Mawson Infrastructure Group Inc. Form 10-Q Quarterly Report Filed

SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q Quarterly report pursuant to sections 13 or 15(d)

Filing Date: 2021-05-19 | Period of Report: 2021-03-31 SEC Accession No. 0001213900-21-027773

(HTML Version on secdatabase.com)

FILER Mawson Infrastructure Group Inc. Mailing Address Business Address LEVEL 5, 97 PACIFIC LEVEL 5, 97 PACIFIC CIK:1218683| IRS No.: 880445167 | State of Incorp.:DE | Fiscal Year End: 1231 HIGHWAY HIGHWAY Type: 10-Q | Act: 34 | File No.: 000-52545 | Film No.: 21938571 NORTH SYDNEY NSW C3 NORTH SYDNEY NSW C3 SIC: 7374 Computer processing & data preparation 2060 2060 61 02 8624 6130

FORM 10-Q

(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to ______

Commission file number 000-52545 Mawson Infrastructure Group Inc. (Exact name of registrant as specified in its charter)

Delaware 88-0445167 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)

Level 5, 97 Pacific Highway, North Sydney NSW Australia 2060 (Address of principal executive offices, including zip code)

+61 02 8624 6130 (Registrant’s telephone number, including area code)

Wize Pharma, Inc. 24 Hanagar Street, Hod Hasharon, Israel (Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class Trading symbol(s) Name of each exchange on which registered N/A N/A N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

As of May 19, 2021, the issuer had a total of 486,733,566 shares of common stock, par value $.001 per share, outstanding.

TABLE OF CONTENTS

Page Item Number Part I – Financial Information

1. Financial Statements 1 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14 3. Quantitative and Qualitative Disclosures about Market Risks 20 4. Controls and Procedures 20

Part II – Other Information

1. Legal Proceedings 22 1A. Risk Factors 22 2. Unregistered Sales of Equity Securities and Use of Proceeds 31 3. Defaults Upon Senior Securities 31 4. Mine Safety Disclosure 31 5. Other Information 31 6. Exhibits 31 Signatures 32

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MAWSON INFRASTRUCTURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS

March 31, December 31, 2021 2020 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 3,385,277 $ 1,112,811 Prepaid expenses 40,398 11,500 Trade and other receivables 1,271,877 615,145 Cryptocurrencies 578,086 15,061 Total current assets 5,275,638 1,754,517 Property and equipment, net 7,794,544 7,015,285 Equipment deposits 18,045,720 - Financial assets 1,439,659 - Security deposits 1,173,544 969,423 Operating lease right-of-use asset 37,257 41,703 Trademarks - 15,813

TOTAL ASSETS $ 33,766,362 $ 9,796,741

LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Trade and other payables $ 2,176,833 $ 1,882,247 Lease liability 39,859 44,637 Borrowings 1,280,359 - Shareholder loans - 290,978 Total current liabilities 3,497,051 2,217,862 Paycheck protection program loan 14,000 14,000

Common stock (500,000,000 authorized, 486,733,566 issued and outstanding $0.001 par value shares). Series A preferred stock (1,000,000 authorized shares; 178,000 issued and outstanding at 31 March 2021)

Contingencies

Shareholders’ equity: Additional paid-in capital 94,712,138 35,110,000 Share subscription receivable - (16,690) Accumulated other comprehensive income (loss) (5,290,862) (1,341,826) Accumulated deficit (59,182,034) (26,159,539) TOTAL SHAREHOLDERS’ EQUITY 30,239,242 7,591,945 Non-controlling interest 16,069 (27,066) TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 33,766,362 $ 9,796,741

MAWSON INFRASTRUCTURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended March 31, March 2021 March 2020 Q1 Q1 Revenues: Cryptocurrency mining revenue $ 5,120,014 $ 770,461 Sale of crypto currency mining equipment 1,877,613 - Total revenues 6,997,627 770,461

Operating cost and expenses: Cost of revenues 2,372,781 449,897 Selling, general and administrative 2,882,626 476,149 LO2A write offs 23,963,050 - Share based payments 14,795,403 - Depreciation and amortization 1,314,899 1,357,485 Total operating expenses 45,328,759 2,283,531 Loss from operations (38,331,132) (1,513,070) Other income (expense): Realized gain (losses) on foreign currency transactions 1,028,621 (852) Unrealized gain (losses) on foreign currency remeasurement (1,690,303) 889,843 Realized gain (loss) on sale of digital currencies 93,613 (14,309) Other income 379,128 108,895 Loss before income taxes (38,520,073) (529,493) Income tax expenses - - Net loss $ (38,520,073) $ (529,493)

Profit attributable to Non-Controlling interest 43,135 - Net loss attributed to Mawson Infrastructure Group shareholders (38,563,208) (529,493)

Net Loss per share, basic & diluted $ (0.087) $ (0.080) Weighted average number of shares outstanding 442,664,781 6,578,672

MAWSON INFRASTRUCTURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) For the Three Months Ended March 31, 2021

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accumulated Series A Series A Total Common Common Common Common Share Additional Paid- Other Non- Preferred Preferred Accumulated Mawson Total Shares Shares Stock Stock Subscription in- Comprehensive controlling Stock Stock Deficit Stockholders’ Equity (#) ($) (#) ($) Receivable Capital Income/ interest (#) ($) Equity (Loss) Balance as of December 31, - - 7,539,275 - - - (16,690) 15,298,926 (1,341,826) (6,348,465) 7,591,945 (27,066) 7,564,879 2020 Exchange of common stock of Cosmos Capital Limited for common stock 178 0 (7,539,275) - 428,270,616 428,271 - - - 428,271 - 428,271 of Wize Pharma Inc., adjusted to reflect the Exchange Ratio Acquisition of Wize Pharma - - - - 33,052,951 33,053 - (5,436,541) - - (5,403,488) - (5,403,488) Inc. Issuance of Common stock of Mawson Infrastructure Group, Inc., in a PIPE - - - - 25,000,000 25,000 - 2,975,000 - - 3,000,000 - 3,000,000 transaction upon the consummation of the Business Combination Issuance of 28,012,364 mandatorily convertible notes by ------20,441,761 - - 20,441,761 - 20,441,761 Cosmos Capital, net of $1,268,093 of offering costs Issuance of 8,710,982 warrants over Comon Stock of Mawson ------6,881,676 - - 6,881,676 - 6,881,676 Infrastructure Group, Inc., at the Common Stock price of $0.79 Exercise of 115,902 warrants for Mawson - - - - 115,902 116 - - - 116 - 116 Infrastructure Group, Inc. Common Stock Fair value of IPR&D acquired, net of Business ------24,765,831 - - 24,765,831 - 24,765,831 Combination transaction costs Issuance of RSUs and stock ------10,270,803 - - 10,270,803 - 10,270,803 options Fair value ------5,440,863 - - 5,440,863 - 5,440,863 adjustment of

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document LO2A intellectual property revenue sharing obligation Comprehensive ------(4,615,328) (38,563,208) (43,178,536) 43,135 (43,135,401) loss - Balance as of March 31, 178 0 - - 486,439,469 486,440 (16,690) 80,638,319 (5,957,154) (44,911,673) 30,239,242 16,069 30,255,311 2021

MAWSON INFRASTRUCTURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) For the Three Months Ended March 31, 2020

Accumulated Common Common Share Additional Other Non- Total Accumulated Shares Shares Subscription Paid-in- Comprehensive controlling Shareholders’ Deficit Units Amount Receivable Capital Income interest Equity (Loss)

Balance as of May 22, 2019 $ - $ - $ - $ - $ - $ - $ - Net Loss - - - - - (1,314,217) - (1,314,217) Other comprehensive (loss) - - - - (345,182) - - (345,182) Issuance of stock options ------Issuance of common shares 6,578,672 - (459,062) 9,091,800 - - - 8,632,738 Balance as of December 31, 2019 6,578,672 - (459,062) 9,091,800 (345,182) (1,314,217) - 6,973,339 Net Loss - - - - - (529,493) - (529,493) Other Comprehensive (loss) - - - - (866,663) - - (866,663) Issuance of stock options ------Issuance of common shares ------Balance as of 31 March 2019 6,578,672 - (459,062) 9,091,800 (1,211,845) (1,843,710) - 6,036,245

MAWSON INFRASTRUCTURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended March 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (38,520,073) $ (529,493) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,314,899 1,357,485 LO2A write offs 23,963,050 - Investment income (563,771) - Interest expense 250,662 - Interest paid (28,199) - Share based payments 14,795,403 - Write-off of fixed assets 127,608 - Unrealized gain (losses) on foreign currency remeasurement 1,690,303 (889,843) Change in assets and liabilities Prepaid expenses (28,898) - Trade and other receivables (656,732) (664,855) Cryptocurrencies (563,025) 1,023 Security deposits (204,121) 10

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Trade and other payables 294,586 198,284 Net cash provided by operating activities 1,871,692 (527,389) CASH FLOWS FROM INVESTING ACTIVITIES Net proceeds from sale and purchase of property and equipment (2,960,145) (267,418) Payment of fixed asset deposits (18,045,720) - Investment in financial assets (380,100) - Net cash used in investing activities (21,385,965) (267,418) CASH FLOWS FROM FINANCING ACTIVITES Proceeds from common share issuances 1,298,402 - Unit redemptions - (128,611) Proceeds from convertible notes 21,487,391 - Payments of capital issuance costs (2,229,096) - Proceeds from borrowings 1,057,383 201,129 Advances made to external companies (37,076) - Payments of borrowings (291,310) - Net cash provided by financing activities 21,285,694 72,518 Effect of exchange rate changes on cash and cash equivalents 501,045 391,034 Net increase in cash and cash equivalents 2,272,466 (331,255) Cash and cash equivalents at beginning of period 1,112,811 579,290 Cash and cash equivalents at end of period $ 3,385,277 $ 248,035

MAWSON INFRASTRUCTURE GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)

NOTE 1 – GENERAL

General

Mawson Infrastructure Group, Inc. (the “Company” or “Mawson” or “the Group”) was incorporated in the State of Delaware.

The accompanying unaudited consolidated financial statements, including the accounts of the Company’s subsidiaries, Cosmos Capital Limited and its subsidiaries: Cosmos Trading Pty Ltd, Cosmos Infrastructure LLC, Cosmos Manager LLC, Cosmos Grid Tech Pty Ltd, Cosmos Asset Management Pty Ltd, and Luna Squares LLC (formerly known as Innovative Property Management LLC) (collectively referred to as the “Group”), have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Since Mawson acquired Cosmos on March 9, 2021, it has managed most of its activity through the Cosmos Capital Limited, an Australian incorporated company, and its subsidiaries, Cosmos Trading Pty Ltd, Cosmos Infrastructure LLC, Cosmos Manager LLC, Cosmos Grid Tech Pty Ltd, Cosmos Asset Management Pty Ltd, and Luna Squares LLC (formerly known as Innovative Property Management LLC).

Since the acquisition of Cosmos, Mawson has been treated as the acquiree, with Cosmos being the acquirer. The result of which is that these accounts are taken to be the Cosmos accounts, with Mawson incorporated within the acquisition. For discussion regarding this acquisition and treatment please refer to Note 2: Reverse asset acquisition.

Mawson, through its subsidiary Cosmos Capital Ltd, which is a company incorporated in Australia (“Cosmos”), is a ‘Digital Asset Infrastructure’ business, which owns and operates modular data centers (MDCs) based in the United States. As at May 17, 2021 Cosmos currently owns and has ordered 18,332 Miners specifically focused on the SHA-256 algorithm, from a variety of manufacturers, including Bitmain Technology Holding Company (“Bitmain”), Canaan Creative (HK) Holdings Limited (“Canaan”) and Shenzhen MicroBT Electronics Technology Co., Ltd (“Whatsminer”). As at March 31, 2021, the operational Miners produce up to 200 Petahash of computing power, with a total capacity upon deployment of all ordered equipment to produce up to a total capacity upon deployment of all ordered equipment to produce up to 1,483 Petahash.

Going Concern

Based on internally prepared forecast cash flows, combined with the existing cash reserves, which take into consideration what management of the Group considers reasonable scenarios given the inherent risks and uncertainties described both in this 10Q and the Company’s Current Report on Form 8-K/A filed May 13, 2021, management believes that the Group will have adequate cash reserves to enable the Group to meet its obligations for at least one year from the date of approval of the consolidated financial statements, and on this basis the accounts have been prepared on a going concern basis.

Principles of Consolidation and basis of preparation

These consolidated, condensed financial statements should be read in conjunction with the consolidated financial statements for Cosmos Capital Limited and subsidiaries as of December 31, 2020, and the notes thereto, included in the Company’s Current Report on Form 8-K/A filed May 13, 2021. The results of the interim periods are not necessarily indicative of the results to be expected for the full year ended December 31, 2021. These consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position, the results of operations and cash flows of the Company for the periods presented.

Any changes in the Company’s ownership interest in a consolidated subsidiary, through additional equity issuances by the consolidated subsidiary or from the Company acquiring the shares from existing shareholders, in which the Company maintains control is recognized as an equity transaction, with appropriate adjustments to both the Company’s additional paid-in capital and the corresponding non-controlling interest.

Use of Estimates and Assumptions

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the dates of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. The Company has considered the following to be significant estimates made by management, including but not limited to, going concern assumptions, estimating the useful lives of patent assets and fixed assets, realization of long-lived assets, unrealized tax positions and the realization of digital currencies, Business Combinations, Reverse Asset Acquisition, and the Contingent obligation with respect to future revenues.

Critical Accounting Policies

Critical accounting policies are described in the footnotes to the consolidated financial statements for Cosmos Capital Limited and subsidiaries as of December 31, 2020, included in the Company’s Current Report on Form 8-K/A filed May 13, 2021. There have been no changes to critical accounting policies in the three months period ended March 31, 2021 other than as a result of changes to operations as described below.

Reverse Asset Acquisition

On March 9, 2021, the Company acquired the shares of Cosmos Capital Limited in a scrip for scrip exchange. This transaction has been accounted for as a reverse asset acquisition. Under the guidance in ASC 805, Cosmos Capital Limited was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

● The Cosmos Capital shareholders have the largest voting interest in the post-combination company;

● Cosmos Capital management holds executive management roles for the post-combination company and is responsible for the day-to-day operations;

● Cosmos Capital was significantly larger than the Company by assets, revenue, and employees; and

The purpose and intent of in combining the groups was to create an operating public company through the Company, with management continuing to use ● Cosmos Capital’s assets to grow the business;

The application of the initial screen test in ASC 805 determined that the LO2A IPR&D in Mawson International was a single asset and represented substantially all of the fair value of the gross assets acquired. As such, the acquisition is treated as a reverse asset acquisition.

Acquired assets and liabilities of the legal parent entity are therefore measured and recognized at their relative fair values as of the date of the transaction.

After a reverse asset acquisition, despite that the legal acquirer (the legal parent entity) survives as the legal parent entity and continues to issue financial statements, the financial statements reflect the accounting from the perspective of the accounting acquirer (the legal subsidiary) in that the consolidated entity reflects the accounting acquirer as the accounting parent entity, and the financial statements represent a continuation of those of the accounting acquirer, except for the legal capital, which is retroactively adjusted to reflect the capital of the legal acquirer (legal parent entity) in accordance with ASC 805-40-45-1.

The fair value of the consideration given for the acquisition is as follows.

Number of shares issued 33,052,951

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Multiplied by the fair value per share of Mawson common stock (1) 0.79 Total $ 26,111,831

(1) Based on the closing share price of Mawson common stock on the day immediately prior to the close of the transaction.

The fair values of the net tangible assets acquired at the date of acquisition are as follows:

Cash and cash equivalents 1,102,943 Marketable securities 1,096,675 Accounts Payable (50,836) $ 2,148,782

The difference between the consideration given and the fair values of the net tangible assets acquired of $23,963,050 arises as a result of the intangible asset in relation to In process research and development relating to LO2A. Due to the stage of development of this asset significant risks exist in the absence of successful clinical results and regulatory approval for the asset and that there are no reasonably likely expected alternative future uses associated with the asset and combined with the effect of the CVR instrument at the date of acquisition, management has assessed that the fair value of this asset at the acquisition date was $zero. The asset was therefore assessed as impaired and has been fully expensed as such in the consolidated statements of operations for the period ended March 31, 2021.

Contingent obligation in relation to LO2A

Following the reverse asset acquisition upon consummation of the share exchange and the signing of the CVR agreement, the historical LO2A assets and liabilities of the Company, are to be managed with a view to disposal within two years. Only CVR holders have an entitlement to any net proceeds from the disposal, not to the post-combination shareholders of the Company. Accordingly, the Company has assessed that the fair value associated with any future benefits accruing to the company in relation to research and development (IPR&D) is nil, and the difference between the fair value of the tangible net assets acquired and the stock issued has been expensed in these financial statements as stated above.

Despite this, the LO2A contingent obligation remains, however given that there is now no entitlement to revenue on the company’s behalf, the fair value of the contingent obligation with respect to future revenues has been re-assessed as nil.

For further details please refer to the Management Discussion and Analysis.

Share based payments

Under the terms of the Cosmos Transaction Bid Implementation Agreement the Company was required to make Share based payments consisting of up to 40,000,000 shares required to be issued under a Incentive Compensation Program and warrants issued to HC Wainwright as a fee related to the acquisition by Mawson of Cosmos.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies to those previously disclosed in the consolidated financial statements for Cosmos Capital Limited and subsidiaries as of December 31, 2020, and the notes thereto, included in the Company’s Current Report on Form 8-K/A filed May 13, 2021, other than as a result of changes to operations as described below.

Revenue recognition – equipment sales

In Q1 2021 the Company began to earn revenues from the sale of earlier generation cryptocurrency mining units that have been assembled or refurbished for resale. Revenue from the sale of cryptocurrency mining units is recognized when: (i) persuasive evidence of a sales arrangement exists, (ii) the sales terms are fixed or determinable, (iii) title and risk of loss have transferred, (iv) collectability is reasonably assured — generally when products are shipped to the customer and (v) payment is received. At the date of sale, the net book value is expensed in cost of revenues.

Digital Currencies

Digital currencies are included in current assets in the consolidated balance sheets. Digital currencies are recorded at cost less impairment.

An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted.

The following table presents the activities of the digital currencies of the three months ended March 31, 2021;

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Digital currencies at December 31, 2020 0.52 Additions of digital currencies 123.22 Sale of digital currencies (113.45) Digital currencies at March 31, 2021 10.29

Investment in Distributed Storage Solutions Pty Ltd (DSS)

Basic and Diluted Net Loss per Share

Net loss per common share is calculated in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding, as they would be anti-dilutive.

Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share at March 31, 2021 and 2020 are as follows:

As at March 31, 2021 2020 Common stock due to former Cosmos shareholders to be issued pending approval of increase to authorized capital (Note 4) 50,558,133 - Warrants to purchase common stock 8,710,982 Restricted Stock-Units (“RSU”) issued under a management equity plan 40,000,000 Mandatory convertible notes to exchange common stock 63,626,903 - Total 162,896,018 -

The following table sets forth the computation of basic and diluted loss per share:

As at March 31, 2021 2020 Net loss attributable to common shareholders $ 38,520,073 529,493

Denominator: Weighted average common shares - basic and diluted 442,664,781 6,578,672

Loss per common share - basic and diluted $ 0.087 0.080

Comparative average common shares have been revised by the ratio of Cosmos Capital to the Company shares exchanged in the reverse asset acquisition in March 2021.

Recently Issued Accounting Pronouncements

For information with respect to recent accounting pronouncements, see Note 2 to the consolidated financial statements for Cosmos Capital Limited and subsidiaries as of December 31, 2020, and the notes thereto, included in the Company’s Current Report on Form 8-K/A filed May 13, 2021. Recent accounting pronouncements include.

Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”)

Standard/Description– Issuance date: December 2019. This guidance simplifies various aspects of income tax accounting by removing certain exceptions to the general principle of the guidance and also clarifies and amends existing guidance to improve consistency in application.

Effective Date and Adoption Considerations– The guidance was effective January 1, 2021 and early adoption was permitted. The company adopted the guidance on a prospective basis as of the effective date.

Effect on Financial Statements or Other Significant Matters– The guidance did not have a material impact in the consolidated financial results.

Other new pronouncements not applicable to the Company:

Reference Rate Reform (“ASU 2021-01”) issued March 2020, with amendments in 2021; effective March 12, 2020 through December 31, 2022

Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) issued January 2017 effective January 1, 2020;

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Financial Instruments - Credit Losses (“ASU 2016-13 / 2018-19 / 2019-04 / 2019-05 / 2019-10 / 2019-11”) issued June 2016 with amendments in 2018, 2019 and 2020; effective January 1, 2020

NOTE 3 – DEPOSIT, PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

On January 27, 2021, the Company purchased 500 next generation Micro BT M30S ASIC Miners from Foundry Digital LLC. The purchase price per unit was $2,640 giving rise to a total purchase price of $1,320,000. The miners arrived in February 2021.

On February 5, 2021, the Company entered into a Long-Term Purchase Contract with Canaan Convey Co Ltd (“Canaan”) for the purchase of 11,760 next generation Avalon A1246 ASIC Miners (Avalon). The purchase price per unit is $2,889. for a total purchase price of $33,974,640 (the “Canaan Transaction”). There will be a final adjustment to the purchase price in the last delivery due in March 2022 based on the actual tera hash delivered, based on the agreed price per tera hash under the terms of the contract.

The Canaan Transaction schedule of payments is as follows:

(1) Fifty percent (50%) of the total purchase price shall be paid on or before 20 February 2021.

(2) The Company shall pay the remaining fifty percent (50%) of the total purchase price in equal monthly instalments due not less than forty (40) days prior to the scheduled delivery of the Product(s) as follows:

a) $1,058,000 no later than March 20, 2021 b) $1,058,000 no later than April 20, 2021 c) $952,560 no later than May 20, 2021 d) $952,560 no later than June 20, 2021 e) $1,799,280 no later than July 20, 2021 f) $1,693,440 no later than August 20, 2021 g) $1,587,600 no later than September 20, 2021 h) $1,587,600 no later than October 20, 2021 i) $1,587,600 no later than November 20, 2021 j) $1,587,600 no later than December 20, 2021 k) $1,587,600 no later than January 20, 2022 l) $1,587,600 no later than February 20, 2022

As of March 31, 2021, the Company had prepaid approximately $18.05 million in advance for 11,760 Miners. The shipment of the first Miners was received in May, 2021. The Company will recognize these assets as Property and Equipment on the consolidated balance sheet when the transfer of risk and title occurs for each shipment (i.e., the Miners have been delivered by Canaan to the agreed-upon port of loading in China).

On March 26, 2021, the Company acquired an additional 1,000 Avalon A1166 miners from Canaan in addition to the Canaan Transaction. The purchase price per unit is $6,237.00 for a total purchase price of $6,237,000.00. The Company subsequently re-sold 200 of these Avalon A1166 miners.

As of March 31, 2021, approximately $18.05 million cash paid for Miners was recorded as a deposit on the balance sheet.

NOTE 4 – STOCKHOLDERS EQUITY

Common Stock

On December 30, 2020, in connection with the transaction in which Cosmos was acquired (the “Cosmos Transaction”) pursuant to the Bid Implementation Agreement, as amended (the “Bid Agreement”), and as previously disclosed in the Company’s Current Report on Form 8-K filed on January 5 2021, Mawson entered into Securities Purchase Agreements (“PIPE Agreements”) with existing Mawson shareholders to issue 25,000,000 shares in Mawson subject to the Close of the Cosmos Transaction, as well as a further 409,999 shares issued as an acceleration of outstanding RSU’s, which occurred post the closing of the Cosmos Transaction on March 9, 2021.

On March 9 2021, as a part of closing the Cosmos Transaction, Mawson issued a total of 428,270,616 shares to Cosmos shareholders. There remains 50,558,133 shares that are to be issued once the approval of increase in authorized capital has been finalized, taking the total quantity of shares to be issued in the Cosmos Transaction to 478,828,749.

As a result of an adjustment to warrant’s exercise price in December 2020, an aggregate of 115,902 shares of common stock were issued to warrant holders in conjunction with and as a result of the exercise of the warrants, each on a cashless basis.

Restricted Stock

As at May 17 2021, making up the total 428,270,616 in shares issued as a part of the compensation of the Cosmos Transaction, 156,492,928 are restricted in trading under the Restricted Stock Agreement with each shareholder until December 31 2021.

The remaining 50,558,133 shares to be issued post the authorized increase in capital of which 18,474,278 will be restricted.

Contingent Value Rights

Pursuant to the Bid Agreement, prior to the closing of the Cosmos Transaction, Mawson entered into a Contingent Value Rights Agreement (the “CVR Agreement”) with certain of Mawson’s subsidiaries (the “Mawson Subsidiaries”) with a person designated by Mawson prior to the Closing Date as the Holders’ Representative (as defined therein), and the Rights Agent (as defined therein).

Pursuant to the CVR Agreement, at the Closing Date, each Mawson pre-Closing securityholder received one non-transferable CVR for each outstanding share of common stock of Mawson and for each share of common stock of Mawson underlying other convertible securities and warrants, held as of 4:01 p.m. Eastern Time on the day immediately before the Effective Time (as defined in the CVR Agreement).

Each CVR represents the right to receive a pro rata share of any consideration that may be received by Mawson or the Mawson Subsidiaries in connection with the business of Mawon prior to the Cosmos Transaction, which was the treatment of ophthalmic disorders, including dry eye syndrome (“DES”), and which included in- licensed certain rights to purchase, market, sell and distribute a formula known as LO2A, a drug developed for the treatment of DES, and other ophthalmological illnesses, including Conjunctivochalasis (“CCH”) and Sjögren’s syndrome (“Sjögren’s”). In particular, CVR holders will be entitled to any consideration (whether cash, stock, assets or otherwise) that Mawson or the Mawson Subsidiaries (or any of its Affiliates or shareholders) receives in connection with an LO2A Transaction, which, as defined in the CVR Agreement, and which includes (i) a sale of any of the Mawson Subsidiaries to a third party and/or (ii) the partnering, licensing, sublicensing, distribution, reselling or sale of all or any part of the LO2A Technology or LO2A Products to a third party, less transaction expenses and customary deductions as detailed in the CVR agreement, including a deduction of up to $300,000 that the Mawson Subsidiaries undertook to incur in the development of the LO2A Technology at the request of the Holders’ Representative.

The CVRs do not confer to the holders thereof any voting or equity or ownership interest in Mawson. The CVRs are not transferable, except in limited circumstances such as by will or intestacy, and are not and will not be listed on any quotation system or traded on any securities exchange.

The CVR Agreement may be terminated under certain circumstances, including if the Mawson Subsidiaries or Mawson failing to enter into an LO2A Transaction Agreement within two years following the Effective Time.

There can be no assurance that Mawson or the Mawson Subsidiaries will successfully and timely enter into any LO2A Transaction or, if they do, that such LO2A Transaction will ultimately be successful or that any CVR payments will be made.

Series A Preferred Stock

As of May 17, 2021, there are 178,000 shares of Series A Preferred Stock Outstanding.

Common Stock Warrants

A summary of the status of the Company’s outstanding stock warrants and changes during the three months ended March 31, 2021 is as follows:

Weighted Average Weighted Number of Remaining Average Warrants Contractual Exercise Price Life (in years) Outstanding as of December 31, 2020 142,189 Issued 8,710,982 $ 0.001 5.0 Exercised (115,902) Expired 0 Outstanding as of March 31, 2021 8,737,269 $ 0.001 5.0 Warrants exercisable as of March 31, 2021 8,737,269 $ 0.001 5.0

As of March 16, 2021, the Company received a notice from OTC Markets Group (OTC) that the Company failed to have a public float greater than 10% of the total shares outstanding, pursuant to Section 1.1.1(C) of OTCQB Standards, which, if not rectified within 30 days, may result in the Company ceasing to trade on the OTCQB marketplace. However, we expect, subject to several filings, to be in compliance with the rule in the near future and submitted a plan to cure the deficiency on April 16, 2021, which OTC accepted, giving the Company until June 30, 2021 to rectify the issue. Subject to the registration statement S1 being filed and accepted by the SEC, the Company expects that the Company will be in compliance with the rule by June 30, 2021.

NOTE 5 – DEBT, COMMITMENTS AND CONTINGENCIES

Convertible Note

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document be settled in stock or cash at the option of the company. The Cosmos Notes raised net proceeds of $20,275,349 comprising gross proceeds of $21,569,520 less transaction costs.

The Cosmos Notes automatically converted into convertible notes of Mawson (“Mawson Notes”) upon close of the Cosmos Transaction on 9 March 2021. The Mawson Notes have substantially the same terms as the Cosmos notes and mandatorily convert into shares of Mawson the earlier of 6 months from February 12, 2021 or upon the occurrence of certain events at an issue price of $0.339 per Mawson share and will create 63,626,903 shares in total. Given the mandatory and fixed conversion the notes have been accounted for as equity.

Debt

On 25 January 2021 The Company entered into a Leveraged Account Agreement with Independent Reserve. This facility is denominated in Bitcoin (BTC) and enables the Company to borrow up to 10 BTC subject to certain margin requirements. As at March 31, 2021 the Company owed 10 BTC under this facility, which has been recorded within short term borrowings at its fair value of $399,206. Amounts owing under this facility are payable on demand.

On January 27, 2021, Cosmos Infrastructure LLC (“Cosmos Infrastructure”) entered into an Equipment Purchase and Finance and Security Agreement with Foundry Digital LLC (“Foundry”) to purchase machinery that will be located at a facility hosted by Compute North LLC (“Compute North”). On February 5, 2021, the term of the agreement was further amended to have a final payment of January 27, 2022. Under the terms of the agreement, Cosmos Infrastructure purchased 500 Whatsminer M30S mining machines, paid a deposit of $264,000, and borrowed a total of $1,056,000. The facility will be repaid in full on the last payment date.

Leases

The Company owns 50% equity in Luna Squares, LLC. Luna Squares LLC leases a one-acre lot in the State of Georgia referred to as “Luna Squares” from the Development Authority of Washington County. The initial lease term is from May 1, 2020 until April 30, 2023. An amendment to the lease and exercise of option to lease was signed and in effect from February 23, 2021 (“Lease Amendment”). The Lease Amendment covers an additional 4 acres of the property, bringing the total to 5 acres under the lease. It also includes 5, 3-year extension options bringing a total optional lease period running until 2038.

The Company leases the headquarters of its business operations at Level 5, 97 Pacific Highway, North Sydney NSW 2060 Australia, being 1,076 square feet of office space held under a license agreement ending December 31, 2021.

Other than these leases, the Company does not lease any material assets. The Company believes that these offices and facilities are suitable and adequate for its operations as currently conducted and as currently foreseen. In the event additional or substitute offices and facilities are required, the Company believes that it could obtain such offices and facilities at commercially reasonable rates.

Contingent obligation in relation to LO2A

Refer note 2.

NOTE 6 – SUBSEQUENT EVENTS

On April 22, 2021, Distributed Storage Solutions Pty Ltd (DSS), undertook a capital raise to third party investors in Australia at AUD$11.60 per share, which diluted Mawsons holding to 20%.

Apart from the DSS transaction, there have been no subsequent events since March 31, 2021.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements of our balance sheets, statements of comprehensive income (loss) and cash flows. This section should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (“2020 Form 10-K”) filed with the United States Securities and Exchange Commission(the “SEC”), The Annual consolidated financial statements of Cosmos included in included in the Company’s Current Report on Form 8-K/A filed May 13, 2021 and our unaudited interim consolidated financial statements and accompanying notes to these Financial Statements included in this quarterly report on Form 10-Q. For accounting and financial purposes, Mawson is treated as the “acquired” company by Cosmos, and historical financial information provided is that of Cosmos, not Mawson. All amounts are in U.S. dollars.

Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” the “Company,” “Mawson,” “our company” and the “combined company” refer to Mawson Infrastructure Group Inc. (formerly known as Wize Pharma, Inc.), a Delaware corporation, and its direct and indirect subsidiaries, including Cosmos Capital Limited, an Australian company (“Cosmos”), Cosmos Trading Pty Ltd, Cosmos Infrastructure LLC, Cosmos Manager LLC, Cosmos Grid Tech Pty Ltd, Cosmos Asset Management Pty Ltd, and Luna Squares LLC (formerly known as Innovative Property Management LLC).

Forward-Looking Statement Notice

This Quarterly Report on Form 10-Q contains forward-looking statements about our expectations, beliefs or intentions regarding, among other things, our product development efforts, business, financial condition, results of operations, strategies or prospects. In addition, from time to time, our representatives have made or may make forward-looking statements, orally or in writing. Forward-looking statements can be identified by the use of forward-looking words such as “believe,” “expect,” “intend,” “plan,” “may,” “should” or “anticipate” or their negatives or other variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical or current matters. These forward-looking statements may be included in, but are not limited to, various filings made by us with the SEC, press releases or oral statements made by or with the approval of one of our authorized executive officers. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred,

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward- looking statements, including, but not limited to, the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2020, and in Part II – Item 1A of this report.

This report identifies important factors which could cause our actual results to differ materially from those indicated by the forward-looking statements, particularly those set forth under Item 1A. “Risk Factors” as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, and in Part II – Item 1A of this report.

Such risk factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward- looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:

● We may be unable to raise additional capital needed to grow our business.

● The slowing or stopping of the development or acceptance of digital asset systems.

● Changes to any digital asset network’s protocols and software.

● Any decrease in the incentive for Bitcoin mining.

Further or new regulation of digital assets such as Bitcoin as securities or investment securities or of our activities that would require further registration ● or compliance with additional regulations and laws.

● Global climate changes and related environmental regulations, or pandemic or similar items and events.

● Political or economic crises motivating large-scale sales of digital assets.

● Electricity costs.

All forward-looking statements attributable to us or persons acting on our behalf speak only as of the date of this report and are expressly qualified in their entirety by the cautionary statements included in this report. Except as required by applicable law, we undertake no obligations to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. In evaluating forward-looking statements, you should consider these risks and uncertainties.

Overview

General. Mawson (formerly known as Wize Pharma, Inc.), through its majority-owned subsidiary, Cosmos, is a ‘Digital Asset Infrastructure’ business, which owns and operates (through Cosmos) modular data centers (MDCs) currently based in the United States. and Australia. We are focused on developing the technology to enable us to own and operate MDCs that are both air-cooled and liquid immersion cooled.

We either own or have ordered approximately 18,332 specialized, application-specific computers known as Miners, which, as at March 31, 2021 produce approximately 200 Petahash of computing power, with a total capacity upon deployment of all ordered equipment approximately 1,483 Petahash. This is predominately directed to and focused on the process known as digital mining, and specifically for Bitcoin.

Complementing the Miners that we own and operate, we are actively conducting research and development into a suitable solution for liquid immersion for Miners, field-programmable gate array (FPGA) (which is an electronic device that includes digital logic circuitry you can program to customize its functionality), and general-purpose computing on a graphics processing unit (GPU) (which is the use of a GPU together with a central processing unit (CPU) to accelerate computation in applications traditionally handled only by the CPU). We have our own proprietary tank design which we are currently in the process of commercializing.

In addition, our indirect subsidiary, Cosmos Asset Management Pty Ltd (“Cosmos Asset Management”), is the investment manager of the Bitcoin Wholesale Access Fund, a wholesale, unregistered managed investment scheme which currently invests in and holds Bitcoin for third party investors.

Our Products and Services. Our digital asset infrastructure business can be divided into three main activities:

Digital Processing and Hosting Solutions (Mining)

The business of digital processing and mining requires the purchase and ownership of computing hardware and servers specific to the computing problem that a person is seeking to solve, referred to as a “Miner”. Each Miner or component thereof can be specifically specialized to perform a function better than other hardware for the purpose of maximizing the return from any specific processing task.

Mining hardware performs computational operations in support of the blockchain measured in “hash rate” or “hashes per second.” A “hash” is the computation run by mining hardware in support of the blockchain; therefore, a miner’s “hash rate” refers to the rate at which it is capable of solving such computations. The original equipment used for mining Bitcoin utilized the Central Processing Unit (“CPU”) of a computer to mine various forms of cryptocurrency. Due to performance limitations, CPU mining was rapidly replaced by the Graphics Processing Unit (GPU), which offers significant performance advantages over CPUs.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document General purpose chipsets like CPUs and GPUs have since been replaced in the mining industry by Application Specific Integrated Circuits (“ASIC”) chips. These ASIC chips are designed specifically to maximize the rate of hashing operations.

Research and Development

Our research and development, or R&D, program is focused on researching and exploring opportunities to improve the efficiency of hardware and software and MDC’s, including the development of technology to enable us to own and operate MDCs that are both air cooled and liquid immersion cooled. We have also begun research into the software element of computing and are in the initial stages of researching a range of programs to improve efficiency through this avenue as well.

We are conducting research in both Australia and the United States. By conducting research in different countries, we are able to research improvements in efficiencies across varying climates. The climate in Nebraska (extremely warm dry summers, extremely cold, windy winters), varies greatly to Georgia (hot, humid summers, cool, still winters) which varies greatly to Sydney (warm, humid summers, mild, windy winters).

We have partnered with leading design firms in both Australia and the United States to ensure the finished products can be deployed in different climates. By using global designers and vendors, it provides us the opportunity to seek to enhance the design to ensure success of the technology in all jurisdictions, climates and scenarios.

Complementing the Miners that we own and operate, we are actively conducting research and development into a suitable solution for liquid immersion for Miners, field-programmable gate array (“FPGA”) (which is an electronic device that includes digital logic circuitry you can program to customize its functionality), general-purpose computing on a GPU (which is the use of a GPU together with a CPU to accelerate computation in applications traditionally handled only by the CPU). We have our own proprietary tank design which it is currently in the process of commercializing.

In addition to the SHA-256-based Miner servers, we own several other GPU, CPU and FGPA based servers which we are utilizing to explore alternate computing use cases in several fields beyond Bitcoin mining.

Asset Management

We have a dedicated asset management business, which is operated through Cosmos Asset Management, which is involved in the ownership and management of digital assets and infrastructure, and which is the investment manager of the Bitcoin Access Wholesale Fund, a wholesale, unregistered managed investment scheme which invests in and holds Bitcoin for third party investors. This business leverages the existing knowledge and infrastructure of our digital asset business to provide its investors exposure to various investment opportunities.

Through a strategic partnership with Independent Reserve Pty Limited, one of Australia’s leading digital exchanges, Cosmos Asset Management has custody agreements and security procedures in place to manage the various risks with investing in digital assets. In addition, Cosmos Asset Management manages a dedicated business in distributed storage infrastructure.

As of April 30, 2021, the funds under management of the asset management business are approximately USD$6.70 million.

LO2A Business.

Through our holdings in the Wize Subsidiaries, we also have in-licensed certain rights to purchase, market, sell and distribute a formula known as LO2A, a drug developed for the treatment of dry eye syndrome (“DES”), and other ophthalmological illnesses, including Conjunctivochalasis (“CCH”) and Sjögren’s syndrome (“Sjögren’s”). However, as part of the Cosmos Transaction, substantially all of the economic benefits of any successful monetization of our LO2A business, if any, will benefit only the holders of the CVRs and any contingent right holders.

Recent Developments.

Mawson owns 50% equity in Luna Squares LLC. Luna Squares LLC leases a one-acre lot in Georgia referred to as “Luna Squares” from the Development Authority of Washington County. The lease term was originally from May 1, 2020 until April 30, 2023. An amendment to the lease and exercise of option to lease was signed and in effect from February 23, 2021 (“Lease Amendment”). The Lease Amendment covers an additional 4 acres of the property, bringing the total to 5 acres under the lease. It also includes 5, 3-year extension options bringing the total lease period to run until 2038.

Mawson owns 20% equity in Distributed Storage Solutions Pty Ltd (DSS), and Australian private company operating a blockchain based decentralized storage business, based on the IPFS protocol. The business utilizes Filcoin as part of its operations to generate revenue. Mawson subscribed for 500,000 shares at AUD$1.00 per share. On April 22, 2021, DSS undertook a capital raise to third party investors in Australia at AUD$11.60 per share.

COVID-19.

The COVID-19 global pandemic has been unpredictable and unprecedented and is likely to continue to result in significant national and global economic disruption, which may adversely affect our business. We currently do not expect any material impact on our long-term development, operations, or liquidity due to the COVID-19 pandemic. However, we are actively monitoring this situation and the possible effects on our financial condition, liquidity, operations, suppliers, and industry.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Results of Operations - Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020

Three Months Ended March 31, March 2021 Q1 March 2020 Q1 Revenues: Cryptocurrency mining revenue 5,120,014 770,461 Sale of crypto currency mining equipment 1,877,613 - Total revenues 6,997,627 770,461

Operating cost and expenses: Cost of revenues 2,372,781 449,897 Selling, general and administrative 2,882,626 476,149 LO2A acquired IPR&D write down 23,963,050 - Share based payments 14,795,403 - Depreciation and amortization 1,314,899 1,357,485 Total operating expenses 45,328,759 2,283,531 Loss from operations (38,331,132) (1,513,070) Other income (expense): Realized gain (losses) on foreign currency transactions 1,028,621 (852) Unrealized gain (losses) on foreign currency remeasurement (1,690,303) 889,843 Realized gain (loss) on sale of digital currencies 93,613 (14,309) Other income 379,128 108,895 Loss before income taxes (38,520,073) (529,493) Income tax expenses - - Net loss (38,520,073) (529,493)

Revenues

Cryptocurrency mining revenues for the three months ended March 31, 2021 and 2020 were $5.12 million and $770,461, respectively. For the three months ended March 31, 2021, this represented an increase of $4.35 million over the same three month period in 2020. The increase in mining revenue was primarily attributable to higher bitcoin values in the 2021 period, averaging $44,984 per coin as compared to $7,943 per coin in the 2020 period. Bitcoins produced and sold totaled 113.5 in 2021 as compared to 97.0 in the 2020 period.

Sales of cryptocurrency mining equipment for the three months ended March 31, 2021 were $1.88 million. No sales were recorded in the 2020 period. The revenue in 2021 was attributable to sale of earlier generation cryptocurrency mining equipment.

Operating Cost and Expenses

Our operating cost and expenses include cost of revenues; selling, general and administrative expenses; and depreciation and amortization.

Cost of revenues.

Our cost of revenue consists primarily of: cost of mining hardware sold, and direct power costs related to cryptocurrency mining.

Cost of revenues for the three months ended March 31, 2021 and 2020 were $2.37 million and $449,897, respectively. The increase in cost of revenue was primarily attributable to: cost of cryptocurrency mining hardware sold of $1.42 million in the 2021 period; and an increase in power costs related to the increase in the deployment and operation of cryptocurrency mining hardware.

Selling, general and administrative.

Our selling, general and administrative expenses consist primarily of: professional and management fees relating to accounting, audit, and legal: research and development; and general office expenses.

Selling, general and administrative expenses for the three months ended March 31, 2021 and 2020 were $2.88 million and $476,149, respectively. The increase in selling, general and administrative expenses were primarily attributable to: one off professional fees related to the Cosmos Transaction; and increases in expenses related to the increase in the scale of business operations.

LO2A writedown.

Upon consummation of the Reverse Asset Acquisition, where Mawson was determined to be the accounting acquiree, any value associated with the acquired in-process research and development (IPR&D) relating to the Mawson’s LO2A product candidates have been expensed in the consolidated statement of operations as there is no alternative future use and the fair value of the contingent obligation with respect to future revenues assessed as nil fair value given the planned disposal. This resulted in a one off expense of $23,963,050 calculated by reference to the purchase consideration. No expenses were recorded in the 2020 period.

Share based payments consist of: the value of shares required to be issued to Incentive Compensation Program participants under the Cosmos Transaction Bid Implementation Agreement; and the value of warrants issued to HC Wainwright as a fee related to the acquisition by Mawson of Cosmos.

Share based payments expenses for the three months ended March 31, 2021 were $14.80 million. Share based payments were split between HC Wainwright $6.18 million and an accrual of $8.58 million for amounts related to the obligation of Mawson to issue RSU’s pursuant to the terms of the Bid Implementation Agreement for the Cosmos Transaction, included in the Company’s Current Report on Form 8-K/A filed May 13, 2021. No expenses were recorded in the 2020 period

Depreciation and amortization.

Depreciation consists primarily of depreciation of cryptocurrency mining hardware and modular data center (MDC) equipment.

Depreciation and amortization for the three months ended March 31, 2021 and 2020 were $1.31 million and $1.36 million, respectively. The decrease is primarily attributable to the application of the diminishing value method, resulting in a higher depreciation expense in the initial months of mining equipment operation, and that new machines which are being procured have not yet come in the ownership of the Company.

Other income (expenses)

Our other income (expenses) consists of: net realized gains (losses) on foreign currency transactions; net unrealized gains (losses) on foreign currency remeasurement; realized gains (losses) on sale of digital currencies; and other income. Other income consists of sales for hosting clients, investment management fees, unrealized fair value on investments and other minor income events.

Net loss available to Common Shareholders

As a result of the foregoing, the Company recognized a net loss of $38.52 million for the three months ended March 31, 2021 compared to a net loss of $529,493 for the three months ended March 31, 2020.

Liquidity and Capital Resources

General

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. For the three months ended March 31, 2021, we financed our operations primarily through:

entering into Securities Purchase Agreements (the “PIPE Agreements”) on December 31, 2020, with certain accredited investors (the “PIPE Investors”), 1. whereby we agreed to sell to the PIPE Investors, in a private placement, an aggregate of 25 million shares of common stock for aggregate gross proceeds of $3.0 million;

2. the issuance on March 9, 2021 of convertible notes with an aggregate principal amount of $21,442,694; and

3. net cash provided by operating activities of $1.87 million.

Working Capital and Cash Flows

As of March 31, 2021 and December 31, 2020, we had $3.39 million and $1.11 million in cash and cash equivalents, respectively.

As of March 31, 2021, we had $1.31 million of outstanding short term loans, and as of December 31, 2020 we had $290,978 of short term loans. As of March 31, 2021, and at December 31, 2020, we had $14,000 of outstanding long term loans. The loans as of March 31, 2021, relate primarily to: the acquisition of cryptocurrency mining equipment, payable in full by February, 2022; and a Leveraged Account Agreement which lent Mawson 10 Bitcoin (see Note 5 in Item 1 of Part 1 of this Quarterly Report). The loan as of December 31, 2020, relates to a Paycheck Protection Program Loan. The PPP, established as part of the CARES Act, provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loan totals $14,000, and matures in 2022 and bears interest at a rate of 1.0% per annum, payable monthly commencing May 21, 2021. The note may be prepaid at any time prior to maturity with no prepayment penalties. Funds from the loan may only be used for payroll costs, benefits, rent, utilities and interest on other debt obligations incurred prior to February 15, 2020. The Company used the entire amount for such qualifying expenses. Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses during the first 24 weeks of the loan.

As of March 31, 2021 and December 31, 2020, we had positive working capital of $1.78 million and negative working capital of $463,345 , respectively. The increase in working capital was primarily attributable to: additional cash balances related to the Cosmos Transaction; and an increase in trade receivables related to the sale of cryptocurrency mining equipment to third parties.

The following table presents the major components of net cash flows (used in) provided by operating, investing and financing activities for the periods presented:

Three Months Ended

Net cash used in operating activities $ 1,871,692 $ (527,389) Net cash provided by / (used in) investing activities $ (21,385,965) $ (267,418) Net cash provided by (used in) financing activities $ 21,285,694 $ 72,518

For the three months ended March 31, 2021 and 2020, net cash provided by/(used in) operating activities was $1.87 million and ($527,389), respectively. The increase in net cash provided by operating activities was primarily attributable to increased cryptocurrency sales revenue and revenue from the sale of mining equipment.

For the three months ended March 31, 2021 and 2020, net cash provided by investing activities was ($21.39) million and ($267,418), respectively. The increase in net cash used in investing activities was primarily attributable to the increase in the acquisition of cryptocurrency mining equipment.

For the three months ended March 31, 2021 and 2020, net cash provided by financing activities was $21.29 million and $72,518, respectively. The increase in net cash provided by financing activities was primarily attributable mainly due to the issuance of convertible notes discussed in Note 5 of Item 1 of Part 1 of this Quarterly Report which his for the period ended March 31, 2021.

Outlook

According to management estimates, liquidity resources as of March 31, 2021 will be sufficient to maintain our planned level of operations for the next 12 months. However, we may need to raise additional funding or capital raising in order to purchase more equipment or expand operations. Additional financing may not be available on acceptable terms, if at all. Our future capital requirements as well as the ability to obtain financing will depend on many factors, including those listed under Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020.

Off-Balance Sheet Arrangements

In connection with the Cosmos Transaction, we issued one CVR to each of our securityholders for each outstanding share of common stock of Mawson, and for each share of common stock of Mawson underlying other convertible securities and warrants, held immediately before the closing of the Cosmos Transaction. Each CVR represents the right to receive a pro rata share of any consideration that we may receive in connection with any successful monetization of our LO2A business, less transaction expenses and customary deductions as detailed in the CVR agreement, including a deduction of up to $300,000 to be repaid to us for amounts we spend in the development of the LO2A Technology at the request of the Holders’ Representative.

Other than the CVRs and the Contingent obligation in relation to LO2A, as of March 31, 2021, the Company did not have any other off-balance sheet arrangements, as such term is defined under Item 303 of Regulation S-K, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

As a smaller reporting company, the Company has elected not to provide the disclosure required by this item.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report. The Company’s management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). As a result of this assessment, management identified a material weakness in internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The material weakness identified is described below.

Significant Reliance on Key Individuals. There are significant manual processes involved in the Company’s accounting, management and control functions with limited segregation of duties and secondary review. This is not inconsistent with similar small fast growing organizations. This gives rise to the risk of lack of ability to react in a timely manner to operations issues and meet increased US GAAP/PCAOB/SOX/SEC registrant requirements. As well as the risk that compliance and other reporting obligations as a result of risk of management override are not adequately dealt with.

As a result of the material weakness in internal control over financial reporting described above, the Company’s management has concluded that, as March 31, 2021, the Company’s internal control over financial reporting was not effective based on the criteria in Internal Control – Integrated Framework issued by COSO.

Changes in internal control over financial reporting

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company is required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”). Section 404 requires that our management maintain a system of internal control over financial reporting that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. It also requires that our management annually evaluate whether our internal control over financial reporting is effective at providing reasonable assurance and to disclose its assessment to investors.

Although the Company acquired and became the parent company of Cosmos in the Cosmos Transaction, with limited exceptions, the management team of Cosmos became the management team and became responsible for internal control over financial reporting upon completion of the Cosmos Transaction. Cosmos was an Australian registered Unlisted Public Company with limited accounting personnel and other resources with which to address our internal controls and procedures, and was not previously subject to the same requirements. The Company’s new management may not be able to effectively and timely implement controls and procedures that adequately respond to the regulatory compliance and reporting requirements that are applicable to us. If our new management is not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, we may not be able to assess whether our internal control over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our stock.

In addition, as a smaller reporting company and non-accelerated filer, the Company is not subject to the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. However, as the Company grows, it may become subject to the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

If the Company fails to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, the accuracy and timeliness of the filing of annual and quarterly reports may be materially adversely affected and could cause investors to lose confidence in reported financial information, which could have a negative effect on the trading price of common stock. In addition, a material weakness in the effectiveness of internal control over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition.

Since March 9, 2021, with the oversight of senior management and our audit committee, we have begun taking steps and plan to take additional measures to remediate the underlying causes of the identified material weaknesses, primarily through the performance of a risk assessment process; the development and implementation of formal, documented policies and procedures, improved processes and control activities (including an assessment of the segregation of duties); as well as the hiring of additional finance personnel for specific roles such as financial reporting. During the period covered by this Quarterly Report on Form 10-Q, we made the following changes to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting:

We have developed entity level and process level controls with respect to the preparation and review of our consolidated financial statements. We have developed process level controls relating to the review of manually prepared analyses and supporting information used to prepare our consolidated ● financial statements. We are in the process of testing and validating these controls. At this time, we cannot state whether these controls will prove to be effective.

We are currently working to write policies and procedures to ensure the effective design and operation of general IT controls over our financial reporting ● systems We have not yet completed our development, implementation and testing of these controls. At this time, we cannot state whether these controls will prove to be effective.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We may, in the ordinary course of business, become a party to litigation involving collection matters, contract claims and other legal proceedings relating to the conduct of our business. However, as of May 19, 2021, we are unaware of any material pending legal proceedings.

Item 1A. Risk Factors

In light of recent developments related to the Cosmos Transaction, the Company is supplementing the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020, to include the following risk factors.

Summary of Risk Factors

The following constitutes a summary of the material risks relevant to an investment in our company:

Risks Relating to our Digital Asset Infrastructure Business through Cosmos

Both we (collectively) and Cosmos (individually) have incurred operating losses since inception and anticipates continuing to incur substantial operating losses in the near future.

We have historically incurred net losses, including net losses of approximately $10.42 million and $3.45 million for the years ended December 31, 2020 and 2019, respectively. As at December 31, 2020, we had an accumulated deficit of approximately $39.22 million. Similarly, and not included in the forgoing, Cosmos has

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document incurred net and operating losses since its inception in May 2019, including net losses of approximately $5.06 million and operating losses of approximately $4.93 million for the year ended December 31, 2020. Even with the change of our primary business away from our historical LO2A Business to the digital asset infrastructure business of Cosmos, we do not know whether or when we will become profitable and we expect to continue to incur losses for the near future, and these losses will likely increase as we pursue our growth strategy. No certainty exists that we will become profitable and, even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our inability to achieve and then maintain profitability would negatively affect our business, financial condition, results of operations and cash flows.

We may be unable to raise additional capital needed to grow our business.

We will likely continue to operate at a loss, at least until our business strategy is implemented, or if cryptocurrency prices decline, and we expect to need to raise additional capital to expand our operations and pursue our growth strategies, including potential acquisitions of complementary businesses, and to respond to competitive pressures or unanticipated working capital requirements. We may not be able to obtain additional debt or equity financing on favorable terms, if at all, which could impair our growth and adversely affect our existing operations. If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests, and the per share value of our common stock could decline. Furthermore, if we engage in additional debt financing, the holders of debt likely would have priority over the holders of common stock on order of payment preference. We may be required to accept terms that restrict our ability to incur additional indebtedness or take other actions including terms that require us to maintain specified liquidity or other ratios that could otherwise not be in the interests of our stockholders.

The further development and acceptance of digital asset networks and other digital assets, which represent a new and rapidly changing industry, are subject to a variety of factors that are difficult to evaluate. The slowing or stopping of the development or acceptance of digital asset systems may adversely affect us.

Currently, there is relatively small use of Bitcoins and other cryptocurrencies in the retail and commercial marketplace in comparison to relatively large use by speculators, thus contributing to price volatility that could adversely affect an investment in us. Cryptocurrencies are a relatively new concept and asset class, so there is still some degree of uncertainty and pessimism about their use and whether their popularity will gain further traction is difficult to predict. If the popularity and use of cryptocurrencies diminish and leads to their value decreasing, our business, financial condition, results of operations and prospects may be materially adversely affected.

To the extent that the digital asset exchanges representing a substantial portion of the volume in digital asset trading are involved in fraud or experience security failures or other operational issues, such digital asset exchanges’ failures may result in a reduction in the price of some or all digital assets and can adversely affect us.

The digital asset exchanges on which the digital assets trade are new and, in most cases, largely unregulated. Furthermore, many digital asset exchanges (including several of the most prominent USD denominated digital asset exchanges) do not provide the public with significant information regarding their ownership structure, management teams, corporate practices or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, digital asset exchanges, including prominent exchanges handling a significant portion of the volume of digital asset trading.

A lack of stability in the digital asset exchange market and the closure or temporary shutdown of digital asset exchanges due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in the digital asset networks and result in greater volatility in digital asset values. These potential consequences of a digital asset exchange’s failure could materially adversely affect our business, financial condition, results of operations and prospects.

Significant contributors to all or any digital asset network could propose amendments to the respective network’s protocols and software that, if accepted and authorized by such network, could adversely affect us. For example, with respect to Bitcoins networks, a small group of individuals contribute to the Bitcoin Core project on GitHub.com. This group of contributors is currently headed by Wladimir J. van der Laan, the current lead maintainer. These individuals can propose refinements or improvements to the Bitcoin network’s source code through one or more software upgrades that alter the protocols and software that govern the Bitcoin network and the properties of Bitcoin, including the irreversibility of transactions and limitations on the mining of new Bitcoin. Proposals for upgrades and discussions relating thereto take place on online forums. For example, there is an ongoing debate regarding altering the blockchain by increasing the size of blocks to accommodate a larger volume of transactions. Although some proponents support an increase, other market participants oppose an increase to the block size as it may deter miners from confirming transactions and concentrate power into a smaller group of miners.

To the extent that a significant majority of the users and miners on the Bitcoin network install such software upgrade(s), the Bitcoin network would be subject to new protocols and software that could materially adversely affect our business, financial condition, results of operations and prospects. In the event a developer or group of developers proposes a modification to the Bitcoin network that is not accepted by a majority of miners and users, but that is nonetheless accepted by a substantial plurality of miners and users, two or more competing and incompatible blockchain implementations could result. This is known as a “hard fork.” In such a case, the “hard fork” in the blockchain could materially and adversely affect the perceived value of digital assets as reflected on one or both incompatible blockchains, which may materially adversely affect our business, financial condition, results of operations and prospects.

If a malicious actor or botnet obtains control in excess of 50% of the processing power active on any digital asset network, including the Bitcoin network, it is possible that such actor or botnet could manipulate the blockchain in a manner that adversely affects us.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the processing power dedicated to mining on any digital asset network, including the Bitcoin network, it may be able to alter the blockchain by constructing alternate blocks if it is able to solve for such blocks faster than the remainder of the miners on the blockchain can add valid blocks. In such alternate blocks, the malicious actor or botnet could control, exclude or modify the ordering of transactions, though it could not generate new digital assets or transactions using such control. Using alternate blocks, the malicious actor could “double-spend” its own digital assets (i.e., spend the same digital assets in more than one transaction) and prevent the confirmation of other users’ transactions for so long as it maintains control. To the extent that such malicious actor or botnet does not yield its majority control of the processing power or the digital asset community does not reject the fraudulent blocks as malicious, reversing any changes made to the blockchain may not be possible. Such changes could materially adversely affect our business, financial condition, results of operations and prospects.

A failure to properly monitor and upgrade the Bitcoin network protocol could damage the Bitcoin network and adversely affect us.

The open-source structure of the cryptocurrencies network protocols means that the contributors to the protocol are generally not directly compensated for their contributions in maintaining and developing the protocol. The Bitcoin network, for example, operates based on an open-source protocol maintained by contributors, largely on the Bitcoin Core project on GitHub. As an open-source project, Bitcoin is not represented by an official organization or authority. As the Bitcoin network protocol is not sold and its use does not generate revenues for contributors, contributors are generally not compensated for maintaining and updating the Bitcoin network protocol. Although the MIT Media Lab’s Digital Currency Initiative funds the current maintainer Wladimir J. van der Laan, among others, this type of financial incentive is not typical. The lack of guaranteed financial incentive for contributors to maintain or develop the Bitcoin network and the lack of guaranteed resources to adequately address emerging issues with the Bitcoin network may reduce incentives to address the issues adequately or in a timely manner. Changes to a digital asset network which we are mining could materially adversely affect our business, financial condition, results of operations and prospects.

The incentive for Bitcoin mining may decrease over time as the reward decreases.

A Bitcoin halving occurs when block rewards, or the number of Bitcoins entering circulation whenever a block is produced (approximately every 10 minutes), is reduced by half. This means a new Bitcoin will be subsequently issued half as fast as before. This occurs on a schedule built into Bitcoin’s programming and happens every 210,000 blocks with the purpose being to issue the total supply into the market less frequently over time. This supply effect increases Bitcoin’s scarcity, which has, historically, increased its price. When Bitcoin first started, 50 Bitcoins were rewarded to miners per block produced. The reward was decreased over the years and, to date, following the last halving event in May 2020, the block reward is 6.25 Bitcoins per block. Halving events will continue until the block reward reaches zero. The process will end with a predetermined total of 21 million Bitcoins, estimated to be around the year 2140. Although, at each prior halving event, the short-term subsequent effect on the Bitcoin price has been an increase in price, this trend may not continue in the future and may have a reverse effect on the Bitcoin price, in which case, our business, financial condition, results of operations and prospects may be materially adversely affected.

If the award of digital assets for solving blocks and transaction fees for recording transactions are not sufficiently high to incentivize miners, miners may cease expending hashrate to solve blocks and confirmations of transactions on the blockchain could be slowed temporarily.

Bitcoin miners record transactions when they solve for and add blocks of information to the blockchain. When a miner solves for a block, it creates that block, which includes data relating to (i) the solution to the block, (ii) a reference to the prior block in the blockchain to which the new block is being added and (iii) all transactions that have occurred but have not yet been added to the blockchain. The miner becomes aware of outstanding, unrecorded transactions through the data packet transmission and propagation discussed above. Typically, Bitcoin transactions will be recorded in the next chronological block if the spending party has an internet connection and at least one minute has passed between the transaction’s data packet transmission and the solution of the next block. If a transaction is not recorded in the next chronological block, it is usually recorded in the next block thereafter.

As the award of new digital assets for solving blocks declines, and if transaction fees are not sufficiently high, miners may not have an adequate incentive to continue mining and may cease their mining operations. For example, the current fixed reward on the Bitcoin network for solving a new block is six and a quarter (6.25) Bitcoins per block (the reward decreased from twelve and a half (12.5) Bitcoin in May 2020). It is estimated that it will halve again in about 4 years from 2020. This reduction may result in a reduction in the aggregate hashrate of the Bitcoin network as the incentive for miners will decrease. Moreover, miners ceasing operations would reduce the aggregate hashrate on the Bitcoin network, which would adversely affect the confirmation process for transactions (i.e., temporarily decreasing the speed at which blocks are added to the blockchain until the next scheduled adjustment in difficulty for block solutions) and make the Bitcoin network more vulnerable to a malicious actor obtaining control in excess of fifty percent (50%) of the aggregate hashrate on the Bitcoin network. Periodically, the Bitcoin network has adjusted the difficulty for block solutions so that solution speeds remain in the vicinity of the expected ten (10) minute confirmation time targeted by the Bitcoin network protocol.

More significant reductions in aggregate hashrate on digital asset networks could result in material, though temporary, delays in block solution confirmation time. Any reduction in confidence in the confirmation process or aggregate hashrate of any digital asset network may negatively impact the value of digital assets, which will adversely impact our business, financial condition, results of operations and prospects.

An increase in transaction fees could reduce the price or digital assets.

If fees increase for recording transactions on the Bitcoin network, demand for cryptocurrencies may decrease and prevent the expansion of the network to retail merchants and commercial businesses, resulting in a reduction in the price of digital assets that could adversely affect our business, financial condition, results of operations and prospects.

To the extent that the profit margins of digital asset mining operations are not high, operators of digital asset mining operations are more likely to immediately sell their digital assets earned by mining in the digital asset exchange market, resulting in a reduction in the price of digital assets that could adversely impact Cosmos.

Over the past two years, digital asset mining operations have evolved from individual users mining with computer processors, graphics processing units and first-generation servers. Currently, new processing power brought onto the digital asset networks is predominantly added by incorporated and unincorporated

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “professionalized” mining operations. Professionalized mining operations may use proprietary hardware or sophisticated machines. They require the investment of significant capital for the acquisition of this hardware, the leasing of operating space (often in data centers or warehousing facilities), incurring of electricity costs and the employment of technicians to operate the mining farms. As a result, professionalized mining operations are of a greater scale than prior miners and have more defined, regular expenses and liabilities. These regular expenses and liabilities require professionalized mining operations to more immediately sell digital assets earned from mining operations on the digital asset exchange market, whereas it is believed that individual miners in past years were more likely to hold newly mined digital assets for more extended periods. The immediate selling of newly mined digital assets greatly increases the supply of digital assets on the digital asset exchange market, creating downward pressure on the price of each digital asset.

The extent to which the value of digital assets mined by a professionalized mining operation exceeds the allocable capital and operating costs determines the profit margin of such operation. A professionalized mining operation may be more likely to sell a higher percentage of its newly mined digital assets rapidly if it is operating at a low profit margin—and it may partially or completely cease operations if its profit margin is negative. In a low profit margin environment, a higher percentage could be sold into the digital asset exchange market more rapidly, thereby potentially reducing digital asset prices. Lower digital asset prices could result in further tightening of profit margins, particularly for professionalized mining operations with higher costs and more limited capital reserves, creating a network effect that may further reduce the price of digital assets until mining operations with higher operating costs become unprofitable and remove mining power from the respective digital asset network. The network effect of reduced profit margins resulting in greater sales of newly mined digital assets could result in a reduction in the price of digital assets that could adversely impact our business, financial condition, results of operations and prospects.

Digital assets such as Bitcoin are likely to be regulated as securities or investment securities.

Digital assets and cryptocurrencies have been the source of much regulatory consternation, resulting in differing definitional outcomes without a single unifying statement. Although we do not believe Cosmos’ mining activities require registration by Cosmos to conduct such activities and accumulate digital assets, the SEC, the Commodity Futures Trading Commission (“CFTC”), Nasdaq or other governmental or quasi-governmental agency or organization may conclude that Cosmos’ activities involve the offer or sale of “securities”, or ownership of “investment securities”, and Cosmos may face regulation under the Securities Act of 1933, as amended (the “Securities Act”) or the Investment Company Act. Such regulation or the inability to meet the requirements to continue operations, would have a material adverse effect on business, financial condition, results of operations and prospects of Cosmos. Currently in Australia, Bitcoin in and of itself is not a financial product nor are digital assets regarded as money or currency for the purpose of Australian corporations law. The effect of any future regulatory change on digital assets or an entity dealing in or holding digital assets is impossible to predict, but such change could be substantial and adverse to the returns sought by us.

While Bitcoin is presently legal in Australia and the U.S., it may be illegal now, or in the future, to acquire, own, hold, sell or use Bitcoins in one or more other countries.

Regulatory changes or interpretations could cause us (or any of our related entities) to register and comply with new regulations, resulting in potentially extraordinary, recurring or non-recurring expenses to those holding digital assets.

Global climate change and related environmental regulations may have an adverse effect on our business operations and financial position.

The constant discussion surrounding climate change and its effect on the environment such as changes in rainfall, weather patterns, water supplies and shortages, sea level and changing temperatures could have an adverse effect on our operations and financial performance.

Extreme weather events may:

cause damage to one or more of our modular data centres (that houses our Miners) and therefore reduce our ability to maximize the performance of the ● Miners;

affect the delivery times of equipment ordered from our manufacturers and therefore impacting our financial forecasts which were scheduled for a certain ● period of time.

There has been recent commentary about cryptocurrency mining and its impact on the environment and it seems that Governments and related government bodies are introducing or contemplating legislative and regulatory changes in response to various climate change interest groups.

Any legislative changes regarding climate change could add significant burden and costs to our business, including costs related to making our energy consumption more efficient and lower impact on the environment environmental monitoring and reporting, and other costs to comply with such changes. Further, there could be reputational damage to our business caused by increased negative publicity surrounding cryptocurrency and the apparent effects on the environment.

If regulatory changes or interpretations of our activities require us or any of our affiliates to register as a money services business (“MSB”) under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, we may be required to register and comply with such regulations. If regulatory changes or interpretations of our activities require the licensing or other registration as a money transmitter (or equivalent designation) under state law in any state in which we operate, we may be required to seek license or otherwise register and comply with such state law. In the event of any such requirement, to the extent we decide to continue, the required registrations, licenses and regulatory compliance steps may result in extraordinary, non-recurring expenses to us and even in a decision to cease our digital asset infrastructure operations.

To the extent that our activities cause us to be deemed an MSB under the regulations promulgated by the Financial Crimes Enforcement Network (“FinCEN”), a unit of the U.S. Treasury Department focused on money laundering under the authority of the U.S. Bank Secrecy Act, we may be required to comply with FinCEN regulations, including those that would mandate we implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records. In addition, to the extent that our activities cause us to be deemed a “money transmitter” (“MT”) or equivalent designation, under state law in any state in which we operate, we may be required to seek a license or otherwise register with a state regulator and comply with state regulations that may include the implementation of anti- money laundering programs, maintenance of certain records and other operational requirements. Currently, the New York State Department of Financial Services has

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document finalized its “BitLicense” framework for businesses that conduct “virtual currency business activity,” the Conference of State Bank Supervisors has proposed a model form of state level “virtual currency” regulation and additional state regulators including those from California, Idaho, Virginia, Kansas, Texas, South Dakota and Washington have made public statements indicating that virtual currency businesses may be required to seek licenses as money transmitters. In July 2016, North Carolina updated the law to define “virtual currency” and the activities that trigger licensure in a business-friendly approach that encourages companies to use virtual currency and blockchain technology. Specifically, the North Carolina law does not require miners or software providers to obtain a license for multi-signature software, smart contract platforms, smart property, colored coins and non-hosted, non-custodial wallets. Starting January 1, 2016, New Hampshire requires anyone exchanges a digital currency for another currency must become a licensed and bonded money transmitter. In numerous other states, including Connecticut and New Jersey, legislation is being proposed or has been introduced regarding the treatment of Bitcoin and other digital assets. Cosmos will continue to monitor for developments in such legislation, guidance or regulations.

Such additional federal or state regulatory obligations may cause us to incur extraordinary expenses, possibly adversely affecting our business, financial condition, results of operations and prospects. Furthermore, we and our service providers may not be capable of complying with certain federal or state regulatory obligations applicable to MSBs and MTs. If we are deemed to be subject to and determine not to comply with such additional regulatory and registration requirements, we may act to dissolve and liquidate our business. Any such action may materially adversely impact our business, financial condition, results of operations and prospects.

Current interpretations require the regulation of Bitcoins under the Commodity Exchange Act (“CEA”) by the CFTC, we may be required to register and comply with such regulations. To the extent that we decide to continue operations, the required registrations and regulatory compliance steps may result in extraordinary, non-recurring expenses to us. We may also decide to cease certain operations. Any disruption of our operations in response to the changed regulatory circumstances may be at a time that is disadvantageous to investors.

Current and future legislation, CFTC and other regulatory developments, including interpretations released by a regulatory authority, may impact the manner in which Bitcoins are treated for classification and clearing purposes. In particular, Bitcoin derivatives are not excluded from the definition of “commodity future” by the CFTC. We cannot be certain as to how future regulatory developments will impact the treatment of Bitcoins under the law.

Bitcoins have been deemed to fall within the definition of a commodity and we may be required to register and comply with additional regulation under the CEA, including additional periodic report and disclosure standards and requirements. Moreover, we may be required to register as a commodity pool operator and to register as a commodity pool with the CFTC through the National Futures Association. Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting our business, financial condition, results of operations and prospects. If we determine not to comply with such additional regulatory and registration requirements, we may seek to cease certain of our operations. Any such action may adversely affect our business, financial condition, results of operations and prospects.

If regulatory changes or interpretations require the regulation of Bitcoins under the Securities Act and Investment Company Act by the SEC, we may be required to register and comply with such regulations. To the extent that we decide to continue operations, the required registrations and regulatory compliance steps may result in extraordinary, non-recurring expenses to us and we may also decide to cease certain operations. Any disruption of our operations in response to the changed regulatory circumstances may be at a time that is disadvantageous to investors. This would likely have a material adverse effect on us.

Current and future legislation and the SEC rulemaking and other regulatory developments, including interpretations released by a regulatory authority, may impact the manner in which Bitcoins are treated for classification and clearing purposes. The SEC’s July 25, 2017 Report expressed its view that digital assets may be securities depending on the facts and circumstances. As of the date of this report/information statement, we are not aware of any rules that have been proposed to regulate Bitcoins as securities. We cannot be certain as to how future regulatory developments will impact the treatment of Bitcoins under the law. Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting our business, financial condition, results of operations and prospects. If we determine not to comply with such additional regulatory and registration requirements, we may seek to cease certain of our operations. Any such action may adversely affect our business, financial condition, results of operations and prospects.

To the extent that digital assets, including Bitcoins and other digital assets we may own, are deemed by the SEC to fall within the definition of a security, we may be required to register and comply with additional regulation under the Investment Company Act, including additional periodic reporting and disclosure standards and requirements and the registration of the combined company as an investment company. Additionally, one or more states may conclude Bitcoins and other digital assets we may own as a security under state securities laws which would require registration under state laws including merit review laws which would adversely impact us since we would likely not be able to comply. Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting our business, financial condition, results of operations and prospects. If we determine not to comply with such additional regulatory and registration requirements, we may seek to cease all or certain parts of its operations. Any such action would likely adversely affect our business, financial condition, results of operations and prospects and investors may suffer a complete loss of their investment.

Political or economic crises may motivate large-scale sales of digital assets, which could result in a reduction in some or all digital assets’ values and adversely affect us.

As an alternative to fiat currencies that are backed by central governments, digital assets such as Bitcoins, which are relatively new, are subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services, and it is unclear how such supply and demand will be impacted by geopolitical events. Nevertheless, political or economic crises may motivate large-scale acquisitions or sales of digital assets either globally or locally. Large-scale sales of digital assets would result in a reduction in their value and could adversely affect our business, financial condition, results of operations and prospects.

It is likely that the miners and related mining equipment used to mine digital assets will breakdown and may not function at any given time. Any downtime of the miners and mining equipment will have a direct impact on us as they would not be performing their role, that is, solving hashes and receiving a block reward. This would therefore decrease our revenue.

Electricity costs often determine the profitability of our digital asset infrastructure business.

Electricity (or “consumption”) costs is a major factor which will determine whether our digital mining activities are profitable and viable. Digital mining consumes a significant amount of electricity. The financial modelling of our digital asset infrastructure business is based on certain assumptions, one of those being that its electricity costs per kilowatt (in the US) remains within a certain price range because its miners are located in the U.S. Electricity prices are subject to change. Certain economic and regulatory changes (in the U.S.) could occur (beyond our control) to drive up the costs of electricity to a point that we are unwilling to pay or unable to maintain, based on its financial modelling and this would significantly impact the profitability and viability of our business.

Our ability to adopt technology in response to changing security needs or trends poses a challenge to the safekeeping of our digital assets.

The history of digital asset exchanges has shown that exchanges and large holders of digital assets must adapt to technological change in order to secure and safeguard their digital assets. We frequently liquidate cryptocurrencies held and keep a minimum number of cryptocurrencies in our possession so as to minimize our risks against theft, loss, destruction or other issues relating to hackers and technological attack. We believe that we may become a more appealing target of security threats as the size of our Bitcoin holdings grow. To the extent that we are unable to identify and mitigate or stop new security threats, our digital assets may be subject to theft, loss, destruction or other attack, which could adversely affect our business, financial condition, results of operations and prospects.

Security threats could result in a loss of digital assets, or damage to our reputation and brand, each of which could adversely affect us.

Security breaches, computer malware and computer hacking attacks have been a prevalent concern in the digital asset exchange markets. Any security breach caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, and the inadvertent transmission of computer viruses, could harm our business operations or result in loss of our digital assets. Any breach of our infrastructure could result in damage to our reputation which could adversely affect our business, financial condition, results of operations and prospects. Furthermore, we believe that, as our assets grow, we may become a more appealing target for security threats such as hackers and malware.

We frequently liquidate cryptocurrencies held and keep a minimum number of cryptocurrencies in our possession so as to minimize our risks and safeguard our digital assets from theft, loss, destruction or other issues relating to hackers and technological attack. Nevertheless, this security system may not be impenetrable and may not be free from defect or immune to acts of God, and any loss due to a security breach, software defect or act of God will be borne by us.

The security system and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee, or otherwise, and, as a result, an unauthorized party may obtain access to our private keys, data or Bitcoins. Additionally, outside parties may attempt to fraudulently induce employees of ours to disclose sensitive information in order to gain access to our infrastructure. As the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of our security system occurs, the market perception of the effectiveness of its security system could be harmed, which could adversely affect our business, financial condition, results of operations and prospects. In the event of a security breach, we may also be forced to cease operations, or suffer a reduction in assets, the occurrence of each of which could adversely affect us.

A loss of confidence in our security system, or a breach of our security system, may adversely affect our business.

We will take measures to protect our self and our digital assets from unauthorized access, damage or theft; however, it is possible that the security system may not prevent the improper access to, or damage or theft of its digital assets. A security breach could harm our reputation or result in the loss of some or all of our digital assets. A resulting perception that our measures do not adequately protect our digital assets could adversely affect our business, financial condition, results of operations and prospects.

Digital asset transactions are irrevocable and stolen or incorrectly transferred digital assets may be irretrievable. As a result, any incorrectly executed digital asset transactions could adversely affect our business.

Digital asset transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient of the transaction or, in theory, control or consent of a majority of the processing power on the respective digital asset network. Once a transaction has been verified and recorded in a block that is added to the blockchain, an incorrect transfer of digital assets or a theft of digital assets generally will not be reversible, and we may not be capable of seeking compensation for any such transfer or theft. Although our transfers of digital assets will regularly be made to or from vendors, consultants, services providers, etc. it is possible that, through computer or human error, or through theft or criminal action, our digital assets could be transferred from us in incorrect amounts or to unauthorized third parties. To the extent that we are unable to seek a corrective transaction with such third party or are incapable of identifying the third party which has received its digital assets through error or theft, we will be unable to revert or otherwise recover incorrectly transferred digital assets. To the extent that we are unable to seek redress for such error or theft, such loss could adversely affect our business, financial condition, results of operations and prospects.

The limited rights of legal recourse against us, and our lack of insurance protection expose us to the risk of loss of our digital assets for which no person is liable.

The digital assets we hold are not insured. Therefore, a loss may be suffered with respect to our digital assets which is not covered by insurance and for which no person is liable in damages which could adversely affect our business, financial condition, results of operations and prospects.

We do not hold its digital assets with a banking institution or a member of the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Corporation (“SIPC”) and, therefore, our digital assets are not subject to the protections enjoyed by depositors with FDIC or SIPC member institutions.

We may not have adequate sources of recovery if our digital assets are lost, stolen or destroyed.

If our digital assets are lost, stolen or destroyed under circumstances rendering a party liable to us, the responsible party may not have the financial resources sufficient to satisfy its claim. For example, as to a particular event of loss, the only source of recovery we have might be limited, to the extent identifiable, other responsible third parties (e.g., a thief or terrorist), any of which may not have the financial resources (including liability insurance coverage) to satisfy a valid claim by us.

The sale of our digital assets to pay expenses at a time of low digital asset prices could adversely affect our business.

We may sell digital assets to pay expenses on an as-needed basis, irrespective of then-current prices. Consequently, our digital assets may be sold at a time when the prices on the respective digital asset exchange market are low, which could adversely affect our business, financial condition, results of operations and prospects.

We rely on a small number of key people, the loss of which could have a significant impact on us.

The responsibility of the direction and operation of our business relies heavily on a small number of key people, including CEO James Manning and COO, Liam Wilson. If any of our key employees or service providers cease their involvement in our business or, in the unfortunate situations one or more of them are seriously injured or dies, this loss would have a significant and likely adverse impact on us.

Our results of operations may be negatively impacted by the coronavirus outbreak.

In December 2019, the novel coronavirus, or COVID-19, surfaced globally. The World Health Organization declared a global emergency on January 30, 2020, with respect to the outbreak. The impacts of the outbreak are unknown and rapidly evolving. Many countries around the world have imposed quarantines and restrictions on travel and mass gatherings to slow the spread of the virus. In Australia, federal, state and local governments have enacted restrictions on travel, gatherings, and workplaces, with exceptions made for essential workers and businesses. As of the date of this report/information statement, our digital asset infrastructure business has not been declared an essential business. As a result, we may be required to substantially reduce or cease operations in response to governmental action or decree as a result of COVID-19.

Failure to effectively manage our growth could place strains on its managerial, operational and financial resources and could adversely affect its business and operating results.

As our digital asset infrastructure operations grow, the administrative demands upon us will grow, and our success will depend upon our ability to meet those demands. We are organized as a holding company, with numerous subsidiaries. Both the parent company and each of our subsidiaries require certain financial, managerial and other resources, which could create challenges to our ability to successfully manage our subsidiaries and operations and impact our ability to assure compliance with our policies, practices and procedures. These demands include, but are not limited to, increased executive, accounting, management, legal services, staff support and general office services. We may need to hire additional qualified personnel to meet these demands, the cost and quality of which is dependent in part upon market factors outside of our control. Further, we will need to effectively manage the training and growth of our staff to maintain an efficient and effective workforce, and our failure to do so could adversely affect our business and operating results.

We have potential risks in connection with growth and acquisitions.

Our future growth may depend in part on our ability to acquire patented technologies or potential target companies that have synergies with our business activities. Such acquisitions are subject to numerous risks, including, but not limited to the following:

our inability to enter into a definitive agreement with respect to any potential acquisition, or if we are able to enter into such agreement, our inability to ● consummate the potential acquisition;

● difficulty integrating the operations, technology and personnel of the acquired entity including achieving anticipated synergies;

● our inability to achieve the anticipated financial and other benefits of the specific acquisition;

● difficulty in maintaining controls, procedures and policies during the transition and monetization process;

● diversion of our management’s attention from other business concerns; and

failure of our due diligence process to identify significant issues, including issues with respect to patented technologies and other legal and financial ● contingencies.

If we are unable to manage these risks effectively as part of any acquisition, our business could be adversely affected.

We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”). Section 404 requires that our management maintain a system of internal control over financial reporting that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. It also requires that our management annually evaluate whether our internal control over financial reporting is effective at providing reasonable assurance and to disclose its assessment to investors. Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). As a result of this assessment, management identified a material weakness in internal control over financial reporting. As a result of the material weakness in internal control over financial reporting described above, the Company’s management has concluded that, as March 31, 2021, the Company’s internal control over financial reporting was not effective based on the criteria in Internal Control – Integrated Framework issued by COSO.

Although we acquired and became the parent company of Cosmos in the Cosmos Transaction, with limited exceptions, the management team of Cosmos became our management team and became responsible for our internal control over financial reporting upon completion of the Cosmos Transaction. Cosmos was an Australian registered Unlisted Public Company with limited accounting personnel and other resources with which to address our internal controls and procedures and was not previously subject to the same requirements. Our new management may not be able to effectively and timely implement controls and procedures that adequately respond to the regulatory compliance and reporting requirements that are applicable to us. If our new management is not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, we may not be able to assess whether our internal control over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our stock.

In addition, as a smaller reporting company and non-accelerated filer, we are not subject to the auditor attestation requirements of Section 404 of the Sarbanes- Oxley Act. However, as we grow, we may become subject to the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

If we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, the accuracy and timeliness of the filing of our annual and quarterly reports may be materially adversely affected and could cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock. In addition, we identified a material weakness in the effectiveness of our internal control over financial reporting which could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require additional expenditures to comply with these requirements, each of which could have a material adverse effect on our business, results of operations and financial condition.

We may not continue to meet OTC listing requirements

As of March 16, 2021, we received notice from OTC Markets Group (OTC) that we have failed to have a public float greater than 10% of our total shares outstanding, a requirement under Section 1.1.1(C) of OTCQB Standards, which would if not rectified within 30 days may result in our shares ceasing to trade on the OTCQB marketplace. We have submitted a plan to cure this deficiency, which the OTC accepted, and which gives us until June 30, 2021 to rectify the issue. This plan involves filing a registration statement on Form S-1 to register the shares issued in the Cosmos Transaction and in the PIPE, and such registration is required by the terms of the Cosmos Transaction and the PIPE, however, if we are unable to file and have the registration made effective by June 30, 2021, we may not be in compliance with the OTC listing requirements and are shares may cease to trade on the OTCQB marketplace.

Risks Relating to the LO2A Business

With respect to risks relating to our LO2A Business, please see the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, which is incorporated by reference into this information statement. See “Where You Can Find More Information.” However, since the Cosmos Transaction is completed, many of these risks will be (i) primarily related to the likelihood of our ability to successfully enter into any LO2A Transaction and, if we do, the terms thereof, which will mostly affect the holders of CVRs, and (ii) immaterial to the operation of the post-closing combined company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None

Item 6. Exhibits

Lease Agreement between Luna Squares LLC (FKA Innovative Preperty Management, LLC) and The Development Authority of Washington County 10.1* dated May 1, 2020 First Amendment to Lease Agreement and Exercise of Option to Lease an Additional Four Adjoining Acres between Luna Squares LLC (FKA Innovative 10.2* Property Management, LLC) and The Development Authority of Washington County dated February 23, 2021. 10.3* International Sales Contract No:ZY0220211061 between Cosmos Infrastructure LLC and Canaan Convey Co., Ltd. dated February 5, 2021

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 10.4* International Sales Contract NoZY0220211163 between Cosmos Infrastructure LLC and Canaan Convey Co., Ltd. dated March 26, 2021 10.5* Equipment Purchase and Finance and Security Agreement with Foundry Digital LLC. 10.6* Amendment To The Equipment Finance And Security Agreement Dated February 5, 2021 10.7* Second Amendment To The Equipment Finance And Security Agreement Dated April 1, 2021 31.1* Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002. 32** Certifications of Principal Executive Officer and Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002. The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020, (ii) Consolidated Statements of 101 Operations for the three months ended March 31, 2021 and 2020, (iii) Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020, and (iv) Notes to Consolidated Financial Statements

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Mawson Infrastructure Group Inc.

Date: May 19, 2021 By: /s / James Manning James Manning, Chief Executive Officer (Principal Executive Officer)

Date: May 19, 2021 By: /s/ Or Eisenberg Or Eisenberg, Chief Financial Officer (Acting Principal Financial and Accounting Officer)

LEASE AGREEMENT

GEORGIA, WASHINGTON COUNTY

THIS LEASE AGREEMENT, hereinafter “Lease” or “Agreement”, made and entered into on the dates as hereinafter set forth on the signature page(s), by and between THE DEVELOPMENT AUTHORITY OF WASHINGTON COUNTY, a public body corporate and politic of the State of Georgia, with its principal office and place of business in 603 South Harris St. Sandersville, GA, 31082 Washington County, Georgia, as Party of the First Part, hereinafter called “LANDLORD”, and INNOVATIVE PROPERTY MANAGEMENT, LLC, a North Carolina Limited Liability Company, with its principal office and place of business in 5217 Cottage Bluff Ln., Knightdale, NC, 27545 Wake County, North Carolina, as Party of the Second Part, hereinafter called “TENANT”.

W I T N E S S E T H:

Tenant has this day rented and leased from the Landlord, and the Landlord has this day rented and leased to the Tenant, for the lease period hereinafter defined and upon the terms and conditions hereinafter set forth, the following described property, hereinafter called “Premises”, to-wit:

DETAILED AS 1.0 ACRE ON THE ATTACHED EXHIBIT “A”

TOGETHER WITH RIGHTS OF INGRESS AND EGRESS THERETO

1. POSSESSION AND TERM: The “Lease Term” for which said Premises are demised shall begin on May 1, 2020, and shall end on April 30, 2023 unless the lease is sooner terminated or extended as hereinafter provided.

2. UPKEEP AND REPAIR OF PREMISES: Tenant shall be responsible for all maintenance of any buildings, containers, improvements or structures which shall include the roof and exterior maintenance. Tenant shall be responsible for all interior systems such as heating, cooling, electrical, and plumbing and any maintenance for any improvements, machinery, equipment, trade fixtures, and other similar additions of the Tenant. Tenant shall be responsible for outside landscaping, mowing and the maintenance of any of the remaining spaces including any parking areas. The Parties understand and agree that the Premises being leased consists of the Premises in such condition as the same are in on the Effective Date hereof and shall be maintained in such condition by the Tenant, ordinary wear and tear expected.

3. RENTAL: (a) For each of the three years of this lease, through and including all rental payments from May 1, 2020 to April 30, 2023, Tenant shall pay to Landlord a QUARTERLY rental, in advance on the first (1st) day of each quarter as hereafter defined. The “Rent” is the sum of FIVE-THOUSAND ONE-HUNDRED AND TWENTY-FIVE DOLLARS AND 00/100’S DOLLARS ($5,125.00) per quarter for the leased Premises. The total yearly payments due shall be $20,500.00. The QUARTERLY RENTAL payments shall be due as follows:

1st QUARTER — May 1, 2020

2ND QUARTER — August 1, 2020

3RD QUARTER — November 1, 2020

4TH QUARTER — February 1, 2021

1st QUARTER — May 1, 2021

2ND QUARTER — August 1, 2021

4TH QUARTER — February 1, 2022

1st QUARTER — May 1, 2022

2ND QUARTER — August 1, 2022

3RD QUARTER — November 1, 2022

4TH QUARTER — February 1, 2023

(b) Tenant shall pay the Rent when due. No payment by Tenant, or receipt or acceptance by Landlord, of a lesser amount than the correct Rent shall be deemed to be anything other than a payment on account, nor shall any endorsement or statement on any check or letter accompanying any payment be deeded an accord or satisfaction, and Landlord may accept such payment without prejudice to its right to recover the balance due or to pursue any other remedy available to Landlord.

(c) During the term of this lease, if Tenant is more than ten (10) days late in making a monthly rental payment, then the Tenant shall pay as additional rental a late charge of five percent (5%) of said delinquent monthly/quarterly rental payment (the “Late Charge”). All rental payments paid thereafter to the Landlord shall be mailed to Landlord in care of R. Jayson Johnston, Executive Director, Development Authority of Washington County, 603 South Harris St., Sandersville, GA 31082-2825 until otherwise notified in writing.

(d) If initial site work pursuant to section 5 herein is completed prior to the May 1, 2020 initial lease term, Landlord agrees that Tenant may lease the premises for any portion of the month of April 2020 on a pro rata basis in accordance with the rental amount as described in Section 3(a).

4. OPTION TO LEASE ADDITONAL FOUR (4) ADJOINING ACRES. (a) Duringthe term of this Lease and any lease extensions provided for herein, Tenant shall have the option to lease any of the additional four (4) acres that adjoin the one (1) acre Premises as further described as “Potential Expansion 4 Acres” in the Attached Exhibit “A” (hereinafter “Option Property”) and on a per acre basis as defined herein. Such option may be exercised by Tenant by providing to Landlord a written request to lease any of the Option Property. In the event that Tenant desires to exercise its option to lease any of the Option Property pursuant to this section, it is understood and agreed between the parties hereto that the per acre yearly rental rate will be FIVE-THOUSAND AND 00/100 ($5,000.00) to be paid on a quarterly bases as otherwise defined herein.

(b) Landlord and Tenant acknowledge that the option to lease the Option Property herein constitutes a material inducement to the Lessee to improve the Option Property and thereby preserve and create employment opportunities in the County and that in granting such option, the Landlord is considering the entire transaction as a whole, including the promotion and expansion for the public good and welfare industry and trade within the County and the reduction of unemployment.

5. INITIAL SIZE WORK TO PREMISES: Landlord will provide certain Site Work as defined herein for the one (1) acre Premises that is the subject of this Lease. The Site work includes and is defined as topographic survey, civil engineering, grading and site prep and fencing for the one (1) acre Premises. Landlord will not provide any additional Site Work for the Option Property in the event that Tenant exercises its Option to lease any of the Option Property and the Tenant agrees that any rental of any of the Option Property shall be “AS IS” as further defined in section 31 herein.

6. NOTICES: All notices, demands, consents, authorizations, directions or other documents as provided herein shall be sent, via mail by registered or certified mail, return receipt requested, postage prepaid to the Tenant at 5217 Cottage Bluff Ln., Knightdale, NC, 27545 Wake County, North Carolina, until further notice by it in writing, and to the Landlord at c/o R. Jayson Johnston, Executive Director, Development Authority of Washington County, 603 South Harris St., Sandersville, GA 31082-2825 until otherwise notified in writing.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 7. BANKRUPTCY OR INSOLVENCY OF TENANT: (a) It is agreed that this lease and all the rights of the Tenant hereunder shall at the option of the Landlord, terminate upon the Tenant being by any Court adjudged a bankrupt or insolvent, or upon the Tenant making an assignment for the benefit of creditors, or upon the levy of any attachment or legal process upon any equipment, fixtures or other property of the Tenant located upon the premises and not released or discharged by Tenant within ten (10) days after notice from Landlord.

(b) Alternatively, it shall be a default by Tenant under this Lease if Tenant makes an assignment for the benefit of creditors, or files a voluntary petition under any state or federal bankruptcy or insolvency law, or an involuntary petition alleging an act of bankruptcy or insolvency is filed against Tenant under any state or federal bankruptcy or insolvency law that is not dismissed within ninety (90) days, or whenever a petition is filed by or against (to the extent not dismissed within ninety (90) days) Tenant under the reorganization provisions of the United States Bankruptcy Code or under the provisions of any law or like import, or whenever a petition shall be filed by Tenant under the arrangement provisions of the United States Bankruptcy Code or similar law, or whenever a receiver of Tenant, or of or for the property of Tenant, shall be appointed and such appointment shall not be stayed or set aside within sixty (60) days of the date thereof, or Tenant admits it is insolvent or is not able to pay its debts as they mature.

(c) In addition to, and in no way limiting the other remedies set forth herein, Landlord and Tenant agree that if Tenant ever becomes the subject of a voluntary or involuntary bankruptcy, reorganization, composition, or other similar type proceeding under the federal bankruptcy laws, as now enacted or hereinafter amended, then: (a) “adequate assurance of future performance” by Tenant and/ or any assignee of Tenant pursuant to Bankruptcy Code Section 365 will include (but not be limited to) payment of an additional/new security deposit in the amount of three (3) times the then current monthly Base Rent payable hereunder; (b) any person or entity to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code, shall be deemed, without further act or deed, to have assumed all of the obligations of Tenant arising under this Lease on and after the effective date of such assignment. Any such assignee shall, upon demand by Landlord, execute and deliver to Landlord an instrument confirming such assumption of liability; (c) notwithstanding anything in this Lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord under this Lease, whether or not expressly denominated as “Rent”, shall constitute “rent” for the purposes of Section 502(b)(6) of the Bankruptcy Code; and (d) if this Lease is assigned to any person or entity pursuant to the provisions of the Bankruptcy Code, any and all monies or other considerations payable or otherwise to be delivered to Landlord (including Base Rent, Additional Rent and other amounts hereunder), shall be and remain the exclusive property of Landlord and shall not constitute property of Tenant or of the bankruptcy estate of Tenant. Any and all monies or other considerations constituting Landlord’s property under the preceding sentence not paid or delivered to Landlord shall be held in trust by Tenant or Tenant’s bankruptcy estate for the benefit of Landlord and shall be promptly paid to or turned over to Landlord.

8. INSURANCE AND LIABILITY: (a) Liability Insurance. Tenant, at its own expense, shall pay for and maintain during the Lease Term a policy or policies for general liability insurance in an amount of not less than ONE MILLION AND 00/100’S DOLLARS ($1,000,000.00) for injury to any one person, with a limit of THREE MILLION AND 00/100’S DOLLARS ($3,000,000.00) to any number of persons in the aggregate, for FIVE THOUSAND DOLLARS ($5,000) for damage to the property of any one person, and fire damage for any one fire of $500,000 subject to deductibles per occurrence not to exceed $50,000, for the protection of Landlord as against any claim, demand or action in any way arising out of the ownership, maintenance or use of said premises and shall, upon demand, furnish Landlord a certificate of such insurance. Additionally, Tenant, at its own expense, shall pay for and maintain contents insurance on any and all personal property, including but not limited to equipment and inventory, owned by the Tenant located on the leased premises.

(b) Property Insurance. Tenant shall also be responsible at its own expense for paying for and maintaining during the Lease Term a policy or policies for the Premises for hazard, casualty, fire and/or extended coverage insurance on any Improvements, including all containers, buildings, fixtures and any signs, and such coverage shall be sufficient to insure the full replacement value of the such Improvements and shall not in any event be less than an amount not less than 100% of replacement cost of the Improvements.

(c) Tenant shall also be responsible at its own expense for paying for any and all workers’ compensation insurance as required by law relating to the Tenant’s employees working on the premises.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) Tenant further agrees that it will use its best efforts to cause any general contractor involved in any improvement or construction activities at the leased premises to maintain general liability insurance in an amount not less than that required to be maintained under this Section.

(e) In all liability, hazard, casualty, and other insurance policies required to be obtained by Tenant, Tenant shall name Landlord as an additional insured on such policies with loss payable jointly to Landlord and Tenant and shall provide Landlord sufficient evidence of compliance of the same upon request from Landlord. Insurance required hereunder shall be in financially responsible companies licensed to do business in the State of Georgia with an A.M. Best rating of at least “A” or better and such insurance policies shall be fully paid for (including periodic premium payments) and contain such provisions and expiration dates. At the request of the Landlord, the Tenant shall deliver to the Landlord receipts evidencing the payment for all such insurance policies and renewals and replacements. Without limiting the foregoing, each policy shall provide that no act or thing done by the Tenant shall invalidate the policy as against the Landlord and the Tenant shall provide the Landlord with a certificate of the insurer that provides that such insurance may not be cancelled or materially changed by the insurer without at least thirty (30) days prior written notice to the Tenant and Landlord. Such policies shall provide coverage for the indemnity obligations to Landlord under this Lease. Such policies shall be primary, not contributing with, and not in excess of coverage which Landlord may carry and otherwise in such a form and include such coverages as Landlord may reasonably require.

9. INDEMNITY: (a) Landlord shall not be liable to Tenant, its subTenants, employees, agents, visitors, customers, contractors, assignees, licensees, or concessionaires or any other person or governmental entity for injury to person or damage to property on or about the demised Premises, if: caused by the negligence or misconduct or acts of Tenant, its subTenants, employees, agents, visitors, customers, contractors, assignees, licensees, or concessionaires, or any other person entering the premises under Tenant’s and/or Tenant’s subTenants’ express or implied invitation; arising out of Tenant’s use and/or Tenant’s subTenants’ use of the Premises and the conduct of its business therein; arising out of Tenant’s violation and/or Tenant’s subTenants’ violation of any Federal or State laws; or arising out of a breach or default by Tenant in performing its obligations under this lease. Tenant shall indemnify and hold the Landlord, and their respective officials, directors, officers, members and employees, harmless from and against any and all costs, losses, expenses, or claims incurred in connection with any such claim, or arising out of such damage or injury, or in connection with any action or proceeding brought thereon, including reasonable attorneys’ fees actually incurred. The indemnities set forth above specifically extend to, but are in no way limited to, governmental or other claims relating to any actual or alleged violation of any Environmental Laws, State or Federal, provided, that such indemnity shall not extend to any actual or alleged violation of any Environmental Laws which violation exclusively relates to a cause or condition occurring or existing prior to the execution of this lease agreement.

(b) The Tenant shall not be liable to the Landlord, its employees, agents or any other person for injury to person or damage to property on or about the premises if caused by the negligence of the Landlord, its employees or agents or arising out of a breach or default by the Landlord in performing its obligations under this lease. The Landlord shall indemnify Tenant and hold it harmless from and against all losses, expenses or claims arising out of such damage or injury.

(c) The indemnity of the indemnified Persons or Entities contained in this Section shall survive the termination of this lease. The Landlord and Tenant shall each be entitled to enforce its right to indemnification under this Section, and the Landlord’s right to indemnification hereunder shall not be assignable by Tenant.

10. COMPLIANCE WITH LAWS: The Tenant warrants that throughout the term of this lease, it shall, at its own expense, maintain its business operations and activities on the demised premises in compliance with all applicable life and safety codes and all applicable building and zoning, health, environmental, and safety ordinances and laws, including the Occupational Health and Safety Act, the Americans with Disabilities Act of 1990, and all applicable Environmental Laws, whether State or Federal, (provided, that such warranty shall not extend to any actual or alleged violation of any Environmental Laws, which violation exclusively relates to the leased land and exclusively relates to a cause or condition occurring or existing prior to the execution and commencement of the term of this lease agreement), and all other applicable laws, ordinances, rules and regulations of the United States of America, the State, and any political subdivision or agency thereof having jurisdiction over the Tenant and which relate to the operations of the Tenant, any violation of which would have a material adverse effect on the Tenant’s ability to fully perform its obligations under this lease.

11. SUBLETTING: The Tenant shall not have the right to assign this lease or to sublet the demised premises or a portion of the demised premises without obtaining the prior written consent of Landlord pursuant to the terms of the LANDLORD, TENANT AND

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SUBTENANT AGREEMENT attached as Exhibit “B” which shall be executed by Landlord, Tenant and any Subtenant, and such consent shall not be unreasonably withheld, conditioned or delayed. In the event of any such permitted assignment or subletting, Tenant shall nevertheless also continue to be liable for the performance of all conditions hereunder and the payment of all rentals herein reserved for the full term of this lease.

12. SIGNAGE: Tenant shall have the right, at its expense and in conformity with applicable laws, ordinances, and restrictive covenants and subject to the prior approval of Landlord, to erect signs on the premises. Approval from the Landlord shall not be unreasonably withheld, conditioned or delayed. Tenant shall remove all signs of Tenant upon the expiration or earlier termination of this Lease and immediately repair any damage to the Premises caused by, or resulting from, such removal.

13. FIXTURES AND ATTACHMENTS TO BUILDING OR REALTY: (a) The Tenant may, from time to time install trade fixtures, machinery, equipment, furnishings and other personal property at the leased Premises. All such trade fixtures, machinery, equipment furnishings and other personal property shall remain the sole property of the Tenant and the Tenant may remove the same from the leased premises at any time, in its sole discretion and at its own expense, provided that the Tenant repairs any damage to the leased premises caused by such removal. The Tenant may create any mortgage, encumbrance, lien or charge on any such trade fixtures, machinery, equipment, furnishings, and other personal property that is owned by the Tenant or others and that is not a part of the leased Premises that is owned by the Landlord.

(b) Within thirty (30) days after the expiration or termination of this Lease, provided the Tenant is not in default hereunto, the Tenant may remove from the premises all trade fixtures peculiar to the business conducted upon the premises by the Tenant which have been thereupon installed by the Tenant at Tenant’s expense, provided, however, that if the removal of any such fixtures causes damage to the premises Tenant shall restore the premises as closely as practicable to the condition they were in at the time of installation of such fixtures by the Tenant. In the event Tenant desires to leave any of said fixtures on the premises upon the termination of this lease, Tenant shall first obtain Landlord’s written permission to leave such fixtures. In the absence of written authorization from Landlord permitting otherwise, upon the expiration of termination of this lease, Tenant shall return the premises to their condition as of the date of execution of this lease agreement.

14. UTILITY SERVICE AND HOLD HARMLESS AGREEMENT: Tenant shall pay all lawful charges for lights, water, heat, gas, telephone and power bills, and all other similar utility bills accruing for services delivered to and separately metered for the premises during the term of this lease or any extension thereof, and shall at all times save Landlord harmless against any liability for any such charges. Tenant shall be solely responsible for the repair and maintenance of any transformers, meters, electrical infrastructure necessary in connection with such services or Tenant’s uses of the Premises. Tenant’s use of the electrical energy for and on the Premises shall not, at any time, exceed the capacity of either or both of (i) any of the electrical conductors, transformers and equipment in or otherwise servicing the Premises; and (ii) the HVAC systems therein. Additionally, the Tenant shall save Landlord harmless against any liability for Tenant’s failure to abide by the conditions of this section including for injury or damage to person or property caused by fire or theft, or resulting from the operation of heating or air conditioning or lighting apparatus, or from gas, electricity, water, rain, snow, ice, or dampness, that may leak or flow from any part of the Premises or from the pipes, appliances, or plumbing work of any Improvements, containers or buildings on the Premises. Tenant shall further save Landlord harmless for any materialmen’s liens, mechanics or laborer’s liens for any improvements placed upon said Premises at the sole instance of Tenant.

15. INVOLUNTARY CESSATION OF SERVICES TO PREMISES: Landlord reserves the right, acting reasonably and upon notice to Tenant (except in the event of an emergency), without any liability to Tenant and without affecting Tenant’s covenants and obligations hereunder, to stop service (if being provided by Landlord pursuant to any separate agreement) of the HVAC, electric, sanitary, or other systems serving the Premises, or to stop any other services required by Landlord under this Lease, whenever and for so long as may be necessary by reason of accidents, emergencies, strikes, or the making of repairs or changes which Landlord in good faith deems necessary. No such interruption of service shall be deemed an eviction or disturbance of Tenant’s use and possession of the Premises or any part thereof, or render Landlord (or its employees, agents, or representatives) liable for damages of any kind, or relieve Tenant from performance of Tenant’s obligations under this Lease, including, but not limited to, the obligations to pay Rent. Landlord shall use its commercially reasonable best efforts to minimize the interruption of services to the Premises.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 16. USE OF PREMISES: The Premises shall be used for cryptocurrency mining or cryptomining operations and for no other purpose whatsoever without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. All operations shall be lawful and in compliance with all covenants and restrictions affecting the Premises and the Premises shall not be used for any illegal purposes. Tenant shall not, at any time, use or occupy, or suffer or permit anyone to use or occupy the Premises, or do or permit anything to be done in or on the Premises, in any manner, that may (a) cause, or be liable to cause, injury to the Premises or any equipment, infrastructure, facilities or systems therein or in the vicinity therein; (b) constitute a violation of the laws and requirements of any public authority or the requirements of insurance bodies, including any covenant, condition or restriction affecting the Premises which has been disclosed to the Tenant or of which the Tenant has actual or constructive notice; or (c) violate any laws, rules, orders, ordinances and regulations of the City of Sandersville, County of Washington, State of Georgia and of any other governmental authority applicable to Tenant and its location, and consistent with the other terms and conditions of this Lease.

17. REMEDY OF LANDLORD ON DEFAULT: (a) In the event Tenant shall default in the prompt payment when due of any rentals due hereunder, or shall default in keeping any of the other agreements or covenants herein contained and shall remain in default for a period of thirty (30) days after written notice from Landlord, Landlord may thereupon, at its option, re-enter and take possession of the premises and rent the same at the best price which it may obtain by reasonable effort upon private negotiations, and Tenant shall be liable for the difference between the amount received on such renting and the rent payable pursuant to the terms of this agreement. Such leasing by Landlord shall in no way be deemed a breach of the contract and the Tenant acknowledges that Landlord would, in such event, be acting as its agent to minimize the damage resulting from Tenant’s breach of the contract. The rights of the Landlord herein set out are cumulative to and not restrictive of any other rights which Landlord may have under any provisions of law. Notwithstanding the foregoing, the provisions of this Section 17 are subject to Section 4 of the Landlord, Tenant, and Subtenant Agreement concerning Assignment of Rent which includes but is not limited to the provision of Section 4 of said agreement relating to a sub-tenant’s payments to Landlord in the event of Tenant’s default.

(b) Landlord may take whatever action at law or in equity or under the terms of this Lease may appear necessary and desirable to collect the rents and other amounts payable by the Tenant hereunder then due or thereafter to become due, or to enforce performance and observance of any obligation, agreement, or covenant of the Tenant under this agreement. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power to pursue remedies existing at law or in equity or by statute or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient.

(c) In the event the Tenant should default under any of the provisions of this lease and the Landlord should employ attorneys, accountants, or other experts or incur other expenses for the collection of amounts due it hereunder or the enforcement of performance or observance of any obligation or agreement on the part of the Tenant herein contained for its benefit, the Tenant agrees that it shall on demand therefor pay to the Landlord the reasonable and actual fees of such attorneys, accountants, or other experts and such other expenses so incurred by the Landlord. Any attorneys’ fees required to be paid by the Landlord under this lease shall include attorneys’ fees paralegals’ fees through all proceedings, including but not limited to, negotiations, administrative hearings, trials, and appeals, court costs and reimbursable expenses of such attorneys.

18. PROVISIONS APPLICABLE TO HEIRS: This lease and all provisions herein shall be binding upon the heirs, devisees, legal representatives, executors, administrators, successors and assigns of each of the parties hereto, and shall be assignable by Landlord.

19. DESTRUCTION OF ANY EQUIPMENT, FIXTURES, IMPROVEMENTS OR BUILDINGS: In the event that any equipment, fixtures, improvements or buildings (collectively “Improvements”), if any, of the Landlord shall be damaged by fires or other casualty such as is covered by the standard insurance policy extended coverage provisions now contained as a part of extended coverage, but not beyond economic repair, Landlord will promptly and diligently repair said Improvements so as to restore the same to substantially the present condition, and if such damage shall be such as to interfere with the Tenant in the operation of its business, rental shall be abated in proportion to that portion of the Improvements so damaged; and when such Improvements shall have been repaired, the Tenant shall resume the payment of rent as herein provided; but in the event said Improvements should be so damaged by fire or other of said casualties as to make it impractical to undertake to repair the same, then the Landlord shall have the option as to whether it shall rebuild said Improvements and should it elect not to rebuild within ten (10) days after the casualty, then this lease shall be thereupon automatically cancelled and terminated, but if it should elect to rebuild said Improvements, then the rent shall abate until said building is completed and

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document possession thereof delivered over to the Tenant, at which time Tenant shall begin to pay the rent as herein provided. If Landlord fails to complete such rebuilding within ninety (90) days after the casualty, Tenant may, at its option, terminate this lease.

20. NON-WAIVER: Landlord’s failure to take advantage of any default or violation by Tenant shall not be deemed a waiver thereof, nor any custom or practice which may grow up between the parties be construed to waive or lessen the rights of the Landlord.

21. EXTENSION OPTION: (a) It is agreed that if, during the term of this lease, and while Tenant is not in default hereunder, the Tenant desires to extend the term of this lease for an additional period, the parties agree to negotiate in good faith to reach an agreement as to the terms and conditions of said extension, at a rental price to be determined.

(b) The Tenant shall have the privilege of notifying Landlord in writing of its intention to so extend the lease, providing that such notice must be given not less than 90 days, prior to the expiration of the existing term of this lease, and upon such notice being given, provided Tenant is not then in default hereunder, Landlord and Tenant agree to negotiate in good faith to reach an extension agreement.

22. ALTERATIONS. Tenant shall not make any alterations or additions to the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Landlord shall respond to Tenant’s request for alterations within three business days of actual receipt such request, provided that Landlord has been provided with detailed information regarding the nature and scope of such alteration. Notwithstanding the foregoing, Tenant, may from time to time without obtaining the consent or appeal of Landlord install trade fixtures and equipment into Improvements including containers and buildings.

23. “FOR SALE” OR “FOR LEASE” SIGNS. Landlord may place and maintain “For Sale” or “For Lease” signs on the Demised Premises during the last ninety (90) days of the Lease Term or any renewal thereof. Landlord shall remove said signs upon receipt of notice by Tenant pursuant to Section 18 of this Agreement.

24. TAXES: (a) The Tenant shall pay and discharge as and when due all governmental taxes, assessments, ad valorem taxes (if applicable), fees and charges of every kind or nature (“Taxes”), whether special, ordinary or extraordinary, at any time, or from time to time during the Lease Term, in connection with the ownership, leasing, or operation of the Premises, which shall be assessed, charged, or imposed upon the premises or any erections, improvements or installations thereon or thereto. Landlord shall forward the ad valorem tax bill or any other tax bill to Tenant within fifteen (15) days of Landlord’s receipt of said bill. Tenant shall be responsible for 10/12th of the 2020 ad valorem property taxes, if applicable, which shall represent the pro-rated portion of the year in which Tenant shall first have possession of the premises.

(b) Tenant shall be responsible for all personal property taxes levied on any personal property of the Tenant on the leased premises, including but not limited to trade fixtures, machinery, equipment, furnishings and other personal property.

(c) Without limiting the specificity or generality of the preceding paragraphs, the Tenant shall, throughout the term, duly pay and discharge, as the same become due and payable, (i) all taxes and governmental charges of any kind whatsoever that may (on account of a change in law or otherwise) at any time be lawfully assessed or levied against or with respect to the interests of the Landlord or Tenant, (ii) all utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep during the term, and (iii) other levies, permit fees, inspection and license fees and all other charges imposed upon or assessed against the Landlord or Tenant or arising in respect of the occupancy, uses or possession thereof. All such Taxes shall be paid by Tenant before they become delinquent. If Tenant is unable or refuses to pay any such Taxes, such shall constitute a default under this Lease. In such event Tenant shall notify Landlord within thirty (30) days of the due date of such Taxes and Landlord shall have the right (but not the obligation), cumulative to all other rights and remedies of Landlord, to pay such Taxes and to add the amounts of such Taxes paid by Landlord on Tenant’s behalf to the future Rent to be paid to Landlord by Tenant. Further, if permitted by law, Tenant shall be entitle to contest any Taxes in good faith at its own expense. Notwithstanding the foregoing, if the Premises may be subject to loss on account of non-payment of taxes during any period of contest, Lessee shall pay the same under protest and seek a refund, or if permitted, shall post such bond as may be needed to avoid a loss of the Premises.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (d) Under current law, the Landlord may exempt from ad valorem property tax on its property and the Tenant’s leasehold interest is intended by the parties to be a mere usufruct, which is not a separately taxable interest. Notwithstanding anything herein to the contrary, Landlord cannot and does not warrant, guaranty or promise any particular ad valorem tax treatment resulting from this Lease.

25. NO GRATUITY. The Landlord has found and determined, and hereby finds and determines, that the operation of the Premises by the Tenant will be a benefit to the people of the City and the County, and that (a) the economic benefits that will inure to the County and the City and their citizens from the operation of the Premises, from the payments to be made by the Tenant under this Lease, and the taxes that the Tenant is to pay on its own property at the Premises, (b) this transaction is the best and most feasible way to obtain such benefits for the County and the City and their citizens; and, therefore, (c) this Lease involves no gratuity (prohibited by the Constitution of the State of Georgia of 1983) to Tenant.

26. ADVANCES BY THE LANDLORD. If the Tenant shall fail to do any act or pay any taxes, assessments, charges or insurance premiums required by this agreement, the Landlord may (but shall be under no obligation to), after notifying the Company of its intention to do so, do any such act or pay any such taxes, assessments, charges or premiums required by this Agreement, and all amounts so advanced therefor by the Landlord shall become an additional obligation of the Tenant to the one making the advancement, which amounts shall constitute additional rent which shall be payable, with interest at the rate of 5% per annum. Any remedy herein vested in the Landlord for the collection of rent shall also be available to the Landlord for the collection of any additional rent for advances as set out herein.

27. VACATING PREMISES: At the expiration or termination of this lease, Tenant shall peacefully and quietly leave, surrender and yield up to Landlord all of the leased premises in the good order and repair in which such property now is, ordinary wear and tear and casualties not occurring through the Tenant’s negligence excepted, and Tenant shall remove all of its property therefrom so that the Landlord can repossess the leased property on the day upon which this lease or any extension thereof ends, whether upon notice or by holdover or otherwise. Landlord shall have the same rights to enforce this covenant by ejectment and for damages or otherwise as for the breach of any other condition or covenant of this lease. Tenant may at any time prior to or upon the termination of this lease or any renewal or extension thereof remove from the leased premises all materials, equipment and property of every other sort or nature installed by the Tenant thereon, provided that such property is removed without substantial damage or injury to the leased property. No injury or damage shall be considered substantial if it is promptly corrected by restoration to the condition prior to the installation of such property, if and when so requested by the Landlord. Tenant shall, at Tenant’s sole cost and expense, during the term of this lease, restore or repair any damage to the leased premises or building resulting from the use or occupancy by Tenant or the removal of any furniture or fixtures of Tenant; and in the event Tenant shall fail or refuse to do so, Landlord is authorized, at Tenant’s expense, to undertake and to make all such repairs and renovations, and Tenant shall immediately pay the cost of same upon presentation of a statement thereof by Landlord. Any such property not removed by Tenant shall become the property of the Landlord.

28. LANDLORD EXPENSES. In addition to the rental payments required in Section 3, in the event Tenant vacates the demised premises prior to expiration of the term or any extension thereof, or Landlord repossesses the premises, Tenant shall compensate Landlord for the following: all expenses incurred by Landlord in repossession, and in reletting (including repairs, remodeling, replacements, advertisements, and brokerage fees); all reasonable concessions granted to a new Tenant upon reletting; and all expenses incurred by Landlord as a direct or indirect result of Tenant’s default.

29. LANDLORD’S ACCESS. Landlord and its respective agents, employees and representatives shall have the right to enter and/or pass through the Premises at any time or times during normal business hours and upon reasonable prior notice to, and in the company of a representative of, the Tenant (except in the event of emergency): (a) to examine and inspect the Premises and to show them to actual and prospective lenders, prospective purchasers or mortgagees of the Premises or providers of capital to Landlord; and (b) to make such repairs, alterations, additions and improvements in or to the Premises or its facilities and equipment as Landlord is required to make. Landlord shall be allowed to take all materials into and upon the Premises that may be required in connection with any required repair, alterations, additions or improvements, without any reduction or modification of Tenant’s covenants and obligations hereunder. Provided, however, that in all cases of entry permitted hereunder, Landlord shall use reasonable efforts to avoid interference with Tenant’s business operations and Tenant’s occupancy and use of the Premises, and in the case of any such entry, shall take such steps as Tenant shall reasonably request to protect Tenant’s trade secrets and confidential information, including, in the case of any entry under subpart (a) of the preceding sentence, requiring the signing of reasonable confidentiality agreements from such prospective lenders, purchasers

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document or mortgagees. Additionally, Landlord shall have the following rights exercisable, without notice to Tenant, and without being deemed an eviction or disturbance of Tenant’s use or possession of the Premises or giving rise to any claim for set-off or abatement of Rent, at any time after Tenant vacates or abandons the Premises for more than sixty (60) consecutive days with no intention of reoccupying the Premises: (i) to have pass keys, access cards, or both, to the Premises; and (ii) to decorate, remodel, repair, alter, demolish or otherwise prepare the Premises for reoccupancy. During the period of ninety (90) days prior to the Expiration Date (or at any time, if Tenant has vacated or abandoned the Premises or is otherwise in default under this Lease), Landlord and its agents may, upon reasonable prior notice to, and in the company of a representative of, the Tenant, exhibit the Premises to prospective Tenants during normal business hours and erect a “For Lease” sign thereon.

30. NET LEASE. This Lease shall be deemed and construed to be a “net, net, net lease” or “triple net lease,” and the Tenant shall pay absolutely net during the Term the rent, taxes, insurance premiums, costs of operation, maintenance, use and occupancy of the Premises and all other payments required hereunder, free of any deductions, without abatement, diminution, or set-off other than those herein expressly provided.

31. NO WARRANTY OF CONDITION OR SUITABILITY BY THE LANDLORD. Tenant acknowledges that it has inspected the Premises as they exist on the date of execution hereof, insofar as it desired to do so, and agrees that the Premises are leased to Tenant hereunder, and accepted by Tenant, in their “AS IS” condition as of the execution hereof. The Landlord makes no warranty, either express or implied, as to the merchantability, condition, or workmanship of any part of the Premises or that the same will be suitable for the Tenant’s purposes or needs.

32. CONDEMNATION. In the event that the whole or any part of the leased premises shall be taken by any governmental agency or utility under the power of eminent domain, both parties shall pursue their own damage awards with respect to any such taking, provided, however, that Tenant shall be entitled to the award in connection with any condemnation insofar as the same represents compensation for or damage to the Improvements, fixtures paid for or installed by Tenant, equipment, or other property on the premises, moving expenses, and alteration expenses. Landlord shall be entitled to the entirety of any award insofar as same represents compensation for or damage to Landlord’s fee title to the leased premises or building.

33. TENANT TO MAINTAIN ITS EXIS FENCE. The Tenant agrees that while this Lease is in effect it shall maintain its legal existence and good standing as a Georgia company, shall not without the prior written consent of the Landlord (which consent shall not be unreasonably withheld or delayed), consolidate with or merge into it, and shall not dissolve or otherwise dispose of substantially all of its assets. The Tenant may, without violating this agreement, consolidate with, merge into or convert to an entity, or sell or otherwise transfer to another entity all or substantially all of its assets as an entirety and thereafter the Tenant may dissolve (if applicable), provided the surviving, resulting or successor (i) is authorized to do business in the State, (ii) assumes in writing (or by operation of law) all of the obligations of the Tenant under this lease, and (iii) obtains all licenses and permits required by law to operate the business of Tenant.

34. RECORDING. A “short form lease” or “memorandum of lease” giving appropriate notice hereof, may be recorded in all offices as may at the time be provided by law as the proper place for recordation.

35. GOVERNING LAWS. This Lease shall be construed in accordance with the laws of the State of Georgia. Landlord and Tenant agree that the sole venue for any action which may arise under this Lease shall be the Superior Court of Washington County, Georgia or the United States District Court for the Middle District of Georgia, Macon Division; the Landlord and Tenant each agree to submit to personal jurisdiction in both forums for any action which arises out of this Lease.

36. WAIVER OF TRIAL BY JURY. THE LANDLORD AND THE TENANT, TO THE FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY ANY PARTY TO THIS LEASE WITH RESPECT TO THIS LEASE, THE PREMISES, OR ANY OTHER MATTER RELATED TO THIS LEASE OR THE PREMISES.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 37. IMMUNITY OF MEMBERS, OFFICERS, AND EMPLOYEES OF AUTHORITY. No recourse shall be had for the enforcement of any obligation, covenant, promise, or agreement of the Landlord contained in this lease or for any claim based hereon or otherwise in respect hereof or upon any obligation, covenant, promise, or agreement of the Landlord against any director, member, officer, or employee, as such, in his individual capacity, past, present, or future, of the Landlord, or any successor person, whether by virtue of any constitutional provision, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly agreed and understood that this lease is solely a corporate obligation of the Landlord and that no personal liability whatsoever shall attach to, or be incurred by, any director, member, officer, or employee, as such, past, present, or future, of the Landlord, or of any successor person, either directly or through the Landlord, or any successor person, under or by reason of any of the obligations, covenants, promises, or agreements entered into between the Landlord and Tenant whether contained in this lease or in any instrument supplemental hereto, and that all personal liability of that character against every such director, member, officer, and employee of the Landlord or any such successor person is, by the execution of this lease and as a condition of and as part of the consideration for the execution of this lease, expressly waived and released by the Tenant. The immunity of the directors, members, officers, and employees of the Landlord under the provisions contained in this section shall survive the termination of this lease.

38. SEVERABILITY. If any portion of this Lease shall be held to be invalid or unenforceable for any reason, the remaining provisions shall be continually valid and enforceable. If a Court of competent jurisdiction finds that any provision of this Lease is invalid or unenforceable, but that by limiting such provision, it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

39. TIME IS OF THE ESSENCE. Time is of the essence of this Lease and each and all of its provisions.

40. AMENDMENTS, CHANGES AND MODIFICATIONS. This lease contains the entire agreement between the parties relating to the subject matter. This lease supersedes all prior contracts, proposals, representations and commitments, oral, written or otherwise. This lease may only be amended by an instrument signed by the authorized representatives of both parties. If any provision of this lease shall be declared invalid or unenforceable, the remainder of this lease shall continue in full force and effect.

41. COUNTERPARTS. This lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

[SIGNATURES ON FOLLOWING PAGE]

LANDLORD, TENANT, AND SUBTENANT AGREEMENT

THIS AGREEMENT (this “Agreement”) is made as of the ______, by and between THE DEVELOPMENT AUTHORITY OF WASHINGTON COUNTY, a public body corporate and politic of the State of Georgia, with its principal office and

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document place of business in 603 South Harris St. Sandersville, GA, 31082 Washington County, Georgia, (hereinafter “Landlord”), INNOVATIVE PROPERTY MANAGEMENT, LLC, a North Carolina Limited Liability Company, with its principal office and place of business in 5217 Cottage Bluff Ln., Knightdale, NC, 27545 Wake County, North Carolina (hereinafter “Tenant”), ______(“Subtenant”), with reference to the following facts:

A. Landlord and Tenant entered into that certain Lease Agreement dated ______(collectively the “Master Lease”), relating to certain premises more particularly described in the Master Lease (“Premises”) and as follows:

DETAILED AS 1.0 ACRE ON THE ATTACHED EXHIBIT “A” TOGETHER WITH RIGHTS OF INGRESS AND EGRESS THERETO

B. Tenant and Subtenant have entered into a Sublease Agreement dated as of ______(“Sublease”). By the terms of the Sublease, Tenant will sublease to Subtenant and Subtenant will sublease from Tenant a portion of the Premises consisting of approximately______square feet of space located at the Premises as more particularly described in the Master Lease and Sublease (“Sublease Premises”).

C. Tenant has requested that Landlord consent to Tenant subletting the Sublease Premises to Subtenant pursuant to the Sublease. Landlord has agreed to consent to the subletting on the following terms and conditions.

NOW, THEREFORE, in consideration of the foregoing, and in consideration of the mutual agreements and covenants hereinafter set forth, Landlord, Tenant and Subtenant agree as follows:

1. DEFINITIONS. Unless otherwise defined in this Agreement, all defined terms used in this Agreement shall have the same meaning and definition given them in the Master Lease. If any terms defined herein contradict the meaning of the same term in the Master Lease, the Master Lease definition will control.

2. MASTER LEASE.

2.1 SUBORDINATION. The Sublease is and shall be at all times subject and subordinate to all of the terms and conditions of the Master Lease and, notwithstanding anything to the contrary contained in the Sublease, Subtenant agrees to perform all of the covenants of Tenant contained in the Master Lease insofar as the same relate to the Sublease Premises, provided that Subtenant shall not be obligated to pay rent, operating expenses or other charges in excess of the amounts specified in the Sublease. In case of any conflict between the provisions of the Master Lease and the provisions of the Sublease, as between Tenant and Landlord, the provisions of the Master Lease shall prevail unaffected by the Sublease. Subtenant shall not violate any of the terms and conditions of the Master Lease to the extent applicable to the use and occupancy of the Sublease Premises. Any breach of the Master Lease by Tenant or any breach of the Sublease or Master Lease by Subtenant which results in a breach of the Master Lease shall entitle Landlord to all the rights and remedies provided in the Master Lease.

2.2 ATTORNMENT. In the event the Master Lease terminates prior to the termination of the Sublease, Sublessee agrees to attorn to Landlord and to recognize Landlord as Sublessee’s landlord under the Sublease, upon the terms and conditions and at the rental rate specified in the Sublease and for the then remaining term of the Sublease, except that Landlord shall not be bound by any provision of the Sublease which in any way increases Landlords duties, obligations or liabilities to Sublessee beyond those owed to Tenant under the Master Lease. Sublessee agrees to execute and at any time and from time to time, upon request of Landlord, any instruments which may be necessary or appropriate to evidence such attornment. Notwithstanding any provision to the contrary in the Sublease or in any other agreement, Subtenant acknowledges that it shall have no right and there shall not be vested in Subtenant any right to exercise rights of first refusal, options, or other similar preferential rights, if any, given to Tenant under the Master Lease.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2.3 TENANT REPRESENTATIONS AND WARRANTIES. Tenant represents and warrants to Landlord that (a) attached to this Agreement as Exhibit “B” is a true and correct copy of the Master Lease (subject to any redactions as to any confidential information), and there exist no amendments, modifications, or extensions of or to the Master Lease except as specified herein, and the Master Lease is now in full force and effect; and (b) to Tenant’s actual knowledge, there exist no defenses or offsets to enforcement of the Master Lease by Landlord or Tenant. To Tenant’s actual knowledge, (i) Landlord is not in default in the performance of the Master Lease, (ii) Landlord has not committed any breach thereof, and (iii) no event has occurred which, with the passage of time, or the giving of notice, or both, would constitute a default or breach by Landlord.

2.4 TENANT AND SUBTENANT REPRESENTATIONS AND WARRANTIES. Tenant and Subtenant represent and warrant to Landlord that (a) there are no additional payments of rent or consideration of any type payable by Subtenant to Tenant with regard to the Sublease Premises other than as disclosed in the Sublease, (b) a true, correct and complete copy of the Sublease is attached hereto as Exhibit “C” (subject to any redactions as to any confidential information), and (c) no amendment to the Sublease shall be effective or enforceable between Tenant and Subtenant unless and until Landlord shall have consented to such amendment in writing.

3. CONSENT OF LANDLORD. Landlord hereby consents to the subletting of the Sublease Premises to Subtenant pursuant to the terms of the Sublease. Landlord’s consent shall not release or discharge Tenant of any of its obligations under the Master Lease or release, discharge or alter the primary liability of Tenant to pay rent and all other sums due under the Master Lease and to perform and comply with all other obligations of Tenant under the Master Lease. As between Landlord and Tenant, the Sublease shall not alter, amend or otherwise modify any provisions of the Master Lease. Landlord shall have no obligations to any party in connection with the Sublease Premises other than those obligations set forth in the Master Lease. Landlord shall not be bound or estopped in any way by the provisions of the Sublease. This Agreement shall not be construed as a consent by Landlord to, or as permitting, any other or further subletting or assignment by Tenant or Subtenant. Landlord shall not (i) be liable to Subtenant for any act, omission or breach of the Sublease by Tenant, (ii) be subject to any offsets or defenses which Subtenant might have against Tenant, (iii) be bound by any Base Rent or Additional Rent which Subtenant might have paid in advance to Tenant, or (iv) be bound to honor any rights of Subtenant in any security deposit made with Tenant, except to the extent Tenant has delivered such security deposit to Landlord. Tenant hereby agrees that in the event of termination of the Master Lease, Tenant shall, upon the written demand of Landlord, immediately pay or transfer to Master Landlord any security deposit, rent or other sums then held by Tenant from Subtenant.

4. ASSIGNMENT OF RENT

4.1 Subject to the terms of Section 4.2, Tenant hereby absolutely and irrevocably assigns and transfers to Landlord Tenant’s rights under the Sublease to all rentals and other sums due Tenant under the Sublease.

4.2 Landlord agrees that until a default shall occur in the performance of Tenant’s obligations under the Master Lease, Tenant shall have a license to receive, collect and enjoy the rentals and other sums due Tenant under the Sublease except as otherwise provided under the Master Lease. However, said license shall automatically terminate without notice to Tenant upon the occurrence of a default by Tenant in the performance of its obligations under the Master Lease and Landlord may thereafter, at its option, receive and collect, directly from Subtenant, all rentals and other sums due or to be due Tenant under the Sublease. In such event and so long as Subtenant pays to Landlord all rentals and other sums due or to be due Tenant under the Sublease, and so long as Subtenant abides by all of the Terms of Tenant’s obligations under the Master Lease, Landlord agrees that Subtenant may remain a Subtenant in accordance with all other terms provided herein and as provided in the Master Lease. Landlord shall not, however, by reason of the assignment of all rentals and other sums due Tenant under the Sublease nor by reason of the collection of said rentals or other sums from the Subtenant, (a) be bound by or become a party to the Sublease, (b) be deemed to have accepted the attornment of Subtenant, or (c) be deemed liable to Subtenant for any failure of Tenant to perform and comply with Tenant’s obligations under the Sublease. Tenant hereby irrevocably authorizes and directs Subtenant, upon receipt by Subtenant of any written notice from Landlord stating that a default exists in the performance of Tenant’s obligations under the Master Lease, to pay directly to Landlord the rents and other income due and to become due under the Sublease. Tenant agrees that Subtenant shall have the right to rely solely upon such notice from Landlord notwithstanding any conflicting demand by Tenant or any other party. Tenant hereby agrees to indemnify, defend and hold Subtenant harmless from any and all claims, losses, liabilities, judgments, costs, demands, causes of action and expenses (including, without limitation, attorneys’ fees and consultants’ fees) (collectively, “claims”) which Subtenant may incur in relying on any written notice from Landlord and/or paying rent and other sums due under the Sublease directly to Landlord in accordance with this Section 4.2. Without limiting the generality of the foregoing, the acceptance of rent hereunder by Landlord shall not be a waiver of any preceding breach by Tenant or Subtenant of the Master Lease or Sublease other than the failure of Tenant or Subtenant, as the case may be, to pay the particular rental so accepted.

5. INDEMNIFICATION. Tenant and Subtenant each shall indemnify and hold harmless Landlord and Landlord’s members, agents, employees, partners, shareholders, directors, invitees, and independent contractors (collectively “Agents”) of Landlord, against and from any and all Claims arising from or related to the following: (a) Subtenant’s use of the Sublease Premises or any activity done, permitted or suffered by Subtenant in, on or about the Sublease Premises, any Improvements, Containers, Buildings, or the Property; (b) the Sublease and any act or omission by Subtenant or its Agents in connection with or related to the Sublease, the Sublease Premises, any Improvements, Containers, Buildings, or the Property; (c) any Hazardous Material used, stored, released, disposed, generated, or transported by Subtenant or its Agents in, on, or about the Sublease Premises, including without limitation, any Claims arising from or related to any Hazardous Material investigations, monitoring, cleanup or other remedial action; and (d) any action or proceeding brought on account of any matter referred to in items (a), (b), and/or (c). If any action or proceeding is brought against Landlord by reason of any such Claims, upon notice from Landlord, Tenant and Subtenant shall defend the same at their expense with counsel reasonably satisfactory to Landlord. The obligations of Tenant and Subtenant under this Section 5 shall survive any termination of the Sublease or the Master Lease.

6. ASSIGNMENT AND SUB-SUBLETTING. Subtenant shall not voluntarily or by operation of law, (1) mortgage, pledge, hypothecate or encumber the Sublease or any interest therein, (2) assign or transfer the Sublease or any interest therein, sub-sublet the Sublease Premises or any part thereof, or any right or privilege appurtenant thereto, or allow any other person (the employees, agents and invitees or Subtenant excepted) to occupy or use the Sublease Premises, or any portion thereof, without first obtaining the written consent of Landlord.

7. Miscellaneous Provisions.

7.1 Tenant shall pay to Landlord, upon Landlord’s demand, the fee specified in the Master Lease, or if no fee is so specified, Landlord’s reasonable fees incurred in connection with Landlord’s review and processing of documents relating to the subletting of the Sublease Premises to Subtenant.

7.2 Landlord shall use reasonable efforts to notify Subtenant of any default by Tenant under the Master Lease of which Landlord has actual knowledge and which is not cured within any applicable notice and cure period provided in the Master Lease; provided, however, that the failure of Landlord to provide such notice shall not give rise to liability on the part of Landlord or otherwise alter or modify the rights and obligations of the parties hereunder. The giving of any such notice to Subtenant shall not vest in Subtenant any rights or remedies except as otherwise expressly set forth herein.

7.3 Tenant and Subtenant agree not to amend, modify, supplement, or otherwise change in any respect the Sublease except with the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. This Agreement shall not create in Subtenant, as a third party beneficiary or otherwise, any rights except as set forth in this Agreement.

7.4 All notices which Landlord or Subtenant desire to give or provide to the other shall be personally delivered or sent by registered or certified U.S. mail, postage prepaid, return receipt requested, and, if to Landlord, shall be sent to the address set forth immediately below Landlord’s signature hereto, and, if to Subtenant shall be sent to the Sublease Premises. Each party shall have the right to change its address for notices by giving written notice thereof to the other party in accordance with this Section 7.4. Any notice given in accordance with this Section 7.4 shall be deemed delivered upon actual receipt (or attempted delivery if delivery is refused). Copies of any notices of default sent by (i) Tenant under the Master Lease or Sublease, as applicable, shall be delivered to Landlord and Subtenant at the addresses for each set forth in the Master Lease and Sublease, as applicable, at the same time such notices are sent to Landlord or Subtenant, as applicable, and (ii) Subtenant to Tenant under the Sublease shall be delivered by Subtenant to Landlord at the address set forth in the Master Lease at the same time such notices are sent to Tenant as set forth in the Sublease.

7.5 This Agreement, together with the provisions of the Master Lease relating to subletting or assigning, contains the entire agreement between the parties hereto regarding the matters which are the subject of this Agreement. In the event of a permitted

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document assignment under the Master Lease by Landlord or Tenant of its interest in the Master Lease, then the assignee of either Landlord of Tenant, as appropriate, shall automatically be deemed to be the assignee of Landlord or Tenant under this Agreement, and such assignee shall automatically assume the obligations of Landlord or Tenant under this Agreement. No other assignments of this Agreement shall be permitted, except with the written consent of all parties hereto. Any attempted assignment in violation of this section shall be void. The terms, covenants and conditions of this Agreement shall apply to and bind the heirs, successors, the executors and administrators and permitted assigns of all the parties hereto. The parties acknowledge and agree that no rule or construction, to the effect that any ambiguities are to be resolved against the drafting party, shall be employed in the interpretation of this Agreement. If any provision of this Agreement is determined to be illegal or unenforceable, such determination shall not affect any other provisions of this Agreement, and all such other provisions shall remain in full force and effect.

7.6 If either party hereto fails to perform any of its obligations under this Agreement or if any dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the defaulting party or the party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred by the other party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys’ fees and disbursements. Any such attorneys’ fees and other expenses incurred by either party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys’ fees obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment.

7.7 COUNTERPARTS. This Agreement may be executed in any number of counterparts, provided each of the parties hereto executes at least one counterpart; each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

7.8 NO COMMISSION. Tenant and Subtenant covenant and agree that under no circumstances shall Landlord be liable for any brokerage commission or other charge or expense in connection with the Sublease or this Agreement and Tenant and Subtenant agree to protect, defend, indemnify and hold Landlord harmless from the same and from any cost or expense (including but not limited to attorneys’ fees) incurred by Landlord in resisting any claim for any such brokerage commission.

7.9 NO LIMITATION OF RIGHTS. This Agreement shall in no manner be construed as limiting Landlord’s ability to exercise its rights to recapture any portion of the Premises, as set forth in the Master Lease, in the event of a proposed future sublease or assignment of such portion of the Premises.

7.10 GOVERNING LAWS. This Agreement shall be construed in accordance with the laws of the State of Georgia. All Parties agree that the sole venue for any action which may arise under this Agreement shall be the Superior Court of Washington County, Georgia or the United States District Court for the Middle District of Georgia, Macon Division; the Parties each agree to submit to personal jurisdiction in both forums for any action which arises out of this Agreement.

7.11 Tenant and Subtenant agree that the liability of Landlord hereunder and any recourse by Tenant or Subtenant against Landlord shall be subject to the limitations on liability set forth in the Master Lease. In addition, neither Landlord, nor any of its constituent members, partners, subpartners, or agents, shall have any personal liability, and Tenant and Subtenant each hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant and/or Subtenant.

7.12 JOINT AND SEVERAL LIABILITY. Tenant and Subtenant shall be jointly and severally liable for all bills rendered by Landlord for charges incurred by or imposed upon Subtenant which arise during the term of the Sublease for services rendered and materials supplied to the Sublease Premises pursuant to the Master Lease, Sublease and/or this Agreement.

7.13 The voluntary or other surrender of the Master Lease by Tenant, or a mutual cancellation, termination or expiration thereof, shall not work as a merger, and shall, at the option of Landlord, terminate all or any existing subleases or subtenancies, or may, at the option of Landlord, operate as an assignment to Landlord of any or all such subleases or subtenancies.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 7.15 Waiver of Subrogation. Landlord, by giving Landlord’s consent to the Sublease, and Subtenant hereby mutually waive their respective rights of recovery against each other for any loss of, or damage to, either parties’ property to the extent that such loss or damage is insured by an insurance policy required to be in effect at the time of such loss or damage. Each party shall obtain any special endorsements, if required by its insurer whereby the insurer waives its rights of subrogation against the other party. This provision is intended to waive fully, and for the benefit of the parties hereto, any rights and/or claims which might give rise to a right of subrogation in favor of any insurance carrier. The coverage obtained by Subtenant pursuant to the Insurance Section of the Master Lease shall include, without limitation, a waiver of subrogation endorsement attached to the certificate of insurance. The provisions of this Section 7.15 shall not apply in those instances in which such waiver of subrogation would invalidate such insurance coverage or would cause either party’s insurance coverage to be voided or otherwise uncollectible.

IN WITNESS WHEREOF, Landlord, Tenant and Subtenant have executed this Agreement as of the day and year first hereinabove written.

“LANDLORD”

DEVELOPMENT AUTHORITY OF WASHINGTON COUNTY

BY: (SEAL) CHAIRMAN ATTEST: (SEAL) SECRETARY

Signed, sealed and delivered this ____ day of______, 2020, in the presence of:

Witness

NOTARY PUBLIC FOR GEORGIA

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

“TENANT”

INNOVATIVE PROPERTY MANAGEMENT, LLC

By:

Member/Officer/Title:

Attest:

Member/Officer/Title:

Signed, sealed and delivered this ____ day of______, 2020, in the presence of:

NOTARY PUBLIC STATE OF

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

“SUBTENANT”

By:

Member/Officer/ Title:

Attest:

Member/Officer/ Title:

ADDRESS:

Signed, sealed and delivered this ____ day of______, 2020, in the presence of:

Witness

NOTARY PUBLIC STATE OF

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit 10.2

FIRST AMENDMENT TO LEASE AGREEMENT AND EXERCISE OF OPTION TO LEASE AN ADDITIONAL FOUR ADJOINING ACRES

GEORGIA, WASHINGTON COUNTY

THIS FIRST AMENDMENT TO LEASE AGREEMENT AND EXERCISE OF OPTION TO LEASE AN ADDITIONAL FOUR ADJOINING ACRES is dated this 23 day of February, 2021 (the “Effective Date”), hereinafter “Amended Lease” or “Amended Agreement”, made and entered into on the dates as hereinafter set forth below, by and between THE DEVELOPMENT AUTHORITY OF WASHINGTON COUNTY with its principal office and place of business in 603 South Harris St. Sandersville, GA, 31082 Washington County, Georgia, as Party of the First Part, hereinafter called “LANDLORD”, and INNOVATIVE PROPERTY MANAGEMENT, LLC, a North Carolina Limited Liability Company, with its principal office and place of business at 5217 Cottage Bluff Ln., Knightdale, NC, 27545 Wake County, North Carolina, as Party of the Second Part, hereinafter called “TENANT”.

WHEREAS, Landlord and Tenant are the current Parties to that certain commercial Lease Agreement dated May 1, 2020, (the “Lease” or “Agreement”) with the term ending April 30, 2023, pursuant to which Tenant is leasing from Landlord approximately 1 acre of real property located in Washington County, Georgia (the “Current Premises”); and

WHEREAS, Tenant desires to exercise its option to lease an additional four (4) acres of property pursuant to Section 4 of said Lease and for the same Lease Term and upon the terms and conditions previously set forth in said Lease; said property is hereinafter called the “Expansion Premises”, to-wit:

SEE DETAILED ACRES ON THE ATTACHED EXHIBIT “A” TOGETHER WITH RIGHTS OF INGRESS AND EGRESS THERETO

WHEREAS, the Parties desire to amend the Lease to more particularly reflect the leasing of the Expansion Premises; and

WHEREAS, the Tenant desires that Landlord contract with Triple Point Engineering for certain Civil Engineering Work (as defined herein) so that said Civil Engineering Work will be completed more expeditiously due to the Landlord’s ongoing relationship with Triple Point Engineering; and

WHEREAS, Landlord and Tenant agree that Tenant will pay for and reimburse Landlord for all such Civil Engineering Work, subject to the terms and provisions of this Amended Lease; and

WHEREAS, Landlord and Tenant desire that Landlord will retain final review and authorization of all Civil Engineering Work plans and all such communication Tenant has with Triple Point Engineering in connection with the Civil Engineering Work will go through Landlord; and

WHEREAS, Tenant understands that all Site Work in addition to the Civil Engineering Work will be contracted by, paid for and arranged by Tenant; and

WHEREAS, both Parties find that approval of this Amended Lease constitutes a proper exercise of their respective authority and find that this Amended Lease is in the public interest.

NOW THEREFORE, in consideration of the mutual covenants contained herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree to amend the Lease as follows:

Recitals; Defined Terms. The above-stated Recitals are restated and incorporated into this Section 1 as though fully set forth 1. herein.

Lease in Full Force and Effect. Landlord and Tenant acknowledge that the Lease is in full force and effect and has not been amended, modified, or supplemented except as set forth herein and no notice of default has been given under or in connection 2. with the Lease which has not been cured, and Landlord has no actual knowledge of the occurrence of any other default under or in connection with the Lease. The terms used herein shall have the same definitions as set forth in the Lease.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exercise of Option to Lease an Additional Four Acres of Property. Effective as of the Effective Date, Landlord agrees to lease to Tenant and Tenant agrees to lease from Landlord the Expansion Premises, for the entire Lease Term, and subject to and in 3. accordance with the terms of the Lease. As of the Effective Date: (a) the Expansion Premises shall be subject to all of the terms and conditions of the Lease, as amended herein, for the entire Lease Term, subject to Section 4 below, and (b) all references in the Lease to the “Premises” shall be deemed to include the Current Premises and the Expansion Premises.

Amendment to Lease Regarding Additional Rent as Defined in the Lease. It is understood and agreed between the Parties hereto that, for the Expansion Premises, the per acre yearly rental rate will be TWENTY-THOUSAND AND 00/100 DOLLARS 4. ($20,000.00) to be paid on a quarterly basis of FIVE-THOUSAND AND 00/100 ($5,000.00) per acre per quarter upon the terms and conditions as otherwise provided for in the Lease. The Parties agree that the quarterly rental payment will be pro-rata if the signing date of this Amended Lease does not correspond with the quarterly payment schedule as provided for in the Lease.

Additional Civil Engineering Work for Tenant Site Work to Expansion Premises. (a) At the request of Tenant, Landlord has contracted with Triple Point Engineering for certain civil engineering related to additional Tenant Site Work for the Expansion Premises (hereinafter referred to as the “Civil Engineering Work”). The scope and extent of said Civil Engineering Work for the Expansion Premises is defined as and limited to the “Proposed Scope of Services” from Triple Point Engineering which is 5. attached hereto as Exhibit “B”. Without limiting or expanding the Civil Engineering Work as defined in Exhibit “B”, the scope of said contracted Civil Engineering Work specifically does not include surveying, grading, land clearing, site prep, fencing and other related Site Work and any and all costs associated with such Site Work will be contracted by, paid for and arranged by Tenant. The attached Exhibit “B” is incorporated herein by reference and the scope of said work defined therein shall control.

(b) It is understood and agreed between the Parties that Tenant will pay for and reimburse Landlord for all work performed by Triple Point Engineering as defined in the “Proposed Scope of Services” as attached hereto as Exhibit “B”. Additionally, Tenant will pay Landlord a TWO-THOUSAND DOLLAR AND 00/100 ($2,000.00) administrative fee. The proposed lump sum fees as outlined in Exhibit “B” and said administrative fee due Landlord are abbreviated as follows (subject to any other terms in this Amended Lease, the Lease and in said Exhibit “B”):

Task 1 – Schematic Design Phase $4,400 (assuming no more than three iterations on the layout) Task 2- DD & CD Phase $ 7,500 Task 3 – ESPCP $ 7,500 Administrative fee - $ 2,000 Total $ 21,400

Landlord requires that the retainer fee of one-half (1/2) of the total proposed fees (TEN-THOUSAND AND SEVEN- HUNDRED DOLLARS AND 00/100 - $10,700) shall be paid upfront before any work is commenced. The final signed and sealed drawings will be provided following receipt of the balance of the project fees and administrative fee with any additional fees as provided in the attached Exhibit “B”.

(c) It is understood and agreed between the Parties hereto that Landlord retains full authorization and review of said Civil Engineering Work as outlined in Exhibit “B” and all communication between Tenant and Triple Point Engineering with respect to the Civil Engineering Work will go through Landlord and such communication shall be in writing or email format. As additional consideration for this Amended Lease, Tenant understands and agrees that the Civil Engineering Work will be completed more expeditiously due to the Landlord’s ongoing relationship with Triple Point Engineering.

(d) Notwithstanding anything to the contrary set forth in this Amended Lease, Tenant shall have no obligation to reimburse Landlord for the costs of the Civil Engineering Work or any other work performed by Triple Point Engineering in excess of $21,400.00, unless Landlord obtained the prior written approval of Tenant for such excess costs.

6. Extension Options. Section 21 of the Lease is hereby deleted in its entirety and the following shall be substituted in lieu thereof:

21. EXTENSION OPTIONS. Landlord hereby grants to Tenant five (5) consecutive options to renew the Lease (each, an “Extension Option”) for a period of three (3) years each (any such option period, a “Renewal Term”). The Lease Term shall be deemed to be automatically extended to the next Renewal Term unless the Tenant gives Landlord written notice not later

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document than ninety (90) days prior to the end of the then current Lease Term that it elects not to extend the Lease Term; provided, however, that Landlord shall have the right to negate such automatic exercise of an Extension Option in the event that Tenant is in default of the Lease beyond any applicable notice and cure periods, at either the time of giving such notice or at the time of commencement of the applicable Renewal Term, by delivering written notice to Tenant of such negation on or prior to the date of commencement of the applicable Renewal Term. The term “Lease Term” means the Lease Term as defined by the Lease Agreement and, if one or more of the Renewal Terms are exercised, shall include the related Renewal Term(s). Tenant's leasehold estate during a Renewal Term shall be subject to all terms and provisions of the Lease. The Rent during any Renewal Term shall be the Rent in effect at the end of the then expiring Term or Renewal Term, increased by four percent (4%) per annum. For clarity, Rent shall increase, on a cumulative basis, by four percent (4%) upon each commencement date of each Renewal Term.

7. Equipment and Data Security. The following shall be added as Section 42 of the Lease Agreement:

42. EQUIPMENT AND DATA SECURITY. For the purposes of this Section 42 and the lease:

“Equipment” means all equipment, fixtures and furnishings and all personal property of any kind, including, but not limited to, computer servers and components, data center infrastructure support equipment, network equipment, fiber optic infrastructure, power and cooling equipment, backup generators, fire suppression equipment, security equipment, and electrical substations, transformers or interconnects, as well as any replacement equipment, which is to be located and used on or at the Premises, from time to time, which is suitable for the Tenant’s business.

“Security Incident” means any incident that involves or reasonably may involve the unauthorized access, use, disclosure, damage, vandalism, or loss of any Equipment or Storage Data or any other suspected breach or compromise of the security, confidentiality or integrity of any Equipment, Storage Data, or the Premises.

“Software” means any software code, computer system, network, database, or other information system owned, controlled, or operated by or on behalf of the Tenant used in any way through the Equipment, or at or in connection with the Premises.

“Stored Data” means any and all data, metadata, data elements, identifiers, data models, data structures, databases, information, files, documents, materials, content, libraries, software, firmware, code, scripts, algorithms, and any items similar to any of the foregoing, in each of the foregoing cases, collected, stored, cached, located or resident on or within, or transmitted to or from, in any way and for any period of time, the Equipment.

(a) Software. Landlord acknowledges that Landlord has no license or other rights to use or access the Software. Landlord shall not be responsible for the actions or content of or result created by the Software or use of the Software by Tenant or others, except to the extent caused by the negligence or willful misconduct of Landlord or Landlord’s employees, agents, contractors or representatives or the breach by Landlord of this Lease.

(b) Security Incidents. Between the Landlord and the Tenant, any and all preparations required for and any and all responses to any and all Security Incidents (including, without limitation, all remediation and preventative efforts) will be solely the responsibility of and under the control of Tenant. Landlord shall have no responsibility to monitor the Premises or the Equipment. Upon Tenant's request, pursuant to Tenant's instruction, and at Tenant's sole cost and expense, Landlord shall reasonably support Tenant in its response to any Security Incident, including, without limitation, assistance with or the performance of all reasonably necessary and corrective action. Notwithstanding the foregoing, nothing herein is intended to limit the liability of Landlord with respect to Security Incidents caused by the negligence or willful misconduct of Landlord or Landlord’s employees, agents, contractors or representatives or the breach by Landlord of this Lease.

(i) Landlord shall have no access, control, or responsibility for the Stored Data. Tenant may destroy, relocate or let remain the Stored Data, or take any other action with respect to the Stored Data, in its sole and absolute discretion, without

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document any liability to Landlord. Tenant agrees at all times to comply with all laws applicable the Stored Data, whether or not owned by Tenant, including laws regulating personal, financial, health, and other information which may be part of the Stored Data and protected from disclosure.

(ii) The Landlord has no right, title or interest in or to the Stored Data, including, without limitation, any right to access, inspect, obtain, relocate, modify, destroy, preserve, pledge, lease, sell, appropriate or exercise any dominion or control over the Stored Data, or to allow any Person to access, inspect, obtain, relocate, modify, destroy, preserve, pledge, lease, sell, appropriate or exercise any dominion or control over the Stored Data. In the event Landlord receives any claim, inquiry, request or legal demand from a third party, including any governmental entity, related to the Stored Data or entry to the Premises, Landlord will provide Tenant with prompt prior written notice thereof no later than ten (10) days before a response is legally required, so that Tenant may seek a protective order or other appropriate remedy and/or waive compliance with the terms of this Lease. In the event that such protective order or other remedy is not obtained or Tenant waives compliance with the provisions of this Lease, Landlord agrees to furnish only that portion of the Stored Data which Landlord reasonably believes is legally required to be furnished and to exercise good faith efforts to obtain assurances that confidential treatment will be accorded the information provided.

(d) Hold Harmless. In addition to any other provisions set forth in the Lease, Tenant will indemnify and hold harmless the Landlord from any suit, demand, or claim by any third-party, public or private, related to the Stored Data, including but not limited to actual or consequential damages (but only to the extent Landlord actually pays consequential damages to such third-party), expenses of litigation, including attorney’s fees, and any and all other reasonable expenses incurred by the Landlord in connection with any such suit, demand, or claim, except with respect to any suit, demand or claim which is caused by, or is purported to be caused by, the negligence or willful misconduct of Landlord or Landlord’s employees, agents, contractors or representatives or the breach by Landlord of this Lease.

This Section 42 shall survive the expiration and any earlier termination of this lease.

All Other Lease Terms in Full Force and Effect. Except as modified by this Amended Lease, all of the terms, provisions, conditions, and covenants of the Lease shall be and remain in full force and effect, including but not limited to, all provisions 8. relating to the property being leased “As Is”, and the property being subject to the “Site Work” and “Alterations” provisions as provided for in the Lease in Sections 5, 22, and 31.

Approval and Authority to Sign. Each Party acknowledges that this Amended Lease was duly approved by each Party and each Party acknowledges that the individual or individuals signing this Amended Lease are duly authorized to so sign. Tenant is a 9. corporation or limited liability company organized, existing and in good standing in the State of North Carolina and with the North Carolina Secretary of State.

[SIGNATURES ON FOLLOWING PAGE]

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and affixed their seals, on this 23 day of February, 2021.

DEVELOPMENT AUTHORITY OF WASHINGTON COUNTY

BY: /s/ Michael Shepperd (SEAL) CHAIRMAN

ATTEST: /s/ Trey Shepperd (SEAL) SECRETARY

Party of the First Part and "LANDLORD"

Signed, sealed and delivered this 23 day of February, 2021, in the presence of:

Witness

/s/ Holley Davis

NOTARY PUBLIC FOR GEORGIA

INNOVATIVE PROPERTY MANAGEMENT, LLC

By: /s/ Kyle Hoffman Authorized Member: Kyle Hoffman

Party of the Second Part and “TENANT”

Signed, sealed and delivered this 23 day of February, 2021, in the presence of:

Kyle M. Hoffman

Witness

/s/ Johana Gonzalez Ponce

NOTARY PUBLIC FOR NORTH CAROLINA

CONFIDENTIAL

INTERNATIONAL SALES CONTRACT No：ZY0220211061

This INTERNATIONAL SALES CONTRACT (the “Contract”) is made between the Seller and the Buyer after consensus has been reached by both Parties on the cooperation of A1246 or such other replacement product in the future (the “Product”) during the Term of this Contract.

THE SELLER: CANAAN CONVEY CO., LTD. THE BUYER: COSMOS INFRASTRUCTURE LLC

Address: Zpark building 27 Tower C floor 2 201, Haidian District, Address: Level 5, 97 Pacific Highway, North Sydney, NSW Beijing, China Australia Business Registration No: 91110108MA018GQHX2 Tel/Fax: +61 499 400 900 Tel/Fax: +86 10-58741865 E-mail: [email protected] E-mail: [email protected]

1. PRODUCT & DELIVERY

1.1 PRODUCT SPECIFICATIONS & PRICE LIST.

Quantity Price Per Price Description of Products (UNIT) T-Hash per Unit Subtotal Proposed Model: A1246 (Unit) (USD/Th) (USD) (USD) Shipment Date 588 40 3,600 2,116,800 2021-04-30 588 38 3,420 2,010,960 2021-05-30 588 36 3,240 1,905,120 2021-06-30 A1246 (85T or 87T or 90T) 588 36 3,240 1,905,120 2021-07-30 (Each shipment will be the mix of 1,176 34 3,060 3,598,560 2021-08-30 these three specifications. The 1,176 32 2,880 3,386,880 2021-09-30 value difference will be settled 1,176 30 2,700 3,175,200 2021-10-30 before the last shipment in this 1,176 30 2,700 3,175,200 2021-11-30 contract.) 1,176 30 2,700 3,175,200 2021-12-30 1,176 30 2,700 3,175,200 2022-01-30 1,176 30 2,700 3,175,200 2022-02-28 1,176 30 2,700 3,175,200 2022-03-31 Total 11,760 33,974,640

The A1246 is in three different specifications in terms of Hash performance (referred to as “T-Hash”), say 85T, 87T and 90T. The product you are going to receive will be a mix of these three according to the production output. The price difference 1.2 will be adjusted at the last shipment in Feb 2022. The Buyer agrees with this option upon Seller’s email notice. The buyer should replenish the corresponding payment after receiving the notice.

The cost of Delivery & Insurance of the Products from the Seller’s warehouse to the final destination station of the Buyer will be covered by the Buyer, and other specific rights and obligations in delivery shall be determined according to the 1.3 Trading Term.

The Buyer shall be responsible for all custom declaration and the corresponding duties and value-added tax charges. If the Buyer 1.4 authorized the Seller to deal with the custom declaration and other procedures, the Buyer shall pay service fees to the Seller, which can be otherwise agreed by both parties.

1.5 This contract will be terminated if the buyer fails to pay the first payment on time stipulated in this contract.

2. The Total Value of this Contract will be adjusted according to the final shipment mix of miner model and T-Hash. The buyer will pay the difference between the total T-Hash shipped and the consideration paid in total at the rate of USD$30 / T-Hash.

PAYMENT & THE PAYER’S ACCOUNT.

2.1 The Buyer shall pay 50% of total payment ($16,987,320) on or before 20th February 2021

2.2 The Buyer shall pay the remaining 50% (Balance to Pay) for each shipment in order of

Total Contract Down Description of Products Quantity Value Payment Balance to Pay Date Model: A1246 (Unit) (USD) (USD) Value (USD) Before 588 2,116,800 1,058,400 1,058,400 2021-03-20 588 2,010,960 1,005,480 1,005,480 2021-04-20 588 1,905,120 952,560 952,560 2021-05-20 588 1,905,120 952,560 952,560 2021-06-20 1,176 3,598,560 1,799,280 1,799,280 2021-07-20 A1246 1,176 3,386,880 1,693,440 1,693,440 2021-08-20 (Mix of 85T, 87T & 90T) 1,176 3,175,200 1,587,600 1,587,600 2021-09-20 1,176 3,175,200 1,587,600 1,587,600 2021-10-20 1,176 3,175,200 1,587,600 1,587,600 2021-11-20 1,176 3,175,200 1,587,600 1,587,600 2021-12-20 1,176 3,175,200 1,587,600 1,587,600 2022-01-20 1,176 3,175,200 1,587,600 1,587,600 2022-02-20 TOTALS 11,760 33,974,640 16,987,320 16,987,320

2.3 Payment will be made by the Buyer to the Seller to the following account:

Seller Buyer AGRICULTURAL BANK OF CHINA HANGZHOU JIUBAO NATIONAL AUSTRALIA Bank Name BRANCH Bank Name BANK NO.1211 HANGHAI 333 George Street Address ROAD,JIANGGAN Address Sydney, NSW 2000 DISTRICT,HANGZHOU CHINA

Beneficiary Name CANAAN CONVEY CO LTD Beneficiary Name Cosmos Capital Limited

ROOM110, 1ST FLOOR BEIJING Level 5, 97 Pacific Highway, Beneficiary Address VENTURE ROAD 36,HAIDIAN Beneficiary Address North Sydney, NSW 2060 DIST BEIJING CHINA

A/C No. 19033314040001675 A/C No. MOSCAUSD01

Swift Code ABOCCNBJ110 Swift Code NATAAU3303M

3. TRADING TERM.

The Buyer shall notify the Seller at least 14 days prior to Proposed Shipment Date (as set out in Clause 1.1) of the method and destination of shipping, provided always that the Buyer is shipping the Product out of China. The Buyer shall notify the Seller of the following details:

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document FCA To: 【/】 , Port of Loading: 【/】 , Shipping Address: 【/】 , Shipping Method：【/】, Shipping Date: / The aforesaid trading term shall be based on the notification from e-mail of the Buyer on the home page of the contract. And that the Buyer has made payment in full for the Batch due for delivery.

CONFIDENTIAL

4. BUYER’S OBLIGATIONS.

The payer of the payment must be the Buyer of the Contract or in accordance with THE PAYER’S ACCOUNT set forth above. The 4.1 Buyer shall obtain a prior written consent by the Seller if there is any inconformity with the payer of the payment.

The Buyer warrants that it has legitimate business license(s) and administrative license, and that it will operate lawfully and with 4.2 integrity in the jurisdiction in which it operates, nominated to be the United States of America and Australian and HK.

If the Buyer delays in the payments, it shall pay the compensation to the Seller, which shall be the sum of non-paid amount × the 4.3 days postponed/365 × 10%. The Seller may terminate this contract if the delay caused by the Buyer exceeds 30 days.

A default mining pool will be set for each product of the Seller before leaving the factory to test whether the product operates normally, and the Buyer shall change the mining pool settings by itself when the product is used for the first time. The Buyer 4.4 recognizes and agrees that the Seller shall not be liable for any loss of revenue when changing settings and/or that arising from the Buyer's failure to change the mining pool settings.

5. DELIVERY.

5.1 Trade terms in the Contract are based on Incoterms 2010 of the International Chamber of Commerce.

Under the trade term specified under this Contract, if the Seller is responsible for insurance and freight transportation, it has the right 5.2 to choose the third-party company that provides the service.

All delivery dates (as set out in Clause 1.1) are approximate, and as stipulated by the trading term the Seller shall not be liable for 5.3 any damages of any kind resulting from delay in delivery.

The Seller shall not be liable for any loss or damage suffered by the Buyer resulting directly or indirectly from, or through, or arising out of any delay in shipment or delivery of any Product, or resulting directly or indirectly from or through delay arising out of any of the following: fire, flood, strike, epidemic, accident, civil commotion, riot or war, shortage of labor, fuel, materials or supplies, 5.4 regulations, priorities, orders or embargoes imposed by any civil or military government; or any other cause or causes (whether or not similar to the foregoing) beyond the reasonable control of the Seller. However, the Seller must use all reasonable endeavors to resolve any issues or any impacts to ensure delivery.

5.5 Transfer of risk and title shall occur upon delivery to the Contract delivery address as notified by the Buyer pursuant to Clause 3.

Where deliver is greater than 30 days from the date specified in Clause 1.1, the Seller shall reimburse the Buyer on the following 5.6 basis: Unit Price x Quantity of Units × the days postponed/365 × 10%.

6. INSPECTION AND ACCEPTANCE.

The Buyer shall examine the goods as soon as possible after their arrival at ultimate delivery destination and shall notify the Seller in writing of any lack of conformity of the goods within 15 days from the date when the Buyer discovers or ought to have discovered the lack of conformity. In any case the Buyer shall have no remedy for lack of conformity if it fails to notify the Seller thereof within 30 days from the date of arrival of the goods at the agreed destination. The products will be deemed as consistent with the agreement by both parties if the Buyer fails to do so in the above-mentioned inspection and acceptance period.

CONFIDENTIAL

7. CLAIM.

Any claim by the Buyer concerning the goods shipped hereunder shall be filed within 60 days after the arrival of the goods at the port of destination and supported by a survey report issued by a survey or approved by the Seller for the Seller’s examination. Claims in respect of matters within the scope of responsibility of the insurance company, shipping company, transportation organization and/ or post office will not be entertained by the Seller.

8. WARRANTIES.

The Seller guarantees that all products and all documents related with the products, include but not limited to drawings, technical standards, product specifications, etc. delivered to the Buyer will, at the time of such delivery, be free and clear of all liens, security 8.1 interests and other encumbrances and will conform, in all material respects, to the Specifications. If there is any act of intellectual property infringement, the Seller will claim for compensation through relevant ways.

The Buyer guarantees that none of the Buyer, any of its subsidiaries or, to the best knowledge of the Buyer or its representative, any director, officer, shareholders or employee of the Buyer or any of its subsidiaries is an entity or person who is a) the target of any 8.2 Sanctions Law, or b) located, controlled, organized, or resident in a country or territory that is, or whose government currently is, the target of countrywide sanctions imposed by any sovereign government sanctions authorities.

The Buyer guarantees that it is and will be in compliance with any applicable anti-money laundering, anti-terrorist or economic 8.3 sanctions legislation, regulation or guideline, in respect of the source of funds, making the transaction, or using the products herein.

The Seller gives a guarantee for all delivered goods 365 days from the date of the delivery. If during this period defects in the Goods are revealed, the Seller shall repair or replace, free of charge, any part proven defective in material, performance or workmanship, 8.4 but mining earnings will not be compensated. In this condition, the Buyer shall pay the inbound shipping and the Seller will pay the return shipping.

The Exclusions of Quality Warrants: a) The installation, operation, usage, maintenance and examination and repair of the products are not applied to the technical requirements of the products or the requirements of the Products Manual; b) The damages are made 8.5 by the Buyer or any third party intentionally or carelessly;. c) The normal damages of the products; d) The damage resulting from improper recast; e) The damage resulting from force majeure; and f) Other conditions irrelevant with the Seller.

9. COMPLIANCE & SANCTIONS.

The Buyer and its customers who purchased the products in the stream of commerce shall not export, re-export, transfer or otherwise release products provided by the Seller, directly or indirectly, to or for: i) a U.S. prohibited destination, such as Iran, Syria, North Korea, Crimean region, Venezuela and Cuba, or a national thereof wherever located, or to any other country subject to restriction under applicable laws and regulations of any countries and international organizations; ii) any sanctioned person or entity identified on the U.S. Consolidated Screening List (see https://2016.export.gov/ecr/eg_main_023148.asp) or subject to sanctions administered by the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) (see http://sanctionssearch.ofac.treas.gov/); and iii) the design, production or use of military, nuclear, missile or chemical & biological weapons activities or systems and any party engaged in such activity.

CONFIDENTIAL

10. LIABILITY FOR BREACH.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document After this Contract comes into effect, the Seller and the Buyer shall fully perform their obligations as stipulated in this Contract. 10.1 If either Party fails to perform or partially performs its contractual obligations, it shall be liable for such breach and shall compensate all losses resulting thereof to the other Party.

If the Buyer cancels the order except upon the Seller’s written consent, the Seller shall have the right to deduct all the buyer’s 10.2 payment, plus all reasonable costs and losses it sustains arising from the Buyer’s cancellation of an order without the Seller’s written consent and the Seller shall also have the right to refuse to perform the delivery obligation under the Contract.

In the event that the Seller suffers any loss or receives any complaint as a result of the breach of this Contract by the Buyer, or any other circumstances cause or may cause the damage of the Seller 's interests, then the Seller has the right to unilaterally 10.3 suspend or terminate this Contract and require the Buyer to be liable for all reasonable and actual losses to the Seller and assume related liabilities.

According to the agreed delivery date of the Contract, if the Seller cannot deliver the products on schedule for the Buyer’s reasons or the Buyer fails to take the products according to the agreed delivery date, the Seller can require the storage charges as 10.4 0.2%/per day on the value of goods not delivered. The Seller has the right to unilaterally suspend or terminate the Contract and refuse to perform the delivery obligation under the Contract if the ordered goods cannot be delivered more than 30 days after agreed delivery date due to the Buyer’s responsibility.

If there are damages or losses in the buyer due to the quality or delivery of the products or the Seller, the Buyers remedy is limited to replacement under the Seller warranty. All other representations, express or implied, warranty, or liability relating to 10.5 the condition or use of the product are specifically disallowed, and in no event shall the Seller be liable to Buyer, or any third party, for any direct and indirect consequential or incidental damages.

The Buyer shall, defend, indemnify, and hold harmless the Seller, its affiliates and their respective officers, directors, employees, agents, servants, subcontractors, and distributors from and against any and all actions, claims, demands, suits, judgments, 10.6 liabilities, expenses (including but not limited to reasonable attorney’s fees), losses, or damages of whatever nature arising out of or relating to (i) any breach by the Buyer of any representation, warranty, covenant or obligation hereunder; and (ii) any third- party claims to the extent caused by acts or omissions of the Buyer.

If the Seller breaches the Contract, it shall be liable for compensation and to perform its obligations within the prescribed time 10.7 limit.

Notwithstanding any other provision in this contract, neither party shall be liable to the other party for any loss of profit or 10.8 revenues, loss of opportunity, loss of goodwill or reputation, and /or any indirect or consequential losses whatsoever, even if advised of the possibility of such damages.

11. FORCE MAJEURE.

Neither Party shall be liable for the delays in certificate, stocking, shipment or delivery due to force majeure. The affected Party shall notify the other Party that the delivery date of products exported overseas is determined by the customs clearance time and logistics speed at home abroad. Under all the conditions of force majeure, the Seller will not responsible for the delay and failure of delivery or any problems of the quality of the Products.

12. APPLICABLE LAW AND JURISDICTION.

This Contract shall be governed by and construed in accordance with the laws of P.R.China excluding conflict of laws provisions which may direct the application of another jurisdiction’s laws. Any disputes arising from or in connection with this Contract shall be submitted to the Hangzhou Arbitration Commission in Hangzhou, China for arbitration which shall be conducted in accordance with its arbitration rules in effect at the time of applying for arbitration. The language to be used in the arbitral proceedings shall be Chinese. The arbitral award is final and binding upon both parties.

CONFIDENTIAL

The Prevailing Party in any dispute shall have the right to collect from the other party its reasonable costs, necessary disbursements, and attorneys’ fees incurred in enforcing this Contract. The “Prevailing Party” means the party in whose favor a(n) arbitral award, judgment, decree, or final order is rendered, and also means the party obtaining substantially the relief sought, whether by compromise, settlement, or judgment.

14. CONFIDENTIALITY.

Either Party must keep the any Confidential Information obtained from the other Party, as well as this cooperation and the specific content of this Contract in strict confidence. For the purpose of this Agreement, “Confidential Information” shall mean any and all information (whether in oral, written or electronic form) including technical or other information imparted in 14.1 confidence or disclosed by one party to the other or otherwise obtained by one party relating to the other’s business, finance or technology, know-how, trade secrets, intellectual property, assets, strategy, products and customers, including without limitation information relating to management, financial, marketing, technical and other arrangements or operations of any person, firm, or organisation associated with that Party;

Either Party shall not use such Confidential Information for any purpose other than that specified herein nor disclose such information to any company or individual other than The Seller or The Buyer, unless agreed by the other Party in written consent. Either Party shall only disclose the Confidential Information to its Representatives (i) who need to know the Confidential 14.2 Information for the purpose of the performance of the Agreement, (ii) who are bound by confidentiality obligations at least as restrictive as those contained herein. For the purpose of this Agreement, “Representative” means any affiliates, directors, officers, employees, agents and advisors.

However, such confidential information may be disclosed as required by laws and regulations, judicial organs, regulatory 14.3 agencies, or as otherwise provided herein. This Article shall survive the termination, suspension, invalidation or invalidity of this Contract or any articles here in, and remain binding on both Parties.

15. MISCELLANEOUS.

This Article shall survive the termination, suspension, invalidation or invalidity of this Contract or any articles herein, and remain binding on both Parties.

This contract shall constitute the entire agreement of both parties and supersede all prior oral or written agreement, commitments and understandings with respect to the transaction hereof. The English language text of this Contract shall prevail over any translations thereof. If any provision of this Contract is held to be invalid or unenforceable by a court of competent jurisdiction, then that provision will be enforced to the maximum extent permissible in conformance with the intent of the parties, and the remaining provisions will remain in full force and effect. This Contract shall come into force from the seal or signature date by both parties, and this Contract is made out in four original copies, two copies to be held by each party in witness thereof.

Appendices A and B are inseparable attachments to this contract and the parties shall abide by the provisions of these appendices.

(No text below)

CONFIDENTIAL

(Signature Page of this INTERNATIONAL SALES CONTRACT)

SELLER: CANAAN CONVEY CO., LTD. BUYER:COSMOS INFRASTRUCTURE LLC

Seal and Signature: /s/ James Manning

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Date: 2021.2.5 Mr. James Manning FOR COSMOS MANAGER LLC, MANAGER OF /s/ Edward Lu COSMOS INFRASTRUCTURE Date:

CONFIDENTIAL

Appendix A: Declaration for Integrity

As the cooperative customer of the Seller, the Buyer would like to eliminate illegal actions together with the Seller, including but not limited to commercial bribery; and the Buyer warrants that:

The Buyer prohibits itself and/or its relevant employees, officers or principals to provide any presents, money or any tangible or 1 intangible interests through any other methods (other than reasonable and customary business souvenir, meal and entertaining proven acceptable under Chinese law. For souvenir, any souvenir that is priced over 500RMB is deemed inappropriate and unacceptable).

If the Buyer authorizes itself and/or its relevant employees, officers or principals to engage in any of the aforesaid actions, the Seller is entitled to terminate the cooperation with the Buyer and cancel the Contract entered into by the parties. At the same time, the Buyer 2 agrees to pay the fine for breach of this Declaration, which shall be all losses, damages, costs, legal fees, penalties and all damages caused to the Seller from such acts and any other restitution provided by law.

If the Buyer and/or its relevant employees, officers or principals treat the Seller’s employees and/or their families secretly, or provide 3 any interests to the Seller’s employees and/or their families, the Buyer shall immediately notify the Seller; if the Buyer fails to do so, the above Article 2 may be applied.

If the Seller’s employees ask for any tangible or intangible interests from the Buyer and/or its employees, the Buyer will notify the 4 Seller immediately and coordinate with the Seller to deal with such employees according to the laws. The Seller may terminate the cooperation with the Buyer permanently if the Buyer conceals such acts of asking for bribes.

CONFIDENTIAL

Appendices B: Technical acceptance standards

The following custom parameters are:

1、Device name:【A1246】

2、Hashrate：the whole machine is stable at【90】TH/s（【-3】%~ 【+3】 %）without overclocking

3、Power Consumption：【3400】（【-5】 %~【+5】 %）@Wall-Plug

4、Power Supply AC Input：【185】V ~ 【285】 V

5、Operating Temperature：【-5】℃ ~ 【35】℃

6 、Cooling method: 【Wind Cooling】

CONFIDENTIAL

INTERNATIONAL SALES CONTRACT No. [ ZY0220211163]

This INTERNATIONAL SALES CONTRACT (the “Contract”) is made between the Seller and the Buyer after consensus has been reached by both Parties on the cooperation of [A1166](the “Product”) during the Term of this Contract.

THE SELLER: CANAAN CONVEY CO., LTD. THE BUYER: [Cosmos Capital Limited]

Address: Zpark building 27 Tower C floor 2 201, Haidian District, Address: [Level 5, 97 Pacific Highway, North Sydney, Beijing, China NSW Australia] Business Registration No: 91110108MA018GQHX2 Tel/Fax: [+61 499 400 900] Tel/Fax: +86 10-58741865 E-mail: [[email protected]] E-mail: [email protected]

1. PRODUCT & DELIVERY

1.1 PRODUCT SPECIFICATIONS & PRICE LIST.

Description of Products Quantity (UNIT) Per Thera Hash Price(USD/T) Unit Price (USD) Subtotal (USD) [A1166] [1000] [77] [6,237] [6,237,000] Total (USD) [6,237,000]

1.2 The [A1166] is in three different specifications in terms of Hash performance, [72T,75T and 81T]. The product Buyer receives will be a mix of these three according to the production output. The price difference will be adjusted at the last shipment in [April 2021]. The Buyer agrees with this option upon Seller’s email notice. The Buyer should replenish the corresponding payment after receiving the notice.

1.3 The cost of Delivery & Insurance of the Products from the Seller’s warehouse to the final destination station of the Buyer will be covered by the Buyer, and other specific rights and obligations in delivery shall be determined according to the Trading Term. 1.4 The Total Value of this Contract will be adjusted according to the final shipment mix of miner model and T-Hash. The Buyer will pay the difference if there is.

1.5 The Seller has the right to terminate this Contract if the Buyer fails to pay the first payment on time stipulated in this Contract.

2. PAYMENT & THE PAYER’S ACCOUNT.

The Buyer shall pay [100]% of total payment $[6,237,000] before ______[31st March]

Seller Buyer AGRICULTURAL BANK OF CHINA BEIJING BRANCH Bank Name Bank Name NATIONAL AUSTRALIA BANK HAIDONG sub- branch, P.R. China

No.11 DING XUYUAN ROAD 333 George Street Sydney, NSW Address HAIDIAN DISTRICT BEIJING Address 2000 CHINA

Beneficiary Name CANAAN CONVEY CO LTD Beneficiary Name Cosmos Capital Limited

ROOM110, 1ST FLOOR BEIJING Level 5, 97 Pacific Highway, North Beneficiary Address VENTURE ROAD 36, HAIDIAN Beneficiary Address Sydney, NSW 2060 DIST BEIJING CHINA

Swift Code ABOCCNBJ010 Swift Code NATAAU3303M

3. TRADING TERM.

[ ] To: [ ], Port of Loading: [ ] , Shipping Address: [ ] , Shipping Method: [ ], Shipping Date: depending on the actual logistic availability in [End of March or April] or another date agreed by the two parties and/or after the payment paid in full.

CONFIDENTIAL

The unfilled information of this article shall be based on the notification from e-mail of the Buyer on the home page of the Contract. Any modification of the Trading Term shall be agreed by the Seller and the Buyer.

4. BUYER’S OBLIGATIONS.

4.1. The payer of the payment must be the Buyer of the Contract or in accordance with THE PAYER’S ACCOUNT set forth above. The Buyer shall obtain a prior written consent by the Seller if there is any inconformity with the payer of the payment.

4.2. the Buyer warrants that it has legitimate business license and administrative license, and that it will operate lawfully and with integrity.

4.3. If the Buyer delays in the payments, it shall pay the compensation to the Seller, which shall be the sum of non-paid amount × the days postponed/365 × 10%. The Seller may terminate this Contract if the delay caused by the Buyer exceeds 30 days.

4.4. A default mining pool will be set for each product of the Seller before leaving the factory to test whether the product operates normally, and the Buyer shall change the mining pool settings by itself when the product is used for the first time. The Buyer recognizes and agrees that the Seller shall not be liable for any loss of revenue when changing settings and/or that arising from the Buyer's failure to change the mining pool settings.

5. DELIVERY.

5.1. Trade terms in the Contract are based on Incoterms 2010 of the International Chamber of Commerce.

5.2. Under the trade term specified under this Contract, if the Seller is responsible for insurance and freight transportation, it has the right to choose the third-party company that provides the service.

5.3. All delivery dates are approximate, and as stipulated by the trading term the Seller shall not be liable for any damages of any kind resulting from delay in delivery.

5.4. The Seller shall not be liable for any loss or damage suffered by the Buyer resulting directly or indirectly from, or through, or arising out of any delay in shipment or delivery of any Product, or resulting directly or indirectly from or through delay arising out of any of the following: fire, flood, strike, epidemic, accident, civil commotion, riot or war, shortage of labor, fuel, materials or supplies, regulations, priorities, orders or embargoes imposed by any civil or military government; or any other cause or causes (whether or not similar to the foregoing) beyond the reasonable control of the Seller.

6. INSPECTION AND ACCEPTANCE.

The Buyer shall examine the goods as soon as possible after their arrival at destination and shall notify the Seller in writing of any lack of conformity of the goods within 3 days from the date when the Buyer discovers or ought to have discovered the lack of conformity. In any case the Buyer shall have no remedy for lack of conformity if it fails to notify the Seller thereof within 15 days from the date of arrival of

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the goods at the agreed destination. The products will be deemed as consistent with the agreement by both parties if the Buyer fails to do so in the above-mentioned inspection and acceptance period.

7. CLAIM.

Any claim by the Buyer concerning the goods shipped hereunder shall be filed within 30 days after the arrival of the goods at the port of destination and supported by a survey report issued by a survey or approved by the Seller for the Seller’s examination. Claims in respect of matters within the scope of responsibility of the insurance company, shipping company, transportation organization and/or post office will not be entertained by the Seller.

8. WARRANTIES.

8.1. The Seller guarantees that all products and all documents related with the products, include drawings, technical standards, product specifications(if any). delivered to the Buyer will, at the time of such delivery, be free and clear of all liens, security interests and other encumbrances and will conform, in all material respects, to the Specifications. If there is any act of intellectual property infringement, the Seller will claim for compensation through relevant ways.

8.2. The Buyer guarantees that none of the Buyer, any of its subsidiaries or, to the best knowledge of the Buyer or its representative, any director, officer, shareholders or employee of the Buyer or any of its subsidiaries is an entity or person who is a) the target of any Sanctions Law, or b) located, controlled, organized, or resident in a country or territory that is, or whose government currently is, the target of countrywide sanctions imposed by any sovereign government sanctions authorities.

CONFIDENTIAL

8.3. The Buyer guarantees that it is and will be in compliance with any applicable anti-money laundering, anti-terrorist or economic sanctions legislation, regulation or guideline, in respect of the source of funds, making the transaction, or using the products herein.

8.4 The Seller gives a guarantee for all delivered goods 360 days from the date of the delivery. If during this period defects in the Goods are revealed, the Seller shall repair or replace, free of charge, any part proven defective in material, performance or workmanship, but mining earnings will not be compensated. In this condition, the Buyer shall pay the inbound shipping and the Seller will pay the return shipping.

8.5 The Exclusions of Quality Warrants: a) The installation, operation, usage, maintenance and examination and repair of the products are not applied to the technical requirements of the products or the requirements of the Products Manual; b) The damages are made by the Buyer or any third party intentionally or carelessly;. c) The normal damages of the products; d) The damage resulting from improper repair; e) The damage resulting from force majeure; and f) Other conditions irrelevant with the Seller.

9. Compliance & Sanctions.

10. LIABILITY FOR BREACH.

10.1. After this Contract comes into effect, the Seller and the Buyer shall fully perform their obligations as stipulated in this Contract. If either Party fails to perform or partially performs its contractual obligations, it shall be liable for such breach and shall compensate all losses resulting thereof to the other Party.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 10.2. If the Buyer cancels the order except upon the Seller’s written consent, the Seller shall have the right to deduct all the Buyer’s payment, plus all costs and losses it sustains arising from the Buyer’s cancellation of an order without the Seller’s written consent and the Seller shall also have the right to refuse to perform the delivery obligation under the Contract.

10.3. In the event that the Seller suffers any loss or receives any complaint as a result of the breach of this Contract by the Buyer, or any other circumstances cause or may cause the damage of the Seller 's interests by the Buyer’s breach, then the Seller has the right to unilaterally suspend or terminate this Contract and require the Buyer to be liable for all losses to the Seller and assume related liabilities. 10.4. According to the agreed delivery date of the Contract, if the Seller cannot deliver the products on schedule for the Buyer’s reasons or the Buyer fails to take the products according to the agreed delivery date, the Seller can require the storage charges as 0.2%/per day on the value of goods not delivered. The Seller has the right to unilaterally suspend or terminate the Contract and refuse to perform the delivery obligation under the Contract if the ordered goods cannot be delivered more than 30 days after agreed delivery date due to the Buyer’s responsibility.

10.5. If there are damages or losses in the Buyer due to the quality or delivery of the products or the Seller, the Buyers remedy is limited to replacement under the Seller warranty. All other representations, express or implied, warranty, or liability relating to the condition or use of the product are specifically disallowed, and in no event shall the Seller be liable to Buyer, or any third party, for any direct and indirect consequential or incidental damages.

10.6. The Buyer shall, defend, indemnify, and hold harmless the Seller, its affiliates and their respective officers, directors, employees, agents, servants, subcontractors, and distributors from and against any and all actions, claims, demands, suits, judgments, liabilities, expenses (including but not limited to reasonable attorney’s fees), losses, or damages of whatever nature arising out of or relating to (i) any breach by the Buyer of any representation, warranty, covenant or obligation hereunder; and (ii) any third-party claims to the extent caused by acts or omissions of the Buyer.

CONFIDENTIAL

10.7. If the Seller breaches the Contract, it shall be liable for compensation and to perform its obligations within the prescribed time limit.

10.8. Notwithstanding any other provision in this contract, neither party shall be liable to the other party for any loss of profit or revenues, loss of opportunity, loss of goodwill or reputation, and /or any indirect or consequential losses whatsoever, even if advised of the possibility of such damages.

11. FORCE MAJEURE.

12. APPLICABLE LAW AND JURISDICTION.

13. ATTORNEYS’ FEES.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document decree, or final order is rendered, and also means the party obtaining substantially the relief sought, whether by compromise, settlement, or judgment.

14. CONFIDENTIALITY.

14.1. Either Party must keep the any Confidential Information obtained from the other Party, as well as this cooperation and the specific content of this Contract in strict confidence. For the purpose of this Agreement, “Confidential Information” shall mean any and all information (whether in oral, written or electronic form) including technical or other information imparted in confidence or disclosed by one party to the other or otherwise obtained by one party relating to the other’s business, finance or technology, know-how, trade secrets, intellectual property, assets, strategy, products and customers, including without limitation information relating to management, financial, marketing, technical and other arrangements or operations of any person, firm, or organisation associated with that Party;

14.2. Either Party shall not use such Confidential Information for any purpose other than that specified herein nor disclose such information to any company or individual other than The Seller or The Buyer, unless agreed by the other Party. Either Party shall only disclose the Confidential Information to its Representatives (i) who need to know the Confidential Information for the purpose of the performance of the Agreement, (ii) who are bound by confidentiality obligations at least as restrictive as those contained herein. For the purpose of this Agreement, “Representative” means any affiliates, directors, officers, financier and prospective financier, employees, agents and advisors.

14.3. However, such confidential information may be disclosed as required by laws and regulations, listing rules, judicial organs, regulatory agencies, or as otherwise provided herein. This Article shall survive the termination, suspension, invalidation or invalidity of this Contract or any articles herein, and remain binding on both Parties.

CONFIDENTIAL

15. MISCELLANEOUS.

This Article shall survive the termination, suspension, invalidation or invalidity of this Contract or any articles herein, and remain binding on both Parties.

This Contract shall constitute the entire agreement of both parties and supersede all prior oral or written agreement, commitments and understandings with respect to the transaction hereof. The English language text of this Contract shall prevail over any translations thereof. If any provision of this Contract is held to be invalid or unenforceable by a court of competent jurisdiction, then that provision will be enforced to the maximum extent permissible in conformance with the intent of the parties, and the remaining provisions will remain in full force and effect. This Contract shall come into force from the seal or signature date by both parties, and this Contract is made out in four original copies, two copies to be held by each party in witness thereof.

Appendices A and B are inseparable attachments to this Contract and the parties shall abide by the provisions of these appendices.

(No text below)

CONFIDENTIAL

(Signature Page of this INTERNATIONAL SALES CONTRACT)

SELLER: CANAAN CONVEY CO., LTD. BUYER: Cosmos Capital Limited

Seal and Signature: /s/ Edward Lu Seal and Signature: /s/ James Manning

CONFIDENTIAL

Appendix A: Declaration for Integrity

As the cooperative customer of the Seller, the Buyer would like to eliminate illegal actions together with the Seller, including but not limited to commercial bribery; and the Buyer warrants that:

1.The Buyer prohibits itself and/or its relevant employees, officers or principals to provide any presents, money or any tangible or intangible interests through any other methods (other than reasonable and customary business souvenir, meal and entertaining proven acceptable under Chinese law. For souvenir, any souvenir that is priced over 500RMB is deemed inappropriate and unacceptable).

2.If the Buyer authorizes itself and/or its relevant employees, officers or principals to engage in any of the aforesaid actions, the Seller is entitled to terminate the cooperation with the Buyer and cancel the Contract entered into by the parties. At the same time, the Buyer agrees to pay the fine for breach of this Declaration, which shall be all losses, damages, costs, legal fees, penalties and all damages caused to the Seller from such acts and any other restitution provided by law.

3.If the Buyer and/or its relevant employees, officers or principals treat the Seller’s employees and/or their families secretly, or provide any interests to the Seller’s employees and/or their families, the Buyer shall immediately notify the Seller; if the Buyer fails to do so, the above Article 2 may be applied.

4.If the Seller’s employees ask for any tangible or intangible interests from the Buyer and/or its employees, the Buyer will notify the Seller immediately and coordinate with the Seller to deal with such employees according to the laws. The Seller may terminate the cooperation with the Buyer permanently if the Buyer conceals such acts of asking for bribes.

CONFIDENTIAL

Appendices B: Technical acceptance standards

The following custom parameters are:

1,Device name: [A1166]

2,Hashrate:the whole machine is stable at[72/75/81]TH/s([-3]%~ [+3] %)without overclocking

3,Power Consumption: [3400] ( [-5] %~[+5] %)@Wall-Plug

4,Power Supply AC Input:[185]V ~ [285] V

5,Operating Temperature: [-5]°C ~ [35]°C

6,Cooling method: [Wind Cooling]

FOR USE WITH U.S. BORROWERS WITH U.S. EQUIPMENT

DATE: JANUARY 27, 2021

EQUIPMENT FINANCE AND SECURITY AGREEMENT

1. DISCLOSURE STATEMENT

FOUNDRY DIGITAL LLC

Address: Lender 1100 Pittsford Victor Road, Pittsford, NY 14534 Attention: Mike Colyer Tel. No.: 585.432.0963 E-mail: [email protected]

COSMOS INFRASTRUCTURE LLC

Address: 1299 Farnam Street Suite 300, Omaha, NE Borrower 68102, USA Attention: James Manning Tel. No.: +61 499 400 900 E-mail: [email protected]

Facility: Equipment finance term facility

Total Amount to be Advanced by Lender in $ 1,056,000 U.S. Dollars: (the “Loan”)

Interest Rate 16.5 % per annum

Administration Fee $6,500.00 per advance of any portion of the Loan disbursed under this Agreement (the “Administration Fee”)

The Loan shall be repaid by way of blended payments of interest, principal, and other applicable fees (“Blended Payments”) to be paid in accordance with the payment schedule attached as Schedule “A” (the “Payment Schedule”) with the final payment due on July 29, 2022. Payment Structure Notwithstanding the foregoing, an Administration Fee shall be paid by Borrower to Lender concurrently with the advance of any portion of the Loan disbursed under this Agreement.

The assets, property and undertakings described in Schedule “B” hereto, as such schedule may be Financed Property: amended, supplemented and / or replaced from time to time by the Lender, including all additions, parts, (the “Property”) attachments and accessories from time to time and any software, hardware, power supply equipment and / or power cartridges used from time to time.

Vendor of the Property: MicroBT (the “Vendor”)

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Proposed Location of Compute North LLC Storage of the Property: 3215 Global Drive Pl. (the “Initial Designated Kearney, NE 68847 Location”)

Amount of Liability Insurance Required See $1,320,000 Section 13(a):

Other Additional None Provisions:

A Wallet owned and controlled by Genesis Global Trading, Inc. (“Genesis Trading”) for the purposes Details of First Blocked of selling Mined Digital Currency pursuant to a Direction and Payment Agreement by and among Wallet: Borrower, Lender and Genesis Trading, with a public address to be provided by Lender to Borrower in (“Blocked Wallet A”) writing.

Details of Second Blocked A cloud-based wallet with multi-party computation (MPC) protocol supported by Curv, Inc. with a Wallet: public address to be provided by Lender to Borrower in writing. (“Blocked Wallet B”)

2. DEFINED TERMS AND INTERPRETATION.

In this Agreement the following terms have the following meanings:

“Acceleration” has the meaning ascribed to it in Section 23 in this Agreement;

“Administration Fee” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement;

“Airdrop” means a distribution of a new token or tokens of Digital Currency resulting from the ownership of a pre-existing token of Digital Currency;

“Applicable Law” has the meaning ascribed to it in Section 12(a) in this Agreement;

“Blended Payments” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement;

“Blocked Wallet A” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement or means such other wallet as may be agreed to by Lender and Borrower in writing from time to time;

“Blocked Wallet B” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement or means such other wallet as may be agreed to by Lender and Borrower in writing from time to time;

“Blocked Wallets” means, collectively, Blocked Wallet A and Blocked Wallet B.

“Borrower” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement;

“Business Day” means a day on which Lender is open for business, following the New York Stock Exchange calendar of holidays;

“Charge” means any mortgage, charge, pledge, hypothecation, lien (statutory or otherwise), assignment, financial lease, title retention agreement or arrangement, security interest or other encumbrance of any nature however arising, or any other security agreement or arrangement creating in favour of any creditor a right in respect of the Collateral that is prior to the right of any other creditor in respect of the Collateral;

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Collateral” means the (a) Equipment; (b) Mined Digital Currency; (c) any rights or interests the Borrower may have in Blocked Wallet A and Blocked Wallet B; (d) all Material Agreements relating to any of (a) to (c) in this definition including without limitation those Material Agreements set out in Schedule “C”; and (e) any Proceeds relating to any of (a) to (d) in this definition.

“Communication” means any notice, demand, request, consent, approval or other communication which is required or permitted by this Agreement to be given or made by a party;

“Critical Services” has the meaning ascribed to it in Section 15(c) in this Agreement;

“Designated Location” means the Initial Designated Location or such other location as may be agreed to by the Lender in writing from time to time;

“Designated Pool” has the meaning ascribed to it in Section 14(f) in this Agreement;

“Digital Currency” means all Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), Ether Classic (ETC), Litecoin (LTC), or other digital currency or cryptocurrency including without limitation those arising from a Hard Fork, Airdrop or otherwise;

“Equipment” means: (a) the Property; (b) the Supplemental Property; (c) all additions, parts, attachments and accessories to the Property and / or the Supplemental Property from time to time; (d) any software, hardware, power supply equipment and / or power cartridges used from time to time in connection with (a) to (c) in this definition; (e) all goods, intangibles, money, documents of title, chattel paper, and instruments relating to (a) to (d) in this definition; and (f) any substitutions, repairs, replacements relating to any of (a) to (e) in this definition;

“Hard Fork” means a permanent divergence in the blockchain (e.g., when non-upgraded nodes cannot validate blocks created by upgraded nodes that follow newer consensus rules, or an Airdrop or any other event which results in the creation of a new token of Digital Currency);

“Host” has the meaning ascribed to it in Section 18 in this Agreement;

“Host / Landlord Accommodations” has the meaning ascribed to it in Section 18 in this Agreement;

“Importation Costs” has the meaning ascribed to it in Section 4 in this Agreement;

“Initial Designated Location” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement;

“Interest Rate” means the interest rate set out in Section 1 (Disclosure Statement) in this Agreement or any Post Default Risk Adjusted Interest Rate or Permitted Cure Risk Adjusted Interest Rate in effect from time to time in accordance with Section 26(a) and 26(b) hereof;

“Landlord” has the meaning ascribed to it in Section 18 in this Agreement;

“Lender” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement;

“Loan” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement;

“Loan Documents” means this Agreement, any liquidity direction agreement entered into by the Borrower, the Lender, and Genesis Global Trading, Inc., any Host / Landlord Accommodations, and any other instruments and agreements entered into between Lender and Borrower or executed by Borrower in favour of Lender relating to this Agreement;

“Material Agreements” means all agreements, permits, licenses, including without limitation any lease agreements, pooling agreements or hosting agreements that is, in each case, directly or indirectly related or connected to this Agreement;

“Mined Digital Currency” means any and all Digital Currency mined or otherwise generated by, or in connection with, the Equipment from time to time;

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document “Mining Pool” means a protocol for a group of miners to pool their collective mining equipment to mine Digital Currency and share in the Digital Currency mined by the Equipment in accordance with a distribution scheme agreed to by such miners;

“Obligations” means all present and future indebtedness, liabilities and obligations of Borrower to Lender under this Agreement and any other Loan Documents including without limitation the obligation to make all Blended Payments hereunder;

“Overclock” has the meaning ascribed to it in Section 14(b) in this Agreement;

“Payment Schedule” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement;

“Person” includes any individual, trust, corporation, partnership, sole proprietorship, limited partnership, joint venture, unincorporated organization, association, institution, entity, party or government (including any division, agency or department thereof) and the successors, heirs and assigns of each;

“Permitted Cure” means (i) where an Acceleration has occurred, Lender has agreed in writing to withdraw such Acceleration; and (ii) whether or not an Acceleration has occurred, Lender has confirmed in writing that an existing Event of Default has been cured by Borrower in form and substance satisfactory to Lender in its sole and unfettered discretion;

“Permitted Cure Risk Adjusted Interest Rate” has the meaning ascribed to it in 26(b) in this Agreement;

“PMSI” means a purchase money security interest;

“Post Default Risk Adjusted Interest Rate” has the meaning ascribed to it in Section 26(a) of this Agreement;

“Previously Approved Mining Strategy” means Borrower’s approved strategy for mining Digital Currency from the Equipment set out in Schedule “D”, or such other strategy as may be approved by Lender in writing from time to time in its sole and unfettered discretion;

“Proceeds” has the meaning set out in the UCC;

“Property” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement;

“Receiver” means a receiver and / or a receiver and manager;

“Scheduled Final Payment Date” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement;

“Supplemental Property” means the assets, property and undertakings (if any described) in Schedule “E”;

“Taxes” has the meaning ascribed to it in Section 5 in this Agreement;

“Term” has the meaning ascribed to it in Section 8 of this Agreement;

“Total Loss” has the meaning ascribed to it in Section 22(r) of this Agreement;

“UCC” means the Uniform Commercial Code.

“Vendor” has the meaning ascribed to it in Section 1 (Disclosure Statement) in this Agreement.

Unless the context otherwise requires, all references herein to any statute or any provision thereof will include such statute or provision as it may be amended, restated, re-enacted or replaced from time to time. If the context so requires, words importing number shall be deemed to include a greater or lesser number, words importing gender shall be deemed to include the other gender or the body corporate and words importing the body corporate shall be deemed to include either gender. The words “hereto”, “herein”, “hereof”, “hereunder”, “this Agreement” and similar expressions mean and refer to this Agreement. The headings in this Agreement are for convenience only and shall not define or limit any of the terms hereof.

3. PURPOSE AND ADVANCE OF LOAN

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Subject to the terms and conditions herein Lender agrees to advance the Loan to Borrower for the sole purpose of Borrower purchasing the Property. Lender shall (and Borrower hereby directs Lender to) advance the Loan by disbursing the Loan directly to the Vendor to complete the acquisition of the Property. If for any reason after the Loan is disbursed, the Property is not delivered to Borrower and / or Borrower does not accept the Property, Borrower agrees to immediately reimburse Lender the amount of the Loan. Borrower appoints Lender as Borrower’s agent for the sole and limited purpose of completing the acquisition of the Property in accordance with this Section 3.

4. ORDER, DELIVERY AND INSTALLATION OF EQUIPMENT

Borrower is solely responsible for arranging the order, delivery and installation of the Property entirely at its own risk and expense, and in particular, shall pay any and all delivery and installation charges. Lender shall not be liable to Borrower for any delay in, or failure of, or refusal to accept, delivery of the Property. If Borrower acquires the Property outside of the United States of America, Borrower shall arrange for the importation of the Property and pay any and all costs, charges, taxes, duties and other expenses arising from and / or relating to such importation (collectively, “Importation Costs”).

5. INTEREST AND PRINCIPAL PAYMENTS

Borrower shall pay Lender the Blended Payments set out in the Payment Schedule in the amounts and at the times specified in the Payment Schedule. All Blended Payments and other amounts due under this Agreement shall be made together with all applicable taxes (collectively, “Taxes”) in immediately available funds in U.S. Dollars and shall be payable to Lender at its address shown above or to such other place or in such other manner as Lender may at any time or times designate in writing. Interest at the Interest Rate shall be calculated monthly on the principal of the Loan and any other Obligations then outstanding until repaid in full, on the basis of the actual number of days elapsed in a year, being 365 or 366, as the case may be, and is payable monthly in arrears.

6. PREPAYMENTS

Subject to Applicable Law, Borrower agrees that it shall only be entitled prepay the Loan during the Term by paying the aggregate of: (i) all Blended Payments required to be paid under the Payment Schedule up until and including on the Scheduled Final Payment Date regardless of whether such Blended Payments have come due on the date of prepayment; and (ii) and all other Obligations then outstanding.

7. CONDITIONS PRECEDENT

Lender shall have no obligation to advance any funds pursuant to this Agreement until all of the following conditions precedent are fulfilled to the satisfaction of Lender in its sole and unfettered discretion:

(a) all of the representations and warranties made by Borrower in this Agreement shall be true and accurate as of the date of the advance of funds, as if they had been made on that date;

(b) Borrower shall have provided Lender with a certificate of insurance or other evidence satisfactory to Lender of compliance with the insurance requirements set forth in this Agreement including without limitation under Section 13 hereof;

(c) Borrower shall have provided Lender with an invoice or bill of sale from the Vendor for the Equipment, and provided Lender with evidence in form and substance satisfactory to Lender in its sole and unfettered discretion that the amount of the Loan shall be sufficient to complete a purchase of the Equipment and cover all Importation Costs if applicable;

(d) Lender shall be satisfied in its sole and unfettered discretion that Vendor will deliver the Equipment to Borrower upon receipt of the advance and that the Equipment once obtained by Borrower will be kept at all times at the Designated Location;

(e) Lender shall have obtained satisfactory Host / Landlord Accommodations from all applicable Hosts and Landlords;

(f) on the advance date, Borrower shall have paid Lender all fees and other amounts that are then due under this Agreement, including, but not limited to, the Administration Fee;

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (g) Lender shall have received such financial and other information relating to Borrower as it shall have reasonably requested;

(h) Lender shall have received an officer’s (secretary’s) certificate from Borrower in form and substance acceptable to Lender in its sole and unfettered discretion, inclusive of a certificate of incumbency, supporting resolutions from Borrower, and a certified copy of Borrower’s constating documents;

(i) [RESERVED];

(j) Lender’s security interest in the Collateral shall be duly registered, filed and perfected such that Lender has a first ranking security interest in the Collateral, and Lender shall have received such other documents relative to its security interest, as Lender may reasonable require; and

(k) on the advance date Borrower shall have not failed to observe or perform any of its covenants in this Agreement.

8. TERM

The term of the Loan will start on the date of this Agreement and end on the earlier of: (i) an Acceleration; (ii) the date this Agreement is terminated in accordance with the terms hereof; and (iii) the Scheduled Final Payment Date (such period, the “Term”).

9. IDENTITY OF EQUIPMENT

Borrower shall affix to the Equipment, and not remove, conceal or alter, any labels, plates or other identification supplied by Lender indicating Lender’s security interest. Borrower acknowledges that the Equipment is and shall remain personal and movable property and shall take such steps as may be requested by Lender to prevent any person from acquiring any rights in any Equipment by reason of the Equipment being claimed or deemed to be real property or part thereof. Lender’s security interest in the Equipment shall be in no way impaired by the absence of any such label, plate or other identification setting out Lender’s security interest.

10. NO WARRANTIES FROM LENDER

(a) Borrower acknowledges and agrees that: (i) it has selected all Equipment and the Vendor and manufacturer thereof; (ii) it is solely responsible for the use of and results obtained from the Equipment; (iii) it has not relied on Lender’s skill or judgment in any way in selecting the Equipment; and (iv) Lender has made no representation or warranty with respect to Equipment, including its condition, safety, design, durability, capability, workmanship, quality, operation, compliance with law, suitability or fitness for the use intended by Borrower, patent or intellectual property infringement, latent or patent defects, its freedom from Charges, or with respect to any other matter or thing whatsoever. All representations, warranties and conditions, whether express or implied, statutory or otherwise from Lender regarding the Equipment, are hereby excluded.

(b) Lender shall not be liable to Borrower or any other Person for any liability, claim, loss, cost, damage or expense of any kind or nature caused directly or indirectly by the Equipment or any deficiency or defect thereof or the use, ownership or maintenance thereof or for any loss of business or other damages whatsoever and howsoever caused (including indirect, special, consequential, punitive or exemplary damages).

(c) Lender shall not be liable to Borrower or any other Person for any liability, claim, loss, cost, damage or expense of any kind or nature caused directly or indirectly by a Designated Pool, and that the performance of a Designated Pool shall not in any way affect Borrower’s duty to pay the Blended Payments and perform its other Obligations as set forth in this Agreement or any other Loan Documents.

(d) Borrower acknowledges and agrees that neither the manufacturer, the Vendor, nor any salesperson, representative or other agent of the manufacturer or Vendor, is an agent of Lender or is authorized to waive or alter any term or condition of this Agreement and no representation or warranty as to the Equipment or any other matter by the manufacturer or Vendor, nor the fact that the Lender and or its affiliates may receive a referral fee from the Vendor, manufacturer, or any Hosts / Landlords, shall in any way affect Borrower’s duty to pay the Blended Payments and perform its other Obligations as set forth in this Agreement or any other Loan Documents.

11. USE OF EQUIPMENT

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document All Equipment is at Borrower’s risk and shall be used by Borrower for commercial purposes only. Borrower shall not affix the Equipment to real or immovable property nor to any goods, chattels or movable property not otherwise financed hereunder without the prior written consent of Lender. Borrower shall ensure that the Equipment is used only by competent and qualified operators and not for any illegal or improper purpose, and in the case of any software related to the Equipment, same is used in accordance with each applicable licence thereof.

12. MAINTENANCE OF EQUIPMENT

Borrower shall, at its own expense: (i) keep the Equipment in its original condition and working order, normal wear and tear only excepted, (ii) use, operate, maintain, repair, overhaul and service the Equipment (including furnishing all material necessary for the operation and maintenance of the Equipment); and (iii) maintain all records, logs and other materials, in compliance with all (a) manufacturer and Vendor recommendations, all requirements to maintain all applicable warranties and insurance in effect and all applicable laws, orders, rules, regulations and directives of any federal, provincial, state, local or foreign government agencies, departments, boards or authorities (collectively, “Applicable Law”). At the request of Lender, Borrower shall furnish to Lender proof of required maintenance of the Equipment.

(b) Borrower shall immediately give notice to Lender of any Total Loss.

Borrower may alter or modify Equipment only with the prior written consent of Lender and, in the case of software, subject to the (c) terms of and in compliance with any license for that software.

13. INSURANCE

Borrower shall obtain and maintain, at its own expense, a public or third party liability insurance in respect of the Equipment and all risk insurance (including extended coverage, earthquake and flood endorsements) against loss or damage to such Equipment, including coverage for fire, theft, and such other risks of loss as are customarily covered by insurance on such type of Equipment in (a) such amounts, in such form, with such deductibles and with such insurers, all as shall be satisfactory to Lender; provided that: (i) the amount of insurance at any time covering damage to or loss of Equipment shall not be less than the greater of the full replacement value of the Equipment and the aggregate instalments of the Blended Payments for such Equipment then remaining unpaid; and (ii) each liability insurance policy shall provide coverage of not less than the amount specified in the Disclosure Statement.

The liability insurance policy will name Borrower and Lender as insureds, and each property policy will name Lender (and contain an endorsement designating Lender) as additional insured and lender’s loss payee thereof. Each policy (i) shall contain a standard mortgage endorsement clause; (ii) shall require the insurer to give Lender at least 30 days prior written notice of any alteration in the terms of such policy or the cancellation thereof; and (iii) will provide that no act, omission or misrepresentation by Borrower or any (b) other named insured will affect the rights thereunder of Lender and its successors and assigns. Borrower shall furnish Lender with a certificate of insurance or other evidence satisfactory to Lender of such insurance coverage provided that Lender shall be under no duty either to ascertain the existence of or to examine such insurance policy or to advise Borrower in the event such insurance coverage shall not comply with the requirements hereof.

If Borrower fails to insure Equipment as required hereunder, Lender may, but shall not be required to, obtain such insurance itself and the cost of the insurance shall be for the account of Borrower and due on the date of the next scheduled Blended Payment together (c) with interest on such amount, to be charged at the Interest Rate applicable to the next scheduled Blended Payment. Borrower consents to Lender’s release, upon Borrower’s failure to obtain appropriate insurance coverage, of any and all information necessary to obtain required insurance.

Borrower will at its expense make all proofs of loss and take all other steps necessary to recover insurance benefits, unless advised in writing by Lender that Lender desires to do so, which Lender may do at Borrower’s expense. Borrower hereby irrevocably appoints (d) Lender, with full power of substitution and coupled with an interest, as Borrower’s attorney-in-fact to make claim for, receive payment of and execute and endorse all documents, cheques or drafts issued with respect to any claim under any insurance policy relating to the Equipment.

14. BORROWER’S COVENANTS

Borrower acknowledges and agrees that it shall:

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document permit Lender or its agents to, upon twenty-four (24) hours’ notice, during normal business hours, fully inspect the Collateral (a) including any documents (including maintenance records) relating thereto and take copies thereof, to determine Borrower’s compliance with this Agreement or the condition of the Collateral or for any other purpose;

not use the Equipment in a manner that will result in the clock rate of the Equipment exceeding the clock rate pre-set in the Equipment (b) by the manufacturer (“Overclock”), without the express prior written consent of Lender;

not use any hardware or software with the Equipment or alter any existing hardware or software without Lender’s prior written (c) consent;

not alter its strategy for the mining of Digital Currency (including, without limitation, the type of Digital Currency that will be (d) mined) from the Previously Approved Mining Strategy or use the Equipment in a manner contrary or inconsistent with the Previously Approved Mining Strategy without Lender’s prior written consent;

upon Lender’s request, provide Lender in writing with all information requested by Lender regarding the Collateral including serial (e) numbers, models, and makes;

upon Lender’s request, only mine the Equipment as part of a Mining Pool, designated by the Lender in its sole and commercially (f) reasonable discretion (a “Designated Pool”);

keep the Collateral free and clear of all seizures, forfeitures, Charges, claims, privileges, debts or taxes of any nature whatsoever (g) and not, without the prior written consent of Lender, lease or otherwise relinquish possession (except for required or scheduled maintenance) of the Equipment or any part thereof;

not change its name, amalgamate or otherwise merge its business with the business of any other Person without Lender’s prior (h) written consent; and

(i) not change the location of the Equipment from the Designated Location without Lender’s prior written consent.

15. BORROWER’S REPORTING OBLIGATIONS

Borrower acknowledges and agrees that it shall (at the sole cost of Borrower):

(a) upon or prior to receipt of the Equipment provide Lender with a list of any serial numbers associated with the Equipment;

at all times, provide Lender with access to any reporting and / or monitoring software used in connection with the Equipment, (b) including any such software provided by the Host(s) and / or Landlord(s) of the Designated Location to Borrower in connection with the Equipment;

if Borrower owns the Designated Location, on the first Business Day of each month, provide evidence of the payment of all utilities, (c) internet, telephone, electricity, and other similar or critical services necessary for the ordinary course operation of the Equipment (collectively, “Critical Services”) due in the prior month;

(d) if Borrower does not own the Designated Location, on the first Business Day of each month provide:

evidence of any payments required to be made under any agreements with Host(s) and / or Landlord(s) of the Designated (i) Location;

if any agreement between Borrower and the Host(s) and / or Landlord(s) of the Designated Location requires Borrower to (ii) pay any Critical Services, evidence of the payment of such Critical Services due in the prior month;

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document on the fifth Business Day of each month, provide Lender with a report certified by an officer of Borrower, in form and substance (e) satisfactory to Lender, in its sole and unfettered discretion, certifying that Borrower continues to own and be in possession and control of the Equipment, and setting out:

(i) any repairs done to the Equipment in the prior month;

(ii) any Digital Currency rewards issued in connection with the Equipment during the prior month; and

(iii) the uptime of the Equipment in the prior month;

on the first Business Day of each fiscal quarter, provide Lender with information, in form and substance, satisfactory to Lender, in its (f) sole and unfettered discretion, regarding the performance of the Equipment, including but not limited to the firmware and/or software running on the Equipment;

immediately, and in any event, within twenty four (24) hour, after Borrower learns of any event that has disrupted and / or prevented the continuous mining of Digital Currency to the Blocked Wallets by the Equipment (including without limitation any loss of (g) electricity, loss of internet connection, software issues, or viruses), notify Lender, in writing with reasonable detail of such event and provide Lender with Borrower’s proposed course of action to recommence the mining of Digital Currency; and

as soon as possible, and, in any event, within five (5) days, after Borrower learns of the following, notify Lender, in writing with reasonable detail of: (i) any proceeding instituted or threatened to be instituted against Borrower in any court or before any commission or any regulatory body (federal, provincial, territorial, local or foreign); (ii) the occurrence of any event, circumstance or (h) claim, that could reasonably be expected to have a material adverse effect on Borrower, Borrower’s ability to perform its Obligations, any of the Collateral or the rights of Lender under or in connection with this Agreement; (iii) the occurrence of any Event of Default; or (iv) any material loss of or damage to the Collateral.

16. BORROWER’S REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Lender on the date hereof that:

Borrower is duly formed and organized, validly existing and in good standing under the laws of the jurisdiction of its formation and (a) is entitled to conduct its business in all jurisdictions in which it carries on business or has assets;

the execution, delivery and performance by Borrower of this Agreement, and all Loan Documents are within Borrower’s powers, have been duly authorized by all necessary action, and do not contravene or result in a breach or default under: (i) Borrower’s (b) organizational (constating) documents including without limitation any articles, bylaws, trust indentures, partnership agreements or shareholders agreements; (ii) any Applicable Law; or (iii) contractual restriction binding on or affecting Borrower;

no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is (c) required for the due execution, delivery and performance by Borrower of this Agreement and all Loan Documents;

this Agreement and all Loan Documents constitute legal, valid and binding obligations of Borrower, enforceable against Borrower (d) in accordance with their respective terms;

it has the right, power and authority to assign its right, title and interest in and to any and all of the Material Agreements to Lender upon the terms and conditions hereof (except for any Material Agreement which by the provisions thereof or by law is not assignable (e) or which requires the consent of any third party(s) to its assignment unless Borrower has obtained the consent of such third party(s) in form and substance acceptable to Lender in its sole and unfettered discretion);

Borrower’s principal place of business, chief place of business, registered office and chief executive office is at the address specified (f) on the first page of this Agreement, and its full legal name (including any French versions thereof) is specified on the signature page of this Agreement;

(g) Borrower will not house and / or store the Equipment at any location other than the Designated Location;

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (h) Borrower is duly registered, in all applicable States within the United States of America, for the payment and/or collection of Taxes;

(i) The Collateral is free and clear of all seizures, forfeitures, Charges, or claims;

there are no actions, suits or proceedings pending, or to the knowledge of Borrower, threatened, before any court, administrative (j) agency, arbitrator or governmental body which may, if determined adversely to Borrower, materially compromise its ability to perform its obligations under this Agreement other than those disclosed to Lender in writing;

all financial statements that are delivered from time to time by Borrower to Lender pursuant to this Agreement shall have been prepared in accordance with generally accepted accounting standards applied on a consistent basis and shall fairly state in all material (k) respects the financial condition of Borrower and its consolidated subsidiaries (subject to normal year-end adjustments) as at the date thereof, and all other financial and other information, budgets, timetables, certificates, plans, specifications and other material provided to Lender in connection with this Agreement are (or will be, as the case may be) true and accurate;

Borrower has, or will have at the time of receipt of the Collateral, all licenses, permits and consents as are required ( ) under any Applicable Law in connection with its possession, use or operation of the Collateral; and

(a) Borrower has not failed to observe or perform any of its covenants in this Agreement.

17. LENDER’S RIGHT TO MAKE PAYMENTS

If Borrower fails to perform any of its obligations under this Agreement, Lender may, but need not, perform the obligation or cause it to be performed, in each case such performance shall not be deemed a waiver or cure of any breach of this Agreement resulting from such failure. The cost of performing the obligation shall be for the account of Borrower and due on the date of the next scheduled Blended Payment together with interest on such amount, to be charged at the Interest Rate applicable to the next scheduled Blended Payment.

18. HOSTS / LANDLORDS

Borrower shall obtain and deliver to Lender such waivers and subordination agreements (collectively, “Host / Landlord Accommodations”) in form and substance acceptable to Lender in its sole and unfettered discretion, as Lender may request from any entity that may host the Equipment (“Hosts”), and / or the owners, landlords and mortgagees of any real property upon which the Equipment may be located (collectively, “Landlords”) including without limitation any applicable Hosts and / or Landlords in respect of the Designated Location.

19. SECURITY INTEREST

As security for the payment and performance of the Obligations, Borrower mortgages and charges to Lender, and grants to Lender a (a) security interest in (inclusive of a PMSI), and Lender takes a security interest in (inclusive of a PMSI), all of Borrower’s right, title and interest in and to the Collateral.

Borrower and Lender do not intend to postpone the attachment of the security interest created hereby, and the security interests will attach when: (i) this Agreement has been executed, or in the case of after-acquired Collateral, that Collateral has been acquired by (b) Borrower; (ii) value has been given; and (iii) Borrower has rights in the Collateral, or in the case of after-acquired Collateral, acquires rights in the Collateral.

The security interest created by this Agreement is, in addition and without prejudice to any other security interests now or later, held (c) by Lender. No security interests held by Lender will be exclusive of or dependent upon or merge in any other security interests, and Lender may exercise its rights under such security interests independently or in combination.

Borrower shall, at Lender’s reasonable request, at any time and from time to time, authenticate, execute and deliver to Lender such financing statements, documents and other agreements and instruments (and pay the cost of filing or recording the same in all public (d) offices deemed necessary or desirable by Lender) and do such other acts and things or cause third parties to do such other acts and things as Lender may deem necessary or desirable in its sole discretion in order to establish and maintain a valid, attached and perfected security interest in the Collateral in favor of Lender (free and clear of all other liens, claims, encumbrances and rights of

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document third parties whatsoever, whether voluntarily or involuntarily created) to secure payment of the Indebtedness, and in order to facilitate the collection of the Collateral. Borrower irrevocably hereby makes, constitutes and appoints Lender (and all persons designated by Lender for that purpose) as Borrower’s true and lawful attorney and agent-in-fact to execute and file such financing statements, documents and other agreements and instruments and do such other acts and things as may be necessary to preserve and perfect Lender’s security interest in the Collateral. Borrower acknowledges and agrees that its appointment of Lender as its attorney and agent-in-fact for the purposes specified in this Agreement is an appointment coupled with an interest and shall be irrevocable until termination of this Agreement in accordance with the terms of this Agreement.

20. MATERIAL AGREEMENTS

Borrower specifically acknowledges and agrees that by virtue of the execution and delivery of this Agreement, Lender does not assume, and Borrower hereby releases and holds harmless Lender from responsibility for, the payment of any sums due or to become (a) due under any of the Material Agreements or the performance of any obligations to be performed under or with respect to any of the Material Agreements by Borrower.

Lender may, however, at its option, upon the occurrence and during the continuance of an Event of Default, assume or perform any such obligations which Lender considers necessary or desirable to obtain the benefit of any Material Agreement free of any set-off, (b) deduction or abatement, and any money so expended by Lender shall form part of the Obligations and bear interest at the Interest Rate.

If there shall be a default under any of the Material Agreements on the part of Borrower, for any reason, Lender may, upon the occurrence and during the continuance of such default, at its option, without assuming any of the obligations of Borrower under the relevant Material Agreements and without waiving or releasing Borrower from any of the terms hereof or any of the Obligations, (c) cure the default. The cost of curing the default (including any monetary default) shall be for the account of Borrower and due on the date of the next scheduled Blended Payment together with interest on such amount, to be charged at the Interest Rate applicable to the next scheduled Blended Payment.

Notwithstanding anything in this Agreement to the contrary, nothing herein shall constitute an assignment or attempted assignment of any Material Agreement which by the provisions thereof or by law is not assignable or which requires the consent of any third party to its assignment unless such consent has been obtained. In each such case, Borrower shall, upon the request of Lender, use its commercially reasonable efforts to obtain the consent of any necessary third party to its assignment hereby, in form and substance (d) acceptable to Lender, and to its further assignment by Lender to any third party who may acquire same as a result of the exercise by Lender of remedies after default, provided however, that Borrower in satisfying such commercially reasonable efforts shall not be required to make any third party expenditures (other than its own legal counsel) or to assume any additional material liability to the third party. Upon such consent being obtained or waived, this Assignment shall apply to the applicable Material Agreement without regard to this section and without the necessity of any further assurance to effect the assignment thereof.

Unless and until consent to assignment is obtained as provided above, Borrower shall, to the extent it may do so by law or pursuant to the provisions of the document or interest therein referred to, hold all benefit to be derived from the applicable Material Agreements (e) in trust for Lender, (including, without limitation, Borrower’s beneficial interest in any Material Agreement which may be held in trust for Borrower by a third party) as additional security for payment of the Obligations and shall deliver up all such benefit to Lender, forthwith upon demand by Lender.

21. MINED DIGITAL CURRENCY

Borrower agrees that all Mined Digital Currency shall (both before and after an Event of Default, subject only to Section 27(b) (a) hereof) be immediately deposited in Blocked Wallet A.

Unless an Event of Default is existing and continuing, Borrower shall be entitled to sell any Mined Digital Currency in the ordinary (b) course.

If an Event of Default is existing and continuing, all rights and licenses of Borrower granted hereunder will cease and Borrower shall (c) only be entitled to sell and/or trade Mined Digital Currency with the written consent of the Lender.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Any Mined Digital Currency not deposited in Blocked Wallet A shall by held in trust by Borrower on behalf of Lender, and shall (d) forthwith be delivered to Lender.

Lender and Borrower agree that Lender shall have two wallet administrators for Blocked Wallet B with the power to add new users, designate whitelisted addresses and create transaction rules for Blocked Wallet B, in its sole and unfettered discretion. Lender and (e) Borrower agree that the Lender’s administrators shall, subject to Section Error! Reference source not found. hereof, whitelist two addresses for withdrawals made from Blocked Wallet B: (i) an address to be designated by the Lender; and (ii) an address to be designated by the Borrower.

Without in any way limiting the Lender’s ability to create transaction rules for Blocked Wallet B in its sole and unfettered discretion, and subject to Section Error! Reference source not found. hereof, the following transaction rules shall be created by Lender in (f) respect of Blocked Wallet B: (i) a transaction rule allowing Borrower to make withdrawals from Blocked Wallet B (the “Borrower Withdrawal Rule”); and (ii) a transaction rule allowing Lender to make withdrawals from Blocked Wallet B.

22. EVENTS OF DEFAULT

The occurrence or happening of any one or more of the following events shall constitute a “Default” and if such Default is still occurring following the applicable cure period, it shall be deemed an “Event of Default”:

(a) Borrower does not pay any of the Obligations owing to Lender when due;

(b) Borrower fails to pay any amounts in respect of Critical Services when due;

(d) All Obligations owing to Lender have not been repaid in full by the Scheduled Final Payment Date;

Any of the Equipment is disconnected from its power source and such Equipment is not reconnected to a comparable power source (e) within five (5) Business Days;

A Host or Landlord ceases to provide (or provides notice that it intends to cease providing) any services that are required for the (f) continuous mining of Digital Currency by the Equipment and such services are not resumed within five (5) Business Days of the original termination of the services;

(g) Subject to Section 27(b) hereof, any Mined Digital Currency is deposited in a wallet that is not one of the Blocked Wallets;

Subject to Section 27(b) hereof, Borrower or any party acting on behalf of Borrower attempts to direct any Mined Digital Currency (h) to a wallet that is not one of the Blocked Wallets;

Borrower does not observe or perform any of the terms, conditions or covenants to be observed or performed by Borrower under this (i) Agreement, the other Loan Documents or any other agreement or document existing at any time between Borrower and Lender;

any representation or warranty made by Borrower in this Agreement or in any document or certificate furnished to Lender in (j) connection with or pursuant to this Agreement shall prove to be incorrect at any time in any respect;

(k) without Lender’s prior written consent, Borrower removes any Equipment from the Designated Location;

without Lender’s prior written consent, Borrower parts with possession of any Equipment or purports to (or does) sell, assign, (l) transfer, sublet or otherwise suffer a Charge of any kind upon or against any interest in this Agreement or the Collateral;

(m) Borrower prevents or attempts to prevent Lender from having full unencumbered access to the Blocked Wallets;

(n) Borrower at any time fails to maintain in effect any insurance required hereunder;

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Borrower fails to make any payments when due to any Hosts or Landlords, or otherwise in is breach of any of its agreements with (o) any Hosts or Landlords;

the Equipment is used in a manner not consistent with standard industry practice that may result in accelerated depreciation to the (p) value of the Equipment;

(q) Borrower Overclocks the Equipment without the express written prior consent of Lender;

the Equipment is lost, stolen, substantially destroyed, condemned or seized (collectively, a “Total Loss”) or Borrower loses control (r) and / or possession of the Equipment;

Borrower becomes insolvent or bankrupt; Borrower becomes subject to proceedings under the United States Bankruptcy Code (the “US Code”), or any similar legislation in any applicable jurisdiction; Borrower files a notice of intention to file a proposal under the US Code, institutes any proceedings seeking an order for relief under the US Code or any similar legislation or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding-up, dissolution, reorganization, arrangement, adjustment or composition (s) of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or fails to file an answer or any other pleading denying the material allegations in any such proceeding instituted against it; an application for a Bankruptcy order is filed against Borrower or Borrower files an assignment for the benefit of creditors under the US Code; or if Borrower takes any corporate action to authorize or effect any of the foregoing actions;

(t) a Receiver, trustee, liquidator, custodian or other similar official is appointed in respect of Borrower or any of Borrower’s property;

any court, government or governmental agency condemns, seizes or otherwise appropriates, or takes custody or control of, all or a (u) materially substantial portion of the property of Borrower;

(v) Borrower ceases to carry on its business, or any material part of its business;

any final, non-appealable judgment shall be rendered against Borrower which remains unsatisfied for thirty (30) days following the (w) rendering of such judgment;

the holder of a security interest delivers a notice of intention to enforce its security or takes possession of all or any part of Borrower (x) property, or a distress, execution or other similar process is levied against all or any part of that property;

Borrower suffers the loss or suspension of any licences, permits or other operating authorities required for the operation of its (y) business or any part of it, and such loss is material to the operation of its business, taken as a whole; or

(z) Any other reason not specified herein that materially impairs Borrower’s ability to perform its obligations under the Agreement.

23. ACCELERATION

If any Event of Default occurs, Lender may in its sole and unfettered discretion, declare the entire unpaid principal advanced hereunder, all interest accrued and unpaid thereon and all fees, charges, costs and other Obligations to be immediately due and payable, whereupon all such amounts shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Borrower, and irrespective of whether or not Borrower purports to cure such Event of Default (an “Acceleration”).

24. CURING EVENTS OF DEFAULT

Borrower shall be permitted to cure the Defaults referenced following the occurrence of such Default, as set forth below:

If a Default occurs pursuant to Sections 22(a), 22(b), or 22(d), Borrower shall have one (1) Business Day to cure such Default before (a) an Event of Default shall be deemed to have occurred.

25. SECURITY INTERESTS ENFORCEABLE

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The occurrence of an Event of Default will cause the security interest granted hereunder to become enforceable without the need for any action or notice by Lender, and irrespective of whether Borrower subsequently purports to cure such Event of Default.

26. DEFAULT INTEREST

(a) Upon the occurrence of an Event of Default and an Acceleration, and subject to Section 26(b) hereof, the Interest Rate for all purposes under this Agreement shall immediately be deemed to be the Interest Rate applicable prior to the Event of Default plus ten percent (10%) per annum (the “Post Default Risk Adjusted Interest Rate”) and any reference herein to the Interest Rate shall be deemed to be a reference to the Post Default Risk Adjusted Interest Rate.

(b) Following implementation of the Post Default Risk Adjusted Interest Rate, if a Permitted Cure occurs within thirty (30) days of the date of the occurrence of the underlying Event of Default, the Post Default Risk Adjusted Interest Rate shall cease to apply and the Interest Rate for all purposes under this Agreement shall thereafter be deemed to be the Interest Rate applicable prior to the Event of Default (the “Permitted Cure Risk Adjusted Interest Rate”) and any reference herein to the Interest Rate shall be deemed to be a reference to the Permitted Cure Risk Adjusted Interest Rate.

(c) It is the intent of the parties that the Interest Rate, the Post Default Risk Adjusted Interest Rate, the Permitted Cure Risk Adjusted Interest Rate, and other charges to Borrower under this Agreement shall be lawful; therefore, if for any reason the interest or other charges payable under this Agreement are found by a court of competent jurisdiction, in a final determination, to exceed the limit which Lender may lawfully charge Borrower, then the obligation to pay interest and other charges shall automatically be reduced to such limit and, if any amount in excess of such limit shall have been paid, then such amount shall be refunded to Borrower.

27. REMEDIES OF LENDER

If the security interests granted hereunder become enforceable, Lender may enforce its rights by any one or more of the following remedies:

by taking possession of the Collateral or any part of it, and collecting, demanding, suing, enforcing, recovering, receiving amounts in (a) respect of the Collateral, and for that purpose entering into and upon any lands, buildings, and premises and doing any act and taking any proceedings in the name of Borrower, or otherwise, as Lender considers necessary;

by directing any Mined Digital Currency to a digital wallet designated by Lender that is not one of the Blocked Wallets, and/or (b) by suspending or terminating Borrower’s access to Blocked Walled B, including without limitation, by removing or altering the Borrower Withdrawal Rule and / or removing Borrower’s signing authority in respect of Blocked Wallet B;

by applying from time to time, in whole or in part, any Mined Digital Currency received by Lender to reduce the Obligations of (c) Borrower;

(d) by exercising any rights granted to Lender under any Host / Landlord Accommodations;

(e) by proceedings in any court of competent jurisdiction for the appointment of a Receiver of all or any part of the Collateral;

(f) by demanding that that Borrower deliver the Collateral to Lender;

(g) by proceedings in any court of competent jurisdiction for the sale or foreclosure of all or any part of the Collateral;

(h) by filing proofs of claim and other documents to establish its claims in any proceeding or proceedings relating to Borrower;

(i) by appointment by instrument in writing of a Receiver of all or any part of the Collateral;

(j) by sale or lease by Lender of all or any part of the Collateral, whether or not it has taken possession of the Collateral;

(k) by retaining any of the Collateral in satisfaction of all or part of the Obligations; and

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document by any other remedy or proceeding authorized or permitted by this Agreement or by law or equity, including all of the rights and (l) remedies of Lender under the UCC.

Without limiting any of the foregoing, on an occurrence of an Event of Default, Lender shall have all of the rights, title and interest in and to the Material Agreements, without modifying or discharging any of Borrower’s Obligations to Lender.

With respect to Collateral, upon the occurrence and during the continuance of an Event of Default, Lender may exercise from time to time any rights and remedies available to it under any other applicable law in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement or in any of the other document or instrument executed in connection herewith, including, but not limited to, the UCC, and all of Lender’s rights and remedies shall be cumulative and non-exclusive to the extent permitted by law. In particular, but not by way of limitation of the foregoing, Lender may, without notice, demand or legal process of any kind, take possession of any or all of the Collateral (in addition to Collateral of which it already has possession), wherever it may be found, and for that purpose may pursue the same wherever it may be found, and may enter onto any of Borrower’s premises where any of the Collateral may be, and search for, take possession of, remove, keep and store any of the Collateral until the same shall be sold or otherwise disposed of, and Lender shall have the right to store the same at any of Borrower’s premises without cost to Lender. At Lender’s request, Borrower shall, at Borrower’s expense, assemble the Collateral and make it available to Lender at one or more places to be designated by Lender and reasonably convenient to Lender and Borrower. Borrower recognizes that if Borrower fails to perform, observe or discharge any of its Indebtedness under this Agreement, no remedy at law will provide adequate relief to Lender, and agrees that Lender shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages. Subject to Applicable Law, any notification of intended disposition of any of the Collateral required by law will be deemed to be a reasonable authenticated notification of disposition if given at least ten (10) days prior to such disposition and such notice shall (i) describe Lender and Borrower, (ii) describe the Collateral that is the subject of the intended disposition, (iii) state the method of the intended disposition, (iv) state that Borrower is entitled to an accounting of the Obligations and state the charge, if any, for an accounting and (v) state the time and place of any public disposition or the time after which any private sale is to be made. Lender may disclaim any warranties that might arise in connection with the sale, lease or other disposition of the Collateral and has no obligation to provide any warranties at such time. Any Proceeds of any disposition by Lender of any of the Collateral may be applied by Lender to the payment of expenses in connection with the Collateral, including, without limitation, legal expenses and reasonable attorneys’ fees, and any balance of such Proceeds and all other payments received by Lender during the continuance of a Default may be applied by Lender toward the payment of such of the Indebtedness, and in such order of application, as Lender may from time to time elect.

28. RECEIVER

After the security interests granted hereunder have become enforceable, Lender may, upon and during an Event of Default, appoint by instrument in writing any qualified Person to be a Receiver of the Collateral and may remove any Person so appointed and appoint another qualified Person in its stead. Any Receiver appointed under this Agreement may exercise any one or more of the following powers:

to take possession of the Collateral and for that purpose to enter into and upon any lands, buildings, and premises and to do any act (a) and take any proceedings in the name of Borrower, or otherwise, as the Receiver considers necessary;

to carry on or concur in carrying on the business of Borrower as it pertains to the Collateral (including, without limiting the generality of the powers contained in this Agreement, payment of the obligations of Borrower whether or not they are due and cancellation or (b) amendment of any contracts) and the employment and discharge of those agents, managers, employees and others upon terms and with salaries, wages or remuneration as the Receiver thinks proper;

(c) to repair and keep in repair the Collateral or any part of it, and to do all acts and things necessary to protect the Collateral;

to make any arrangement or compromise that the Receiver thinks expedient in the interests of Lender or Borrower and to assent to (d) any modification or change in or omission from the provisions of this Agreement;

to exchange any part of the Collateral for any other property suitable for the purposes of Borrower upon terms that seem expedient, (e) and either with or without payment or exchange of money or equality of exchange or otherwise;

to raise on the security of the Collateral or any part of it, by mortgage, charge or otherwise, any sum of money required for the repair, (f) insurance or protection of the Collateral, or any other purposes mentioned in this Agreement, or as may be required to pay off or

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document discharge any lien, charge or encumbrance upon the Collateral or any part of it, that would or might have priority over the security interest of Lender; and

whether or not the Receiver has taken possession, to sell or lease or concur in the sale or leasing of any of the Collateral or any part of it after giving Borrower not less than 20 days’ written notice of the Receiver’s intention to sell or lease, and to effect any sale or lease by conveying, transferring or assigning in the name of or on behalf of Borrower or otherwise; and any sale or lease may be made either at public sale or lease (including public auction or closed tender), or by private sale or lease, as the Receiver may determine, and any sale or lease may be made from time to time as to the whole or any part of the Collateral; and the Receiver may (g) rescind or vary any contract for the sale or lease of any of the Collateral or any part of it, and may resell and re-lease without being liable for any loss occasioned by doing so; and the Receiver may sell or lease any of the Collateral for cash or credit, or part cash and part credit, or otherwise as may appear to be most advantageous, and at the prices that can be reasonably obtained for the Collateral, and if a sale or lease is on credit neither the Receiver nor Lender will be accountable for or charged with any monies until actually received.

29. FORECLOSURE / SALE

The provisions of Section 28(g) will also apply to a sale or lease of any of the Collateral by Lender under Section 27(j).

30. LIABILITY OF RECEIVER

A Receiver appointed and exercising powers under this Agreement will not be liable for any resulting loss unless the loss is caused by the Receiver’s own gross negligence or wilful default, and when so appointed the Receiver will be considered to be the agent of Borrower.

31. EFFECT OF APPOINTMENT OF RECEIVER

Immediately upon Lender taking possession of any Collateral or appointing a Receiver, all powers, functions, rights and privileges of the directors and officers of Borrower concerning the Collateral will cease, except as otherwise consented to in writing by Lender.

32. VOLUNTARY FORECLOSURE

Upon and during an Event of Default, Lender may elect to retain all or part of the Collateral in satisfaction of the Obligations or any part of them. Lender may designate any part of the Obligations to be satisfied by the retention of all or part of the Collateral which Lender considers to have a net realizable value approximating the amount of the designated part of the Obligations, in which case only the designated part of the Obligations will be considered to be satisfied by the retention of the Collateral or part of the Collateral as applicable. For greater certainty, if Lender elects to retain all or part of the Collateral, Lender shall be solely entitled to any Digital Currency subsequently mined or otherwise generated by, or in connection with, the Equipment retained by Lender.

33. APPOINTMENT OF ATTORNEY

In addition to the power of attorney granted in Section 13(d) herein, Borrower irrevocably appoints Lender, and any officer or agent of Lender, with full power of substitution, effective upon the occurrence of an Event of Default, to be the attorney of Borrower with full power and authority in the place of Borrower and in the name of Borrower or in its own name, to take all appropriate action and to execute all documents and instruments as, in the opinion of the attorney acting reasonably, may be necessary or desirable to accomplish the purposes of this Agreement, and generally to use the name of Borrower and to do all things as may be necessary or incidental to the exercise of all or any of the powers conferred on Lender under this Agreement. These powers are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests granted to Lender are released. Nothing in this Section affects the right of Lender or any other Person, to sign and file or deliver, as applicable, any financing statements, financing change statements, notices, verification agreements and other documents relating to the Collateral and this Agreement as Lender or the other Person considers appropriate.

34. PROCEEDS OF DISPOSITION

The Proceeds of any sale, lease or other disposition of the whole or any part of the Collateral will be applied to the Obligations, and any surplus remaining in the hands of the Receiver or Lender will be distributed as required by the UCC or other Applicable Law.

35. DEALINGS OF LENDER

Lender will not be obliged to exhaust its recourse against Borrower or any other Person or against any other security interests it may hold in respect of the Obligations before realizing upon or otherwise dealing with the Collateral in any manner Lender considers desirable. Lender may grant extensions of time and other indulgences, take and give up security, accept compositions, grant releases and discharges and otherwise deal with Borrower and any other Person, and with any or all of the Collateral, and with other security and sureties, as Lender may see fit, all without prejudice to the Obligations or to the rights and remedies of Lender under this Agreement. The powers conferred on Lender under this Agreement are solely to protect the respective interests of Lender in the Collateral and will not impose any duty upon Lender to exercise any such powers.

36. EXPENSES

Borrower will reimburse Lender for all fees (including legal fees) and out of pocket expenses incurred in preparing this Agreement and any other Loan Documents (whether or not the transactions contemplated by this Agreement are consummated) in an amount not to exceed ten-thousand dollars ($10,000), in responding to requests from Borrower for waivers, amendments and other matters, and in enforcing and preserving its security interest in the Collateral and Lender’s rights under this Agreement and the Loan Documents.

37. STATUTORY WAIVERS

To the fullest extent permitted by Applicable Law, Borrower waives all of the rights, benefits and protections given by the provisions of any existing or future statute which imposes limitations upon the powers, rights or remedies of Lender or upon the methods of realization of security, including any seize or sue or anti-deficiency statute or any similar provisions of any other statute.

38. AGREEMENT ABSOLUTE; NON-CANCELLABLE

This Agreement cannot be cancelled or terminated except as expressly provided herein. Borrower’s obligation to pay all Obligations hereunder is absolute and unconditional and is not subject to any delay, reduction, set-off, defence, withholding, deduction, claim, counterclaim or recoupment for any reason at all, including any failure, destruction, repossession or theft of the Collateral, loss of use of the Collateral (including if the Equipment does not operate as intended by Borrower, or at all), any representations by the manufacturer or the Vendor of the Equipment, any past, present or future claims of Borrower against Lender under this Agreement or otherwise, any fundamental breach of contract or for any other cause, whether similar or dissimilar to the foregoing, it being the intention of the parties hereto that all Obligations shall continue to be payable in all events in the manner and at the times required hereby. If the Equipment is unsatisfactory for any reason, Borrower shall make any claim solely against the manufacturer or the Vendor thereof and shall, nevertheless, pay Lender all Obligations.

39. CURRENCY INDEMNITY

All amounts payable by Borrower under this Agreement, whether Blended Payments or otherwise, shall be paid to Lender in U.S. dollars (the “Original Currency”). If Borrower makes payment of any liability or obligation of Borrower to Lender under this Agreement in a currency (the “Other Currency”) other than the Original Currency (whether voluntarily or pursuant to an order or judgment of a court or tribunal of any jurisdiction), such payment shall constitute a discharge of the liability of Borrower hereunder in respect of such liability or obligation only to the extent of the amount of the Original Currency which Lender purchases in the United States with the amount Lender receives on the date of receipt in accordance with Lender’s normal practice. If the amount of the Original Currency which Lender is able to purchase is less than the amount of such currency originally due to it in respect of such relevant liability or obligation, Borrower shall indemnify and save Lender harmless from and against any loss or damage arising as a result of such deficiency. This indemnity shall constitute an obligation separate and independent from the other liabilities and obligations contained herein, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by Lender from time to time and shall continue in full force and effect notwithstanding any judgment or order in respect of any amount due hereunder or under any judgment or order.

40. GENERAL INDEMNITY

Borrower acknowledges and agrees that it shall:

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document pay when due, and indemnify and save Lender harmless from, all Taxes, fees, assessments or other levies imposed on the Collateral or the delivery, purchase, lease, use, ownership, operation, possession, sale, storage or return thereof or any Blended Payments, whether assessed to Lender or Borrower, and any fines, penalties or forfeitures relating to the Collateral. Borrower will immediately (a) deliver proof of payment of such amounts to Lender. The licensing and registration of any item any Collateral and any renewal thereof required under Applicable Law shall be the sole responsibility of Borrower and shall be effected by Borrower on a timely basis in accordance with Applicable Law; and

indemnify and save Lender harmless from and against all liabilities, claims, losses, costs, claims, demands, damages, awards, actions and causes of action and other expenses of any nature whatsoever (including reasonable legal fees, but excluding special, exemplary, punitive or consequential damages) arising, directly or indirectly, as a result of this Agreement or any breach hereof by Borrower, or the inaccuracy of any representation or warranty made by Borrower under or in connection herewith or in any other way relating (b) to the use, operation, ownership, manufacture, design, durability, capability, workmanship, quality, compliance with law, suitability, selection, purchase, character, safety, condition, delivery, refusal by Borrower to accept delivery, possession, sale, storage or return of any Collateral, including damage or injury (including death) of Persons or property, and whether caused by Borrower’s negligence or otherwise; provided that Borrower shall not have any obligation hereunder to Lender with respect to liabilities arising from the gross negligence or willful misconduct of Lender.

41. SURVIVAL

All indemnities provided by Borrower to Lender under this Agreement, including, without limitation, under Sections 39 and 40, shall survive and continue in full force and effect notwithstanding any matter or thing, including termination of this Agreement, the end of the Term, any other release or discharge from this Agreement of any Collateral, the sale or disposition of any Collateral or the release or discharge of Borrower to pay any Blended Payments due hereunder.

42. RIGHTS OF SET-OFF

At any time that Borrower has failed (beyond any grace permitted by Lender) to perform or observe any of its covenants in this Agreement, Lender is authorized at any time to set-off and apply any funds held by it and for the credit of Borrower against any and all of the obligations of Borrower.

43. CONFIDENTIALITY

This Agreement has been provided to Borrower on the understanding that its contents may not be revealed or discussed with any other party, except with the prior written approval of Lender, to Borrower’s professional advisors, or pursuant to any legal or regulatory requirement (collectively, a “Legal Requirement”). Borrower may only disclose the contents of this Agreement pursuant to a Legal Requirement if it: (a) promptly notifies Lender so that Lender may take appropriate lawful preventative action; (b) provides only the information that is legally required to be disclosed by Legal Requirement; and (c) exercises reasonable efforts to obtain assurance that the information will not be further disclosed.

44. ENTIRE AGREEMENT

This Agreement and the Loan Documents constitute the entire agreement between the parties and supersede all proposals or prior agreements, oral or written, and all other communications between Lender and Borrower with respect to the subject matter hereof.

45. COPY OF AGREEMENT

Borrower hereby acknowledges having received an executed copy of this Agreement and waives all rights to receive from Lender a copy of any financing statement, financing statement (transition), financing change statement or verification statement filed at any time in respect of Borrower and / or the Collateral.

46. FURTHER ASSURANCES

Borrower will execute, acknowledge, register, record, publish or file, as the case may be, all such further documents and do all such further acts as may be reasonably requested by Lender or necessary or proper to carry out more effectively the purposes of this Agreement

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document , to protect Lender’s rights herein or therein and to perfect, protect, preserve and render opposable in all applicable jurisdictions, Lender’s interest in all Collateral.

47. NOTICE

Any Communication must be in writing and either:

(a) personally delivered;

(b) sent by prepaid registered mail; or

Any Communication must be sent to the intended recipient at its address set out in the Disclosure Statement or at any other address as any party may from time to time advise the other by Communication given in accordance with this Section 48. Any Communication delivered to the party to whom it is addressed will be deemed to have been given and received on the day it is so delivered at that party’s address, provided that if that day is not a Business Day then the Communication will be deemed to have been given and received on the next Business Day. Any Communication transmitted by email or other equivalent form of electronic communication will be deemed to have been given and received on the day on which it was transmitted (but if the Communication is transmitted on a day which is not a Business Day or after 5:00 p.m. (local time of Lender)), the Communication will be deemed to have been received on the next Business Day. Any Communication given by registered mail will be deemed to have been received on the fifth Business Day after which it is so mailed. If a strike or lockout of postal employees is then in effect, or generally known to be impending, every Communication must be effected by personal delivery or by facsimile, email or functionally equivalent electronic transmission.

Any Communication sent to Lender shall additionally be sent by carbon copy to its counsel HMB Legal Counsel at the address set out below:

HMB Legal Counsel 500 West Madison, Suite 3700 Chicago, Illinois 60661 Attn: Ati P. Khatri Email: [email protected]

With a copy to:

[email protected] Attn: Legal

48. RELATIONSHIP OF THE PARTIES

Nothing contained in this Agreement shall be deemed or construed by the parties, or by any third party, to create the relationship of a partnership or joint venture between the parties hereto, it being understood and agreed that no provision contained herein shall be deemed to create any relationship between the parties hereto other than the relationship of Borrower and Lender.

49. MISCELLANEOUS

If any provision shall be held to be invalid or unenforceable in any jurisdiction, the validity and enforceability of the remaining provisions shall not in any way be affected or impaired. Without prejudice to the ability of Lender to enforce this Agreement and all Loan Documents in any other proper jurisdiction, Borrower irrevocably submits to the jurisdiction of any court of competent (a) jurisdiction as set forth in Section 51 for any action or proceeding arising out of or relating to this Agreement, the other Loan Documents or the transactions contemplated hereby or thereby and Borrower irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such court.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document For the purposes of this Agreement, a rate of interest is or is to be calculated on the basis of a period which is less than a full calendar (b) year, the yearly rate of interest to which the said rate is equivalent is the said rate multiplied by the actual number of days in the calendar year for which such calculation is made and divided by the number of days in such period.

This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original and all (c) of which taken together shall be deemed to constitute one and the same instrument.

(d) Time is of the essence hereof.

The failure of or delay by Lender to enforce an obligation or exercise a right or remedy under any provision of this Agreement or to exercise any election in this Agreement shall not be construed as a waiver of such provision, and the waiver of a particular obligation (e) in one circumstance will not prevent Lender from subsequently requiring compliance with the obligation or exercising the right or remedy in the future. No waiver or modification by Lender of any provision of this Agreement shall be deemed to have been made unless expressed in writing and signed by Lender.

This Agreement, and all other Loan Documents shall be binding upon and enure to the benefit of the parties hereto or thereto and their heirs, executors, administrators, successors and permitted assigns. Borrower may not assign this Agreement and the other Loan Documents or any obligations, rights and / or interests hereunder or thereunder without the prior written consent of Lender. Lender may without the consent of Borrower sell, assign or otherwise dispose of its obligations, rights and / or interests in, or grant a security (f) interest in, this Agreement, the Collateral and/or the Collateral individually or together, in whole or in part. If Borrower is given written notice of any such sale, assignment, other disposition or grant of a security interest, it shall immediately make all applicable Blended Payments and other amounts hereunder or thereunder directly to the applicable transferee. Borrower consents to Lender disclosing to any actual or potential transferee any information regarding Borrower in the possession of Lender.

(g) Where there shall be more than one Borrower, their obligations hereunder shall be joint and several.

Each provision of this Agreement is distinct and severable. If any provision of this Agreement, in whole or in part, is or becomes illegal, invalid or unenforceable in any jurisdiction, the illegality, invalidity or unenforceability of that provision will not affect the (h) legality, validity or enforceability of the remaining provisions of this Agreement, or the legality, validity or enforceability of that provision in any other jurisdiction.

This Agreement may be executed and delivered by the Parties in one or more counterparts, each of which will be an original, and (i) each of which may be delivered by facsimile, e-mail or other functionally equivalent electronic means of transmission, and those counterparts will together constitute one and the same instrument.

Lender and Borrower confirm that they have expressly required that this Agreement, all Schedules and all Related Documents be (j) drafted in English.

50. GOVERNING LAW

THIS AGREEMENT SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT EXCLUDING, TO THE EXTENT APPLICABLE, PERFECTION OF THE SECURITY INTERESTS IN (a) COLLATERAL LOCATED OUTSIDE OF THE STATE OF NEW YORK, WHICH SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED AND CONTROLLED BY THE LAWS OF THE RELEVANT JURISDICTION IN WHICH SUCH COLLATERAL IS LOCATED.

TO INDUCE LENDER TO ACCEPT THIS AGREEMENT, BORROWER IRREVOCABLY AGREES THAT, SUBJECT TO LENDER'S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT OR THE COLLATERAL HELD IN THE UNITED STATES SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF NEW YORK, STATE OF NEW YORK. (b) BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN SAID CITY AND STATE. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO BORROWER AT THE ADDRESS

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SET FORTH FOR NOTICE IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

BORROWER AND LENDER EACH HEREBY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, THE INDEBTEDNESS, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY BORROWER OR LENDER OR WHICH, IN ANY WAY, (c) DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN BORROWER AND LENDER. IN NO EVENT SHALL LENDER BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

Signature Page Follows

Dated as of the date first written above: January 27, 2021

COSMOS INFRASTRUCTURE LLC Per:

Per: /s/ James Manning Name: James Manning Title: CEO

Per: /s/ Liam Wilson Name: Liam Wilson Title: COO

FOUNDRY DIGITAL LLC

Per: /s/ Mike Colyer Name: Mike Colyer Title: CEO

SCHEDULE “A” Payment Schedule

= Customer Input field = Genesis Inputs

Inputs Payment Summary Equipment Purchase Amount $ 1,320,000 Total Principal Payment $ 1,056,000.00 Down Payment (%) 20% Total Interest Payment $ 137,940.00 Down Payment ($) $ 264,000 Initial Loan Size $ 1,056,000 Total Cost + Principal $ 1,193,940.00 Tenor (mo) 18 Payments Per Year 12 Machine Cost $ 2,640 Machine Type MicroBT M30S Price per Terahash Average $ 30.00 Hashrate (Th) 88 Number of Machines Purchased 500 Power Consumption (Watts) 3344 Interest Rate (% ann) 16.5% J/TH 38.00

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Price of Machine including financing $ 2,916 Negotiated purchase price ($/TH) $ 30.00 Price of Machine Delta Average $ 276 Number of Machines 500 Delta Price per Terahash Average $ 3.14 Machine Cost $ 2,640.00 Total % increase in Machine cost 10.5% Payment Lag (mo) (0, 1 or 2 month options)* 0 Expected Delivery Date 2/1/2020 Loan Start Date 1/27/2021 Total Hash Power (PH) 44 Total Payment Time 18 Shipping and Duties per Unit $ 256.56 Shipping and Duties Total $ 128,280.00

Principal Principal Start Date Month Cycle (Days) Interest Pmt Total Pmt Balance Pmt 1/27/2021 2/26/2021 1 30.00 $1,056,000.00 $ 58,666.67 $ 14,520.00 $ 73,186.67 2/26/2021 3/28/2021 2 30.00 $ 997,333.33 $ 58,666.67 $ 13,713.33 $ 72,380.00 3/28/2021 4/27/2021 3 30.00 $ 938,666.67 $ 58,666.67 $ 12,906.67 $ 71,573.33 4/27/2021 5/27/2021 4 30.00 $ 880,000.00 $ 58,666.67 $ 12,100.00 $ 70,766.67 5/27/2021 6/26/2021 5 30.00 $ 821,333.33 $ 58,666.67 $ 11,293.33 $ 69,960.00 6/26/2021 7/26/2021 6 30.00 $ 762,666.67 $ 58,666.67 $ 10,486.67 $ 69,153.33 7/26/2021 8/25/2021 7 30.00 $ 704,000.00 $ 58,666.67 $ 9,680.00 $ 68,346.67 8/25/2021 9/24/2021 8 30.00 $ 645,333.33 $ 58,666.67 $ 8,873.33 $ 67,540.00 9/24/2021 10/24/2021 9 30.00 $ 586,666.67 $ 58,666.67 $ 8,066.67 $ 66,733.33 10/24/2021 11/23/2021 10 30.00 $ 528,000.00 $ 58,666.67 $ 7,260.00 $ 65,926.67 11/23/2021 12/23/2021 11 30.00 $ 469,333.33 $ 58,666.67 $ 6,453.33 $ 65,120.00 12/23/2021 1/22/2022 12 30.00 $ 410,666.67 $ 58,666.67 $ 5,646.67 $ 64,313.33 1/22/2022 2/21/2022 13 30.00 $ 352,000.00 $ 58,666.67 $ 4,840.00 $ 63,506.67 2/21/2022 3/23/2022 14 30.00 $ 293,333.33 $ 58,666.67 $ 4,033.33 $ 62,700.00 3/23/2022 4/22/2022 15 30.00 $ 234,666.67 $ 58,666.67 $ 3,226.67 $ 61,893.33 4/22/2022 5/22/2022 16 30.00 $ 176,000.00 $ 58,666.67 $ 2,420.00 $ 61,086.67 5/22/2022 6/21/2022 17 30.00 $ 117,333.33 $ 58,666.67 $ 1,613.33 $ 60,280.00 6/21/2022 7/29/2022 18 38.00 $ 58,666.67 $ 58,666.67 $ 806.67 $ 59,473.33

SCHEDULE “B”

DESCRIPTION OF PROPERTY

(500) units Manufacturer: MicroBT Model: Whatsminer M30S Average TH: 88

Serial Numbers to Follow

Schedule “C”

Material Agreements.

Compute North Co-Location Agreement dated June 29, 2019.

Previously Approved Mining Strategy.

Current strategy is to mine and liquidate.

Schedule “E”

Supplemental Property

None.

AMENDMENT

TO THE

EQUIPMENT FINANCE AND SECURITY AGREEMENT

DATED

02/05/2021

WHEREAS:

Foundry Digital LLC (“Foundry”) and Cosmos Infrastructure LLC (“Cosmos”) entered into the Equipment Finance and (A) Security Agreement, dated January 27, 2021 (“Agreement”);

(B) Pursuant to the Agreement, Cosmos agreed to finance certain mining equipment (“Equipment”) from Foundry; and

Cosmos, as Borrower, seeks to amend the Payment Schedule of the Agreement in its entirety by executing an amendment to (C) the Agreement.

NOW THEREFORE, the parties agree to amend the Agreement (“Amendment”) as follows:

Amendment of Payment Structure- The Payment Structure as specified on the Disclosure Statement of the Agreement (1) shall be deleted in its entirety and replaced with the following:

“The Loan shall be repaid by way of blended payments of interest, principal, and other applicable fees (“Blended Payments”) to be paid in accordance with the payment schedule attached as Schedule “A” (the “Payment Schedule”) with the final payment due on January 27, 2022.

Notwithstanding the foregoing, an Administration Fee shall be paid by Borrower to Lender concurrently with the advance of any portion of the Loan disbursed under this Agreement.”

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Schedule A Replacement- Schedule A of the Agreement shall be deleted in its entirety and replaced with the attached (2) Schedule A.

No Other Modification. Except as specifically modified hereby, all of the terms and conditions of the Agreement shall remain (3) unchanged and in full force and effect.

[Signature page follows]

IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as of the date first written above.

COSMOS INFRASTRUCTURE LLC

Per: /s/ James Manning Name:James Manning Title: CEO

FOUNDRY DIGITAL LLC

Per: /s/ Mike Colyer Name:Mike Colyer Title: CEO

SECOND AMENDMENT

TO THE

EQUIPMENT FINANCE AND SECURITY AGREEMENT

dated

April 1, 2021

WHEREAS:

Foundry Digital LLC (“Foundry”) and Cosmos Infrastructure LLC (“Cosmos”) entered into the Equipment Finance and Security (A) Agreement, dated January 27, 2021 (“Agreement”);

(B) Pursuant to the Agreement, Cosmos agreed to finance certain mining equipment (“Equipment”) from Foundry;

Cosmos, as Borrower, amended the Payment Schedule of the Agreement via amendment, dated February 5, 2021 (C) (“Amendment”); and

(D) Cosmos now seeks to amend Schedule B of the Agreement in its entirety by executing an amendment to the Agreement.

NOW THEREFORE, the parties agree to amend the Agreement (“Second Amendment”) as follows:

Schedule B Replacement- Schedule B of the Agreement shall be deleted in its entirety and replaced with the attached Schedule (1) B.

No Other Modification. Except as specifically modified herein, all of the terms and conditions of the Agreement shall remain (2) unchanged and in full force and effect.

[Signature page follows]

IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as of the date first written above.

COSMOS INFRASTRUCTURE LLC

Per: /s/ James Manning Name:James Manning Title: CEO

FOUNDRY DIGITAL LLC

Per: /s/ Mike Colyer Name:Mike Colyer Title: CEO

DESCRIPTION OF PROPERTY

Manufacturer Model Units Delivered

MicroBT Whatsminer M30S-84T 32 MicroBT Whatsminer M30S-86T 168 MicroBT Whatsminer M30S-88T 149 MicroBT Whatsminer M30S-90T 129 MicroBT Whatsminer M30S-92T 22

Total Units Delivered: 500

Serial numbers for each unit included below:

SVM1ES503820121308630123943A00017 SVM1ES503820121308630123943A00060 SVM1ES503820121308630123943A00057 SVM1ES603820121509030124143A00058 SVM1ES503820121408630123943A00010 SVM1ES503820121408630123943A00012 SVM1ES503820121408630123943A00005 SVM1ES503820121408630123943A00002 SVM1ES503820121308630123943A00019 SVM1ES503820121208630123943A00096 SVM1ES603820121509030124143A00092 SVM1ES503820121208630123943A00107 SVM1ES503820121308630123943A00052 SVM1ES503820121308630123943A00003 SVM1ES503820121308630123943A00049 SVM1ES503820121308630123943A00063 SVM1ES503820121308630123943A00047 SVM1ES603820121509030124143A00083 SVM1ES603820121509030124143A00042 SVM1ES603820121509030124143A00063 SVM1ES603820121509030124143A00089 SVM1ES503820121408630123943A00001 SVM1ES503820121408630123943A00008 SVM1ES503820121408630123943A00014 SVM1ES603820121708630124143A00031 SVM1ES603820121608630124143A00023 SVM1ES603820121608630124143A00004 SVM1ES603820121508630124143A00086 SVM1ES603820121609030124143A00052 SVM1ES603820121509030124143A00081 SVM1ES603820121509030124143A00075 SVM1ES603820121808630124143A00007 SVM1ES603820121608630124143A00105 SVM1ES603820121608630124143A00001 SVM1ES603820121508630124143A00085 SVM1ES603820121609030124143A00019 SVM1ES603820121509030124143A00057 SVM1ES603820121509030124143A00066 SVM1ES603820122208630124143A00105

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

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SVM1ES603820122308630124143A00003 SVM1ES603820122409030124143A00009 SVM1ES603820122509030124143A00003 SVM1ES603820122509030124143A00011 SVM1ES603820122508630124143A00016 SVM1ES603820122508630124143A00009 SVM1ES603820122408630124143A00035 SVM1ES504020121308630123943A00039 SVM1ES504020121308630123943A00064 SVM1ES603820122509030124143A00024 SVM1ES603620122509230124143A00028

SVM1ES603820122508630124143A00027 SVM1ES603820122509030124143A00021 SVM1ES504020121708630123943A00018 SVM1ES603820122409030124143A00012 SVM1ES603820122308630124143A00129 SVM1ES603820122308630124143A00135 SVM1ES603820122308630124143A00134 SVM1ES603820122509030124143A00014 SVM1ES603820122409030124143A00020 SVM1ES603820122509030124143A00017 SVM1ES603820122409030124143A00010 SVM1ES504020121308630123943A00061 SVM1ES504020121408630123943A00027 SVM1ES504020121308630123943A00066 SVM1ES504020121308630123943A00054 SVM1ES504020121408630123943A00036 SVM1ES504020121108630123943A00097 SVM1ES504020121308630123943A00050 SVM1ES603820122409030124143A00001 SVM1ES603820122509030124143A00032 SVM1ES603820122508630124143A00020 SVM1ES603820122409030124143A00032 SVM1ES504020121708630123943A00015 SVM1ES603820122409030124143A00015 SVM1ES603820122409030124143A00006 SVM1ES603820122308630124143A00128 SVM1ES603820122308630124143A00084 SVM1ES603820122308630124143A00082 SVM1ES603820122308630124143A00081 SVM1ES603820122308630124143A00087 SVM1ES603820122308630124143A00125 SVM1ES603820122308630124143A00127 SVM1ES603820122409030124143A00017 SVM1ES603820122409030124143A00031 SVM1ES603820122509030124143A00004 SVM1ES603820122509030124143A00005 SVM1ES603820122409030124143A00014 SVM1ES603820122409030124143A00033 SVM1ES504020121408630123943A00082 SVM1ES603820122509030124143A00026 SVM1ES604020120308430124143A00083

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SVM1ES603820122508630124143A00022 SVM1ES603820122409030124143A00028 SVM1ES603820122509030124143A00025 SVM1ES603820122409030124143A00002 SVM1ES604020122508430124143A00023 SVM1ES603820121208630124143A00122 SVM1ES603820121308630124143A00044 SVM1ES603820121508630124143A00001 SVM1ES603820121508830124143A00010 SVM1ES603820121508630124143A00025 SVM1ES603820121308630124143A00051 SVM1ES603820122108430124143A00007 SVM1ES603820121208630124143A00115 SVM1ES603820121908430124143A00029 SVM1ES603820121508830124143A00048 SVM1ES603820121208430124143A00116 SVM1ES603820121508830124143A00044 SVM1ES603820121208430124143A00113 SVM1ES603820121208430124143A00114 SVM1ES603820121508630124143A00009 SVM1ES603820121508830124143A00037 SVM1ES603820121508830124143A00043 SVM1ES603820121508430124143A00024 SVM1ES603820121908430124143A00013

SVM1ES603820121308830124143A00065 SVM1ES603820121508830124143A00078 SVM1ES603820122108430124143A00008 SVM1ES603820121908430124143A00050 SVM1ES603820122108430124143A00026 SVM1ES603820121508830124143A00050 SVM1ES603820121708830124143A00027 SVM1ES603820122408830124143A00029 SVM1ES603820122408830124143A00030 SVM1ES603820121508830124143A00080 SVM1ES603820122208430124143A00089 SVM1ES603820122208430124143A00018 SVM1ES603820122308430124143A00073 SVM1ES603820121508830124143A00133 SVM1ES603820121608830124143A00015 SVM1ES603820121508830124143A00091 SVM1ES603820121508630124143A00031 SVM1ES603820112808830124143A00068 SVM1ES603820121708830124143A00030 SVM1ES603820112708830124143A00083 SVM1ES603820122208430124143A00075 SVM1ES603820121508830124143A00079 SVM1ES603820121808430124143A00017 SVM1ES603820121308630124143A00026 SVM1ES603820121608830124143A00030 SVM1ES603820121508830124143A00132 SVM1ES603820121508830124143A00097 SVM1ES603820121208430124143A00093

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SVM1ES603820121508630124143A00041 SVM1ES603820121508830124143A00047 SVM1ES603820121508630124143A00034 SVM1ES603820121608830124143A00018 SVM1ES603820122408830124143A00011 SVM1ES603820122308430124143A00002 SVM1ES603820121508830124143A00077 SVM1ES603820122108430124143A00011 SVM1ES603820121608830124143A00113 SVM1ES603820121608830124143A00014 SVM1ES603820121508830124143A00131 SVM1ES603820121508830124143A00055 SVM1ES603820121808830124143A00001 SVM1ES603820121708830124143A00033 SVM1ES603820121608830124143A00102 SVM1ES603820121508830124143A00064 SVM1ES604020122108430124143A00016 SVM1ES603820121608830124143A00045 SVM1ES603820121608830124143A00041 SVM1ES603820121608830124143A00081 SVM1ES603820121508630124143A00036 SVM1ES603820121208830124143A00066 SVM1ES603820121208830124143A00011 SVM1ES603820122408830124143A00027 SVM1ES603820121508830124143A00135 SVM1ES503820121408830123943A00007 SVM1ES503820121308830123943A00034 SVM1ES503820121308830123943A00024 SVM1ES603820121608830124143A00026 SVM1ES603820121608830124143A00021 SVM1ES603820121208830124143A00068 SVM1ES503820121408830123943A00075 SVM1ES503820121408830123943A00074 SVM1ES603820122108430124143A00002 SVM1ES603820121308430124143A00015 SVM1ES503820121308830123943A00038 SVM1ES503820121308830123943A00031

SVM1ES503820121408830123943A00009 SVM1ES603820121608430124143A00043 SVM1ES603820121608830124143A00007 SVM1ES503820121408830123943A00048 SVM1ES503820121608830123943A00059 SVM1ES604020121608630124143A00048 SVM1ES603820121708830124143A00028 SVM1ES603820122208430124143A00087 SVM1ES503820121408830123943A00086 SVM1ES603820121208830124143A00003 SVM1ES503820121408830123943A00056 SVM1ES603820122208430124143A00090 SVM1ES603820121608830124143A00012 SVM1ES503820121408830123943A00072 SVM1ES603620122209230124143A00047

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SVM1ES503820121408830123943A00083 SVM1ES503820121308830123943A00045 SVM1ES603820121208830124143A00053 SVM1ES503820121108830123943A00087 SVM1ES503820121308830123943A00062 SVM1ES503820121308830123943A00010 SVM1ES503820121408830123943A00077 SVM1ES503820121508830123943A00011 SVM1ES503820121508830123943A00102 SVM1ES503820121108830123943A00085 SVM1ES603820121208830124143A00051 SVM1ES603820121609230124143A00110 SVM1ES603820122209230124143A00021 SVM1ES603820121509230124143A00040 SVM1ES604020121508630124143A00054 SVM1ES604020121608630124143A00008 SVM1ES603820121209230124143A00064 SVM1ES604020121608630124143A00011 SVM1ES603620122309230124143A00132 SVM1ES604020121608630124143A00003 SVM1ES603620122209230124143A00101 SVM1ES603620122309230124143A00131 SVM1ES503820121408830123943A00066 SVM1ES603620122509230124143A00001 SVM1ES604020121508630124143A00136 SVM1ES603820121209230124143A00091 SVM1ES603820121509230124143A00068 SVM1ES603620122509230124143A00002 SVM1ES503820121408830123943A00029 SVM1ES503820121108830123943A00093 SVM1ES503820121408830123943A00076 SVM1ES503820121308830123943A00021 SVM1ES604020121508630124143A00088 SVM1ES603820121509230124143A00016 SVM1ES603620122509230124143A00007 SVM1ES603620122509230124143A00006 SVM1ES503820121408830123943A00070 SVM1ES503820121408830123943A00089 SVM1ES503820121408830123943A00060 SVM1ES603620122209030124143A00015 SVM1ES503820121308830123943A00016 SVM1ES603620122209230124143A00092 SVM1ES603820121209230124143A00071 SVM1ES603620122209030124143A00042 SVM1ES603620122309230124143A00133 SVM1ES503820121508830123943A00022 SVM1ES604020121508430124143A00137 SVM1ES603620122309230124143A00124 SVM1ES604020122208630124143A00069 SVM1ES604020121608630124143A00038

SVM1ES603820122408830124143A00034 SVM1ES603820121209030124143A00067

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SVM1ES603820121209030124143A00055 SVM1ES603820121209030124143A00037 SVM1ES603820121209030124143A00062 SVM1ES603820121209030124143A00056 SVM1ES603820121109030124143A00096 SVM1ES603820121209030124143A00052 SVM1ES603820121209030124143A00027 SVM1ES603820121209030124143A00006 SVM1ES603820121209030124143A00036 SVM1ES603820121209030124143A00023 SVM1ES603820121109030124143A00043 SVM1ES603820121109030124143A00020 SVM1ES603820121109030124143A00041 SVM1ES603820121209030124143A00014 SVM1ES603820121109030124143A00069 SVM1ES603820121109030124143A00051 SVM1ES503820121608630123943A00068 SVM1ES603820121209030124143A00008 SVM1ES603820121209030124143A00012 SVM1ES503820121608630123943A00060 SVM1ES603820121109030124143A00066 SVM1ES503820121608630123943A00062 SVM1ES503820121508630123943A00101 SVM1ES603820121109030124143A00062 SVM1ES503820121408630123943A00084 SVM1ES503820121508630123943A00005 SVM1ES503820121308630123943A00001 SVM1ES503820121308630123943A00004 SVM1ES503820121408630123943A00062 SVM1ES503820121408630123943A00079 SVM1ES503820121408630123943A00095 SVM1ES503820121408630123943A00078 SVM1ES603820121109030124143A00055 SVM1ES503820121308630123943A00006 SVM1ES503820121408830123943A00026 SVM1ES604020121608430124143A00050 SVM1ES604020121608430124143A00049 SVM1ES503820121408630123943A00030 SVM1ES503820121408630123943A00081 SVM1ES604020122208430124143A00048 SVM1ES503820121308830123943A00023 SVM1ES603820122508830124143A00010 SVM1ES603620122309230124143A00130 SVM1ES503820121608630123943A00056 SVM1ES604020121608430124143A00009 SVM1ES604020121508430124143A00056 SVM1ES503820121508830123943A00008 SVM1ES503820121508830123943A00007 SVM1ES603820121609230124143A00108 SVM1ES603820121209030124143A00058 SVM1ES603820121209030124143A00070 SVM1ES603820121209030124143A00045 SVM1ES603820121209030124143A00049 SVM1ES603820121208830124143A00022 SVM1ES603820121209030124143A00004 SVM1ES603820121108830124143A00039 SVM1ES603820121208830124143A00032 SVM1ES603820121108830124143A00024 SVM1ES603820121109030124143A00063

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SVM1ES603820121209030124143A00024 SVM1ES603820121108830124143A00095 SVM1ES603820121209030124143A00017 SVM1ES603820121209030124143A00015

SVM1ES603820121209030124143A00028 SVM1ES603820121108830124143A00034 SVM1ES603820121208830124143A00005 SVM1ES603820121208830124143A00050 SVM1ES603820121108830124143A00019 SVM1ES603820121209030124143A00033 SVM1ES603820121108830124143A00061 SVM1ES603820121108830124143A00045 SVM1ES603820121108830124143A00027 SVM1ES603820121208830124143A00009 SVM1ES603820121108830124143A00025 SVM1ES603820121108830124143A00037 SVM1ES603820121108830124143A00030 SVM1ES603820121108830124143A00017 SVM1ES603820121108830124143A00050 SVM1ES603820121108830124143A00094 SVM1ES603820121108830124143A00023 SVM1ES603820121208830124143A00026 SVM1ES603820121208830124143A00016 SVM1ES603820121108830124143A00029 SVM1ES603820121108830124143A00026 SVM1ES603820121208830124143A00021 SVM1ES603820121108630124143A00022 SVM1ES603820121209030124143A00019 SVM1ES603820121109030124143A00068 SVM1ES603820121208830124143A00030 SVM1ES603820121208630124143A00002 SVM1ES603820121208630124143A00013 SVM1ES603820121209030124143A00063 SVM1ES603820121108830124143A00054 SVM1ES603820121108830124143A00028 SVM1ES603820121108630124143A00033 SVM1ES603820121108630124143A00035 SVM1ES603820121108830124143A00060 SVM1ES603820121108830124143A00047 SVM1ES603820121208830124143A00034 SVM1ES603820121108630124143A00018 SVM1ES603820121108630124143A00049 SVM1ES603820121108630124143A00048 SVM1ES603820121208830124143A00001 SVM1ES603820121108630124143A00044 SVM1ES603820121208830124143A00054 SVM1ES603820121208830124143A00103 SVM1ES603820121208830124143A00073 SVM1ES603820121208630124143A00007 SVM1ES603820121208830124143A00102 SVM1ES603820121208830124143A00106 SVM1ES603820121308630124143A00071

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SVM1ES603820121208630124143A00105 SVM1ES603820121208630124143A00110 SVM1ES603820121208630124143A00109 SVM1ES603820121208830124143A00108 SVM1ES603820121208630124143A00123 SVM1ES603820121208830124143A00098 SVM1ES603820121208830124143A00131 SVM1ES603820121208830124143A00117 SVM1ES603820121208830124143A00118 SVM1ES603820121208830124143A00119 SVM1ES603820121208830124143A00120 SVM1ES603820121208830124143A00129 SVM1ES603820121208830124143A00121 SVM1ES603820121208630124143A00126 SVM1ES603820121208630124143A00125 SVM1ES603820121308830124143A00012 SVM1ES603820121308830124143A00030

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

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SVM1ES603820121309030124143A00077 SVM1ES603820121309030124143A00073 SVM1ES603820121509030124143A00023 SVM1ES603820121309030124143A00070 SVM1ES603820121309030124143A00075 SVM1ES603820121509030124143A00003 SVM1ES603820121309030124143A00068 SVM1ES603820121509030124143A00004 SVM1ES603820121309030124143A00067 SVM1ES603820121409030124143A00067 SVM1ES603820121409030124143A00100 SVM1ES603820121509030124143A00012 SVM1ES603820121509030124143A00013 SVM1ES603820121509030124143A00021 SVM1ES603820121409030124143A00102 SVM1ES503820121308630123943A00036 SVM1ES603820121409030124143A00104 SVM1ES603820121509030124143A00018 SVM1ES603820121509030124143A00014 SVM1ES603820121509030124143A00002 SVM1ES503820121408630123943A00013 SVM1ES503820121408630123943A00015 SVM1ES503820121408630123943A00025 SVM1ES603820121509030124143A00017 SVM1ES603820121409030124143A00097 SVM1ES503820121408630123943A00063 SVM1ES503820121408630123943A00003 SVM1ES503820121408630123943A00018 SVM1ES603820121509030124143A00015 SVM1ES603820121309030124143A00058 SVM1ES503820121408630123943A00019 SVM1ES503820121408630123943A00024 SVM1ES503820121408630123943A00023 SVM1ES503820121408630123943A00016 SVM1ES603820121409030124143A00099 SVM1ES503820121408630123943A00046 SVM1ES503820121408630123943A00032 SVM1ES503820121408630123943A00028 SVM1ES603820121509030124143A00026 SVM1ES603820121409030124143A00101

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, James Manning, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Mawson Infrastructure Group Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact 2. necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the unaudited condensed consolidated financial statements, and other financial information included in 3. this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as 4. defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our a) supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed b) under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions c) about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the d) registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial 5. reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting a) which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the b) registrant’s internal control over financial reporting.

MAWSON INFRASTRUCTURE GROUP INC.

Date: May 19, 2021 By: /s/ James Manning James Manning Chief Executive Officer (Principal Executive Officer)

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Or Eisenberg, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Mawson Infrastructure Group Inc.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the b) registrant’s internal control over financial reporting.

MAWSON INFRASTRUCTURE GROUP INC.

Date May 19, 2021 By: /s/ Or Eisenberg Or Eisenberg Chief Financial Officer (Principal Financial Officer)

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Mawson Infrastructure Group Inc. (the “Company”) for the period ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, James Manning, Chief Executive Officer of the Company, and Or Eisenberg, Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of (2) operations of the Company.

MAWSON INFRASTRUCTURE GROUP INC.

Date: May 19, 2021 By: /s/ James Manning James Manning Chief Executive Officer (Principal Executive Officer)

MAWSON INFRASTRUCTURE GROUP INC.

Date: May 19, 2021 By: /s/ Or Eisenberg Or Eisenberg Chief Financial Officer (Principal Financial Officer)

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Document And Entity 3 Months Ended Information - shares Mar. 31, 2021 May 18, 2021 Document Information Line Items Entity Registrant Name Mawson Infrastructure Group Inc. Document Type 10-Q Current Fiscal Year End Date --12-31 Entity Common Stock, Shares Outstanding 486,733,566 Amendment Flag false Entity Central Index Key 0001218683 Entity Current Reporting Status Yes Entity Filer Category Non-accelerated Filer Document Period End Date Mar. 31, 2021 Document Fiscal Year Focus 2021 Document Fiscal Period Focus Q1 Entity Small Business true Entity Emerging Growth Company false Entity Shell Company false Entity File Number 000-52545 Entity Incorporation, State or Country Code DE Entity Interactive Data Current Yes

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Condensed Mar. 31, Dec. 31, Balance Sheets - USD ($) 2021 2020 Current assets: Cash and cash equivalents $ 3,385,277 $ 1,112,811 Prepaid expenses 40,398 11,500 Trade and other receivables 1,271,877 615,145 Cryptocurrencies 578,086 15,061 Total current assets 5,275,638 1,754,517 Property and equipment, net 7,794,544 7,015,285 Equipment deposits 18,045,720 Financial assets 1,439,659 Security deposits 1,173,544 969,423 Operating lease right-of-use asset 37,257 41,703 Trademarks 15,813 TOTAL ASSETS 33,766,362 9,796,741 Current liabilities: Trade and other payables 2,176,833 1,882,247 Lease liability 39,859 44,637 Borrowings 1,280,359 Shareholder loans 290,978 Total current liabilities 3,497,051 2,217,862 Paycheck protection program loan 14,000 14,000 TOTAL LIABILITIES 3,511,051 2,231,862 Common stock (500,000,000 authorized, 486,733,566 issued and outstanding $0.001 par value shares). Series A preferred stock (1,000,000 authorized shares; 178,000 issued and outstanding at 31 March 2021) Contingencies Shareholders’ equity: Additional paid-in capital 94,712,138 35,110,000 Share subscription receivable (16,690) Accumulated other comprehensive income (loss) (5,290,862) (1,341,826) Accumulated deficit (59,182,034)(26,159,539) TOTAL SHAREHOLDERS’ EQUITY 30,239,242 7,591,945 Non-controlling interest 16,069 (27,066) TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ $ 9,796,741 33,766,362

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Condensed Balance Sheets Mar. 31, 2021Dec. 31, 2020 (Parentheticals) - $ / shares Statement of Financial Position [Abstract] Common stock authorized 500,000,000 500,000,000 Common stock issued 486,733,566 486,733,566 Common stock outstanding 486,733,566 486,733,566 Common stock par value (in Dollars per share) $ 0.001 $ 0.001 Series A preferred stock authorized 1,000,000 1,000,000 Series A Preferred Stock issued 178,000 178,000 Series A preferred stock outstanding 178,000 178,000

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Condensed 3 Months Ended Statements of Operations Mar. 31, 2021 Mar. 31, 2020 (Unaudited) - USD ($) Revenues: Cryptocurrency mining revenue $ 5,120,014 $ 770,461 Sale of crypto currency mining equipment 1,877,613 Total revenues 6,997,627 770,461 Operating cost and expenses: Cost of revenues 2,372,781 449,897 Selling, general and administrative 2,882,626 476,149 LO2A write offs 23,963,050 Share based payments 14,795,403 Depreciation and amortization 1,314,899 1,357,485 Total operating expenses 45,328,759 2,283,531 Loss from operations (38,331,132) (1,513,070) Other income (expense): Realized gain (losses) on foreign currency transactions 1,028,621 (852) Unrealized gain (losses) on foreign currency remeasurement (1,690,303) 889,843 Realized gain (loss) on sale of digital currencies 93,613 (14,309) Other income 379,128 108,895 Loss before income taxes (38,520,073) (529,493) Income tax expenses Net loss (38,520,073) (529,493) Profit attributable to Non-Controlling interest 43,135 Net loss attributed to Mawson Infrastructure Group shareholders $ (38,563,208)$ (529,493) Net Loss per share, basic & diluted (in Dollars per share) $ (0.087) $ (0.080) Weighted average number of shares outstanding (in Shares) 442,664,781 6,578,672

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Condensed Accumulated Total Series A Share Additional Non- Statements of Stockholders’ Common Common Other Accumulated Mawson Preferred Subscription Paid- in- controlling Total Equity (Unaudited) - USD Stock Stock Comprehensive Deficit Stockholders’ Stock Receivable Capital interest ($) Income (Loss) Equity Balance at May. 22, 2019 Net Loss (1,314,217) (1,314,217) Comprehensive loss (345,182) (345,182) Issuance of stock options Issuance of common shares (459,062) 9,091,800 8,632,738 Issuance of common shares (in 6,578,672 Shares) Balance at Dec. 31, 2019 (459,062) 9,091,800 (345,182) (1,314,217) 6,973,339 Balance (in Shares) at Dec. 31, 6,578,672 2019 Net Loss (529,493) (529,493) Comprehensive loss (866,663) (866,663) Issuance of stock options Issuance of common shares Balance at Mar. 31, 2020 (459,062) 9,091,800 (1,211,845) (1,843,710) 6,036,245 Balance (in Shares) at Mar. 31, 6,578,672 2020 Balance at Dec. 31, 2020 (16,690) 15,298,926 (1,341,826) (6,348,465) $ 7,591,945 (27,066) 7,591,945 Balance (in Shares) at Dec. 31, 7,539,275 2020 Exchange of common stock of Cosmos Capital Limited for common stock of Wize $ 0 $ 428,271 428,271 428,271 Pharma Inc., adjusted to reflect the Exchange Ratio Exchange of common stock of Cosmos Capital Limited for common stock of Wize 178 (7,539,275)428,270,616 Pharma Inc., adjusted to reflect the Exchange Ratio (in Shares) Acquisition of Wize Pharma $ 33,053 (5,436,541) (5,403,488) (5,403,488) Inc. Acquisition of Wize Pharma 33,052,951 Inc. (in Shares) Issuance of Common stock of Mawson Infrastructure Group, Inc., in a PIPE transaction $ 25,000 2,975,000 3,000,000 3,000,000 upon the consummation of the Business Combination Issuance of Common stock of Mawson Infrastructure Group, Inc., in a PIPE transaction 25,000,000 upon the consummation of the Business Combination (in Shares) Issuance of 28,012,364 mandatorily convertible notes 20,441,761 20,441,761 20,441,761 by Cosmos Capital, net of $1,268,093 of offering costs Issuance of 8,710,982 warrants over Comon Stock of Mawson Infrastructure Group, Inc., at 6,881,676 6,881,676 6,881,676 the Common Stock price of $0.79 Exercise of 115,902 warrants for Mawson Infrastructure $ 116 116 116 Group, Inc. Common Stock Exercise of 115,902 warrants for Mawson Infrastructure 115,902 Group, Inc. Common Stock (in Shares)

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Fair value of IPR&D acquired, net of Business Combination 24,765,831 24,765,831 24,765,831 transaction costs Issuance of RSUs and stock 10,270,803 10,270,803 10,270,803 options Fair value adjustment of LO2A intellectual property 5,440,863 5,440,863 5,440,863 revenue sharing obligation Comprehensive loss (4,615,328) (38,563,208) (43,178,536) 43,135 (43,135,401) Balance at Mar. 31, 2021 $ $ $ $ 0 $ 486,440 $ (16,690) $ (5,957,154) $ 30,239,242 $ 16,069 80,638,319 (44,911,673) 30,239,242 Balance (in Shares) at Mar. 31, 178 486,439,469 2021

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Condensed 3 Months Ended Statements of Stockholders’ Mar. 31, 2021 Equity (Unaudited) USD ($) (Parentheticals) Statement of Stockholders' Equity [Abstract] Mandatorily convertible notes $ 28,012,364 Offering costs 1,268,093 Issuance of warrants over Common Stock 8,710,982 Common Stock price 0.79 Exercise of warrants $ 115,902

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Condensed 3 Months Ended Statements of Cash Flows Mar. 31, 2021 Mar. 31, 2020 (unaudited) - USD ($) CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (38,520,073)$ (529,493) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,314,899 1,357,485 LO2A write offs 23,963,050 Investment income (563,771) Interest expense 250,662 Interest paid (28,199) Share based payments 14,795,403 Write-off of fixed assets 127,608 Unrealized gain (losses) on foreign currency remeasurement 1,690,303 (889,843) Change in assets and liabilities Prepaid expenses (28,898) Trade and other receivables (656,732) (664,855) Cryptocurrencies (563,025) 1,023 Security deposits (204,121) 10 Trade and other payables 294,586 198,284 Net cash provided by operating activities 1,871,692 (527,389) CASH FLOWS FROM INVESTING ACTIVITIES Net proceeds from sale and purchase of property and equipment (2,960,145) (267,418) Payment of fixed asset deposits (18,045,720) Investment in financial assets (380,100) Net cash used in investing activities (21,385,965) (267,418) CASH FLOWS FROM FINANCING ACTIVITES Proceeds from common share issuances 1,298,402 Unit redemptions (128,611) Proceeds from convertible notes 21,487,391 Payments of capital issuance costs (2,229,096) Proceeds from borrowings 1,057,383 201,129 Advances made to external companies (37,076) Payments of borrowings (291,310) Net cash provided by financing activities 21,285,694 72,518 Effect of exchange rate changes on cash and cash equivalents 501,045 391,034 Net increase in cash and cash equivalents 2,272,466 (331,255) Cash and cash equivalents at beginning of period 1,112,811 579,290 Cash and cash equivalents at end of period $ 3,385,277 $ 248,035

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3 Months Ended General Mar. 31, 2021 Organization, Consolidation and Presentation of Financial Statements [Abstract] GENERAL NOTE 1 – GENERAL

General

Mawson Infrastructure Group, Inc. (the “Company” or “Mawson” or “the Group”) was incorporated in the State of Delaware.

Going Concern

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document date of approval of the consolidated financial statements, and on this basis the accounts have been prepared on a going concern basis.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant 3 Months Ended Accounting Policies Mar. 31, 2021 Accounting Policies [Abstract] SUMMARY OF NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and basis of preparation

Use of Estimates and Assumptions

Critical Accounting Policies

The Cosmos Capital shareholders have the largest voting interest in the post- ● combination company;

Cosmos Capital management holds executive management roles for the post- ● combination company and is responsible for the day-to-day operations;

Cosmos Capital was significantly larger than the Company by assets, revenue, and ● employees; and

The purpose and intent of in combining the groups was to create an operating public ● company through the Company, with management continuing to use Cosmos Capital’s assets to grow the business;

Acquired assets and liabilities of the legal parent entity are therefore measured and recognized at their relative fair values as of the date of the transaction.

The fair value of the consideration given for the acquisition is as follows.

Number of shares issued 33,052,951 Multiplied by the fair value per share of Mawson common stock (1) 0.79 Total $26,111,831

Based on the closing share price of Mawson common stock on the day immediately prior to (1) the close of the transaction.

The fair values of the net tangible assets acquired at the date of acquisition are as follows:

Cash and cash equivalents 1,102,943 Marketable securities 1,096,675 Accounts Payable (50,836) $2,148,782

The difference between the consideration given and the fair values of the net tangible assets acquired of $23,963,050 arises as a result of the intangible asset in relation to In process research

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document and development relating to LO2A. Due to the stage of development of this asset significant risks exist in the absence of successful clinical results and regulatory approval for the asset and that there are no reasonably likely expected alternative future uses associated with the asset and combined with the effect of the CVR instrument at the date of acquisition, management has assessed that the fair value of this asset at the acquisition date was $zero. The asset was therefore assessed as impaired and has been fully expensed as such in the consolidated statements of operations for the period ended March 31, 2021.

Contingent obligation in relation to LO2A

For further details please refer to the Management Discussion and Analysis.

Share based payments

Significant Accounting Policies

Revenue recognition – equipment sales

Digital currencies are included in current assets in the consolidated balance sheets. Digital currencies are recorded at cost less impairment.

The following table presents the activities of the digital currencies of the three months ended March 31, 2021;

Digital currencies at December 31, 2020 0.52 Additions of digital currencies 123.22 Sale of digital currencies (113.45) Digital currencies at March 31, 2021 10.29

Investment in Distributed Storage Solutions Pty Ltd (DSS)

Basic and Diluted Net Loss per Share

Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share at March 31, 2021 and 2020 are as follows:

As at March 31, 2021 2020 Common stock due to former Cosmos shareholders to be issued 50,558,133 - pending approval of increase to authorized capital (Note 4) Warrants to purchase common stock 8,710,982 Restricted Stock-Units (“RSU”) issued under a management equity 40,000,000 plan Mandatory convertible notes to exchange common stock 63,626,903 - Total 162,896,018 -

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The following table sets forth the computation of basic and diluted loss per share:

As at March 31, 2021 2020 Net loss attributable to common shareholders $ 38,520,073 529,493

Denominator: Weighted average common shares - basic and diluted 442,664,781 6,578,672

Loss per common share - basic and diluted $ 0.087 0.080

Comparative average common shares have been revised by the ratio of Cosmos Capital to the Company shares exchanged in the reverse asset acquisition in March 2021.

Recently Issued Accounting Pronouncements

Accounting Standards Update (“ASU”) No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”)

Effect on Financial Statements or Other Significant Matters– The guidance did not have a material impact in the consolidated financial results.

Other new pronouncements not applicable to the Company:

Reference Rate Reform (“ASU 2021-01”) issued March 2020, with amendments in 2021; effective March 12, 2020 through December 31, 2022

Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) issued January 2017 effective January 1, 2020;

Financial Instruments - Credit Losses (“ASU 2016-13 / 2018-19 / 2019-04 / 2019-05 / 2019-10 / 2019-11”) issued June 2016 with amendments in 2018, 2019 and 2020; effective January 1, 2020

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Deposit, Property and 3 Months Ended Equipment and Intangible Mar. 31, 2021 Assets Property, Plant and Equipment [Abstract] DEPOSIT, PROPERTY AND NOTE 3 – DEPOSIT, PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS EQUIPMENT AND INTANGIBLE ASSETS On January 27, 2021, the Company purchased 500 next generation Micro BT M30S ASIC Miners from Foundry Digital LLC. The purchase price per unit was $2,640 giving rise to a total purchase price of $1,320,000. The miners arrived in February 2021.

The Canaan Transaction schedule of payments is as follows:

(1) Fifty percent (50%) of the total purchase price shall be paid on or before 20 February 2021.

a) $1,058,000 no later than March 20, 2021

b) $1,058,000 no later than April 20, 2021

c) $952,560 no later than May 20, 2021

d) $952,560 no later than June 20, 2021

e) $1,799,280 no later than July 20, 2021

f) $1,693,440 no later than August 20, 2021

g) $1,587,600 no later than September 20, 2021

h) $1,587,600 no later than October 20, 2021

i) $1,587,600 no later than November 20, 2021

j) $1,587,600 no later than December 20, 2021

k) $1,587,600 no later than January 20, 2022

l) $1,587,600 no later than February 20, 2022

As of March 31, 2021, the Company had prepaid approximately $18.05 million in advance for 11,760 Miners. The shipment of the first Miners was received in May, 2021. The Company will

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document recognize these assets as Property and Equipment on the consolidated balance sheet when the transfer of risk and title occurs for each shipment (i.e., the Miners have been delivered by Canaan to the agreed-upon port of loading in China).

As of March 31, 2021, approximately $18.05 million cash paid for Miners was recorded as a deposit on the balance sheet.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3 Months Ended Stockholders' Equity Mar. 31, 2021 Stockholders' Equity Note [Abstract] STOCKHOLDERS EQUITY NOTE 4 – STOCKHOLDERS EQUITY

Common Stock

Restricted Stock

The remaining 50,558,133 shares to be issued post the authorized increase in capital of which 18,474,278 will be restricted.

Contingent Value Rights

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (“Sjögren’s”). In particular, CVR holders will be entitled to any consideration (whether cash, stock, assets or otherwise) that Mawson or the Mawson Subsidiaries (or any of its Affiliates or shareholders) receives in connection with an LO2A Transaction, which, as defined in the CVR Agreement, and which includes (i) a sale of any of the Mawson Subsidiaries to a third party and/ or (ii) the partnering, licensing, sublicensing, distribution, reselling or sale of all or any part of the LO2A Technology or LO2A Products to a third party, less transaction expenses and customary deductions as detailed in the CVR agreement, including a deduction of up to $300,000 that the Mawson Subsidiaries undertook to incur in the development of the LO2A Technology at the request of the Holders’ Representative.

Series A Preferred Stock

As of May 17, 2021, there are 178,000 shares of Series A Preferred Stock Outstanding.

Common Stock Warrants

A summary of the status of the Company’s outstanding stock warrants and changes during the three months ended March 31, 2021 is as follows:

Weighted Weighted Average Number Average Remaining of Exercise Contractual Warrants Price Life (in years) Outstanding as of December 31, 2020 142,189 Issued 8,710,982 $ 0.001 5.0 Exercised (115,902) Expired 0 Outstanding as of March 31, 2021 8,737,269 $ 0.001 5.0 Warrants exercisable as of March 31, 2021 8,737,269 $ 0.001 5.0

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Debt, Commitments and 3 Months Ended Contingencies Mar. 31, 2021 Commitments and Contingencies Disclosure [Abstract] DEBT, COMMITMENTS NOTE 5 – DEBT, COMMITMENTS AND CONTINGENCIES AND CONTINGENCIES Convertible Note

On February 12, 2021, Cosmos issued 28,012,364 unsecured convertible promissory notes (the “Cosmos Notes”), which mandatorily convert into 0.0424 shares in Cosmos at the earlier of 6 months from February 12, 2021 or upon the occurrence of certain events. The notes accrue interest at the rate of 8% per annum which may be settled in stock or cash at the option of the company. The Cosmos Notes raised net proceeds of $20,275,349 comprising gross proceeds of $21,569,520 less transaction costs.

Debt

Leases

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other than these leases, the Company does not lease any material assets. The Company believes that these offices and facilities are suitable and adequate for its operations as currently conducted and as currently foreseen. In the event additional or substitute offices and facilities are required, the Company believes that it could obtain such offices and facilities at commercially reasonable rates.

Contingent obligation in relation to LO2A

Refer note 2.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3 Months Ended Subsequent Events Mar. 31, 2021 Subsequent Events [Abstract] SUBSEQUENT EVENTS NOTE 6 – SUBSEQUENT EVENTS

On April 22, 2021, Distributed Storage Solutions Pty Ltd (DSS), undertook a capital raise to third party investors in Australia at AUD$11.60 per share, which diluted Mawsons holding to 20%.

Apart from the DSS transaction, there have been no subsequent events since March 31, 2021.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accounting Policies, by 3 Months Ended Policy (Policies) Mar. 31, 2021 Accounting Policies [Abstract] Principles of Consolidation Principles of Consolidation and basis of preparation and basis of preparation These consolidated, condensed financial statements should be read in conjunction with the consolidated financial statements for Cosmos Capital Limited and subsidiaries as of December 31, 2020, and the notes thereto, included in the Company’s Current Report on Form 8-K/A filed May 13, 2021. The results of the interim periods are not necessarily indicative of the results to be expected for the full year ended December 31, 2021. These consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position, the results of operations and cash flows of the Company for the periods presented.

References in these notes to the Company as of a date prior to March 9, 2021, are references to Cosmos Capital Limited and its subsidiaries, not Mawson Infrastructure Group Inc. and its subsidiaries. On March 9, 2021, Cosmos Capital Limited was acquired by the Company. For accounting purposes, this was accounted for as a reverse asset acquisition with Cosmos Capital Limited as the accounting acquirer (refer to significant accounting policies below). Use of Estimates and Use of Estimates and Assumptions Assumptions The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

Reverse Asset Acquisition

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document On March 9, 2021, the Company acquired the shares of Cosmos Capital Limited in a scrip for scrip exchange. This transaction has been accounted for as a reverse asset acquisition. Under the guidance in ASC 805, Cosmos Capital Limited was determined to be the accounting acquirer based on evaluation of the following facts and circumstances: