportunity enables Data Vault to secure future markets.  Data Vault's patented solutions help introduce profitable solutions and advancement through Data Vault's innovations.

Data Vault has developed a portfolio of patents covering a high performance computing technology platform that solves for tokenomics based data valuation, visualization and monetization. The combination of the Adio and Data Vault portfolios offer patented crypto-anchoring technologies,  which further increase the trust in data and its sources. Used in conjunction with Fintech and Insurtech applications the platform facilitates the creation of trusted Digital Twins and highly scalable tokenomic solutions leveraging the best of Blockchain and AI technologies. The Data Vault platform creates a meta-data layer that connects to a company or to individual data assets being created by a company or single users across all platforms. We enable the scoring, valuing and visualizing of data assets and the ability to monetize these assets while still meeting or exceeding all the regulatory and legal data requirements. Data Vault’s exclusive Adio anchor technology expands data sets to the physical or virtual world of assets enabling these connections to data and blockchains that facilitates the creation of audit trails and immutable data assets within the block chain and WebWe create value by unlocking the value of data and making it known and measurable to its owners. Data Vault provides access to AI, ML and Blockchain tools within High Performance Computing environments to maximize intelligence, data yield and experiences.  The value Data Vault creates around data is its ability to become cash on the balance sheets of Data Vault's clients. Data Vault creates new revenue for customers through the monetization of their data assets.  Data Vault's value is increased through actionable intelligence that Data Vault systems create. Key principles of Data Vault value proposition are that data has a value that once understood can be leveraged towards institutional goals for Data Vault's customers.

Data Vault platform includes the Information Data Exchange. Tokenomic management for data objects, data valuation and data monetization are all enabled by this patented technology for our customers. The company has developed a number of data observation capabilities including a token key for each market vertical that allows our customers to begin with tailored data objects for their templated use.   Further our 3d display has a number of attributes that can be tailored to help our users perceive data in the proper context.  We also enable a past, present and future data relationship and analysis of data objects. 3rd party, public and proprietary data sets can be adjunct to data sets our customers control in the platform.

Patent Portfolio

Data Vault, through its subsidiary Datavault Inc., developed significant patent portfolios focused on blockchain, data visualization, valuation, and monetization technologies. Data Vault has secured patents related to blockchain-driven data scoring and visualization, allowing for the valuation and trading of data assets securely. Patents also cover innovative secure token systems which are crucial for the implementation of their Information Data Exchange™ (IDE). Data Vault also has patents related to brain-computer interfaces, indicating a venture into integrating AI with human interface technology. The portfolio includes foundational technologies for Web 3.0, enhancing data handling in decentralized ecosystems.

Data Vault is strategically positioning itself in the tech market by integrating blockchain, AI, and data management technologies, aiming to provide businesses with tools for secure valuation, visualization, and data monetization.

ELECTION OF DIRECTORS

(Proposal No. 1)

The following individuals have been nominated as members of our Board, each to serve until the Company’s 2025 Annual Meeting of Stockholders, until each of their respective successors are elected and qualified or until each of their earlier resignation or removal. Pursuant to our Bylaws, directors are to be elected by a plurality of the votes of the shares of Common Stock present in person or represented by proxy at the Annual Meeting and voting on such matter. This means that the eight (8) candidates receiving the highest number of affirmative votes at the Annual Meeting will be elected as directors. Only shares that are voted in favor of a particular nominee will be counted toward that nominee’s achievement of a plurality.

Proxies cannot be voted for a greater number of persons than the number of nominees named or for persons other than the named nominees.

Following is information about each nominee, including biographical data for at least the last five (5) years. Should one or more of these nominees become unavailable to accept nomination or election as a director, the individuals named as proxies on the enclosed proxy card will vote the shares that they represent for the election of such other persons as the Board may recommend, unless the Board reduces the number of directors. We have no reason to believe that any nominee will be unable or unwilling to serve if elected as a director.

Brett Moyer, Chief Executive Officer, President, and Director and Chairman

Brett Moyer is a founding member of the Company and has served as the President and Chief Executive Officer of the Company and as a member of its Board since August 2010. From August 2002 to July 2010, Mr. Moyer served as president and chief executive officer of Focus Enhancements, Inc., a developer and marketer of proprietary video technology and UWB wireless chips. From February 1986 to May 1997, Mr. Moyer worked at Zenith Electronics Inc. a consumer electronic company, where he had most recently been the vice president and general manager of its Commercial Products Division. Between August 2017 and October 2019, Mr. Moyer served as a member of the board of directors of DionyMed Brands Inc., a company which operated a multi-state, vertically integrated operating platform that designs, develops, markets and sold a portfolio of branded cannabis products. From June 2016 to November 2018, Mr. Moyer served as a member of the board of directors of Alliant International University, a private university offering graduate study in psychology, education, business management, law and forensic studies, and bachelor’s degree programs in several fields. From 2003 to December 2015, he served as a member of the board of directors of HotChalk, Inc., a developer of software for the educational market, and from March 2007 to September 2008, he was a member of the board of directors of NeoMagic Corporation, a developer of semiconductor chips and software that enable multimedia applications for handheld devices. Mr. Moyer received a Bachelor of Arts in Economics from Beloit College in Wisconsin and a Master’s of Business Administration with a concentration in finance and accounting from Thunderbird School of Global Management.

Kimberly Briskey, Director

Kimberly Briskey has been a member of the Board since June 2024. Ms. Briskey currently serves as Brand CFO of Eddie Bauer at SPARC Group LLC, where she leads a finance and accounting team managing an $800M multichannel business. She joined SPARC Group LLC in August 2020. Previously, she served as Sr. Director of DTC Finance and Company Planning at SPARC Group LLC. She has expertise in financial planning, long-range budgeting, and operational oversight. Her extensive experience includes senior roles at Lucky Brand, Beyond Yoga, J Brand, and GUESS? INC., driving financial efficiencies and profitability across various retail and e-commerce channels. Ms. Briskey holds a Bachelor of Science in Global Business and Marketing from Arizona State University and a Professional Designation in Product Development from the Fashion Institute of Design and Merchandising. The Company believes that Ms. Briskey is qualified to serve on the Board because of her years of experience as a growth-oriented financial executive in global organizations.

Dr. Jeffrey M. Gilbert, Director

Dr. Gilbert has been a member of the Board since April 2015. Dr. Gilbert has been working in the Research and Machine Intelligence and Project Loon teams at Google, Inc. since March 2014, and from January 2014 to March 2014, Dr. Gilbert worked for Transformational Technology Insights LLC, a consulting company, where he served as the sole principal. Previously, from May 2011 to December 2013, Dr. Gilbert was chief technology officer of Silicon Image, Inc., a leading provider of wired and wireless connectivity solutions. Dr. Gilbert was responsible for Silicon Image Inc.’s technology vision, advanced technology, and standards initiatives. Prior to joining Silicon Image Inc., Dr. Gilbert was chief technical officer of SiBEAM Inc., a fabless semiconductor company pioneering the development of intelligent millimeter wave silicon solutions for wireless communications, from May 2005 to May 2011. Before SiBEAM Inc., Dr. Gilbert served as director of algorithms and architecture and other engineering and management positions at Atheros Communications, a semiconductor developer, from May 2000 to May 2005, where he led the development of that company’s 802.11n, 802.11g, eXtended Range, and Smart Antenna technologies. Dr. Gilbert received a Ph.D. in Electrical Engineering from the University of California Berkeley, an M.Phil. in Computer Speech and Language Processing from Cambridge University, and a B.A. in Computer Science from Harvard College. The Company believes that Dr. Gilbert is qualified to serve on the Board to advise the Company on technology developments and management based on his long-standing experience in the wireless and technology industries.

David Howitt, Director

David Howitt has been a member of the Board since December 2021. Since March 2004, Mr. Howitt has served as the founder and CEO of Meriwether Group LLC, a strategic consulting firm that works with disruptive consumer brands by integrating their visions, developing growth strategies, scaling their brands, and increasing revenue in order to build enterprise value (“Meriwether”). Prior to founding Meriwether, between 1997 to 2008 Mr. Howitt worked in various positions at Adidas US, including managing Licensing and Business Development and as corporate counsel from 1997 to 2001. Mr. Howitt serves as Member Of The Board Of Advisors, Bloch International. Mr. Howitt earned his bachelor’s degree, political science/ philosophy at Denison University and his JD, environmental and natural resources law at Lewis & Clark Law School. The Company believes that Mr. Howitt is qualified to serve on the Board because of his experience as a growth-oriented leader in a multitude of organizations.

Helge Kristensen, Director

Helge Kristensen has been a member of the Board since August 2010. Mr. Kristensen has held high level management positions in technology companies for the last 25 years and for the last 18 years, he has served as vice president of Hansong Technology, an original device manufacturer of audio products based in China, and as president of Platin Gate Technology (Nanjing) Co. Ltd, a company with focus on service- branding in lifestyle products as well as pro line products based in China. Since August 2015, Mr. Kristensen has served as co-founder and director of Inizio Capital, an investment company based in the Cayman Islands. Mr. Kristensen has been involved in the audio and technology industries for more than 25 years. His expertise is centered on understanding and applying new and innovative technologies. He holds a master’s degree in Engineering and an HD-R, a graduate diploma, in Business Administration (Financial and Management Accounting) from Alborg University in Denmark. The Company believes that Mr. Kristensen is qualified to serve on the Board because of his technology and managerial experience as well has his knowledge of the audio industry.

Sriram Peruvemba, Director

Sriram Peruvemba has been a member of the Board since June 2020. He is the CEO of Marketer International Inc., a marketing services firm, a position he has held since July 2014. Mr. Peruvemba currently serves on a number of additional boards, including as a member of Visionect d.o.o since September 2017, as a member of Omniply Technologies since May 2020, as a member of Edgehog Technologies since January 2023, as a member of SmartKem Inc. since July 2023, and as a member of Azumo since July 2023. He previously served as board member and chair of marketing for the Society for Information Display from August 2014 to July 2020. Mr. Peruvemba was previously the Chief Marketing Officer at E Ink Holdings, where he played a major role in transforming the startup to a global company with a valuation greater than $1 billion. With over 30 years of experience in the technology industry, Mr. Peruvemba has been an influential advocate in the advancement of electronic hardware technologies. Based in Silicon Valley, Mr. Peruvemba advises high tech firms in the US, Canada, and Europe. He received a bachelor’s degree in Engineering from Bangalore University, an MBA degree from Wichita State University and a post-graduate diploma in management from Indira Gandhi National Open University. The Company believes that Mr. Peruvemba is qualified to serve on the Board because of such experience and because he is an acknowledged expert on electronic displays, haptics, touch screens, electronic materials and related technologies. He also consults, writes and presents on those subjects globally.

Robert Tobias, Director

Robert Tobias has been a member of the Board since February 2020 and has served as CEO, Chairman and President of HDMI Licensing Administrator Inc. since January 2017, where he has been the strategic force behind the licensing, enforcement, compliance and growth of HDMI® technology around the world. Mr. Tobias leads efforts to promote the HDMI specification as the premier digital and audio interface to the consumer electronics, mobile, PC and entertainment industries. In addition, he oversees IP enforcement with 2000 HDMI licensees and partners responsible for the release of twelve billion HDMI products worldwide, and as such brings a recognized level of expertise working with foreign regulatory channels, customs authorities, standards development organizations, media companies, etc., to grow the business and protect the HDMI brand. Prior to joining HDMI Licensing Administrator Inc., Mr. Tobias served as President of HDMI Licensing LLC, a wholly owned subsidiary of Lattice Semiconductor, from September 2015 to December 2016, where he led the marketing, licensing and compliance teams promoting and licensing the HDMI intellectual property, and prior to that, he held the roles of President at MHL and Senior Director of Strategic Product Marketing and Business Development at Silicon Image. Mr. Tobias earned a Bachelor’s degree in Electrical Engineering from UC Davis, an MBA from Santa Clara University and chairs the UC Davis Engineering Faculty Dean’s Executive Committee and is a UC Davis Foundation Trustee. The Company believes that Mr. Tobias is qualified to serve on the Board based on his experience and leadership in the consumer electronics industry as well as his strong relationships with top consumer electronics brands in Asia.

Wendy Wilson, Director

Wendy Wilson has been a member of the Board since May 2021. Ms. Wilson previously served as Vice President of Marketing at ChargePoint, Inc. from August 2017 to November 2023, a leading electric vehicle charging network provider, where she had profit and loss responsibilities for the company’s home business unit, assisted with run go-to- market functions for such company’s SaaS businesses and helped to expand operations into European markets with scalable localization, web, and marketing processes. Previously, Ms. Wilson served as Vice President of Marketing at Jive Software, a communication software company, from August 2014 to July 2017, where she led demand generation, field and web teams, and has held leadership roles in small venture capital funded startups and publicly traded firms, including Yahoo! Inc. and The Walt Disney Company (“Disney”). In her leadership role at Infoseek, which was acquired by Disney in 1998, she was responsible for cross- disciplinary teams from ESPN, Go.com (ABC News), Mr. Showbiz and Infoseek brands. At Yahoo, she was responsible for both the monetization and editorial strategy for the Yahoo front page, known then as the world’s homepage. Ms. Wilson is a graduate of Northwestern University with a bachelor’s degree in English. The Company believes that Ms. Wilson is qualified to serve on the Board based on her expertise in digital marketing and go-to-market strategies for companies with “business to consumer” and “business to business to consumer” commerce models.

Required Vote

Our Certificate of Incorporation does not authorize cumulative voting. Our Bylaws provide that directors are to be elected by a plurality of the votes of the shares of Common Stock present in person or represented by proxy at the Annual Meeting and voting on the matter. This means that the eight (8) candidates receiving the highest number of affirmative votes at the Annual Meeting will be elected as directors. Only shares that are voted in favor of a particular nominee will be counted toward that nominee’s achievement of a plurality. Shares present at the Annual Meeting that are not voted for a particular nominee or shares present by proxy where the stockholder properly withheld authority to vote for such nominee will not be counted toward that nominee’s achievement of a plurality.

At the Annual Meeting a vote will be taken on a proposal to approve the election of the eight (8) director nominees.

THE BOARD UNANIMOUSLY RECOMMENDS 

A VOTE FOR THE ELECTION OF THE EIGHT (8) DIRECTOR NOMINEES.

CORPORATE GOVERNANCE

Board of Directors

The Board oversees our business affairs and monitors the performance of our management. In accordance with our corporate governance principles, the Board does not involve itself in day-to-day operations. The directors keep themselves informed through discussions with the Chief Executive Officer, other key executives and by reading the reports and other materials sent to them and by participating in Board and committee meetings. Our directors hold office until the next Annual Meeting of Stockholders and until each of their respective successors are elected and qualified or until each of their earlier resignation or removal, or if for some other reason they are unable to serve in the capacity of director.

Our Board currently consists of eight (8) members: Brett Moyer; Kimberly Briskey; Dr. Jeffrey M. Gilbert; David Howitt; Helge Kristensen; Sriram Peruvemba; Robert Tobias and Wendy Wilson. All of our directors will serve until our next Annual Meeting of Stockholders and until each of their respective successors are duly elected and qualified or until each of their earlier resignation or removal.

Director Independence

As our Common Stock is listed on the Nasdaq Capital Market, our determination of the independence of directors is made using the definition of “independent director” contained in Rule 5605(a)(2) of the Marketplace Rules of the Nasdaq Stock Market LLC (“Nasdaq”). Our Board affirmatively determined that Kimberly Briskey, Dr. Jeffrey M. Gilbert, Sriram Peruvemba, Robert Tobias and Wendy Wilson are “independent directors,” as that term is defined in the Marketplace Rules of Nasdaq (the “Nasdaq Rules”). Under the corporate governance rules of Nasdaq, our Board must be composed of a majority of “independent directors.” Additionally, subject to certain limited exceptions, our audit, compensation, and nominating and corporate governance committees also must be composed of all independent directors.

The Nasdaq Rules require that each member of a listed company’s audit, compensation and nominations committees be independent. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. Under the Nasdaq Rules, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

To be considered to be independent for purposes of Rule 10A-3 of the Exchange Act, a member of an audit committee of a listed company may not, other than in such member’s capacity as a member of such committee, such company’s board of directors, or any other committee of such board of directors: (1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries.

Our Board has undertaken a review of its composition, the composition of its committees and the independence of each director. Based upon information requested from and provided by each director concerning such director’s background, employment and affiliations, including family relationships, our Board has determined that (a) the following members of our Board have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director: Brett Moyer, Helge Kristensen and David Howitt, and (b) other than such directors, each of our directors is “independent” as that term is defined under the Nasdaq Rules. In making this determination, our Board considered the current and prior relationships that each non-employee director has with our Company and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our shares of Common Stock by each non-employee director. Our Board has determined that (i) Ms. Briskey, Mr. Peruvemba and Ms. Wilson satisfy the independence standards for the Board’s audit committee established by the Nasdaq Rules and Rule 10A-3 of the Exchange Act, (ii) Mr. Peruvemba, Dr. Gilbert and Mr. Tobias satisfy the independence standards for the Board’s compensation committee established by the Nasdaq Rules and are “independent directors” for such committee’s purposes and (iii) Mr. Tobias, and Dr. Gilbert satisfy the independence standards for the Board’s nominating and corporate governance committee established by the Nasdaq Rules and are “independent directors” for such committee’s purposes.

Board Composition and Diversity

The following table sets forth certain diversity statistics as self-reported by the current members of the Board. Each of the categories listed in the below table has the meaning as it is used in the Nasdaq Rules.

Board Meetings and Attendance

During fiscal year 2023, the Board held four (4) physical/telephonic meetings. No incumbent director attended, either in person or via telephone, fewer than 75% of the aggregate of all meetings of the Board and the committees of the Board, for which at the time of the meeting they were a member of the Board. The Board also approved certain actions by unanimous written consent.

Annual Meeting Attendance

Although we do not have a formal policy regarding attendance by members of the Board at our annual meeting of stockholders, the Board encourages all of its members to attend the annual meeting of stockholders. The Company held its 2023 Annual Meeting of Stockholders on January 30, 2024 (initially scheduled for December 15, 2023 and adjourned a number of times due to failure to reach a quorum each time), which was attended in person by Brett Moyer.

Stockholder Communications with the Board

Stockholders wishing to communicate with the Board, the non-management directors, or with an individual Board member may do so by writing to the Board, to the non-management directors, or to the particular Board member, and mailing the correspondence to: c/o Brett Moyer, Chief Executive Officer, WiSA Technologies, Inc., 15268 NW Greenbrier Pkwy, Beaverton, OR 97006. The envelope should indicate that it contains a stockholder communication. All such stockholder communications will be forwarded to the director or directors to whom the communications are addressed.

Board Committees

Our Board has an audit committee, a compensation committee and a nominating and corporate governance committee. Each Board committee has a charter, which is available on our website at https://ir.wisatechnologies.com/corporate-governance/governance-documents. Information contained on our website is not incorporated herein by reference. Each of the Board’s committees has the composition and responsibilities described below. As of November 1, 2024, the members of such committees are:

Audit Committee — Kimberly Briskey* ⁽¹⁾, Sriram Peruvemba and Wendy Wilson

Compensation Committee — Sriram Peruvemba*, Dr. Jeffrey M. Gilbert and Robert Tobias

Nominating and Corporate Governance Committee — Robert Tobias*, and Dr. Jeffrey M. Gilbert

Audit Committee

Our Board’s audit committee (the “Audit Committee”) has been established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of our Audit Committee are Kimberly Briskey, Sriram Peruvemba and Wendy Wilson, each of whom are “independent” within the meaning of Rule 10A-3 under the Exchange Act and the Nasdaq Rules. Our Board has determined that Ms. Briskey shall serve as the “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. In addition, Ms. Briskey serves as Chairperson of our Audit Committee.

The Audit Committee oversees our corporate accounting and financial reporting process and oversees the audit of our financial statements and the effectiveness of our internal control over financial reporting. The responsibilities of the Audit Committee include, among other matters:

During 2023, the Audit Committee held four (4) virtual meetings to enable members of the then current Audit Committee to review and approve the filing of the Company’s annual and quarterly reports with the SEC.

The Audit Committee operates under a written charter adopted by the Board that satisfies the applicable standards of Nasdaq.

Compensation Committee

The members of our Board’s compensation committee (the “Compensation Committee”) are Sriram Peruvemba, Dr. Jeffrey M. Gilbert and Robert Tobias, each of whom are “independent” within the meaning of the Nasdaq Rules. In addition, each member of our Compensation Committee qualifies as a “non-employee director” under Rule 16b-3 of the Exchange Act. Our Compensation Committee assists the Board in the discharge of its responsibilities relating to the compensation of the members of the Board and our executive officers. Mr. Peruvemba serves as the Chairman of our Compensation Committee.

The Compensation Committee’s compensation-related responsibilities include, among other matters:

In 2023, the Compensation Committee did not hold any meetings but approved various matters, where appropriate, by unanimous written consent. Mr. Moyer, our Principal Executive Officer, President and Chairman of the Board, does not participate in the determination of his own compensation or the compensation of directors. However, he makes recommendations to the Compensation Committee regarding the amount and form of the compensation of the other executive officers and key employees, and he often participates in the Compensation Committee’s deliberations about such persons’ compensation. Mr. Oliva, formerly our Principal Financial Officer, assisted the Compensation Committee in its deliberations regarding executive officer, director and employee compensation, prior to his resignation as Principal Financial Officer on July 11, 2023. No other executive officers participate in the determination of the amount or the form of the compensation of executive officers or directors. The Compensation Committee does not utilize the services of an independent compensation consultant to assist in its oversight of executive and director compensation. On January 30, 2018, the Board adopted a written charter for the Compensation Committee.

Nominating and Corporate Governance Committee

The members of our Board’s nominating and corporate governance committee (“Nominating and Corporate Governance Committee”) are Robert Tobias, and Dr. Jeffrey M. Gilbert, each of whom are “independent” within the meaning of the Nasdaq Rules. In addition, each member of our Nominating and Corporate Governance Committee qualifies as a “non-employee director” under Rule 16b-3 of the Exchange Act. The purpose of the Nominating and Corporate Governance Committee is to recommend to the Board nominees for election as directors and persons to be elected to fill any vacancies on the Board, develop and recommend a set of corporate governance principles and oversee the performance of the Board. Mr. Tobias serves as Chairman of our Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee’s responsibilities include, among other things:

Our Nominating and Governance Committee strives for a Board composed of individuals who bring a variety of complementary skills, expertise or background and who, as a group, will possess the appropriate skills and experience to oversee our business. The diversity of the members of the Board relates to the selection of its nominees. While the Committee considers diversity and variety of experiences and viewpoints to be important factors, it does not believe that a director nominee should be chosen or excluded solely or largely because of race, color, gender, national origin or sexual orientation or identity. In selecting a director nominee for recommendation to our Board, our Nominating and Governance Committee focuses on skills, expertise or background that would complement the existing members on the Board. Accordingly, although diversity may be a consideration in the Committee’s process, the Committee and the Board do not have a formal policy regarding the consideration of diversity in identifying director nominees.

When the Nominating and Governance Committee has either identified a prospective nominee or determined that an additional or replacement director is required, the Nominating and Governance Committee may take such measures as it considers appropriate in connection with its evaluation of a director candidate, including candidate interviews, inquiry of the person or persons making the recommendation or nomination, engagement of an outside search firm to gather additional information, or reliance on the knowledge of the members of the Board or management. In its evaluation of director candidates, including the members of the Board eligible for re-election, the Nominating and Governance Committee considers a number of factors, including: the current size and composition of the Board, the needs of the Board and the respective committees of the Board, and such factors as judgment, independence, character and integrity, age, area of expertise, diversity of experience, length of service and potential conflicts of interest.

The Nominating and Governance Committee of the Board selects director nominees and recommends them to the full Board. In relation to such nomination process, the Nominating and Governance Committee:

The Nominating and Governance Committee has specified the following minimum qualifications that it believes must be met by a nominee for a position on the Board: the highest personal and professional ethics and integrity; proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment; skills that are complementary to those of the existing Board; the ability to assist and support management and make significant contributions to our success; the ability to work well with the other directors; the extent of the person’s familiarity with the issues affecting our business; an understanding of the fiduciary responsibilities that are required of a member of the Board; and the commitment of time and energy necessary to diligently carry out those responsibilities. A candidate for director must agree to abide by our Code of Ethics and Conduct.

After completing its evaluation, the Nominating and Governance Committee makes a recommendation to the full Board as to the persons who should be nominated to the Board, and the Board determines the nominees after considering the recommendation and report of the Committee.

Our Board does not have a policy with regard to the consideration of director candidates recommended by stockholders but would consider candidates recommended by stockholders. Our Board does not have such a policy because we do not reasonably expect to receive any director candidates recommended by stockholders based on past meetings. In the case of director candidates recommended by stockholders, our Board would evaluate such candidates using the factors described above.

In 2023, the Nominating and Corporate Governance Committee did not hold any meetings but approved various matters, where appropriate, by unanimous written consent.

Family Relationships

There are no family relationships between any of the officers or directors of the Company.

Involvement in Certain Legal Proceedings

In 2015, Quantum3D, Inc. (“Quantum3D”), a company of which Mr. Williams had been serving as chief financial officer, as a result of his prior experience in corporate restructuring, was placed into an assignment for the benefit of creditors. Mr. Williams continued to serve as chief financial officer during Quantum3D’s restructuring and negotiated sale in September 2016.

On October 29, 2019, DionyMed Brands Inc., a British Columbia company which Mr. Moyer had been serving as a director, was placed in receivership and Mr. Moyer resigned.

Other than the foregoing, to the best of our knowledge, none of our directors or executive officers has, during the past ten (10) years:

Leadership Structure of the Board

The Board does not currently have a policy on whether the same person should serve as both the Principal Executive Officer and Chairman of the Board or, if the roles are separate, whether the Chairman should be selected from the non-employee directors or should be an employee. The Board believes that it should have the flexibility to make these determinations at any given point in time in the way that it believes best to provide appropriate leadership for the Company at that time. Mr. Moyer is both the Principal Executive Officer and Chairman of the Board. The Company does not have a lead independent director.

Director Nomination Procedures

There have been no material changes to the procedures by which security holders may recommend nominees to the Board.

Risk Oversight

The Board oversees risk management directly and through its committees associated with their respective subject matter areas. Generally, the Board oversees risks that may affect the business of the Company as a whole, including operational matters. The Audit Committee is responsible for oversight of the Company’s accounting and financial reporting processes and also discusses with management the Company’s financial statements, internal controls and other accounting and related matters. The Compensation Committee oversees certain risks related to compensation programs, and the Nominating and Corporate Governance Committee oversees certain corporate governance risks. As part of their roles in overseeing risk management, these committees periodically report to the Board regarding briefings provided by management and advisors as well as the committees’ own analysis and conclusions regarding certain risks faced by the Company. Management is responsible for implementing the risk management strategy and developing policies, controls, processes and procedures to identify and manage risks. As set forth in the Company’s insider trading policy, the Company prohibits insiders, including the Company’s employees, officers or directors, or any of their designees, from engaging in any hedging transactions.

DIRECTOR COMPENSATION

The table below sets forth the compensation paid to our directors during the fiscal year ended December 31, 2023.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Our executive officers are:

Biographical information about Brett Moyer appears above on page 8.

Gary Williams, Chief Accounting Officer and Vice President of Finance

Gary Williams has served as Chief Accounting Officer since September 9, 2019 and as Vice President of Finance since the Company’s founding in August 2010. Mr. Williams previously served as Secretary and Chief Financial Officer since the Company’s founding in August 2010 until September 9, 2019. In addition, Mr. Williams served as the Chief Financial Officer of Quantum3D, Inc., a training and simulation technology company, from November 2012 to September 2016. Prior to joining the Company, Mr. Williams served as secretary, vice president of finance and chief financial officer of Focus Enhancements Inc., a developer and marketer of proprietary video technology, from January 2001 to July 2010, when the videography and semiconductor businesses of the company were purchased by VITEC Multimedia, Inc. and the Company, respectively. Mr. Williams served as controller, vice president of finance, chief financial officer and secretary of Videonics Inc., a publicly traded company in the consumer electronics business, from February 1995 to January 2001, when Videonics merged with Focus Enhancements, Inc. From July 1994 to January 1995, Mr. Williams served as controller for Western Micro Technology, a publicly traded company in the electronics distribution business. From January 1990 to June 1994, Mr. Williams worked in public accounting for Coopers & Lybrand LLP. Mr. Williams is a certified public accountant, inactive, and received a Bachelor’s Degree in Business Administration, with an emphasis in Accounting, from San Diego State University.

EXECUTIVE COMPENSATION

Summary Compensation Table for Fiscal Years 2023 and 2022

The following table sets forth all plan and non-plan compensation for the last two completed fiscal years paid to all individuals who served as the Company’s principal executive officer or acted in a similar capacity and the Company’s two other most highly compensated executive officers during the last completed fiscal year, as required by Item 402(m)(2) of Regulation S-K of the Securities Act. We refer to all of these individuals collectively as our “Named Executive Officers.”

(1) Amounts reported in this column do not reflect the amounts actually received by our named executive officers. Instead, these amounts reflect the aggregate grant date fair value of each restricted stock award (“RSA”) and each RSU granted to the named executive officers during the fiscal years ended December 31, 2023 and 2022, as computed in accordance with Financial Accounting Standards Board (“FASB”) ASC 718. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.

(2) Cash bonus of $19,250 earned in 2021 and paid to Mr. Moyer in 2022.

(3) On July 11, 2023, George Oliva resigned as the Principal Financial Officer of the Company and assumed the role of the Senior Vice President of Finance and Strategic Operations of the Company.

(4) Cash bonus of $13,750 earned in 2021 and paid to Mr. Oliva in 2022.

(5) Includes cash bonus of $12,500 earned in 2021 that was paid to Mr. Williams in 2022.

Executive Employment Agreements and Arrangements

Brett Moyer

Effective August 24, 2022, the Company entered into an employment agreement with Brett Moyer (the “Moyer Agreement”). Pursuant to the Moyer Agreement, Mr. Moyer agreed to continue to serve as our Chief Executive Officer and President and Mr. Moyer’s initial annual base salary is $404,250, which is subject to adjustment approved by the Board. The Moyer Agreement has an unspecified term and Mr. Moyer will serve in his position on an at-will basis, subject to the payment of severance in certain circumstances as set forth in the Moyer Agreement. Pursuant to the Moyer Agreement, if Mr. Moyer is terminated without cause or resigns with good reason, he is entitled to receive twelve (12) months of salary. Mr. Moyer is also entitled to continue to receive the employer subsidy under group health, dental and vision coverage for the period of severance, which is twelve (12) months, a pro rata bonus for the year of termination and the acceleration of vesting with respect to all unvested equity awards. Additionally, in the event of a Change in Control (as defined in each of the Moyer Agreement), all unvested equity awards held by such executive officer shall immediately vest and become exercisable, provided that subject to any exceptions in any award agreement entered into with such executive officer, no exercise may occur more than six (6) months after such termination and in no event after the expiration of such award. Mr. Moyer is also entitled to be made whole for income, employment and excise taxes in the event that payments, benefits and distributions, including the effects of accelerated vesting of equity, would result in the application of the “golden parachute” excise tax under Internal Revenue Code Section 4999.

George Oliva

Effective August 24, 2022, the Company entered into an employment agreement with George Oliva (the “Oliva Agreement”). Pursuant to the Oliva Agreement, Mr. Oliva agreed to continue to serve as then Chief Financial Officer and Secretary of the Company, and Mr. Oliva’s initial annual base salary was $288,750, which was subject to adjustment approved by the Board. The Oliva Agreement had an unspecified term and Mr. Oliva served in his position on an at-will basis, subject to the payment of severance in certain circumstances as set forth in the Oliva Agreement. Pursuant to the Oliva Agreement, if Mr. Oliva was terminated without cause or resigned with good reason, he was entitled to receive twelve (12) months of salary. Mr. Oliva was also entitled to continue to receive the employer subsidy under group health, dental and vision coverage for the period of severance, which is twelve (12) months, a pro rata bonus for the year of termination and the acceleration of vesting with respect to all unvested equity awards. Additionally, in the event of a Change in Control (as defined in each of the Oliva Agreement), all unvested equity awards held by such executive officer were to immediately vest and become exercisable, provided that subject to any exceptions in any award agreement entered into with such executive officer, no exercise may occur more than six months after such termination and in no event after the expiration of such award. Mr. Oliva was also entitled to be made whole for income, employment and excise taxes in the event that payments, benefits and distributions, including the effects of accelerated vesting of equity, would result in the application of the “golden parachute” excise tax under Internal Revenue Code Section 4999.

Effective July 11, 2023, George Oliva resigned as Principal Financial Officer of the Company and entered into a separation agreement with the Company (the “Separation Agreement”), whereby amongst other things, his only title would be Senior Vice President of Finance and Strategic Operations of the Company. The Separation Agreement provided that Mr. Oliva’s employment would last until and through December 20, 2023 or such other date as mutually agreed between the Company and Mr. Oliva (the “Separation Date”). In connection with the Separation Agreement, Mr. Oliva was granted 30,000 RSAs on July 12, 2023 which fully vested on Mr. Oliva’s Separation Date. Additionally, as of the date of the Separation Agreement, Mr. Oliva had a total of 1,499 unvested RSAs and RSUs. The Company agreed to vest all of Mr. Oliva’s unvested RSAs and RSUs as of the Separation Date. The Separation Agreement also set forth various terms regarding the treatment of other employee benefits that Mr. Oliva was entitled to receive under the Company’s existing plans. During the term of the Separation Agreement, Mr. Oliva’s base annual salary remained unchanged. As a material condition to the Separation Agreement, Mr. Oliva executed a supplemental release, which included a customary release of claims by Mr. Oliva (on behalf of himself, his heirs, executors, administrators and assigns) in favor of the Company.

Gary Williams

Effective August 24, 2022, the Company entered into an employment agreement with Gary Williams (the “Williams Agreement”). Pursuant to the Williams Agreement, Mr. Williams agreed to continue to serve as Chief Accounting Officer and Vice President of Finance of the Company, and Mr. Williams’ initial annual base salary is $262,495, which is subject to adjustment approved by the Board. The Williams Agreement has an unspecified term and Mr. Williams will serve in his position on an at-will basis, subject to the payment of severance in certain circumstances as set forth in the Williams Agreement. Pursuant to the Williams Agreement, if Mr. Williams is terminated without cause or resigns with good reason, he is entitled to receive six (6) months of salary. Mr. Williams is also entitled to continue to receive the employer subsidy under group health, dental and vision coverage for the period of severance, which is six (6) months, a pro rata bonus for the year of termination and the acceleration of vesting with respect to all unvested equity awards.

Additionally, in the event of a Change in Control (as defined in each of the Williams Agreement), all unvested equity awards held by such executive officer shall immediately vest and become exercisable, provided that subject to any exceptions in any award agreement entered into with such executive officer, no exercise may occur more than six (6) months after such termination and in no event after the expiration of such award.

Pursuant to the Williams Transition Agreement, Mr. Williams resigned from the Company, effective November 30, 2024. Pursuant to the Williams Transition Agreement, if Mr. Williams remains employed by until and through such date and adequately fulfills his duties and responsibilities to the Company, including providing training, information transfer and/or any other assistance reasonably requested by or on behalf of any person(s) hired and/or designated by the Company to assume any or all of his duties and responsibilities, Mr. Williams is entitled to receive the following compensation and benefits: (a) a one-time bonus in the gross amount of $151,925, to be paid on such date, less applicable taxes and withholdings, and (b) the full, accelerated vesting of any and all restricted stock awards he has been issued and have not vested, effective as of such date.

Mr. Williams and the Company intend to execute a separation agreement (the “Williams Separation Agreement”) on November 30, 2024. The Williams Separation Agreement sets forth various terms regarding the treatment of other employee benefits that Mr. Williams is entitled to receive under the Company’s existing plans. As a material condition to the Williams Separation Agreement, Mr. Williams is required to timely execute the Supplemental Release attached as an exhibit to the Separation Agreement, which includes a customary release of claims by him (on behalf of himself, his heirs, executors, administrators and assigns) in favor of the Company.

Other Compensation

Other than as described above, there were no post-employment compensation, pension or nonqualified deferred compensation benefits earned by our Named Executive Officers during the years ended December 31, 2023 and 2022. We do not have any retirement, pension or profit-sharing programs for the benefit of our directors, officers or other employees. The Board may recommend adoption of one or more such programs in the future.

Pay Versus Performance

The following table sets forth compensation information for our Chief Executive Officer, Brett Moyer, referred to in the tables below as the PEO, and our Chief Accounting Officer, Gary Williams, referred to in the tables below as the Non-PEO NEO, for purposes of comparing their respective compensation to our net loss, calculated in accordance with SEC regulations, for the fiscal years ended December 31, 2023 and 2022.

PEO Equity Award Adjustment Breakout

To calculate the amounts in the “Compensation Actually Paid to PEO” column in the table above, the following amounts were deducted from and added to (as applicable) our PEO’s “Total” compensation as reported in the Summary Compensation Table:

Non-PEO NEO Equity Award Adjustment Breakout

To calculate the amounts in the “Compensation Actually Paid to Non-PEO NEO” column in the table above, the following amounts were deducted from and added to (as applicable) the “Total” compensation of our Non-PEO NEO as reported in the Summary Compensation Table:

Relationship between Pay and Performance

As shown in the disclosure above, compensation actually paid to each our PEO and our Non-PEO NEO was increased from the fiscal year ended December 31, 2022 to the fiscal year ended December 31, 2023, and during those periods, our net loss increased. This is due in large part to the significant emphasis we place on equity incentives, the value of which are closely tied to changes in stock price, in our executive compensation packages. We do not use net income (loss) to determine compensation levels or incentive plan payouts.

Outstanding Equity Awards as of December 31, 2023

The following table provides information regarding the unexercised options and warrants to purchase Common Stock and stock awards held by each of our named executive officers:

2022 Management Team Retention Bonus Plan

On September 1, 2022, the Company adopted its Management Team Retention Bonus Plan (the “Retention Plan”), to incentivize certain management level employees (the “Managers”) to remain intact through and shortly following a potential “Change of Control” (as defined in the Retention Plan). The aggregate Retention Plan bonus amounts for all Managers was $1,250,000.

The Retention Plan provided that each Manager is eligible to receive a lump sum cash amount under the Retention Plan, on the earlier of the six-month anniversary of the date of a Change of Control or at the time of such Manager’s involuntary termination other than for “Cause” (as defined in the Retention Plan) or termination for “Good Reason” (as defined in the Retention Plan). The Retention Plan expired on June 30, 2023, unused, and no accruals were made.

Equity Incentive Plans

2018 Long-Term Stock Incentive Plan of the Company

On January 30, 2018, the Board approved the establishment of the LTIP. The LTIP is intended to enable the Company to continue to attract able directors, employees, and consultants and to provide a means whereby those individuals upon whom the responsibilities rest for successful administration and management of the Company, and whose present and potential contributions are of importance, can acquire and maintain Common Stock ownership, thereby strengthening their concern for the Company’s welfare. The aggregate maximum number of shares of Common Stock (including shares underlying options) that may be issued under the LTIP pursuant to awards of Restricted Shares or Options will be limited to 15% of the outstanding shares of Common Stock, which calculation shall be made on the first trading day of each new fiscal year; provided that, in any year no more than 8% of the Common Stock or derivative securitization with Common Stock underlying 8% of the Common Stock may be issued in any fiscal year. Based on the total shares of Common Stock outstanding on January 1, 2024, up to 1,861,266 shares of Common Stock are available for participants under the LTIP. The number of shares of Common Stock that are the subject of awards under the LTIP which are forfeited or terminated, are settled in cash in lieu of shares of Common Stock or in a manner such that all or some of the shares covered by an award are not issued to a participant or are exchanged for awards that do not involve shares will again immediately become available to be issued pursuant to awards granted under the LTIP. If shares of Common Stock are withheld from payment of an award to satisfy tax obligations with respect to the award, those shares of Common Stock will be treated as shares that have been issued under the LTIP and will not again be available for issuance under the LTIP.

The LTIP was approved by a majority of the Company’s stockholders on January 31, 2018.

At a special meeting of our stockholders held on January 24, 2023, our stockholders approved certain amendments to the LTIP to: (i) increase the annual share limit of Common Stock that may be issued in any single fiscal year only for the 2023 fiscal year under the LTIP from 8% of the shares of Common Stock outstanding to 15% of the shares of Common Stock outstanding (which amount equates to the maximum amount that may be issued in the aggregate under the LTIP); and (ii) permit immediately quarterly calculations based on the number of shares of Common Stock outstanding as of the first trading day of each fiscal quarter, rather than solely as of the first trading day of the fiscal year.

At a special meeting of our stockholders held on March 15, 2024, our stockholders approved certain amendments to the LTIP to increase the annual share limit of Common Stock that may be issued only for the 2024 fiscal year under the LTIP from 8% of the shares of Common Stock outstanding to 15% of the shares of Common Stock outstanding (which amount equates to the maximum amount that may be issued in the aggregate under the LTIP).

2020 Stock Incentive Plan

On July 27, 2020, the Board approved the establishment of the 2020 Plan and the reservation of an aggregate of 6,500 shares of Common Stock authorized for issuance under the 2020 Plan, subject to stockholder approval, which was obtained on October 20, 2020. The 2020 Plan authorizes the grant of equity-based compensation to the Company’s senior managers, employees, directors, consultants, professionals and service providers in the form of stock options, restricted stock and RSUs. All options granted under the 2020 Plan will be considered non-qualified stock options. The purpose of the 2020 Plan is to attract and retain senior managers, employees, directors, consultants, professionals and service providers who provide services to the Company, provided that such services are bona fide services that are not of a capital-raising nature during this period of unprecedented uncertainty and volatility in the COVID-19 environment and its impact on the value of the Company’s equity and grants. As of December 31, 2023, no options or RSAs have been granted under the 2020 Plan while an aggregate , net of cancellations, of 6,285 RSUs have been issued under the 2020 Plan of which 67 remained unvested at December 31, 2023.

Technical Team Retention Plan of 2022

On June 21, 2022, the Board adopted the Company’s Technical Team Retention Plan of 2022 (the “2022 Plan”) and the reservation of an aggregate of 5,000 shares of the Company’s common stock authorized for issuance under the 2022 Plan, subject to stockholder approval. The 2022 Plan authorizes the grant of equity-based compensation, to the Company’s key managers, employees, consultants who provide technical and engineering and related services to the Company, in the form of restricted stock and RSUs. On August 19, 2022, the Company held the 2022 Annual Meeting of Stockholders and approved the adoption of the 2022 Plan and the reservation of an aggregate of 5,000 shares of the Company’s common stock. On September 19, 2022, the Company granted an aggregate of 3,700 RSUs to managers, employees and consultants. Each RSU represents the right to receive one share of the Company’s common stock under the 2022 Plan. As of December 31, 2023, no options or RSAs have been granted under the 2022 Plan while an aggregate, net of cancellations, of 3,450 RSUs have been issued under the 2022 Plan of which 2,531 remained unvested at December 31, 2023.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Other than compensation arrangements for our directors and executive officers, the following is a summary of transactions since the beginning of the last two fiscal years ended December 31, 2023 and 2022 to which we have been a party in which the amount involved exceeded the lesser of (i) $120,000 or (ii) one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any of our then directors, executive officers or holders of more than 5% of any class of our stock at the time of such transaction, or any members of their immediate family, had or will have a direct or indirect material interest. See also “Executive Compensation” for additional information regarding compensation of related parties.

Helge Kristensen

Mr. Kristensen has served as a member of the Board since 2010. Mr. Kristensen serves as vice president of Hansong Technology, an original device manufacturer of audio products based in China, president of Platin Gate Aps, a company with focus on service-branding in lifestyle products as well as pro line products based in Denmark and co-founder and director of Inizio Capital, an investment company based in the Cayman Islands.

For the fiscal years ended December 31, 2023 and 2022, Hansong Technology purchased modules from the Company of approximately $88,000 and $361,000, respectively, and made payments to the Company of approximately $254,000 and $191,000, respectively. For the fiscal years ended December 31, 2023 and 2022, Hansong Technology sold speaker products to the Company of approximately $128,000 and $1,891,000, respectively, and the Company made payments to Hansong Technology of approximately $1,223,000 and $1,831,000, respectively.

At December 31, 2023 and 2022, the Company owed Hansong Technology approximately $250,000 and $874,000, respectively. At December 31, 2023 and 2022, Hansong Technology owed the Company approximately $4,000 and $170,000, respectively.

As of December 31, 2023 and December 31, 2022, Mr. Kristensen owned less than 1.0% of the outstanding shares of the Common Stock.

David Howitt

Mr. Howitt has served as a member of the Board since December 2021. Since March 2004, Mr. Howitt has served as the founder and CEO of Meriwether Group LLC (“MWG”), a strategic consulting firm that works with disruptive consumer brands by integrating their visions, developing growth strategies, scaling their brands, and increasing revenue in order to build enterprise value. MWG, which is also majority-owned by Mr. Howitt, owns a 25% general partner interest in Meriwether Group Capital Hero Fund LP (“Meriwether”).

On September 8, 2023, the Company entered into a Loan and Security Agreement with Meriwether. Pursuant to the Loan and Security Agreement, Meriwether provided the Company with a term loan in the principal amount of $650,000 that was scheduled to mature on November 7, 2023, subject to further extension (the “Meriwether Loan”). The maturity date of the Meriwether Loan was subsequently extended to December 7, 2023. The Company paid back the loan in full on December 7, 2023.

Outstanding Equity Grants to Directors and Executive Officers

We have granted restricted shares to certain of our directors and executive officers. For more information regarding the warrants and stock awards granted to our directors and named executive officers, see “Executive Compensation—Outstanding Equity Awards as of December 31, 2023.”

Indemnification Agreements

We have entered into indemnification agreements with each of our directors and executive officers. Such indemnification agreements require us to indemnify our directors and executive officers to the fullest extent permitted by Delaware law.

Related Person Transaction Policy

Our Audit Committee considers and approves or disapproves any related person transaction as required by Nasdaq regulations. The Company’s written policies and procedures on related party transactions cover any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which: (i) the Company (or any subsidiary) is a participant; (ii) any related party has or will have a direct or indirect interest; and (iii) the aggregate amount involved (including any interest payable with respect to indebtedness) will or may be expected to exceed $120,000, except that there is no $120,000 threshold for members of the Audit Committee. A related party is any: (i) person who is or was (since the beginning of the two fiscal years preceding the last fiscal year, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director; (ii) greater than five percent (5%) beneficial owner of the Company’s common stock or any other class of the Company’s voting equity securities; or (iii) immediate family member of any of the foregoing. An immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and any person (other than a tenant or employee) sharing the same household as such person.

In determining whether to approve or ratify a related party transaction, the Audit Committee, or disinterested directors, as applicable, will take into account, among other factors it deems appropriate: (i) whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; (ii) the nature and extent of the related party’s interest in the transaction; (iii) the material terms of the transactions; (iv) the importance of the transaction both to the Company and to the related party; (v) in the case of a transaction involving an executive officer or director, whether the transaction would interfere with the performance of such person’s duties to the Company; and (vi) in the case of a transaction involving a non-employee director or a nominee for election as a non-employee director (or their immediate family member), whether the transaction would disqualify the director or nominee from being deemed an “independent” director, as defined by Nasdaq, and whether the transaction would disqualify the individual from serving on the Audit Committee or the Compensation Committee or other committees of the Board under applicable Nasdaq and other regulatory requirements.

The Audit Committee only approves those related party transactions that are on terms comparable to, or more beneficial to us than, those that could be obtained in arm’s length dealings with an unrelated third party.

DELINQUENT SECTION 16(a) REPORTS

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons and entities who beneficially own more than ten percent (10%) of any class of the Company’s registered equity securities to file with the SEC the initial reports of ownership and reports of changes in ownership of Common Stock. The Company’s officers, directors and greater than ten percent (10%) beneficial owners are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file.

Specific due dates for such reports have been established by the SEC, and the Company is required to disclose in this Proxy Statement any failure to file reports by such dates during the fiscal year ended December 31, 2023. During such fiscal year, we believe that all reports required to be filed by such persons pursuant to Section 16(a) of the Exchange Act were filed on a timely basis, with the exception of the reports listed in the table below:

AUDIT COMMITTEE REPORT

The following Report of the Audit Committee (the “Audit Report”) does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates this Audit Report by reference therein.

Role of the Audit Committee

The Audit Committee’s primary responsibilities fall into three (3) broad categories:

First, the Audit Committee is charged with monitoring the preparation of quarterly and annual financial reports by the Company’s management, including discussions with management and the Company’s independent registered public accounting firm about draft annual consolidated financial statements and key accounting and reporting matters;

Second, the Audit Committee is responsible for matters concerning the relationship between the Company and its independent registered public accounting firm, including recommending its appointment or removal; reviewing the scope of its audit services and related fees, as well as any other services being provided to the Company; and determining whether the independent registered public accounting firm is independent (based in part on the annual letter provided to the Company pursuant to Public Company Accounting Oversight Board (United States) (“PCAOB”); and

Third, the Audit Committee reviews financial reporting, policies, procedures, and internal controls of the Company.

The Audit Committee has implemented procedures to ensure that during the course of each fiscal year it devotes the attention that it deems necessary or appropriate to each of the matters assigned to it under the Audit Committee’s charter. In overseeing the preparation of the Company’s consolidated financial statements, the Audit Committee met with management and the Company’s independent registered public accounting firm, including meetings with the Company’s independent registered public accounting firm without management present, to review and discuss all consolidated financial statements prior to their issuance and to discuss significant accounting issues. Management advised the Audit Committee that all consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee discussed the consolidated financial statements with both management and the independent registered public accounting firm. The Audit Committee’s review included discussion with the independent registered public accounting firm of matters required to be discussed pursuant PCAOB Auditing Standard 1301, “Communication with Audit Committees.”

With respect to the Company’s independent registered public accounting firm, the Audit Committee, among other things, discussed with BPM LLP matters relating to its independence, including the disclosures made to the Audit Committee as required by PCAOB.

Recommendations of the Audit Committee. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the Board approve the inclusion of the Company’s audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for filing with the SEC.

This Audit Report has been furnished by the Audit Committee of the Board.

Kimberly Briskey, Chairperson
Sriram Peruvemba
Wendy Wilson

RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

(Proposal No. 2)

BPM LLP (“BPM”) has served as our independent registered public accounting firm since 2016 and has been appointed by the Audit Committee to continue as our independent registered public accounting firm for the fiscal year ending December 31, 2024.

At the Annual Meeting, the stockholders will vote on a proposal to ratify this selection of BPM as our independent registered public accounting firm. If this ratification is not approved by the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, the Board will reconsider its selection of BPM as our independent registered public accounting firm.

BPM has no interest, financial or otherwise, in our Company. We do not currently expect a representative of BPM to physically attend the Annual Meeting, however, it is anticipated that a BPM representative will be available to participate in the Annual Meeting via telephone in the event he or she wishes to make a statement, or in order to respond to appropriate questions.

The following table presents aggregate fees for professional services rendered by BPM for the audit of our annual consolidated financial statements for the fiscal years ended December 31, 2023 and 2022.

(1) “Audit fees” include fees for professional services rendered in connection with the audit of our annual consolidated financial statements, review of our quarterly condensed consolidated financial statements and advisory services on accounting matters that were addressed during the annual audit and quarterly review. This category also includes fees for services that were incurred in connection with statutory and regulatory filings or engagements, such as consents and review of documents filed with the SEC.

(2) “Audit-related fees” include fees billed for professional services rendered that are reasonably related to the performance of the audit or review of our consolidated financial statements including subscription for the online library of accounting research literature and are not reported under “Audit Fees.”

(3) “Tax fees” include fees for tax compliance. Tax compliance fees encompass a variety of permissible services, including technical tax compliance related to federal and state income tax matters, and assistance with tax audits.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Our Audit Committee Chairperson pre-approves all audit and non-audit services provided by the independent registered public accounting firm prior to the engagement of such firm with respect to such services. The Chairperson of the Audit Committee has been delegated the authority by such committee to pre-approve all services by the independent registered public accounting firm. The Chairperson of the Audit Committee will report all such pre-approvals to the entire Audit Committee at the next committee meeting.

Vote Required and Recommendation

Our Bylaws provide that all matters (other than the election of directors and except to the extent otherwise required by applicable Delaware law) shall be determined by a majority of the votes cast affirmatively or negatively. Accordingly, the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting, in person or by proxy, and voting on the matter, will be required to ratify the Board’s selection of BPM as our independent registered public accounting firm for the fiscal year ending December 31, 2024.

At the Annual Meeting a vote will be taken on a proposal to ratify the selection of BPM as our independent registered public accounting firm for the fiscal year ending December 31, 2024.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF BPM AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024.

a non-binding advisory proposal to approve the compensation paid to the Company’s named executive officers

(Proposal No. 3)

Summary

Our compensation policies and procedures are centered on a pay-for-performance philosophy, and we believe that they are strongly aligned with the long-term interests of our stockholders. Our compensation program is designed to attract, motivate, and retain the key executives who drive our success. Compensation that rewards excellence and reflects performance, and alignment of that compensation with the interests of long-term stockholders, are key principles of our compensation program design. Although we have made and will continue to make improvements to our compensation program from time to time, these key principles have been unchanged for many years.

We support the principle that our corporate governance policies, including our executive compensation program, should be responsive to stockholder concerns. This principle is embodied in a non-binding, advisory vote that gives you as a stockholder the opportunity to approve the compensation of our named executive officers as disclosed in this proxy statement, including, among other things, our executive compensation objectives, policies and procedures. This vote is intended to provide an overall assessment of our executive compensation program rather than to focus on any specific item of compensation. We value the opinions of our stockholders and intend to take the outcome of this vote into account when considering future executive compensation arrangements. However, because the vote is advisory, it will not directly affect any existing compensation awards of any of our executive officers, including our named executive officers.

As discussed above, our executive compensation program is designed: