Data443 Risk Mitigation, Inc. 8-K

What Happened
Data443 Risk Mitigation, Inc. (ATDS) filed an 8-K reporting it entered a Compensation Agreement with Guangzhou Xiaoyu DiDa Technology Co., Ltd. (“XYDD”) related to the June 3, 2026 termination of a prior business combination agreement between Four Leaf Acquisition Corporation (“FORL”) and XYDD. Under the agreement, Data443 agreed (on behalf of FORL) to issue a $2,000,000 promissory note to XYDD as compensation for that termination.

Key Details

• Note principal: $2,000,000 payable in two installments: $1,000,000 within 90 days of the Date of Deal Close and $1,000,000 within 120 days. No interest if paid on time.
• Late payment: unpaid installments accrue 15% simple interest per year from original due date.
• Prepayment: note may be prepaid in full any time up to 12 months after Date of Deal Close.
• Conversion option: if not fully repaid within 12 months, XYDD may convert outstanding principal and accrued interest into PubCo ordinary shares at 80% of the 20‑trading‑day VWAP before conversion, subject to (a) a conversion floor equal to 50% of the 20‑day VWAP following the Date of Deal Close and (b) an aggregate cap of 19.99% of PubCo’s shares outstanding at the Date of Deal Close; any unconverted balance remains cash‑payable.
• Additional allocation: 1,800,000 PubCo shares allocated to S.SHUN Holdings Limited for prior finder services.
• Governing law and dispute resolution: Delaware law; arbitration under SIAC rules.

Why It Matters
This filing creates a near‑term cash obligation tied to the closing of the contemplated deal and includes a conversion feature that could dilute existing shareholders if the note isn’t repaid within 12 months. The conversion terms include a discounted price and an overall cap (19.99%), so investors should watch for potential share issuance, interest expense if payments are late, and the timing of the Date of Deal Close to assess upcoming liquidity and dilution impacts.