### IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

REM OA HOLDINGS, LLC and SIFT FIXED US002, LLC,

Plaintiff s and Counterclaim

- Defendants ,

v. NORTHERN GOLD HOLDINGS, LLC,
Defendant and

Counterclaim

- Plaintiff,
and REM EQ HOLDINGS, LLC,

Nominal Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) C.A. No. 2022

- 0582

- LWW

MEMORANDUM OPINION
Date Submitted: June 20 , 2023 Date Decided: September 20 , 2023 Thomas W. Briggs, Jr . & Alexandra Cumings , MORRIS, NICHOLS, ARSHT & TUNNELL LLP , Wilmington, Delaware; Michael C. Holmes , Jeffrey Crough & Thomas Mitsch, VINSON & ELKINS LLP , Dallas , Texas ; Matthew R. Freidenberg, VINSON & ELKINS LLP , New York, NY ; Counsel for Plaintiff REM OA Holdings, LLC
Scott B. Czerwonka & D. Charles Vavala, III, WILKS LAW, LLC , Wilmington, Delaware; Counsel for Plaintiff SIFT Fixed US002, LLC

### Martin S. Lessner, Elisabeth S. Bradley & M. Paige Valeski, Y OUNG CONAWAY

STARGATT & TAYLOR LLP , Wilmington, Delaware; Counsel for Defendant Northern Gold Holdings, LLC John D. Hendershot, Matthew W. Murphy & Angela Lam , RICHARDS, LAYTON & FINGER, P.A. , Wilmington, Delaware; Counsel for Nominal Defendant REM EQ Holdings, L

LC

WILL, Vice Chancell or

### 1

In 20 20 , America’s oldest gun maker

— the Remington Outdoor Company

— went bankrupt. Richmond Italia and Scott Soura jointly submitted the winning bid
for its assets, which were later transferred to REM EQ Holdings, LLC. Italia (through Northern Gold Holdings, LLC) and Soura (through REM OA Holdings, LLC) each held 50% of the company’s membership interests and shared decision

making authority. Italia ran the company’s day

- to

- day matters while Soura handled legal and financial under takings. It was almost immediately apparent that the company would require significant capital to restore operations . Traditional financing proved unattainable. With the company burning cash, Soura pursued a loan from a Hong Kong entity called SIFT Capit al Limited Partners during the spring of 2021

. For a time, Italia was kept in the dark

. Soura and SIFT Capital finalized a term sheet that contemplated a $10 million loan in exchange for a warrant to purchase 2.5% of the company ’ s membership
interests

. Four days later , Soura emailed Italia a series of documents. S oura included a draft written consent authorizing any member or officer of the company to execute
the term sheet and all documents related to the term sheet without further approval.
The written consent referenced the term sheet multiple times . The term sheet was not, however, sent to Italia

.

### 2

Italia reviewed the written consent and understood that it contemplated a loan
from SIFT Capital. He sent the documents to his accountant and counsel for review.
M ultiple calls and discussions with Soura and the company ’s counsel about the
documents followed

. But Italia did not ask about or request a copy of the term sheet
referenced in the written consent. Nor did he propose an y changes to the written consent. Instead, after two weeks of review, he signed it. Soura and the company’s officers then negotiated definitive loan documentation with SIFT Capital’s assignee SIFT Fixed US002, LLC. The loan transaction closed in January 2022. The company received $10 million and SIFT
Fixed received a warrant.
SIFT Fixed exercised its warrant in March 2022. Soura told Italia abou t the exercise within days. Italia expressed surprise, refusing to accept that Northern Gold was no longer a 50% member of the company.
SIFT Fixed and REM OA filed this action to confirm SIFT Fixed’s membership. Given Italia’s express authorization of th e loan transaction, the matter seems straightforward. The parties have made it anything but

. Northern Gold raised numerous collateral attacks on the transaction ranging from invalidity to voidness. It questions whether SIFT Capital is real, the releva nt agreements are forged, and SIFT Fixed’s representative at trial was a paid actor

.

### 3

REM OA spun illogical stories to excuse its underhandedness. To make matters worse, trial presented competing narratives from Soura and Italia

. Northern Gold’s frustr ation is understandable

. Soura is not blameless and should have been upfront with his business partner. But ultimately, Italia authorized
the SIFT transaction when he willingly signed the written consent. Italia

— an experienced businessperson represe nted by counsel

— had every chance to ask about the term sheet during weeks of review and negotiation. He opted not to. Northern Gold does not get a do over for its failed diligence. Delawa re law holds sophisticated parties to their contracts. SIFT Fixed was a 2.5% member of the

company when this action was filed . Judgment is entered for the plaintiffs.
I. FACTUAL BACKGROUND Unless otherwise noted, the following facts were stipulated to by the parties

or proven by a preponderance of the evidence at trial

. 1 

### The trial record includes 1, 9 03 exhibits and 5 deposition transcripts. 2 

### Trial was conducted over two days during which five fact witnesses testified

. 3

1 Joint Pre

- trial Stipulation and Order (Dkt. 160) ( “PTO” )

. 2 Facts drawn from exhibits jointly submitted by the parties are referred to by the numbers provided on the parties’ joint exhibit list and cited as “JX __” unless otherwise defined. Deposition transcripts are cited as “[Name] Dep.” See Dkt. 166.
3 Trial testimony is cited as “[Name] Tr.” See Dkts. 174

- 75.

### 4

A. Witness Credibility Before recounting the factual record, I pause to provide essential framing . The testimony given by the two primary witnesses at trial

— Scott Soura, the principal of plaintiff REM OA Holdings, LL C , and R ichmond Italia, the principal of defendant Northern Gold Holdings, LLC

— was irreconcilable. It is obvious that one or both repeatedly lied under o ath. 4 

### I have relied on documentary evidence where it is available and made careful credibility assessments of oral testimony where it is not. 5


### B. Remington Outdoor’ s Bankruptcy On July 27, 2020, firearms manufacturer Remington Outdoor Company, Inc.
and twelve o f its affiliates filed for bankruptcy. 6 

### Remington Outdoor was set to be broken up and sold

. 7 

### Remington Outdoor’s Chief Executive Officer Ken D’Arcy approached Richmond Italia about submitting a bid for the assets

. 8 

### Italia was a

4 Ascertaining the t ruth is complicated by Soura and Italia’s mudslinging

. T heir personal attacks on the other range from the troubling to the bizarre

. S e e , e.g. , i nfra notes 205

- 13, 215 and accompanying text ; JX 3; Soura Tr. 124

- 25

. Suffice it to say that the credibility of these witnesses leaves much to be desired.
5 Northern Gold raised numerous authenticity objections to certain documentary exhibits. See Dkt. 166

. Later in this decision, I conclude that the challenged exhibits are admissible under Delaware Rule of Evidence 901. See infra Section II.C.1 (resolving authenticity objections).
6 PTO ¶ 21.
7 Id.
8 Soura Tr. 7 ; Italia Tr. 304 ; Soura Tr. 6

- 7 ; PTO ¶ 2 2

. I generally found D’Arcy to be a credible witness. Although he developed a distaste for Italia ( see JX 787; D’Arcy Tr. 597; Soura Tr. 103

- 04; Italia Tr. 435) , h e seem ed motivated by a desire to protect the Company. See, e.g. , D’Arcy Tr. 586

- 90.

### 5

successful businessper son who had founded and sold two paintball companies. 9 

### Before becoming Remington Outdoor’s CEO , D’Arcy had served in that role at one of Italia’s companies. 10


### Italia was interest ed in Remington Outdoor but lacked the funds to meet the bidding requirement of $30 million in liquid assets

. 11 

### Italia reached out to Scott
Soura , a social acquaintance , about submitting a joint bid. 12 

### Soura was also a successful businessperson who had owned and operated several companies. 13


### In October 2020 , Soura’s wholly

- owned entity Roundhill Group, LLC submitted the winning bid of $13 million for Remington Outdoor’s firearm division

assets

. 14 

### REM EQ Holdings, LLC ( the “ Company ”)

— the nominal defendant in this
action

— was formed on October 2 to house the assets. 15 

### Italia and Soura agreed that they would each contribute half of the bid in exchange for equal 50% ownership of the Company

. 16 

### The y also agre ed that “ [a]ny future investment of capital or equity

9 Italia Tr. 300

- 04 (testifying that his companies were sold for tens of millions of dollars in profit )

. 10 Id. at 305

- 06; D’Arcy Tr. 568; D’Arcy Dep. 41

- 44.
11 Italia Tr. 311; Soura Tr. 7.
12 Italia Tr. 311 ; Soura Tr. 7

. 13 See Italia Dep. 66

- 67

. 14 Italia Tr. 312 ; Soura Tr. 8 ; JX 26. The bid included $2 million in escrowed funds, which were later returned to Soura. Soura Tr. 8; Italia Tr. 312. The assets were eventually transferred to the Company. See infra note 31 and accompanying text.
15 JX 239; PTO ¶ 17.
16 JX 26.

### 6

may dilute [Italia’s] 50% ownership percentage along with Roundhill’s (or
Roundhill’s designated entity) 50% ownership proportionately. ” 17 

### The bankruptcy
sale of assets to Roundhill closed on October 12. 18


### C. The Company’s Governance After the asset purchase closed, Soura and Italia began formalizing the Company’s governance. On March 24, 2021, Soura sent Italia an initial REM EQ Limited Liability Company Agreement ( the “ LLC Agreement ”), dated as of January 15, 2021

. 19 

### Soura told Italia that the LLC Agreement was intended to be a “placeholder[] to get the accounts open ” to secure a Paycheck Protection Program (PPP) loan and could be revised “ to a proper detailed agreement with all the tax,

contro ls and other terms over the next week or two.” 20 

### The LLC Agreement was executed on March 25, 2021 by Soura on behalf of
REM OA Holdings, LLC and by Italia on behalf of Northern Gold Holdings, LLC

. 21 

### REM OA is a Delaware limited liability company manage d by Belum Ventures,

17 Id.
18 PTO ¶ 25; JX 195.
19 JX 131 ; JX 137

. 20 JX 131.
21 JX 137.

### 7

LLC, which is managed by Soura. 22 

### Northern Gold is a Delaware limited liability

company ; Italia is its sole member and manager. 23 

### The LLC Agreement established that REM OA and Northern Gold each held a 50% membership interest in the Company

. 24 

### It listed Soura as the Company’s

manager
. 25 

### This designation was in name only

. Soura told Italia on March 24 that he was “listed as the manager of EQ Holdings for now so that [he] c[ould] execute the documents [ for the PPP loan ] over the next week.” 26 

### On the day Italia signed the LLC Agreement, Soura sent Italia a letter resigning as manager of the Company, effective April 2, 2021. 27


### Soura and Italia decided to divide responsibilities , with Soura handling financial and legal matters and Italia handling day

- to

- day operations

. 28 

### D’Arcy was

22 Verified Compl. (Dkt. 1) (“Compl.”) ¶ 3.
23 Answer to Verified Compl., Affirmative Defenses, and Verified Countercl. ( Dkt. 18) (“ Answer and Countercl. ” ) ¶ 5.
24 PTO ¶ 27 ; JX 137 ; JX 1642 ( “ LLC Agreement ” dated Jan. 15, 2021) at Ex. A

. The initial LLC Agreement called ownership interests “Membership Interest [ s ] .” LLC Agreement § 1.2. Subsequent amendments called the membership interests “Units.” See infra note 143.
25 PTO ¶ 27; LLC Agreement at 9

. 26 JX 131 (explaining that they could change the manager designation the “next week if [Italia] want [ ed ] ”)

. 27 PTO ¶ 28; JX s 139

- 40.
28 JX 32 at 3 (Italia asking Soura: “ D o u want me to deal with the day to day and let u deal with the big picture stuff, no nee d for both of us to stress over the little things”); JX 69 at 1 (Italia stating that Soura’s “responsibilities amongst others are handling financial and

### 8

hired as the Company’s Chief Executive Officer

. 29 

### Melissa Anderson, who had previously served as Remington Outdoor’s Vice President of FP&A, IT and Internal Financial Reporting, was hired as the Company’s Chief Financial Officer. 30


### The purchased assets were eventually transferred from Roundhill to the Company and the Company’s subsidiaries through agreements dated June 2, 2021. 31


### D. The Company’s Financing Needs The Remington Outdoor firearm assets were not operational, and the Company had negative cashflow upon its formation

. 32 

### Italia and Soura recognized
that the Company needed substantial capital to restart operations and be come competitive. 33 

### They estimated the Company’s long

- term funding needs to exceed

legal affairs of remarms”); JX 615 (“As agreed I’m [Italia] staying out of the legal stuff.”); Soura Tr . 14

- 15; Italia Tr. 316

- 17, 477

- 78; D’Arcy Tr. 572

. 29 D’Arcy Tr. 566.
30 Anderson Dep. 28 , 235

. D’Arcy and Anderson were initially hired as CEO and CFO of RemArm s LLC , a subsidiary of the Company

. Id. at 223; Anderson Tr. 611. L ater , pursuant to a May 14, 2021 written consent , D’Arcy and Anderson were designated as the Company’s CEO and CFO. S ee D’Arcy Dep. 223; Anderson Tr. 611 ; see infra note 113 and accompanying text

. I found Anderson to be a highly credible witness. See supra note 8 (discussing D’Arcy).
31 PTO ¶ 25 ; see i nfra note 1 42 and accompanying text

. 32 Soura Tr. 11

- 12; Italia Tr. 318

- 19, 471

- 72; Italia Dep. 83; Anderson Tr. 614

- 15.
33 JX 14 at 2 (Italia texting on September 28, 2020: “Budget to rebuild Remington to its glory is 25

- 40m over and above purchase price of 13m usd”); JX 32 at 3 (Italia texting on October 14, 2020: “We knew its [sic] was going [] to take 25.m to get this going”); So ura T r. 11

- 12; Italia Tr. 317

- 18 (testifying that $10 million was needed to reach a “break

- even point” but that $ 30 to $40 million was needed “to [make the Company] a real competitor”);
see D’Arcy Tr. 570

.

### 9

the $13 million purchase price by $ 25 million to $40 million. 34 

### D’Arcy and
Anderson concurred

. 35 

### Soura led the Company’s financing efforts , c onsistent with the division of
labor he and Italia had agreed upon

. On January 21, 2021, Soura told Italia that he
was “ working on raising $25

- 30 m[illion]” structured “ as a combination of preferred and common equity with a non

- controlling stake .” 36 

### Italia replied with a thumb s up emoji. 37 

### At the same time, Soura (with Anderson’s assistance ) worked towards securing the PPP loan. 38 

### Italia approved of Soura’s efforts to close the PPP loan but
did not involve himself in the process. 39 

### The Company rec eived $10 million from the PPP loan on March 29 , 2021 but needed additional capital to execute on its plans and meet its financing goal s
. 40 

### The

At trial, Italia testified that he believed that the Co mpany was “monetarily . . . pretty solid in the early months” due to sales of equipment and inventory and a cash infusion from the consortium that the Company joined as part of the Remington Outdoor auction. Italia Tr. 318. This belief is belied by conte mporaneous documentary evidence. For example, c ash flow projections prepared by Anderson showed that, without additional financing, the Company would run out of cash before May 2021. See JX 119; see also JX 1902; JX 125; JX 128.
34 See supra note 33.
35 D’Arcy Tr. 570

- 73; Anderson Tr. 614

- 16.
36 JX 71.
37 Id. ; see Italia Tr. 483

- 84

. 38 JX s 1658

- 59 ; Soura Tr. 16

. 39 Italia Tr. 478, 481

- 82; Soura Tr. 19 ; see supra notes 26

- 27 and accompanying text.
40 Anderson Tr. 612 ; D’Arcy Tr. 573

- 74; JX 1661 at 1

.

### 10

Company was also b urning through cash at an alarming rate. 41 

### A March 2021 cash flow projection prepared by Anderson estimated that , without the PPP loan, the Company would have run out of cash by the end of April. 42 

### That same projection estimated that the Company would deplete $5 million of the remaining PPP funds by the end o f May

. 43 

### Italia grew concerned about the Company’s cash burn, remarking to D’Arcy and Soura on July 6 that the “funds in the bank [we]re diminishing ” and that “[a] t this rate we will need another round of funding very

soon .” 44 

### The Company’s financing needs were partly driven by plans to relocate its headquarters. 45 

### In October 2020, Italia had begun exploring incentives to open a manufacturing facility in the State of Georgia

. 46 

### About a year later , around October

41 Cash flow projections prepared by Anderson reflected the Company’s high cash burn. See JX 1902 (native); JX 119 (native); JX 125 (native); JX 128 (native) ; JX 142 (native) ; JX 1737 (native); JX 150 (native); JX 1780; JX 1903; JX 666; JX 761; JX s 1719

- 2 1; JX 912.
42 JX 142 (native).
43 Id. The projections for March 2021 through February 2022 reflect the $10 million cash injection from the PPP loan but show that the Company would go through th e funds quickly

. See supra note 41 (citing exhibits)

. Anderson’s credible testimony at trial further supports a finding that the Company began using the PPP loan funds before the fall of 2021. Anderson Tr. 628 ( “I knew that we were depleting through the money

. . . . ”). Her deposition te stimony is consistent. Anderson Dep. 63.
44 JX 635; see Italia Tr. 485

- 88 ; s ee also JX 627 (Italia texting Soura on June 17, 2021 and expressing alarm that the Company’s bank “[a]ccount [wa] s going down scary fast”).
45 Soura Tr. 293

- 94; Italia Tr. 464

- 65.
46 PTO ¶ 37 ; see JX 24 ; JX s 4 1

- 42 ; JX s 4 7

- 48

. These discussions continued through the end of 2020 and into 2021. See JX 54; JX 56; JX s 86

- 88; JX 91; JX 126; JX 623; JX 1703

### 11

2021, the Comp any committed to relocating to LaGrange, Georgia

. 47 

### It expected to incur significant expenses from building the f acility

. 48 

### Italia, Soura , and D’Arcy understood that traditional bank loans were not a viable option given the Company’s financial struggles and involvement in the firearms industry

. 49 

### The Company approached traditional lenders but was turned

away. 50 

### Consequently, Soura searched for alternative sources of funding

. E. The Potential SIFT Transaction
In late March 2021, Soura mentioned the Company’s financing challenges to an attorney assisting him with an unrelated matter. 51 

### The attorney introduced him

to SIFT Capital Limited Partners , a Hong Kong company

. 52 

### SIFT Capital i s an asset

¶¶ 24

- 27. In February 2021, D’Arcy took over the negotiations at Italia and Soura’s request. JX 1703 ¶ 24.
47 PTO ¶¶ 38

- 40 ; JX 707

. O n November 8, 2021 , the Governor of Georgia announced the relocation. JX 707.
48 JX 1817; JX 1703 ¶¶ 34

- 35 ; cf. infra note 2 40 and accompanying text.
49 D’Arcy Tr. 574 (“[R]aising funds through traditional banking is a huge challenge for a firearms company. Now add the layer on where you ’ re a startup company with no positive cash flow, with debt, . . . and it ’ s next to impossible to get any funding.”) ; Italia Dep. 93

- 9 5 ; Soura Tr. 2 1 , 204 . D’Arcy explained that in early 2022, the Company was in a better position to “start having conversations” with traditional lenders

. D’Arcy Dep . 164

- 67

. But there is no credible evidence that the Company could have obtained a standard , asset

backed loan at this time

. 50 D’Arcy Tr. 575; Italia Dep. 94

- 95; Soura Tr. 2 1 , 204 ; cf. JX 1825

. 51 Soura Tr. 21

- 24.
52 Id. At trial, Soura testified about what the attorney told him during this conversation. Northern Gold objected to the testimony under Delaware Rule s of Evidence 6 02 and 802

. Id. at 2 2

. The testimony is inadmissible because t he declarant ( Soura’s attorney ) did not testify at trial and Soura’s testimony about her statements is hearsay

. The testimony does

### 12

manager licensed by Hong Kong and Chinese regulators

. 53 

### A phone call was arranged between Soura and SIFT Capital’s C hief Executive Officer , Zhe Zhang. 54 

### During the introductory call between Soura and Zhang, Zhang described SIFT Capital, its investment criteria, and the types of loans it t ypically provided. 55 

### Soura told Zhang that the Company “was looking for a [$] 10 to $15 million loan ” with “ a five

- year maturity that would be interest only and would subordinate to a senior bank facility that [it] intended to get in the near future. ” 56 

### After the call, Soura researched Zhang and SIFT Capital by reviewing SIFT Capital’s website and regulatory filings

. 57

not

— as REM OA argues

— fall within the state of mind exception in Rule 803(3). First, t he declarant’s statements do not go to her “then

- existing state of mi nd (such as motive, intent, or plan) or [her] emotional, sensory, or physical condition (such as mental feeling, pain, or bodily health).” D.R.E. 803(3). Second, Soura’s testimony cannot be used to prove facts purportedly remembered by Soura’s attorney

. See Soura Tr. 23. The state of mind exception does not apply to the declarant’s “statement[s] of ‘memory.’” Capano v. State , 781 A.2d 556, 608 (Del. 2001) ; D.R.E. 803(3) ( excluding “statement[s] of memory or belief to prove the fact remember ed or believed ” from the state of mind exception).
53 JX s 1677

- 7 8 ; see also JX 1679 at 8.
54 Soura Tr. 24.
55 Id. This testimony recounting Zhang’s statements is not being offered for the truth of the matter asserted

. Rather, the statements are being used to prove that the conversation between Soura and Zhang occurred . Later, I address Northern Gold’s argument that there is no evidence SIFT Capital and its principals exist. See infra notes 301

- 07 and accompanying text.
56 Soura Tr. 24.
57 Id. at 25

- 27

.

### 13

Soura and SIFT Capital continued their discussions through April 2021

. 58 

### SIFT Capital requested due diligence from the Company and open ed a data room to
facilitate the exchange of document s
. 59 

### According to Soura, t he data room was controlled by SIFT Capital and accessible through its website

. 60 

### By the end of April 2021 , SIFT Capital’s potential investment in the Company
had solidified. 61 

### SIFT Capital would provide a $10 million interest

- only loan with
a three

- year maturity. 62 

### SIFT Capital would also receive a warrant to purchase 2.5%
of the Company ’s u nits at a nominal exercise price

. 63 

### These conditional terms were subseq uently memorialized. 64

58 Id. at 27

- 28. Soura testified that he had video calls with SIFT Capital , using links sent through WeChat and an iPad owned by his fiancée

. Soura Dep. 67

- 70. But n o WeChat messages were produced , the iPad was apparently discarded , and the data room was eventually closed

. See Soura Dep. 70

- 71; JX 1910 at 2.
59 Soura Tr. 28

- 2 9; JX 639 (SIFT Capital du e diligence request list) ; cf. JX 1685

. 60 Soura Tr. 28

- 29

. There is no documentary evidence of the data room or its contents. See infra note 30 9 and accompanying text (declining to draw an adverse inference regarding the data room). Still, it seems more likely than not that the data room existed and was used by SIFT Capital to facilitate due diligence. The use of a data room to facilitate due diligence is commonplace, and Soura ’s testimony was consistent

. 61 Soura Tr. 28 ; see JX 206

. 62 Soura Tr. 31 ; see JX 206 at 2

. 63 Soura Tr. 31 , 34

- 35 ; see JX 206 at 3

. 64 See JX 206; JX s 208

- 10.

### 14

F. The Commitment Letter SIFT Capital sent Soura the first draft of a term sheet for its investment on May 7, 2021

. 65 

### Soura sent SIFT Capital revisions to the t erm s heet th e same day

. 66 

### Two days later , on May 9, SIFT Capital sent an updated t erm s heet incorporating
Soura’s revisions

. 67 

### An hour later, Soura sent further revisions addressing minor

65 Soura Tr. 35 ; see JX 206 at 2

. SIFT Capital was represented by an attorney in Hong Kong. Soura Tr. 27, 39; see JX 206; JX 208.
66 Soura Tr. 35

- 37; JX 206

. Northern Gold objected to the authenticity of the Commitment Letter, among other SIFT

- related documents. S ee infra Section II.C.1 ( resolving authenticity objection s ). At post

- trial argument, I asked whether there was any metadata showing the creation date of the documents (JX 206 ; JX s 208

- 10 ; JX s 617

- 19 ). See Dkt. 196. REM OA subsequently provided me with a chart of metadata showing that the documents were created on the dates reflected on the ir face s
. Dkt. 190. For example, JX 206 purports to have been sent on May 7, 2021; t he metadata for JX 206 confirms that this document was created on May 7, 2021. See Dkt. 190 ; see also Dkt. 197 . Northern Gold raised concerns with the metadata and ask ed that I decline to consider it. Dkt. 195. Absent the metadata, I find by a preponderance of the evidence

— between the documents themselves , the trial testimony , and other circumstantial evidence

— that the documents were created on the dates reflected on their faces. The weight of the evidence does not indicate the documents were doctored or created after the fact

. See infra Section II.C.1. The metad ata helpfully confirms this finding but is not required to make it

. Regardless, my review of the metadata is not prejudicial to Northern Gold. The metadata was produced to Northern Gold during discovery. Dkt. 190. Northern Gold also cited to metadata in its briefing, though that metadata was not i ntroduced at trial. Def.’ s Post

- trial Answering Br. (Dkt. 183) (“Def.’s Answering Br. ”) 28 , 35, 58 ; Def.’s Pre

- trial Br. (Dkt. 157) 24, 34.
67 Soura Tr. 36

- 37; JX 208. The metadata for JX 208 confirms that th e document was created on May 9, 2021. Dkts. 190 , 197 ; see supra note 66.

### 15

typographical issues. 68 

### SIFT Capital then sent Soura a commitment letter attaching

a final t erm s heet (the “ Commitment Letter ”)

. 69


### The Commitment Letter is eight pages long . The first two pages consist of SIFT Capital’s cover letter , signed by Zhang ; 70 

### t he third page is a signature page for the Company and several subsidiaries ; 71 

### a nd the last five pages are the t erm s heet that Soura and SIFT Capital negotiated

. 72 

### The document provided that SIFT Capital
would purchase a promissory note with a warrant for a total of $10 million

. 73 

### The
note would have a three

- year maturity , accrue interest at 7.5% , and be subordinate to any senior bank debt. 74 

### The warrant would allow SIFT Capital to purchase 2.5% of the Company’s u nits at a n exercise price of $0.01 per unit

. 75 

### The Commitment
Letter also contemplated definitive documentatio n to consummate the transaction : Upon receipt by the undersigned [ SIFT Capital ] of an executed counterpart of this commitment letter, our obligation to purchase from

68 Soura Tr. 37

- 39; JX 209. The metadata for JX 209 confirms that th e document was created on May 9, 2021. Dkts. 190 , 197 ; see supra note 66.
69 Soura Tr. 39

- 40; JX 210 . The metadata for JX 210 confirms that the document was created on May 9, 2021. Dkts. 190, 1 97 ; see supra note 66.
70 JX 210 at 1

- 2 (“SIFT Capital agrees to purchase ten million US dollars ($10,000,000) principal amount of Subordinated Notes (the ‘Notes’) with detachable Warrants to purchase ownership/membership interests of the Company (the ‘Warrants’) with a nominal exercise price to be issued by REM EQ.”).
71 Id. at 3.
72 Id. at 4

- 8

. 73 Id.
74 Id.
75 Id.

### 16

the Company, and the Company ’ s obligation to issue, sell and deliver to us the Notes and W arrants shall become a binding agreement between us subject to the conditions set forth herein. 76 

### Around this time, Soura told D’Arcy about the SIFT Capital investment

. 77


### Soura relayed high

- level details of the transaction to D’Ar cy , leaving out the warrant
and the lender’s identity

. 78 

### D’Arcy expected that the deal would involve a warrant, which he believed was commonplace in such transactions

. 79 

### Soura also told D’Arcy
that he planned to give Italia a copy of the Commitment Letter during an upcoming meeting in Ilion , New York

. 80

76 Id. at 2

. 77 Soura Tr. 32 (testifying that he told D’Arcy about the deal in the first week of May); D’Arcy Tr. 576

- 77 (testifying the conversation occurred in May or June 2021) ; id. at 601 (testifying the conversation occurred in May 2021). To the extent that D’Arcy’s trial testimony is inconsistent with his deposition testimony, I found D’Arcy’s trial testimony that he later refreshed his recollection to be credible. See D’Arcy Dep. 167

- 69 (testifying that he was unsure when the conversation occurred); D’Arcy Tr. 600

- 01 ( testifying on cross
- examination that he refreshed his memory after his deposition) ; see also supra note 8

. 78 Soura Tr. 145; D’Arcy Tr. 576, 602; see also D’Arcy Dep. 167

- 69. D’Arcy did not learn the specific details of the deal until later , when the loan was being negotiated and finalized

. D’Arcy Tr. 576, 602; D’Arcy Dep. 171, 176 . To the extent there is conflicting testimony about whether D’Arcy ever saw the Commitment Letter, the weight of the evidence suggests that he did later while definitive documentation was negotiated

. Cf. D’Arcy Tr. 602

- 05; JX 1703 ¶ 14; D’Arcy Dep. 239.
79 D’Arcy Tr. 578

- 79; D’Arcy Dep. 167.
80 Soura Tr. 44

- 45 ; D’Arcy Tr. 576

- 77 (corroborating Soura’s account)

. Northern Gold objected to the admissibility of D’Arcy’s testimony about what Soura told him. See D’Arcy Tr. 577. D’Arcy’s testimony is admissible as a statement of Soura’s intent under Delaware Rule of Evidence 803(3). See State v. MacDonald , 598 A.2d 1134, 1137

- 41 (Del. Super. 1991) (citing Mutual Life Ins

. Co. v. Hillmon , 145 U.S. 285 (1892))

. In addition, I do not accept the testimony for the truth of the matter asserted

— i.e., that Soura gave a copy of the Commitment Letter to Italia during the Ilion meeting.

### 17

G. The Ilion Meeting On May 10 , 2021

—

the day after Soura received the Commitment Letter from SIFT Capital

— Soura and Italia met at the Company’s factory in Ilion, New York. 81 

### By this point, Soura’s and Italia’s relationship had become strained. 82 

### Italia was
frustrated because Soura had yet to transfer the Remington Outdoor assets from
Roundhill to the Company , though the bankruptcy sale had closed seven months
earlier

. 83 

### On the morning of May 10 , Italia and a small entourage took a private flight
from Fort Lauderdal e, Florida to Ilion , 84 

### while Soura drove by himself from his home in Newtown, Pennsylvania. 85 

### Italia arrived at the factory first

. 86 

### He set up in a
conference room , met with several senior st aff at the factory, and briefly walked through the facility

. 87 

### When Soura arrived in the afternoon , Italia guided him to the
conference room for lunch

. 88

81 PTO ¶ 29.
82 Soura Tr. 149; Soura Dep. 18

- 19; Italia Tr. 338

- 40.
83 Italia Tr. 338

- 39.
84 Id. at 341

- 42. The members of Italia’s group included his son, several business acquaintances, and friends. Id.
85 Soura Tr. 15 2 ; Soura Dep. 28.
86 Italia Tr. 343; Soura Tr. 151; Soura Dep. 28, 139.
87 Italia Tr. 343.
88 Soura Dep. 29; Soura Tr. 151 ; Soura Tr. 45

.

### 18

At this point , Italia’s and Soura’s narratives diverge sharply

. 89


### Soura testified that after lunch, he was shown the factory by an employee before returning to the conference room with Italia and Italia’s group. 90 

### He said that, at some point after the tour , he and Italia “broke off” to a separate room where he
showed Italia a copy of the Commitment Letter that he had printed earlier in the day

. 91 

### According to Soura, Italia reviewed the Commitment Letter and was “happy with it” because it “was consistent with what [they] had spoke[n] about before.” 92 

### Afterward, Italia, his g uests , several factory employees, and Soura went to dinner at
a local restaurant. 93 

### By Italia’s account, his group, several factory employees, and Soura toured the facility together after lunch. 94 

### After the tour, he recalled that the group returned to the conference room to discuss dinner plans and then went to a local restaurant. 95


### Italia testified that he and Soura were never alone on March 10 , that they did not

89 See PTO ¶ 29.
90 Soura Dep. 143

- 44.
91 Id. at 146 ; see infra note 100 (discussing inconsistencies on when Soura printed the letter).
92 Soura Tr. 48

. 93 Soura Dep. 180

- 83

. 94 Italia Tr. 345.
95 Id. at 346

.

### 19

discuss financing, and that he was not shown the Commitment Letter. 96 

### Rather,
Italia first recalled seeing a copy of the Commitment Letter on June 1 4 , 2022 in connection with a filing in this court

. 97 

### Soura and Italia adamantly stick to their stories, but one of them is lying. 98 

### The May 10 meeting was not Schrödinger’s cat: either Soura gave Italia the Commitment Letter in Ilion, or he did not. T he timing generally supports Soura’s

account since t he Ilion meeting came a few days after the Commitment Letter was signed and before Italia was given documents to authorize the Commitment Letter. 99


### Yet Soura’s version of the day’s events is both illogical and inconsistent

. 100 

### Thus, I

96 Id. at 346

- 47

. 97 PTO ¶ 29 (“Italia . . . states under oath that no copy of the Commitment Letter was ever provided to him prior to an attachment to a pleading of the Company on June 14, 2022.”) ; see JX 1643 ( “ Commitment Letter “ ); N. Gold H ldg s
. , LLC. v . REM EQ H ld gs
. , LLC , C.A. No. 2022

- 0308

- LWW ( Dkt. 25 ) Ex. F (filing dated June 13, 2022)

. 98 A popular meme comes to mind. See The Spider

- Man Pointing Meme , in S PIDER

- M AN : D OUBLE I DENTITY (1967) , https://screenrant.com/spider

- man
- pointing

- meme
- cartoon

origin/ (last accessed September 16, 2023)

. 99 See infra note s 114

- 16 and accompanying text

. D’Arcy’s recollection that Soura said he planned to share a copy of the Commitment Letter with Italia does not aid Soura. S ee s upra note 80

. An intention does not guarantee corresponding action.
100 See Soura Tr. 44

- 4 6 (testifying that he printed the Commitment Letter at his home and printed the Company’s organization chart in Ilion); id. at 156

- 60 (testifying that at his deposition he could not recall where and when he printed the Commitment Letter, but he since recall ed at trial); Soura Dep. 37

- 45 (testifying

— confusingly

— about where and when he printed the Commitment Letter). Why would Soura print a copy of the Commitment Letter in Pennsylvania and drive it to Ilion when he could have emailed it to Italia? Occam’s Ra zor suggests that he did not. Soura’s story of personally handing Italia a printed copy of the Commitment Letter fortuitously explains away the lack of evidence documenting the receipt or transmission of the Commitment Letter. Soura Tr. 164

- 65 (“Q. And the reason you never sent Mr. Italia the commitment letter by email or WhatsApp, or

### 20

cannot f ind that Soura gave Italia a printed copy of the Commitment Letter during
the Ilion meeting. On balance, Italia’s account seems (slightly) more plausible , consistent, and in line with the meeting’s overall purpose. 101 

### Despite the intrigue surrounding the day in Ilion , it plays a minor role in the

ov erall story. That is because f our days later , SIFT Capital’s commitment to invest $10 million in the Company was explicitly disclosed to Italia.
H. The May 14 Materials O n May 14 , 2021 , Soura sent Italia an email attaching 56 documents prepared by Company counsel ( collectively, the “ May 14 Materials ”) , including: 102



### • draft a greements transferring or assigning the Remington Outdoor assets from Roundhill to the Company and its subsidiaries ; 103



### • a draft amended LLC Agreement dated May 14, 2021 ; 104



### • a draft written consent of the Company’s members ( the “ May 2021 Consent ” ) ; 105

by any other means to communicate with him, is because you claim that you had already given it to him

. . . and he never asked for it again. . . . A. Yes.”); see id. at 140

- 41.
101 See Italia Tr. 339

- 48, 419.
102 PTO ¶ 30; JX 228. T he Company’s outside counsel at Shulman Bastian Friedman & Bui LLP prepared the May 14 Materials. Soura Tr. 51.
103 JX s 229

- 36

. 104 JX 263

. 105 JX 262. The May 2021 Consent was set up for execution by Soura on behalf of REM OA and Italia on behalf of Northern Gold. Id.

### 21

• f ourteen draft w ritten consents for the Company ’s subsidiaries ( the

“ Subsidiary Consents ”) ; 106 

### and

• additional copies of signature pages for the draft documents in the package

. 107


### The draft amended LLC Agreement attached a Schedule A reflecting that
REM OA and Northern Gold were both 50% member s of the Company

. 108 

### It also contemplated that the Company was managed “solely and exclusively” by its
members , 109 

### that members could delegate authority to the Company’s officers, 110 

### that the agreement could be amended by written consent, 111 

### and that new members would be automatically admitted upon the issuance of membership units. 112

106 T he Subsidiary C onsents were for seven Company subsidiaries : GS Wood Products LLC, REM FA Holdings LLC, REM MA Holdings LLC, REM MO Holdings LLC, REM TML Holdings LLC, Remarms LLC, and Remops LLC

. Seven of the Subsidiary C onsents were set up for execution by the governors (Soura and Italia) , and seven were to be executed by the Company’s members (Soura on b ehalf of REM OA and Italia on behalf of Northern Gold ). JX 259 ; JX 261 ; JXs 264

- 65 ; JXs 267

- 68 ; JX 270 ; JXs 272

- 73 ; JXs 275

- 77 ; JXs 279

- 80.
107 JX s 283

- 84.
108 JX 263 at s ched. A.
109 Id. § 4.1(A).
110 Id.
111 Id. § 11.4

. 112 Id. at s ched. 1.1 (“[A] Person will automatically be admitted as a Member when they are issued Unit(s).”)

.

### 22

The May 2021 Consent provided for the authorization of various actions, including the appoin tment of D’Arcy and Anderson as Company officers. 113 

### It explicitly addressed the Commitment Letter , explaining that the Company had “received a commitment letter with term sheet from SIFT Capital Partners Limited (the ‘ Commitment Letter ’ ) to provide financing to the Company in the approximate amount of $10,000,000.00, subject to certain conditions and due diligence.” 114 

### The May 2021 Co nsent went on to confirm that:
the Members [ REM OA and Northern Gold ] have each reviewed the

. . . Commitment Letter, and have determined that it is in the best interests of the Company and its stakeholders for the Company to enter into the

. . . Commitmen t Letter and to perform all its obligations contemplated thereby

. 115 

### Accordingly, the May 2021 Consent authorized : any Member or Officer acting alone . . . to execute and deliver . . . the Commitment Letter and all documents relating thereto or contemplated thereby, with such changes as the Member or Officer, as applicable, deems in his sole discretion advantageous to the Company, all without any further act, vote or approval of any Member, Officer or other person or entity. 116

113 JX 262; see Italia Tr. 350 (testifying that the purpose of the May 14 Materials “was the creation of all the new companies, subsidiaries, and partnership agreement and the transfer of all of the inventory to those subsidiaries”).
114 JX 262 (emphasis in original)

. 115 Id.
116 Id.

### 23

The May 2021 Consen t referenced the Commitment Letter eight times across
each of its three pages. The term “ Commitment Letter ” is underlined , capitalized , and set apart in parentheses

. 117 

### Six of the Subsidiary Consents similarly defined, described, and provided for the auth orization of the Commitment Letter. 118 

### T he May
14 Materials did not include a copy of the Commitment Letter

. 119


### Italia testified that he noticed the references to the Commitment Letter in the May 2021 Consent and understood them to mean that the Company had secured a loan from SIFT Capital. 120 

### Italia “ didn’t pay much attention to it” because he “didn’t know about [the Commitment Letter] . . . [and] didn’t know one existed.” 121 

### Because
he neither received nor r eviewed the Commitment Letter, he was un aware that the
SIFT transaction contemplated a warrant. 122 

### H e never asked.

117 Id.
118 JX 259; JX 264; JX 267; JX 273; JX 276; JX 2 79

. E ach of these Subsidiary Consents states : “ WHEREAS , the Company has received a commitment letter with term sheet from SIFT Capital Partners Limited (the ‘ Commitment Letter ’ ) to provide financing to its Member in the approximate amount of $10,000,000.00, subject to certain conditions and due diligence.” E .g. , JX 25 9 at 1 (emphasis in original)

. 119 PTO ¶ 31.
120 Italia Tr. 356

- 57, 388

- 90 , 397 . At his deposition, Italia said that he “knew of no existence of any commitment letter.” Italia Dep. 337. He changed his story at trial and admitted that he saw references to the Commitment Letter in the May 2021 Consent and formed a mental impression of the Commitment Letter’s purpose

. Italia Tr. 356

- 57. I found his trial testimony believable.
121 Italia Tr. 399, 400 (“I saw a reference to it. I never gave it any attention because I never received one, so I thought it was a moot point.”).
122 Id. at 358 , 388

- 401.

### 24

I. Italia ’s Review of the May 14 Materials Shortly after receiving the May 14 Materials, Italia sent them to his accountant
and attorney for rev iew

. 123 

### His accountant promptly provided comments on the
documents

. 124 

### But d ue to a potential conflict of interest, Italia’s attorney was unable
to assist him

. 125 

### O n May 17, Italia turned Justin Vineberg of Davies Ward Phillips & Vineberg LLP

— Italia’s “oldest and trusted lawyer/friend”

— for guidance. 126


### Over the next two weeks, Vineberg reviewed the May 14 Materials. 127


### Vineber g and Italia had multiple email and phone discussions about the documents
with Soura and Company counsel at Shulman Bas tian Friedman & Bui LLP

. 128



### T hough tensions ran high at times, the parties and their counsel engaged in productive discussions

. 129

123 JX s 286

- 88 ; JX 291; JX 293 ; Italia Tr. 338, 381 ; Italia Dep. 229

- 30.
124 JX 29 1

. 125 Counsel had an “ongoing relationship with each of [Italia and Soura] , ” so he “c[ould not] assist either of [them] individually in editing the [] agreements between [them] .” JX 363

. Instead, counsel worked “on behalf of Rem EQ Holdings and Remarms, to review the draft documents to determine if they properly reflect [Italia and Soura’s] mutual understanding that documents each grant [them] equal v oting rights and all decision making be by majority (which, in this case, means unanimous).” Id. ; see also JX s 350

- 51 ; JX 375 ; Soura Tr. 183; Italia Tr. 33 8, 422

. 126 JX 351; see JX 293; Italia Tr. 383. Vineberg’s partner , Marc Berger, also assisted

. See Italia Tr. 351; see also JX 396; JX 401; JX 402.
127 See , e.g. , JX 358 ; JX 370; JX 375; JX 390; JX 396; JX s 40 1

- 02 ; JX 460

. 128 See , e.g. , JX 358; JX 370; JX 375; JX s 389

- 90; JX 392; JX 394; JX 396; JX s 401

- 02.
129 Italia Tr. 433

- 34; Soura Tr. 291

. Italia testified that Soura hung up on Vineberg and refused to negotiate. Italia Tr. 385, 428. Th e testimony is contradicted by the documentary

### 25

One area of negotiation concerned a right of first refusal ( ROFR ) for the sale
of a member’s interests

. Italia had considered selling his units or onboarding other
investors since the Company’s infanc y
. 130 

### B ut the original LLC Agreement prohibited all transfers of membership interests

. 131 

### Italia pushed for an amendment to the LLC Agreement providing for a ROFR exception to the transfer prohibition

. 132 

### Soura agreed. 133 

### Italia also made certain that the May 14 Materials effectuated the
transfer of the Remington Outdoor assets from Roundhill to the Company and its
subsidiaries. 134 

### Additionally, Italia was also focused on ensuring that the May 14 Materials
maintained Northern Gold’s rights in and ownership of the Company relative to
REM OA

. 135 

### Soura and Italia asked counsel to confirm that the May 14 Materials

evidence showing that negotiation s occurred. See infra notes 132

- 37 and a ccompanying text; see also Italia Tr. 428

- 31.
130 Italia Tr. 324, 512; JX 14; JX 57; JX 65; JX 70; JX 73; JX 79; JX 90 at 3 (Italia texting that he was “[g]oing to pursue selling [his] side of the asset”); JX 93; JX 100; JX 104; JX s 107

- 09

. 131 JX 137 § 5.1; see JX 93; JX s 10 7

- 09; JX 197

. 132 JX 358; JX 365; JX 368 §§ 5.1

- 5.2; JX 369 §§ 5.1

- 5.2; JX 385; Soura Tr. 54; Italia Tr. 423

- 24, 429

- 31, 443

- 44.
133 JX 368 §§ 5.1

- 5.2; JX 369 §§ 5.1

- 5.2; JX 385; Soura Tr. 54; Italia Tr. 423

- 24, 429

- 31, 443

- 44.
134 JX 358; JX 377; JX 401.
135 See JX 358; JX 385; JX 363; Soura Tr. 53; Italia Tr. 35 3

- 55

.

### 26

g ave them “equal voting rights.” 136 

### In an email to an attorney at Shulman Bastian,
Soura reiterated that the May 14 Materials provided for a 50/50 ownership split
between Northern Gold and REM OA

. 137 

### Throughout the parties’ discussions and negotiations, n either Italia nor his
counsel inquired about the Commitment Letter, asked for a copy of the Commitment
Letter , or proposed any changes to the May 2021 Consent

. 138


### J. Italia Executes the May 14 Materials
. On June 2, 2021, Itali a executed the May 14 Materials

. 139 

### He did not sign
under duress. 140 

### He sent his completed signature pages to Shulman Bastian. The next day, Shulman Bastian circulated the fully executed May 14
Materials. 141 

### T he Remington Outdoor assets were transferred from Roundhill to

136 JX 363 ( counsel memorializing a discussion with Soura and Italia); Soura Tr. 195

- 96 (testifying that he told I t alia “REM OA didn’t have any special rights that Northern Gold Holdings didn’t have”) ; Soura Dep. 421

- 22; see also Soura Tr. 189; Soura Dep. 410 ; supra note 125 (describing counsel’s role)

. 137 JX 385 ; see also JX 365

. 138 Soura Tr. 55 ; Italia Tr. 352 ; compare JX 262 (initial draft) with JX 582 (“May 2021 Consent”) (executed version). Italia and his counsel also did not propose changes to the Subsidiary Consents. E.g. , JX 583; JX 585; JX s 587

- 88; JX s 590

- 91; JX s 593

- 94; JX s 596

- 97; JX s 599

- 600; JX s 602

- 03 ; see supra note 106

. 139 JX 461; see JX 399.
140 Italia Tr. 433 (“I was frustrated. So I don’t want to say duress. I was frustrated at that point.”)

. 141 JX 581

.

### 27

REM EQ and its subsidiaries , 142 

### the amended LLC Agreement became effective , 143


### and D’Arcy and Anderson were appointed the Company’s CEO and CFO. 144 

### By operation of the May 2021 Consent, the Company was authorized to execute, and its
members and off

ic ers to close on, the transaction contemplated by the Commitment Letter “without further act, vote or approval” of its members

. 145 

### On June 4, Soura executed the Commitment Letter on the Company’s
behalf. 146 

### Soura testified that he returned the countersigned copy to SIFT Capital through the data room. 147


### K. The Ault Letter of Intent Shortly after executing the Commitment Letter, Soura learned that Italia was negotiating a potential sale of Northern Gold’s interests i n the Company to Ault Global Holdings, Inc. 148 

### Soura “slow

- walk[ed]” negotiating the definitive

142 JX s 605

- 14.
143 The amended LLC Agreement referred to membership interests as “Units,” stated that REM OA and Northern Gold each owned 50 u nits , and changed the Company’s governance from manager

- managed to member

- managed. Compare JX 510 with JX 137. It was later discovered that the wrong version of the amended LLC Agreement had been circulated, as it did not contain the ROFR agreed on by Italia and Soura. JX 510; see JX 372.
144 JX 581; May 2021 Consent at 2.
145 May 2021 Consent at 2.
146 Soura Tr. 59; J X s 617

- 19; s ee Commitment Letter . The metadata for JX 206 confirms that this document was created on June 4, 2021. Dkts. 190

- 91; see supra note 66.
147 Soura Tr. 59.
148 Id. at 6 3 ; JX s 569

- 70. Italia had been considering selling his interests or onboarding other investors since the Company’s formation. See Italia Tr. 324, 512; JX 14; JX 57; JX

### 28

documents with SIFT Capital while he waited to see if Italia’s sale to Ault would
materialize

. 149 

### On July 7, Italia and Ault executed a letter of intent for Ault to purchase an option to acquire some of Northern Gold ’s membership interests in the Company

. 150


### Th e option would allow Ault to obtain a 44% equity interest and a 50% voting interest, with Northern Gold retaining a 6% e quity interest. 151 

### On July 12, Italia
shared the letter of intent with Soura and sent Soura a ROFR notice

. 152 

### Soura and
Italia discussed the Ault offer. 153 

### Soura did not mention the warrant contemplated by the Commitment Letter to Italia

. 154 

### On July 9, SIFT Capital’s counsel Jade Kobeissi ( a foreign attorney barred in Beirut, Lebanon and Paris, France ) contacted Soura for additional legal and financial

65; JX 70; JX 73; JX 79; JX 90 at 3 (Italia texting “[g]oing to pursue selling my side of the asset” ); JX 93; JX 100; JX 104; JX s 107

- 09.
149 Soura Tr. 62

- 64. Soura testified that he slowed down the process with SIFT Capital because he hoped that partnering with Ault would enable the Company to negotiate more favorable loan terms. Id. at 64, 211. It seems just as likely that Soura was waiting to see whether Italia would remain a significant owner of the Company

. Id. at 211

- 15; Soura Dep. 240

- 244; JX 634 (D’Arcy texting Soura on July 4, 202 1 that the Ault Global deal “will get him [Italia] out sooner rather than later [which] will be beneficial”).
150 JX 655; Italia Tr. 359

- 60.
151 JX 655.
152 JX 654; Italia Tr. 360

- 61.
153 See Italia Tr. 361; Soura Dep. 246.
154 Soura Tr. 216

- 19; Soura Dep. 246

- 47; Italia Tr. 361

.

### 29

due dilige nce. 155 

### SIFT Capital was also represented in the transaction by Scott Matthews, a Delaware attorney and partner at Tarabicos, Grosso & Hoffman,
LLP

. 156 

### Soura worked with Anderson to collect the diligence materials

. 157 

### Meanwhile, Italia’s talks with Ault s talled. 158 

### By the fall of 2021, Soura

— believing that the Ault deal “was truly . . . dead”

— renewed his engagement with SIFT Capital

. 159


### L. The Definitive Loan Materials Around October 2021 , Soura had several calls with SIFT Capital . Soura testified that during one call , he was introduced to Zakaria Abou Issa , who later play ed a role in finalizing the SIFT transaction

. 160 

### Negotiations intensified. 161


### On November 2 and 3, Soura emailed SIFT Capital’ s counsel ( Kobeissi ) legal diligence materials, including “the consents of the entities consenting to all of the
terms of the SIFT commitment letter” ( i.e., May 2021 Consent and Subsidiary

155 JX s 639

- 40.
156 Soura Tr. 69

- 70, 80; see JX 711.
157 JX 645. At this time, Anderson did not know the specific details of the SIFT transaction and had not seen the Commitment Letter. Anderson Tr. 638

- 39. She did not learn that SIFT Capital or SIFT Fixed were the counterparties until she executed loan agreements on the Company’s behalf in late January 2022

. Id. at 632; Anderson Dep. 120. Even then, she knew “pretty much nothing” about the SIFT entities. Anderson Tr. 634.
158 On July 16, Italia canceled the Ault letter of intent. JX s 662

- 63.
159 Soura Tr. 65.
160 Id. at 65

- 66

. 161 Id.

### 30

Consents). 162 

### On November 5, Kobeissi sent Soura draft definitive loan materials (the “ Loan Materials ”) , including a “ W arrant A greement .” 163 

### A few days later , Soura enlisted Joseph Kavan ( the Company’s transactional and compliance counsel and a partner at Kutak Rock LLP ) to lead negotiations. 164


### On November 8 , Soura shared Kavan’s contact information with Kobeissi. 165 

### The next day, SIFT Capital’s Delaware counsel (Matthews) sent Kavan the Loan
Materials. 166 

### Negotiations continued over the next month , with Kavan and Mat t hews exchanging various comments on and revisions to the Loan Materials

. 167 

### By early
December 2021 , the Loan Materials reached near

- final form. 168 

### But the deal was delayed while the parties secured an escrow agent and prepared perfection certificates describing the collateral for the promissory note

. 169

162 JX s 688

- 99 (Subsidiary Consents for five subsidiaries) ; see also JX 674; Soura Tr. 65

- 66.
163 JX 700 ; JX 703

. 164 JX 709 ; Soura Tr. 67

- 68; Soura Dep. 194

- 95; Italia Tr. 579.
165 JX 709.
166 JX s 711

- 17.
167 See JX s 711

- 17; JX 720; JX s 726

- 28; JX s 739

- 40; JX s 751

- 52; JX 754.
168 JX 763.
169 JX 803; JX 1725 ; Soura Tr. 72

- 75; Anderson Tr. 616

- 17.

### 31

M. The Closing On January 25, 2022, as authorized by the Commitment Letter, SIFT Capital assigned its rights and obligations to SIFT Fixed US002, LLC. 170 

### SIFT Fixed is a
Delaware limited liab ility company formed on January 21, 2022. 171 

### SIFT Master
Limited , a Samoa n company, is the sole member of and source of funding for SIFT
Fixed. 172 

### SIFT Master has three stockholders , who were existing clients of SIFT Capital and received the investment opportunity directly from SIFT Capital. 173 

### Issa
served as SIFT Fixed’s manager until he resigned on November 1, 2022. 174 

### Issa was replaced by Joseph Sabeh Afaki , who owns a consulting firm specializing in

170 JX 1594

. Northern Gold raised an authenticity objection to the assignment agreement (JX 1594), among other documents, under Delaware Rule of Evidence 901. That objection is resolved in Section II. C.1, infra

. 171 JX 1595 ; JX 1704.
172 JX 1627; JX 1632 ; JX 1704. There is no evidence that Soura is affiliated with SIFT Capital, SIFT Master, or SIFT Fixed. See Soura Tr. 83 (testifying that he has no affiliation with any SIFT entities).
173 JX 1627 ; Afaki Tr. 556 ; Soura Tr. 221

- 24, 283

. To the extent that Northern G old has raised an authenticity objection to this information, the sources cited in th is footnote corroborate that SIFT Master is funded by its shareholders

— none of whom are Soura. Northern Gold’s overarching authenticity objections are resolved later in t his decision. See Section II. C.1 , infra

. 174 JX 1627; JX 1609 ; JX 1611

. Issa’s resignation occurred w eeks after Northern Gold noticed his deposition

. Dkt. 53; JX 1627

. Afterward , Northern Gold re

- notice d a deposition for Issa and filed a motion to compel it

. Dkt s . 89 , 115. On December 14, 2022, I denied the motion to compel. Dkts. 138, 136.

### 32

business development in the Middle East and Southeast Asia

. 175 

### SIFT Capital’s
Delaware counsel ( Matthews ) served as counsel for SIFT Fixed. 176


### O n January 2 8 , 2022, Matthews circulated W ord and PDF versions of the
finalized Loan Materials . He asked Kavan that the Company “execute [two] originals of each (except the promissory note

- just one) and send them to [his] attention, and send [him] PDFs of all executed documents.” 177 

### Matthews also “asked [his] client [SIFT Fixed] [to] provide [two] originals so that [he could ] collate, date,
and distribute fully

- executed and dated originals to both parties.” 178 

### On January 31,
Anderson executed the Loan Materials on behalf of the Company

. 179 

### Issa did the

175 JX 1627 ; JX 1609 ; see Afaki Tr. 521

- 22 (testifying about his background)

. Afaki was contacted about the role by a business acquaintance who asked Afaki if he could manage an investment. Afaki Tr. 522

- 23. Afaki receives $1,500 in cash per month for his service as the manager of SIFT Fixed. Id. at 527 (“[I]n the UAE, it’s customary to pay such [small] amounts in cash.”). During Afaki’s deposition in Wilmington, Delaware , Northern Gold questioned whether Afaki is an actor hired by SIFT Capital to play a role in this litigation. Afaki Dep. 127

- 28 (Q: “Are you an entertainer?” A: “No, I’m not.” “Q: “Are you a performer?” A: “Absolutely not. ” Q: “Do you have any acting experience?” A: “None.”). Afaki

— both at his deposition and at trial

— gave an unqualified rejection of Northern Gold’s suggestion. See Afaki Tr. 536 (Q: “Are you a perfo rmer, Mr. Afaki?” A. “No, I’m not.”); Afaki Dep Tr. 127

- 28

. I do not doubt that Afaki is who he says he is and found his trial testimony to be credible

. 176 See JX 1150; JX 860.
177 JX 823.
178 Id. ; see also JX 845.
179 JXs 873

- 79; Anderson Tr. 616

- 19; Soura Tr. 73

- 74. This was the first time that Anderson learned about SIFT Capital or SIFT Fixed. Anderson Tr. 632; Anderson Dep. 120.

### 33

same for SIFT Fixed. 180 

### T he parties sent the executed documents to the escrow
agent , Pinnacle Bank

. 181 

### On February 22, 2022, Pinnacle informed SIFT Fixed and the Company by
email that it had received the loan proceeds and executed L oan M aterials. 182


### Pinnacle attached signature pages to each of the Loan Materials signed by SIFT
Fixed and the Company. 183 

### This included signature pages to a Loan Agreement in
which SIFT Fixed agreed to provide the Company and its related entities with a $10
million loan

. 184 

### It also included signature pages to the Warrant Agreement, which granted SIFT Fixed a warrant to purchase 2.565 units (or 2.5% of the Company’s outstanding units). 185

180 JX s 1728

- 3 2 . Northern Gold’s objection challenging the authenticity of the Warrant Agreement (and Loan Materials) is addressed later in this decision. See Section II. C.1 , infra

. 181 JX s 880

- 81. The Company sent the escrow agent its executed documents on February 14. JX 1107. SIFT Fixed sent its executed documents a few days later. See JX 1113; JX 1663.
182 JX 1727; JX s 1728

- 33

. 183 JX s 1728

- 33.
184 JX 1329 (Loan Agreement)

. 185 JX 1337 (Warrant Agreement) ; see JX 1388 (Warrant Agreement with a different signature page). The Loan Materials also included: a Promissory Note in which the Company agreed to pay quarterly interest and to repay SIFT Fixed’s loan by February 2 2 , 2025 (JX 1333); an Unconditional Guaranty for the loan between the Compan y’s wholly owned subsidiaries and SIFT Fixed (JX 1335); and a Pledge and Security Agreement granting SIFT Fixed a security interest in its loan (JX 1331).

### 34

In that same email, Pinnacle asked the parties to provide joint written notice
for “ the amount to be distributed and the portion thereof to be deduced from the
escrow fund

. ” 186 

### Later that day, SIFT Fixed and the Company gave Pinnacle written
authorization to break escrow. 187 

### Pinnacle released the Loan Materials and transferred the loan proceeds to the Company’s bank account

. 188


### N. The February 2022 Consent In late February 2022, Italia and Soura learned that they had “signed the wrong
version” of the amended LLC Agreement since it lacked a ROFR provision

. 189 

### Italia asked that the parties execute another amendment to the LLC Agreement with a
ROFR

. Soura agreed. 190 

### On February 25, Soura sent Italia a draft revised LLC Agreement , along with
an “associated resolution.” 191 

### Soura’s cover email confirmed that the only change to the LLC Agreement related “to the transferability of units” and that “[a]ll prior consents and resolutions remain[ed] effective.” 192 

### The attached LLC Agreement

186 JX 1727.
187 JX 1150.
188 JX 1155

. 189 JX 1058 ; Soura Tr. 83

- 84 , 199 ; Italia Tr. 361, 442

. They made this discovery after Italia requested and received a copy of the May 14 Materials from Company counsel, which he then sent to his own counsel to compare against his files. JX 1269; Italia Tr. 440

- 41.
190 Soura Tr. 84

- 85.
191 JX 1167; see JXs 1168

- 69

. 192 JX 1167.

### 35

included a Schedule A reflecting that Northern Gold and REM OA were both 50%

m ember s of the Company. 193


### The “ resolution ” was a draft written cons ent of the Company’s members dated February 25, 2022 (the “ February 2022 Consent ”). 194 

### The document referenced the May 2021 Consent four times . It confirmed that “any written consent and/or written resolution adopted by [Northern Gold and REM OA] (including, without limitation,
the written consent of the M embers dated as of May 14, 2021) was validly entered
into.” 195 

### It also “approved, confirmed and ratified

. . . any and all actions taken by [ the Company ] in connection with, related to, or in furtherance of any written consent and/or written resolution,” including the May 2021 Consent and “executing any agreements or otherwise entering into any tran sactions.” 196 

### On February 28, Italia signed and returned the revised LLC Agreement without changes

. 197 

### B ut he told Soura that he needed time to “review the written

consent ” and would “ get back to [Soura] with any proposed changes.” 198 

### Italia asked

193 JX 1169 at s ched. A.
194 JX 1168.
195 Id. at 2.
196 Id.
197 JX 1185 ; see JX s 1183

- 84. On March 2, Soura circulated a fully executed version of the o perative LLC Agreement. JX 1273 (“Operative LLC Agreement”)

. 198 JX 1185 ; see JX 1178 ; Italia Tr. 4 5 4 , 461

.

### 36

both Vineberg and a Delaware attorney to review the February 2022 C onsent on his
behalf

. 199 

### Italia forwarded the May 14 Materials to his counsel

. 200


### After review, Italia asked Soura whether the February 2022 Consent exculpate d or release d c laims against the Company’s officers

. 201 

### On March 2, Soura
sent Italia a revised document “with the added language [he and Italia] discussed” and asked Italia to call him with any further concerns. 202 

### Satisfied , Italia signed the February 2022 Consent later that day and sent it to Soura

. 203 

### Soura then circulated executed copies of the revised LLC Agreement and the February 2022 C onsent. 204


### O. The LaGrange Meeting While the SIFT transaction was being finalized, Italia was pressing Sou ra and D’Arcy to facilitate a sale of Italia’s equity to the Mechanical and Chemical Industry Corporation (“ MKE ”)

— a defense contractor affiliated with the Turkish

199 JX 1191; JX 1196; JX 1229; JX 1264; JX 1269 ; Italia Tr. 460

- 62, 480

- 81.
200 JX 1229 ; JX 1269

. 201 JX s 12 22

- 23 ; Soura Tr. 90

- 91; Italia Tr. 454

- 55

. Italia testified that he and his attorneys did not review the “May 14, 2021[] consent” while reviewing the February 2022 Consent. Italia Tr. 459. But Northern Gold’s privilege log reflects that on March 2, Italia and his attorneys had a privileged discussion about the “May 14 Subsidiary Consents.” JX 1598, Entry 103.
202 JX s 1222

- 23.
203 JX 1270 (“ [H] ere u go [.] ”) ; JX 1271

. 204 JX s 1272

- 7 4

.

### 37

government

. 205 

### The deal crystallized in late January 2022 when MKE submitted a
letter of inte nt to acquire 20% of the Company for $60 to $65 million. 206


### The offer raised red flags for D’Arcy

. 207 

### Just six months earlier, Ault had
valued the Company at roughly $38 million

. 208 

### By contrast, MKE’s bid valued the Company at a pproximately $300 to $325 million. The Company’s officers and
counsel w ere also concerned by Italia’s diligence requests

. 209 

### On March 8, 2022, Soura, Italia, and MKE’s counsel met in LaGrange, Georgia to discuss the MKE deal and visit the Company’s new manufacturing
fa cility

. 210 

### Soura recorded th eir conversation

— unbeknownst to the other participants

. 211 

### The recording includes suggestions that the deal was a “ kickback ”

205 Soura Tr. 100

- 01.
206 JX s 901

- 02.
207 D’Arcy Tr. 587

- 90 (expressing concern about sharing diligence information with a foreign firearms manufacturer) ; see also Soura Tr. 101

- 03; Italia Tr. 498

- 500.
208 See JX 655.
209 D’Arcy Tr. 586

- 89; JX 1311; JX 1324; JX 1342 ; see also Soura Tr. 103

- 04.
210 Soura Tr. 104

- 0 6 ; Italia Tr. 371

- 72, 500

- 01.
211 Soura Tr. 104

- 05; Italia Tr. 501; JX s 1618

- 19; JX 1681. Northern Gold objected to the introduction of a transcription of the recorded conversation based on the best evidence rule. Italia Tr. 504

- 05; see D.R.E. 1002. Having reviewed the relevant portions of the transcription and the recorded conversation, I find the transcription to be accurate. JX 1681 at 2

- 3; id. at 1

- 2; see Atkins v. State , 523 A.2d 539, 544

- 45 (Del. 1987) (“When original tape recordings ar e properly introduced into evidence, transcriptions of those recordings may also be received into evidence with the exercise of judicial discretion.”)

.

### 38

scheme based on a purposefully inflated valuation

. 212 

### At trial, Italia adamantly
denied making these statements

. 213


### P. The Warrant Exercise After the meeting in LaGrange , Soura relayed the discussion about the potential MKE transaction to D’Arcy and SIFT Fixed’s representatives ( Kobeissi
and Issa )

. 214 

### Soura also reported t hat Italia had taken firearms, ammunition, and other Company property worth millions of dollars. 215 

### Issa told Soura that SIFT Fixed
intended to exercise its warrant. 216

212 JX 16 81 at 2 ; see also id. at 3 , 5, 8, 97

- 98, 129, 162

. I consider this discussion only insofar as it provides context for SIFT Fixed’s subsequent exercise of its warrant and bears on witness credibility . I make no assessment of the discussed matters beyond that and am not finding that a kickback scheme was hatched

. 213 Italia Tr. 502

- 04

. 214 Soura Tr. 107

- 09; Afaki Tr. 549; D’Arcy Tr. 5 90. Northern Gold raised a standing objection to hearsay insofar as Afaki testified about what Issa told him

. See Afaki Tr. 543. Afaki testified about Issa’s then

- present intention to ex ercise the warrant. Id. at 549. This testimony is admissible on that basis under Delaware Rule of Evidence 803(3). See supra note 80.
215 JX s 97

- 98; JX 143; JX 156; JX 196; JX s 212

- 14; JX 121; JX 151; JX 393; JX 1452; JX 1457; JX 1911; D’Arcy Tr. 590

- 91 (discussing artwork, ammunition, machine guns, a truck, and other firearms that “went missing”) ; Soura Tr. 98. I make no finding on whether Italia did, in fact, engage in this c onduct. See Italia Tr. 348

- 49 (describing taking 47 guns for himself that were “all registered,” “documented,” and “lawfully transferred”). I consider it only as relevant context for SIFT Fixed’s exercise its warrant and witness credibility

. 216 Soura Tr. 111

- 1 3

. Northern Gold objected to Soura’s testimony about what Issa said on hearsay grounds. Soura’s testimony is admissible as a statement of Issa’s then

- present intent under Delaware Rule of Evidence 803(3). See supra note s 80, 214.

### 39

On March 21, 2022, Issa executed a N otice of E xercise on behalf of SIFT
Fixed. 217 

### Soura testified that he received the Notice of Exercise through the SIFT Capital data room. 218 

### On March 22 , Soura updated Schedule A of the operative LLC Agreement to reflect the issuanc e of u nits to SIFT Fixed , listing SIFT Fixed as a 2.5% m ember of the Company

. 219 

### Soura did not send the updated Schedule A to
anyone at that time

. 220 

### Q. The Dallas Meeting On March 31, 2022, Italia, Soura, and D’Arcy met at the Dallas airport to
discuss the potential MKE transaction and corp orate governance issues

. 221 

### By this point, Italia and Soura’s relationship had soured and D’Arcy acted as an intermediary. 222 

### The meeting began with Soura telling Italia that he w ould not

217 JX 1648; Soura Tr. 114

- 15 ; JX 1400. According to Northern Gold , JX 1400 “has a document metadata date of April 20, 2022. ” Def’s Answering Br. 28.
218 Soura Tr. 114

- 15. To the extent that there is contradictory evidence about how Soura received the Notice of Exercise, Soura’s testimony that he received the document through the data room was more credible when placed in context of the overall record

. Cf. Soura Dep. 250 , 467

- 70, 493

- 94 ; Soura Tr. 255, 267

- 69 ; JX 1685; JX 1476

. 219 JX 1455 at s ched. A ; JX 1424 at s ched. A. According to Northern Gold , the document metadata date for JX 1424 is March 22 , 2022. Def’s Answering Br. 35

. 220 Cf. infra note 233 and accompanying text

. 221 D’Arcy Tr. 593

- 94 ; Italia Tr. 364

- 65; Soura Tr. 116

- 17

. 222 D’Arcy Tr. 593.

### 40

support the MKE deal. 223 

### Soura also raised t he SIFT transaction and explained that
SIFT Fixed had exercised its warrant

. 224


### After the Dallas meeting, on April 4, Italia emailed D’Arcy to express his “surprise” that the Company had “taken a loan from an offshore entity in Hong Kong.” 225 

### Italia requested documentation on the SIFT transaction and asked D’Arcy
to forward him the “loan documents.” 226 

### That afternoon, D’Arcy sent Italia the Loan
Materials , including the W arrant A greement

. 227 

### D’Arcy did not include the
Commitment Letter. 228


### R. The Books and Records Action The next day, Northern Gold filed a books and records action in this court , seeking documents pertaining to the Commitment Letter, the May 2021 Consent,

223 Id. at 593

- 94.
224 Id. (testifying that Soura brought the “loan agreement” to the meeting and “Italia said he had never seen these, never agreed with them”); Soura Tr. 118

- 19

. Italia testified that he learned about the $10 million loan from SIFT at the meeting

. Italia Tr. 365

- 66. But he denie d that Soura told him about the warrant. Italia Tr. 368, 513

- 16

. His denial is , however, contradicted by Northern Gold’s own filings in this court stating that Italia learned about the warrant during the March 31 meeting. JX 1552 ¶ 50; JX 1723 at 21; see Italia Tr. 516

- 20. Italia testified that Northern Gold’s submissions were inaccurate and that he had not reviewed them before filing, despit e having testified otherwise during his deposition. Italia Tr. 516

- 20; Italia Dep. 46. Given these inconsistencies and the other evidence , it seems more likely than not that Italia learned about the warrant during the Dallas meeting.
225 JX 1382.
226 Id.
227 JX s 1389

- 94.
228 JXs 1389

- 94.

### 41

SIFT Capital, and SIFT Fixed

. 229 

### On April 21, Soura emailed Company counsel at Richards, Layton & Finger, P.A. ( “ RLF ”) a “complete set” of “the corporate documents and loan documents for REM EQ and [its] subsidiaries .” 230 

### The
documents included the Commitment Letter , the Warrant Agreement, and the Notice
of Exercise

. 231 

### On May 9, RLF informed Northern Gold that SIFT Fixed had executed its

warrant , was a member of the Company , and was a party to the LLC Agreemen t

. 232



### RLF also attached a copy of the revised Schedule A to the LLC Agreement reflecting
SIFT Fixed ’s membership in the Company

. 233


### S. This Litigation This action was commenced by plaintiffs REM OA and SIFT Fixed on
June 30, 2022

. 234 

### The plaintiffs seek a declaration under 6 Del. C. § 18

- 110 that (at

229 N. Gold Hldgs

. , LLC v. Rem EQ Hldgs

. , LLC , 2022 WL 17338787, ¶ ¶ 1.j

- l (Del. Ch. Nov. 23, 2022)

. A paper trial was held in the books and records action on September 20, 2022 , and I issued a bench ruling on October 10

. See infra note 39 0

. A final order and judgment was entered on November 23, 2022. C.A. No. 2022

- 0308

- LWW (Del. Ch. Nov. 23, 2022) (ORDER)

. 230 JX 1401.
231 JX 1446; JX 1451; JX 1419. Northern Gold raised an authenticity objection to various versions of the Commitment Letter (e.g., JX 1446), among other documents, under Delaware Rule of Evidence 901. That objection is resolved in Section II. C.1, infra

. 232 JX 1907. There is no evidence that SIFT Fix ed executed a joinder to the LLC Agreement.
233 JX 1909.
234 Dkt. 1.

### 42

the time the action was filed) SIFT Fixed was a 2.5% m ember of the Company , and
Northern Gold and REM OA we re 48.75% m ember s
. 235 

### The plaintiffs also seek an
award of fees and costs

. 236 

### On August 1, Northern Gold filed a counterclaim seeking declaration s that the
warrant and u nits issued to SIFT Fixed were unauthorized and invalid , that SIFT
Fixed is not a m ember of the Company , and that Northern Gold owns 50% of the Company’s u nits. 237 

### On August 5, I entered a n order to maintain the status quo during the pendency
of the litigation

. 238 

### On November 3, Northern Gold moved to enforce the status quo
order to prevent the Company’s proposed $5 million capital raise through a pro rata equity issuance (the “ Capital Raise ”)

. 239 

### The Company asserted that additional capital was urgently needed to fund the Company’s relocation to Georgia

. 240 

### Given the Company’s professed financial straits , I declined to bar it from proceeding with
the C apital R aise . I did so provided that while the status quo order remained in

235 Compl. ¶¶ 61

- 64.
236 Id. ¶¶ 69

- 72.
237 Answer and Countercl. ¶ ¶ 111

- 20.
238 Dkt. 29.
239 Dkt. 59. The Company proposed issuing 20.51 membership units pro rata to SIFT Fixed, REM OA, and Northern Gold. If a member chose not to participate, a participating member could buy the unpurchased units. Dkt. 59 Ex. B.
240 Dkts. 7 2 , 75. The plaintiffs supported the Company’s position.

### 43

place, no redemption of u nits would occur and no single m ember of the Company
would be deemed to control more than 50% of the Company’s u nits

. 241 

### Northern
Gold was free to take part in the Capital Raise. Subsequently , REM OA and SIFT Fixed subscribed to the Capital Raise

. 242


### After Northern Gold declined to participate, REM OA purchased the u nits Northern
Gold passed on

. 243 

### On December 6, Anderson circulated an updated capitalization table for the Company with the following ownership breakdown: REM OA , 56.8737% ; Northern Gold , 40.6256%; and SIFT Fixed, 2.5007%. 244


### A two

- day trial was held on January 24 and 25, 2023. 245 

### P ost

- trial briefing followed, and a post

- trial argument was held on May 10, 2023

. 246 

### After additional

241 Dkts. 106

- 07

. 242 JX s 1616

- 17; JX s 1620

- 22. Northern Gold raised a relevance objection to these exhibits (as well as JX s 1623

- 24 and JX 1626) under Delaware Rule of Evidence 401. The documents are relev ant to my description of the procedural history of this matter

. 243 JX s 1623

- 24 ; see supra note 242 (discussing relevance)

. 244 JX 1626 ; see supra note 242 (discussing relevance)

. As I explained during the January 17, 2023 pre
- trial conference, the merits of this equity issuance were not a topic for trial. Dkt. 172 at 27. I have made no findings of fact about the propriety or effectiveness of the Capital Raise. I am describing the Capital Raise as part of the procedural background leading up to trial and to provide context for the declaratory relief entered after trial.
245 Dkts. 171, 174

- 75. On the eve of trial, the plaintiffs filed a motion in limine to allow Jade Kobeissi to testify remotely despite his repeated refusal s to sit for a deposition

. Dkt. 154. I denied the plaintiffs’ motion as prejudicial to Northern Gold

. Dkt. 172, 171, 162.
246 Dkts. 189, 196. After trial, the Company submitted a letter outlining its position that it comp li ed with certain federal regulations . Dkt. 178. I have not considered the Company’s assertions when determining whether the plaintif fs met their burden at trial.

### 44

submissions regarding metadata, the matter was taken under advisement on June 20,
2023. 247


### II. LEGAL ANALYSIS
Under 6 Del. C. § 18

- 110, this court is authorized “to determine the membership interest in a limited liability company. 248 

### “The parties have the b urden of proving their respective claims by a preponderance of the evidence.” 249 

### The plaintiffs have done so. Northern Gold has not.
Northern Gold authorized the Commitment Letter and SIFT transaction when it signed the May 2021 Consent after weeks of rev iew and advice from counsel. It provided further authorization through the February 2022 Consent. Although Northern Gold lacked actual knowledge of the transaction’s terms , it c ould have
learned them through basic diligence . None of Northern Gold’s chal lenges
invalidate its consent , the SIFT transaction, or the admittance of SIFT Fixed as a member of the Company

.

247 Dkt. 197. The parties also submitted letters on metadata associated with certain exhibits. Dkts. 190

- 95 ; see supra note 66.
248 6 Del. C. § 18

- 110.
249 Lynch v. Gonzalez , 2020 WL 4381604, at *30 (Del. Ch. July 31, 2020), aff’d , 253 A.3d 556 (Del. 2021); see also In re IAC/InterActiv Corp. , 948 A.2d 471, 493 (Del. Ch. 2008) (“[T]he plaintiff in the [18

- 110] Action[ ] bears the burden of proving by a preponderance of the ev idence that it is entitled to relief.”).

### 45

A. Whether Northern Gold Authorized the SIFT Transaction The LLC Agreement requires that the Company’s “Members” authorize the
issuance of units a nd warrants

. 250 

### The “ Members ” are those “holding, in the aggregate, a majority of more of the total issued and outstanding Units

. ” 251 

### Because
neither Northern Gold nor REM OA held more than 50% of the u nits , they were both required to consent to the Company’s execution of the Commitment Letter and the
issuance of the warrant to SIFT Fixed. The LLC Agreement permits the m embers to act by written consent. 252 

### The May 2021 Consent was signed by REM OA and Northern Gold. 253 

### They expressly

250 LLC Agreement § 3.1(A) (stating that the “Members” “shall have the authority in their sole and absolute discretion . . . to issue Units . . . and to cause the Company to issue warrants, options or other instrument s relating to Units”) ; Operative LLC Agreement § 3.1(D); Operative LLC Agreement § 3.2(A); see also Operative LLC Agreement § 4.1(A) ; infra notes 36 5

- 68, 383

- 84 and accompanying text.
251 Operative LLC Agreement at sched. 1.1 ; see id. (“Unit: shall mean the ownership interest of a Member in the Company at any particular time, including the Member’s share of the profits and losses of the Company, the right to receive distributions from the Company and the right to any and all other benefits to which such M ember may be entitled as provided in this Agreement and in the LLC Act, together with the obligations of such Member to comply with all the terms and provisions of this Agreement and of the LLC Act. The Units owned by a Member shall represent such Member’ s entire interest in the Company, and a Member will automatically cease to be a member of the Company when they no longer own any Units (whether by sale, assignment, redemption or otherwise).”)

. I note that the LLC Agreement as revised on March 22, 2022 i s identical to the version revised in February 2021, except for Soura’s updates to Schedule A. See JX 1455. Other than the changes to Schedule A, the relevant material provisions of the LLC Agreement are not in dispute. See Defs.’ Answering Br. 35

- 36.
252 Operative LLC Agreement § 4.1(A); see infra note 38 2 and accompanying text.
253 Italia’s knowledge and actions are imputed to Northern Gold, just as Soura’s are imputed to REM OA. See In re Am. Int’l Grp., Inc. , 965 A.2d 763, 806 (Del. Ch. 2009)

### 46

granted “any Member or Officer, acting alone” the authority to execute the Commitment Letter “without any further act, vote or approval.” 254 

### Thus, Soura ’s execution of the Commitment Letter was authorized by the Company’s m embers.
The m embers also authorized the Company’s entry into the Loan Materials (including the Warrant Agreement). The May 2021 Consent provided that “any
Member or Officer” was “fully authorized to execute and deliver” and to cause the Company “to pe rform its obligations under . . . all documents relating [to] or contemplated [by] ” the Commitment Letter. 255 

### The final Loan Material s relate to and are contemplated by the Commitment Letter. They conformed to the Commitment Letter’s key business terms, including that SIFT Capital or its designee
would receive a warrant for 2.5% of the Company’s outstanding equity. 256

(“[T]he knowledge of an agent is normally imputed to the agent’s principal.”), aff’d sub nom. Teachers’ Ret. Sys. of Louisiana v. PricewaterhouseCoopers LLP , 11 A.3d 228 (Del. 2011); Cuppels v. Mountaire Corp. , 2020 WL 3 414848, at *6 (Del. Super. June 18, 2020) (“[U]nder standard principles of agency law, [the agent’s] actions may be imputed to [the principal].”).
254 May 2021 Consent at 2 ; see also JX 526; JX 583; JX 587; JX 590; JX 596; Italia Tr. 399, 401

- 02 ; Operative L LC Agreement at sched. 1.1 (“Member: means REM OA HOLDINGS, LLC and NORTHERN GOLD HOLDINGS, LLC, as the initial members of the Company, and includes any Person admitted as an additional member of the Company or a substitute member of the Company pursuant t o the provisions of this Agreement . . . or other agreement authorized by the Members . . . .”).
255 May 2021 Consent at 2.
256 Compare JX 210 with JX 1391 at 2 and JX 1394 at 1; see also infra notes 346

- 53 ; infra Section II .C.1 (resolving Northern Gold’s authenticity challenges, including to JX 1391). Moreover, t he “Member or Officer” was permitted to finalize the documents “with such changes . . . deem[ed] in his [or her] sole discretion advantageous to the Company , all

### 47

Northern Gold and REM OA further authorized the Commitment Letter and
Loan Materials when they executed the February 2022 Consent. They affirmed that the May 2021 Consent “was validly entered into” and a “binding agreement enforceable against” each member, ratified action s previously taken pursuant to the May 2021 Consent , and authorized “ any Member, Officer or other agent of the Company . . . to continue to take any and all actions . . . in furtherance of” the May
2021 Consent. 257


### Delaware is a “contractarian” state. 258 

### Ou r law recognizes that “parties have a right to enter into good and bad contracts” and “enforces both.” 259 

### “As a matter of ordinary course, parties who sign contracts and other binding documents, or
authorize someone else to execute those documents on their behalf, are bound by the obligations that those documents contain.” 260 

### “The presumption that the parties are bound by the language of the agreement ” they signed “ applies with even greater force when the parties are sophisticated ” and “ engaged in arms

- length

w ithout any further act, vote or approval of any Member, Officer or other person or entity. ” May 2021 Consent at 2.
257 JX 1274 at 2

. 258 GRT, Inc. v. Marathon GTF Tech., Ltd. , 2011 WL 2682898, at *12 (Del. Ch. July 11, 2011) (explaining that Delaware “is more contractarian than . . . many other states”).
259 Nemec v. Shrader , 991 A.2d 1120, 112 6 (Del. 2010).
260 Off. Comm. of Unsecured Cred s. of Motors Liquid

. Co. v. JPMorgan Chase Bank, N.A. , 103 A.3d 1010, 1015 (Del. 2014)

.

### 48

negotiations.” 261 

### Th is presumption is particularly strong when sophisticated parties are represented by counsel. 262 

### Italia is a sophisticated businessperson

. He founded, ran, and sold two
businesses for substantial profits. 263 

### He wa s advised by counsel in negotiating and executing the May 2021 Consent

— the same counsel who has represented him in “dozens” of corporate transactions. 264 

### He was represented by counsel again in
connection with the February 2022 Consent, even negotiating for the inclusion of a provision. 265 

### He is presumptively held to his agreements.
B. Whether Northern Gold’s Authorization Is Valid Northern Gold avers that it should not be bound by the May 2021 Consent (and the agreements it authorized) for numerous reasons. These include that: (1) Northern Gold was not given a copy of the Commitment Letter to approve; (2) Northern Gold was mistaken or misled about the terms of the SIFT transaction;
and (3) information about th e dilutive terms of the SIFT transaction was withheld

261 W. Willow

- Bay Ct., LLC v. Robino

– Bay Ct. Plaza, LLC , 2007 WL 3317551 , at *9 (Del. Ch. Nov. 2, 2007 ), aff’d , 985 A.2d 391 (Del. 2009 ).
262 See Comrie v. Enterasys Networks, Inc. , 2004 WL 936505, at * 4 (Del. Ch. Apr. 27, 2004), aff’d , 864 A.2d 929 (Del. 2004); Great Lakes Chem. Corp. v . Pharmacia Corp. , 788 A.2d 544, 555 (Del. Ch. 2001).
263 E.g. , Italia Tr. 463.
264 Id. at 383.
265 JX 1274.

### 49

from Northern Gold by REM OA . None of these arguments invalidate Northern
Gold’s authorization

.

1. Ignorance of the Commitment Letter’s Terms The plaintiffs did not prove that Northern Gold was shown the Commitment Letter before Italia signed the May 2021 Consent. 266 

### But Italia was admittedly aware that he was signing a document authorizing a Commitment Letter for SIFT Fixed to provide a $10 million loan to the Company

. 267 

### Even if he were not, a review of the May 2021 Consent would have made it obvious. The May 2021 Consent emphasized and repeatedly mentioned the Commitment Letter. 268 

### A contracting party must “stand by the words of his contract.” 269 

### Avoidance is not justified by “a party’s failure to read a contract” or insistence that s he “had not been informed of [its] stated terms.” 270 

### This is especially so where the contracting

266 See supra note 101 and accompanying text ( finding that Italia was not given a copy of the Commitment Letter during the Ilion meeting). They also did not prove that Italia received a copy before he signed the February 2022 Consent.
267 Italia Tr. 356

- 57, 388; see supra note s 120

- 21 and accompanying text (finding that Italia saw references to and formed an impression of the Commitment Letter when he reviewed the May 2021 Consent) ; May 2021 Consent at 1

- 2

. 268 See supra note 117 and accompanying text (discussing the repeated mentions and emp hases of the Commitment Letter in the May 2021 Consent ).
269 Pellaton v. Bank of N

.Y. , 592 A.2d 473, 47 7 (Del. 1991).
270 Id. ; see also Graham v. State Farm Mut. Auto. Ins. Co. , 565 A.2d 908, 913 (Del. 1989) (“[A] party’s failure to read a contract [cannot] ju stify its avoidance.”); Moore v. O’Connor , 2006 WL 2442027, at *4 (Del. Super. Aug. 23, 2006) (“One of the basic tenets of contract law is that a party is responsible for the terms of a contract they sign, even if unaware of the terms.”); Harrington Racewa y, Inc. v. Vautrin , 2001 WL 1456873, at *3

### 50

party is a sophisticated businessperson represented by counsel. 271 

### Italia and his lawyers

— who spent weeks reviewing the May 14 Materials

— had ample opportunity to ask about the Commitment Letter. Their failure to do so cannot vitiate
Northern Gold’s written assent. 272


### The fact that the warrant was unmentioned in the May 2021 Consent does not require a different outcome

. 273 

### The May 2021 Consent referenced the Commitment
Letter that, in turn, addressed the warrant. “The obligation of a contracting party to read any contract it signs extends to documents incorporated by re ference, which become part of the terms of the parties’ agreement at the time of execution.” 274

(Del. Super. Aug. 31, 2001) (“[T]he Court cannot protect business people who decide to sign contracts . . . without reading them.”).
271 Braga Inv. & Advisory, LLC v. Yenni , 2023 WL 3736879, at *14 (Del. Ch. May 31, 2023) (explaining that “a sophisticated investor, cannot rely on its own failure to request and read [an agreement] as grounds to rescind . . . or to invalidate” the agreement).
272 See McAnulla Elect. Const., Inc. v. Radius Techs., LLC , 2010 WL 3792129, at *1 (Del. Super. Sept. 24, 2010)

. 273 See Def .’s Answering Br. 39

- 40.
274 McAnulla , 2010 WL 3792129, at *4 (rejecting the plaintiff’s argument that it was not bound by a contract incorporated by reference into its agreement with the defendant becaus e the plaintiff was never given the referenced contract); see also Rose Heart, Inc. v. Ramesh C. Batta Assocs., P.A. , 1994 WL 164581 (Del. Super. Apr. 12, 1994). Northern Gold tries to distinguish McAnulla because the agreement at issue there was a single page in length

. Def .’s Answering Br. 46. This argument is unavailing

. N one of the written consents referencing the Commitment Letter exceeded two and a half pages. See May 2021 Consent ; JX 526; JX 583; JX 587; JX 590; JX 596; JX 599 ; s ee also RHA Constr., Inc. v. Scott Eng’g, Inc. , 2013 WL 3884937, at *7 (Del. Super. July 24, 2013) (holding that a separate document not provided at the time of execution was incorporated into an enforceable contract where the contract was ten pages long and the separate document was referenced on the ninth page).

### 51

Northern Gold “bore responsibility for making further inquiries before it agreed to assume obligations defined in a separate document.” 275 

### It chose not to inqui re.

2. Mistake or Fraud Northern Gold suggests that its authorization of the Commitment Letter was ineffective because Soura and Company counsel le d it to believe that the May 2021
Consent pr eserved Northern Gold’s 50% membership interest. 276 

### Insofar as this argument invokes the doctrines of mistake or fraudulent inducement, neither applies. 277

275 McAnulla , 2010 WL 3792129, at *4

. 276 Def .’s Answering Br. 40

- 42. Northern Gold also suggests that its authorization of the Commitment Letter in the May 2021 C onsent is ineffective because there is “no evidence of a meeting of the minds for Northern Gold to give away its valuable 50% interest in the Company for no consideration and for Soura to acquire a controlling interest in the Company (with SIFT [Fixed]) for no consideration.” Id. at 42. Setting aside that Soura did not obtain a controlling interest, Northern Gold’s argument falls apart in view of Italia’s decision to execute the May 14 Material s. By signing the materials, his “mutual assent to the exchange and consideration” was manifested. United Health A ll , LLC v. United Med., LLC , 2013 WL 6383026, at *6 (Del. Ch. Nov. 27, 2013). Further, the $10 million loan provided consideration to the Company, wh ose benefit was indirectly shared with Northern Gold. See Agostino v. Hicks , 845 A.2d 1110 , 1124 (Del. Ch. 2004) (observing that “warrants were issued as partial consideration for providing [a loan] to [the company] (the benefits of which were indirectly shared by plaintiff)”).
277 Northern Gold does not expressly invoke either of these doctrines . Instead, it cites to various cases involving unrelated legal principles. Def .’s Answering Br. 41. The plaintiffs (fairly) interpreted Northern Gold’s disjointed arguments as raising theories of fraudulent inducement o r mistake. See Pls.’ Post

- trial Reply Br. (Dkt. 186 ) 6

- 8. I have therefore considered th e doctrines and whether they bear on my conclusion that Northern Gold authorized the Commitment Letter and SIFT transaction by signing the May 2021 Consent

. Insofar as Northern Gold is invoking the doctrines, both unilateral mistake and fraudulent inducement must be proven by the party seeking to void the contract. See FdG Logistics

### 52

Under Delaware law, recission of a contract due to unilateral mistake is only available when a party can demonstrate that “the mistake occurred regardless of the
exercis e of ordinary care.” 278 

### As discussed, Northern Gold could have discovered
the warrant by exercising ordinary care : requesting and reviewing the Commitment
Letter referenced in the May 2021 Consent

. 279 

### A party is not excused from its obligations because it “was mistaken as to the legal effect of his contract.” 280


### Fraudulent inducement is likewise “not available as a defense when one had the opportunity to read the contract and by doing so could have dis covered the misrepresentation.” 281 

### Italia had known since January 2021 that Soura was looking

LLC v. A&R Logistics Hldgs. , Inc. , 131 A.3d 842, 861 (Del. Ch. Feb. 23, 2016 ), aff’d , 148 A.3d 1171 ( Del. 2016); Braga Inv. , 2023 WL 3736879, at *10.
278 FdG Logistics , 131 A.3d at 861 ( citation omitted).
279 W. Willow

- Bay , 2009 WL 3247992, at *4 n.19 (Del. Ch. Oct. 6, 2009) (“‘[F]ailure to read a contract provides no defense against enforcement of its provisions where the mistake sought to be avoided is unilateral and could have been deterred by the simple, prudent act of reading the contract.’” (quoting 27 Williston on Contracts § 70.11 3 (4th ed. 2009))), aff’d , 985 A.2d 391 (Del. 2009) (TABLE); Burge v. Fidelity Bond & Mortg. Co. , 648 A.2d 414, 420 (Del. 1994) ( explaining that a unilateral mistake must have “occurred regardless of the exercise of ordinary care”).
280 Shah v. Shah , 1988 WL 67403, at *4 (Del. Ch. June 28, 1988).
281 Carrow v. Arnold , 2006 WL 3289582, at *11 (Del. Ch. Oct. 31, 2006) (citing 17A Am. Jur. 2d Contracts § 214 (2006)), aff’d , 933 A.2d 1249 (Del. 2007); see also Snyder v. Jehovah’s Witnesses, Inc. , 2005 WL 2840285, a t *3 (Del. Super. Oct. 28, 2005) (holding that reliance was not justifiable where the party “had both the awareness and the opportunity to discover the accurate information . . . but chose not to”); Hollinger Int’l v. Black , 844 A.2d 1022, 1065

- 66 n.95 (De l. Ch. 2004) (“Succinctly put, a party will not be heard to complain that he has been defrauded when it is his own evident lack of due care which is responsible for his predicament.”).

### 53

to raise funds by offering a “a non

- controlling stake

. ” 282 

### When Italia s aw the
references to the Commitment Letter in the May 2021 Consent , he knew they

concerne d a loan from SIFT Capital

. 283 

### He opted not to investigate. 284 

### Instead, Northern Gold executed multiple written c onsents authorizing the Commitment
Letter. 285


### 3. Breach of Fiduciary Duty
Northern Gold also contends that its consent is negated by “REM OA’s
vio lation of its fiduciary duty of disclosure” regarding the Commitment Letter. 286 

### REM OA did not, however, owe fiduciary duties to Northern Gold. Section 4.1(A) of the LLC Agreement provides that the Company’s management rests with the “ Members ” (i.e., a majo rity of the members). 287 

### Section 4.4(B) states that “[e]xcept as otherwise provided herein . . . each Member shall have

282 See supra note 36 and accompanying text.
283 See Italia Tr. 356

- 57 ; supra notes 120

- 21 and accompanying text.
284 See Carrow , 2006 WL 3289582, at *1 (concluding that a party had not proven fraudulent inducement where the party reviewed the contract, saw the allegedly fraudulent terms, and failed to investigate); Arwood v. AW Site Services, LLC , 2022 WL 705841, at *25 (Del. Ch. Mar. 9, 2022) (rejecting a fraud claim where the plaintiffs saw evidence of the fraud and were recklessly indifferent to the truth).
285 As such, Northern Gold’s authorization was neither “silent” nor giv en by “acquiesce[nce].” Def.’s Answering Br. 42.
286 Id.
287 Operative LLC Agreement § 4.1(A).

### 54

the default fiduciary duties provided by applicable law.” 288 

### But “only managing members or controllers owe fiduciary duties by default i n LLCs.” 289 

### REM OA was
neither. 290 

### The LLC Agreement does not impose any additional, non

- default fiduciary duties on REM OA. 291


### C. Whether the Relevant Agreements Are Valid Next, Northern Gold asserts that the agreements effectuating the SIFT
transaction are invalid. 292 

### It makes two main arguments. First, that the Commitment Letter, Loan Materials, and Notice of Exercise are in authentic or forged

. And

288 Id. § 4.4(B). Section 4.4(B) waives the fiduciary duties of majority M embers: “To the fullest extent permitted by law, the Members, when acting pursuant to th e authority given to them in this Agreement, shall not have any fiduciary duties to any other Member or any other Person bound by this Agreement.” Id.
289 Beach to Bay Real Est. Ctr. LLC v. Beach to Bay Realtors Inc. , 2017 WL 2928033, at *5 (Del. Ch. July 10, 2017 , revised July 11, 2017) (holding that minority members of Delaware LLCs do not owe default fiduciary duties). The only case Northern Gold cites to argue otherwise addresses the availability of Corwin ratification. See Def.’s Answering Br. 4 2.
290 REM OA owned 50% of the Company. The Company was managed by the “Members,” meaning a majority. JX 1424 at s ched. 1.1

. 291 Even if REM OA owed a fiduciary duty to Northern Gold, Northern Gold had the means to evaluate the decision presented to it

. See Dohmen v. Goodman , 234 A.3d 1161, 1171 (Del. 2020) (stating that where the company asks a stockholder to enter into an indivi dual transaction, the stockholder “may refuse to do so until he is satisfied the [company] has given him sufficient information to evaluate the decision presented to him” ) (citing Latesco, L.P. v. Wayport, Inc. , 2009 WL 2246793, at *6 (Del. Ch. July 24, 20 09)).
292 These arguments are made in a section of Northern Gold’s post

- trial brief called “The Plaintiffs Have Not Met Their Burden to Prove the Validity of the ‘Warrant’ or that a Valid Contract Exists Between the Company and SIFT002 Making SIFT002 a Tie

- Breaking Member in the Company.” Def.’s Answering Br. 55. Sub

- arguments made in this section overlap with others I have addressed elsewhere. I have endeavored to avoid duplication where possible.

### 55

second, that the plaintiffs did not prove that the Warrant Agreement is an enforceable

contr act. The Warrant Agreement and related documents are authentic and credible evidence. The Warrant Agreement is also enforceable.

1. Authenticity Northern Gold contends that the plaintiffs failed to prove the authenticity of the Commitment Letter, Warrant Ag reement , and Notice of Exercise. 293 

### It asserts that the signatories for SIFT Capital and SIFT Fixed

— Zhang and Issa

— are imaginary and that their signatures are “forger[ies].” 294 

### These arguments are without factual or legal support.
Under Rule 901 of the D el aware Rules of Evidence , authentication requires “evidence sufficient to support a finding that the item is what the proponent claims
it is.” 295 

### This “lenient burden” is “easily met.” 296 

### “The proponent need not conclusively prove the evidence’s authenticit y, but merely provide a ‘rational basis’

293 Def.’s Answering Br. 56

- 65.
294 Id. at 61, 63, 76 . Northern Gold bears the burden of proving that the documents are forgeries. See Clymer v. DeGirolano , 2021 WL 2181377, at *4 (Del. Ch. May 27, 2021) (“The weight of authority in Delaware indicates that the [party seeking to invalidate the contract] bea r the burden of proving that [the] signature was forged.”); see also Matter of Doris J. Foster Inter Vivos Declaration of Tr. , 2022 WL 17091972, at *3 n.35 (Del. Ch. Nov. 21, 2022) (“To the extent that [the party] contends that the signature was forged, [ that party] bears the burden of proof.”).
295 D.R.E. 901(a).
296 Schaffer v. State , 2018 WL 1747793, at *5 (Del. 2018).

### 56

from which a reasonable finder of fact could draw that conclusion.” 297 

### Means to
authenticate are flexible and include “witness testimony, corroborative circumstances, distinctive characteristics, or other evidence p robative of authenticity.” 298 

### The authenticity inquiry under Rule 901 is distinct from the question of whether a document is a forgery

. Authenticity is the threshold matter

. 299 

### Once the court is satisfied that the requirements of Rule 901 are met, the factfinder must
determine whether the admitted evidence is credible. 300 

### The record provides a sufficient evidentiary basis to authenticate the various agreements with SIFT

ent ities . I reject Northern Gold’s contentions that th e documents are fake or forged

.

297 Id. ; see United States v. Turner , 718 F.3d 226, 232 (3d Cir. 2013) ( explaining that t he federal counterpart of D.R.E. 901 requires “a prima facie showing of some competent evidence to support authentication”). Delaware Rule of Evidence 901 tracks Federal Rule of Evidence 901, and federal decisions are highly persuasive authority on the former

. See Dawson v. Pittco Cap. P’rs , L.P. , 2010 WL 692385, at *1 n.3 (Del. Ch. Feb. 15, 2010).
298 Schaffer , 2018 WL 1747793, at *5 (citation omitted).
299 Parker v. State , 85 A.3d 682, 687

- 88 (Del. 2014) (“Where a proponent seeks to introduce [] evidence, he or she may use any form of ver ification available under Rule 901

. . . . [T] he trial judge as the gatekeeper of evidence may admit the [evidence] when there is evidence ‘sufficient to support a finding’ by a reasonable juror that the proffered evidence is what its proponent claims it t o be. . . . If the Judge answers that question in the affirmative, the jury will then decide whether to accept or reject the evidence.”); see United States v. Black , 767 F.2d 1334, 1342 (9th Cir. 1985) (“The question of authenticity is left to the discreti on of the trial judge [under F.R.E. 901].”).
300 See United States v. Aldaco

- Lopez , 956 F.2d 1168 , 1168 (9th Cir. 1992) (“Once the [proponent] meets this burden [under F.R.E. 901], the probative force of the evidence is an issue for the jury.”); United State s v. Turner , 718 F.3d 226, 232 (3d Cir. 2013) (same).

### 57 a. Zhang and Issa Northern Gold’s attacks on the documents’ authenticity stem from its
insistence that Zhang and Issa do not “even exist.” 301 

### Although neither Zhang nor
Issa testified in this action , there is ample evidence confirming their existence s and roles at SIFT Capital and SIFT Fixed, respectively. 302 

### Soura, D’Arcy, and Anderson each had multiple conversations with Issa; 303 

### Afaki met him in person. 304 

### There is documentary evidence that SIFT Fixed’s Delaware counsel ( Matthews ) worked with Issa to obtain his signature for the loan documents. 305 

### Regarding Zhang, Soura
testified to numerous conversations with him. 306 

### S elf

- authenticating filings with the Securities and Exchange Commission further confirm Zhang’s background and role at SIFT Capital. 307

301 Def’s Answering Br. 61

- 67.
302 See Castro v. State , 266 A.3d 201, 206 n.14 (Del. 2021) (“The law makes no distinction between direct and circumstantial evidence.”). Northern Gold sought to compel the d epositions of Zhang and Issa. Dkt. 115. I denied this motion because both were foreign citizens and neither was then a director, officer, managing agent , or employee of SIFT Fixed. See Dkt. 145.
303 Soura Tr. 65

- 66, 77

- 78, 110

- 11; D’Arcy Tr. 581; Anderson Tr. 621

- 22 (describing a Teams meeting with Issa) ; JX 1587; JX 1477 (meeting invite with Anderson, Soura, D’Arcy, and Issa); JX 1479 ; JX 1485 ; JX 1487.
304 Afaki Tr. 537

. 305 JX s 711

- 17; JX s 719

- 20; JX 727; J X s 739

- 40; JX s 751

- 52; JX 754 ; JX s 873

- 79; Anderson Tr. 616, 618

- 19; Soura Tr. 69

- 70, 73

- 74, 76

- 77, 80 ; JX s 880

- 81 ; JX 1133; JX s 1150

- 53.
306 Soura Tr. 23

- 24, 27, 66.
307 E.g. , JX 1679 at 8.

### 58 b. The Commitment Letter C ircumstantial evidence provides adequate grounds to authenticate the Commitment Letter and reject the argument that it was forged. At trial, Soura testified to conversations with Zhang about terms of the SIFT transaction that were
later documented in the Commitment Letter

. 308 

### He explained that drafts o f the term sheet portion of the Commitment Letter were exchanged through the data room. 309 

### Soura credibly testified that the data room was controlled by SIFT Capital on its eponymous website and bore SIFT Capital’s unique logo. 310 

### The Commitment

308 Soura Tr. 23

- 24, 27, 66.
309 Id. at 255

- 56; Soura Dep. 492

- 93. Because few documents from the data room were produced in this litigation, Northern Gold also seeks an adverse inference against the plaintiffs “that the documents that were purged from the data room would have demonstrated that [SIFT Fixed] is not a valid member of the Company.” Def.’s Answering Br. 103. I decline to grant this adverse inference given the lack of evidence that the plaintiffs “intentionally or recklessly destroy[ed] evidence.” Sears, Roebuck & Co. v. Midcap , 893 A.2d 542, 552 (Del. 2006); cf. Braga Inv. , 2023 WL 3736879, at * 7 (noting that “[t]he only documentary evidence of the contents of the data room is a screenshot of an automated email sent from the data room service provider to [the defendant]”). An adverse inferenc e is also inappropriate because any evidence from the data room would presumably aid the plaintiffs’ case

. See Stern v. Shammas , 2015 WL 4530473, at *14 (E.D.N.Y. July 27, 2015) ( explaining that an adverse inference was uncalled for where both parties wer e equally prejudiced by loss of evidence) (citation omitted) . Further more , Northern Gold also lost data

. Northern Gold imaged Italia’s phone on September 20, 2022

— months after litigation commenced. But Italia apparently dropped his phone from a helicopt er in April 2022, and pre

- April 2022 data was irretrievably lost. Dkt. 145 at 80. It is more likely than not that Soura obtained the Commitment Letter and Notice of Exercise from the data room. An adverse inference suggesting otherwise would be illogica l as it would require the existence of a grand conspiracy to hoodwink Italia (and the court)

. There is no proof of any such scheme.
310 Soura Tr. 41, 28

- 29, 40; see JX 1685 (explaining that the data room was closed by SIFT Capital on or around March 27, 2022).

### 59

Letter was also printed on SIFT Capital letterhead and signed by Zhang, SIFT Capital’s CEO. 311 

### The metadata produced to Northern Gold with draft and final versions of the
Commitment Letter confirm s the authenticity of the documents . The first draft of
the Commitment Letter was created on May 7, 2021, and subsequent drafts were
created over the next few days. 312 

### The final Commitment Letter bearing Zhang’s signature was created on May 9

— the day before the Ilion meeting. 313 

### Soura countersigned the Commitment Letter on J une 4, after Northern Gold and REM OA
executed the May 2021 Consent. 314



### c. The Warrant Agreement The record also supports the Warrant Agreement ’s authenticity . The Warrant Agreement was part of the Loan Materials, which were negotiated between the Company’s and SIFT Fixed’s counsel. 315 

### There is evidence that drafts of the Warrant Agreement and signature pages to the contract were transmitted by email.

311 JX 210; see Soura Tr. 40.
312 See supra note 66. I would conclude that the documents are both authentic and credible regardless of the metadata, based upon t he circumstantial evidence discussed above.
313 Id.
314 Id. Northern Gold objects to the admissibility of the drafts. The drafts satisfy Rule 901 for the same reasons as the final Commitment Letter.
315 JX s 711

- 20; JX s 726

- 28; JX s 739

- 40; JX s 751

- 52; JX 754; J X s 763

- 64; JX 803; JX s 83 6

- 3 7; JX 823; JX 1116; Soura Tr. 69

- 70 , 73

- 74, 76

- 77, 80 ; JX s 873

- 79; Anderson Tr. 616, 618

- 19; JX 880

- 81; JX 1133 ; JX s 1150

- 53

.

### 60

For exa mple, counsel sent their clients’ signature pages to Pinnacle. 316 

### Pinnacle
released the funds after receiving written authorization from both parties. 317


### Northern Gold raises concerns about the credibility of the Warrant Agreement because there are two dif ferent versions of the fully executed document , each with a slightly different signature by Issa. 318 

### One version is redline d , 319 

### and the
other is clean

. 320 

### Based on the record, it is more likely that t he two versions exist
because SIFT Fixed’s counsel was a ct ing expeditiously , rather than due to nefarious

316 JX 1133; JX 1113; JX 900; JX 860; JX 1107; JX 845; JX 1110; JX 893; JX 867; JX 1109; JX 858.
317 Soura Tr. 76

- 77; JX 1150; JX 1663; JX 1727; JX 1107; JX 1147; JX 1140. To the extent that Northern Gold is challenging the authenticity of the Loan Materials more broadly, the analysis and outcome are the same.
318 Compare JX 1337 with JX 1380. Northern Gold also argues that the Warrant Agreement is fake because the addres s listed for SIFT Fixed in the Warrant Agreement is to a “strip mall with no offices” related to SIFT Fixed. See Def.’s Answering Br. 58; Soura Tr. 238

- 39. There is no documentary evidence to support this contention.
319 JX 13 37; see also JX 1336 ; JX s 137 2

- 73

. 320 JX 1380; JX 1383 ; JXs 1388

- 89; JXs 1394

- 96; JX 1401 ; JX 1451; JX 1530 ; JX 1537; JX 1647. This version was circulated several times as a fully compiled and executed version.

### 61

reasons
. 321 

### Issa’s signatures on the two versions are not so different to my eye that
one or both must be forged. 322



### d. The Notice of Exercise Lastly, the Notice of Exercise is admissible under Rule 901

. The Notice of Exercise was part of the Loan Material s as Appendix 1 to the Warrant Agreement.
Soura testified that in March 2022 , Issa said that “he intended to exercise [the warrant] and would be sending [the executed Notice of Exercise] shortly.” 323 

### Soura said that he then retrieved the signed document from the SIFT Capital data room. 324 

### Issa’s signature on the Notice of Exercise appears similar to his signature on other

321 During closing of the SIFT transaction , SIFT Fixed’s Delaware counsel directed Issa and the Company to execute the Warrant Agreement twice. JX 823; see JX 845. He complied and sent signature pages to the escrow agent. JX s 1727

- 33. After closing, Soura sought to locate a complete version of the Warrant Agreement with sign ature pages and realized that the document had redlining. JX 1336; JX 1337. Kavan explained that Matthews had sent the Company a redlined version “in the interest of time” since he had not “heard back” from his client on the clean version. JX 1344. Mat thews had directed the Company “to call [the redlined version] the final version.” JX 1344. Kavan later found the clean version and sent it to D’Arcy, Soura, and RLF before a final version was compiled. JX 1389; JX s 1394

- 96; JX 1401; JX 1451; JX 1530; J X 1537. The clean final version was the one filed as an attachment to the Complaint. JX 1647.
322 JX 1915 (citing JX 1336; JX s 1647

- 48; JX 1468; JX 1722; JX 1539; JX 1673); see D.R.E. 901(b)(3).
323 Soura Tr. 115

. Northern Gold objected to this testimony on hearsay grounds. As with similar, previously addressed hearsay objections, this testimony is admissible to show Issa’s then

- present intent to sign and send the documents. See supra notes 80, 214, 216; see also D.R.E. 803(3). I do not consider the testimony proof that Issa signed the documents at that time.
324 Soura Tr. 114

- 15.

### 62

documents. 325 

### This evidence suggests that the Notice of Exercise as signed by Iss a is authentic and not a forgery. 326



### 2. Enforceability Northern Gold also argues that the plaintiffs failed to show that the Warrant Agreement is a valid and enforceable contract. 327 

### A party seeking to enforce a contract “bears the burden of proving the existe nce of a contract by a preponderance
of the evidence.” 328 

### “The elements necessary to prove the existence of an
enforceable contract are: (1) the intent of the parties to be bound; (2) sufficiently definite terms; and (3) consideration.” 329 

### The plaintiffs h ave proven these elements. First, the Warrant Agreement reflects the Company’s and SIFT Fixed ’s intent
to be bound. 330 

### “Whether a party manifested an intent to be bound is a question of

325 JX 1915.
326 Northern Gold avers that the metadata for the Notice of Exercise shows that it was created on April 20, 2022. Def.’s Answering Br. 28. This is incongruous with the date on the face of the document. JX 1400; see also Sou ra Tr. 94 (testifying that the Notice of Exercise was executed on March 21, 2022); JX 1454. But given the timing, it is possible that the document as produced was “created” on a file system. See Altman v. New Rochelle Pub

. Sch. Dist. , 2017 WL 66326, at * 13 (S.D.N.Y. Jan. 6, 2017) (“[T]he ‘Created’ date found in the metadata ‘does not necessarily reflect the authoring date of a document, but . . . more accurately reflects the date the file was ‘created’ within the file system of a particular device.’”).
327 Def.’s Answering Br. 56

- 60.
328 Harrison v. Dixon , 2013 WL 4759681, at *2 (Del. Ch. Sept. 5, 2013).
329 Pulieri v. Boardwalk Props., LLC , 2015 WL 691449, at *6 (Del. Ch. Feb. 18, 2015) (citation omitted).
330 JX 210.

### 63

fact.” 331 

### Delaware courts look to “overt manifestation of assent

— not s ubjective intent” when assessing whether a contract was formed. 332


### Anderson overtly manifested the Company’s intent when she signed the Warrant Agreement on its behalf. 333 

### “That act alone is the strongest evidence of an
intent to be bound.” 334 

### To be sure , “a wet ink, signed version of a contract

. . . is not evidence so powerful that it negates all other evidence to the contrary.” 335 

### The weight of the evidence, however, lends further support to the Warrant Agreement’s enforceability. The Warrant Agreement was negotiated by Soura as authorized by the May
2021 Consent signed by the Company’s m embers

. 336 

### He engaged in arm’s

- length negotiation s over several months. 337 

### Company counsel advised on th ose

331 Eagle Force Hldgs., LLC v. Campbell , 235 A.3d 727, 735 (Del. 2020).
332 Black Horse Cap., LP v. Xstelos Hldgs., Inc. , 2014 WL 5025926, at *12 (Del. Ch. Sept. 30, 2014) (quoting Indus. Am., Inc. v. Fulton Indus., Inc. , 285 A.2d 412, 415 (Del. 1971)); see also UBEO Hldgs., LLC v. Drakulic , 2021 WL 17 16966, at *9 (Del. Ch. Apr. 30, 2021).
333 JX 1337.
334 Restanca, LLC v. House of Lithium, Ltd. , 2023 WL 4306074, at *18 (Del. Ch. June 30, 2023); see also Eagle Force , 235 A.3d at 736 (“[T]he act of placing signatures on the signature lines at the end of a co ntract is so universally recognized as the means of accepting and binding one ’ s self to the contract” that in all but the most unusual case “no other act or statement is ordinarily required.”) (citation omitted).
335 Kotler v. Shipman Assoc., LLC , 2019 WL 40 25634, at *17 (Del. Ch. Aug. 21, 2019).
336 May 2021 Consent at 2

- 4

. 337 See supra notes 162

- 68 and accompanying text. The limited involvement of D’Arcy or Anderson in negotiating the SIFT transaction is not improper since the May 2021 Consent gave Soura equa l authority to act. May 2021 Consent at 2 ; see also D’Arcy Dep. 325; Anderson Dep. 145; Anderson Tr. 632. It was also consistent with Soura’s general role in

### 64

negotiations. 338 

### Anderson’s execution of the Warrant Agreement was also authorized by the Company’s m embers pursuant to the May 2021 Consent

. 339


### SIFT Fixed manifested its intent to be bound when Issa signed the Warrant Agreement. Northern Gold argues otherwise because t here are two different executed versions of the Warrant Agreement. 340 

### That is because SIFT’s Delaware counsel “never heard back from SIFT concerning the clean version” of the Warrant Agreement and “in the interest of time” sent the Company a signed redline d version
of the document that he deemed “ the final version.” 341 

### Second, the Warrant Agreement contains sufficiently definite terms

. 342 

### It
details the number of shares to be issued, the issuance price, and the manner of

securing financing. For example, he had similarly led efforts to secure the PPP loan early in t he Company’s existence. See supra notes 20, 38

- 39.
338 See, e.g. , JX 818; see also supra note 167.
339 May 2021 Consent at 2

. 340 Def.’s Answering Br. 58. Northern Gold argues that the plaintiffs did not prove that SIFT Fixed signed the Warrant Agreement because (1) the address listed for SIFT Fixed on the signature line is to a strip mall in New Jersey, and (2) Issa’s signatures o n the two versions of the Warrant Agreement do not match. Id. I am aware of no authority invaliding a contract based on a mailing address. As to Issa’s signature, I have rejected the argument that it is a forgery. See supra Section II.C.1.
341 JX 1344; s ee supra note 318.
342 See Sarissa Cap

. Domestic Fund LP v. Innoviva, Inc. , 2017 WL 6209597, at *21 (Del. Ch. Dec. 8, 2017) (explaining that the “relevant inquiry” is whether a “reasonable negotiator” would conclude that “the agreement reached constituted ag reement on all of the terms that the parties themselves regarded as essential” (quoting Leeds v. First Allied Conn. Corp. , 521 A.2d 1095, 1097 (Del. Ch. 1986)) )

.

### 65

exercise. 343 

### It lacks specific dates, list ing “February ___, 2022” as the “Issue Date” and “February ___, 2027” as the “Expiration Date

. ” 344 

### But these omissions are not fatal. “[T]ime, unlike price and quantity, is not invariably a material element of a
contract.” 345


### Northern Gold contends that the Warrant Agreement is unenforceable because
its terms differ from the Commitment Letter. 346 

### The Commitment Letter provide s for the application of Hong Kong law. 347 

### The Warrant Agreement include s a Delaware choice of law provision. 348 

### But the Commitment Letter says nothing about which law governs future Loan Materials

. Its choice of law provision is limited to

“ this Commitment Letter.” 349

343 JX 1394.
344 Id.
345 Hazen v. Miller , 1991 WL 244240, at *2 (Del. Ch. Nov. 18, 1991) (“In a proper case the Court may infer a reasonable time for performance.”)

. 346 See Defs.’ Answering Br. 60; Commitment Letter at 1 (requiring that definitive documentation be in the same “form and substance” as outlined in the Commitment Letter);
see Def.’s Answering Br. 60.
347 Commitment Letter at 4 . Northern Gold also argues that the Commitment Letter ’s dispute resolution provision is inconsistent with the LLC Agreement and the Warrant Agreement , which ha ve Delaware forum provision s
. Def.’s Answerin g Br. 60. The Warrant Agreement is, however, a superseding contract. See supra notes 350

- 53 and accompanying text. And the Commitment Letter’s dispute resolution provision does not purport to bind members with respect to disputes under the LLC Agreement

. See infra note 349 (citing Commitment Letter at 4).
348 JX 1394 § 4.8

. 349 Commitment Letter at 4 (“ This commitment letter shall be governed by Hong Kong law, without regard to Hong Kong choice of law principles. Any dispute, controversy, difference or claim arising out of or relating to this commitment letter . . . shall be referred

### 66

In any event , “where a new, later contract between the parties covers the same subject matter as an earlier contract, the new contract supersedes and controls that issue, if the two agreements conflict .” 350 

### The parties’ intent that a later contract supersede an earlier one may be evidenced by language to that effect, such as an integration clause in the later contract

. 351 

### The Commitment Letter was expressly subject to future “[d]efinitive documentation” and “ancillary documents . . . to be executed prior to disbursement of proceeds.” 352 

### T he parties enter ed into the superseding Warrant Agreement , which contains a n integration clause

. 353

to and finally resolved by arbitration ad ministered by the Hong Kong International Arbitration Centre

. . . .”) (emphasis added).
350 Cabela’s LLC v. Wellman , 2018 WL 5309954, at *4 (Del. Ch. Oct. 26, 2018).
351 S ee Bioveris Corp. v. Meso Scale Diagnostics, LLC , 2017 WL 5035530, at *7 (Del. Ch. Nov. 2, 2017) ; see also Country Life Homes, Inc. v. Shaffer , 2007 WL 333075, at *5 (Del. Ch. Jan. 31, 2007) (“The new contract, as a general matter, will control over the old contract with respect to the same subject matter to the extent that the new contract i s inconsistent with the old contract or if the parties expressly agreed that the new contract would supersede the old one.”) (citation omitted)

. 352 Commitment Letter at 8

. In addition, the May 2021 Consent authorized the Company’s entry into agreements con templated by the Commitment Letter “with such changes as the Member or Officer, as applicable, deem[ed] in his sole discretion advantageous to the Company.” May 2021 Consent at 2

. 353 JX 1394 § 4.9 . Northern Gold argues that other terms of the Commitment Letter were unmet: that there was no “recapitalization of the Company” and that the “Company, the Warrant holders and other members of the Company” did not “enter into an agreement containing Co

- Sale, Drag

- along and Pre

- emptive rights customary and consistent with transactions of this type.” Def.’s Answering Br. 60. But the parties entered into the superseding Warrant Agreement.

### 67

Third , there is no dispute that the Warrant Agreement provides for
consideration. The Company was gi ven a $10 million loan. In exchange, SIFT
Fixed received interest and a warrant.
D. Whether the Issuance of Units to SIFT Fixed is E nforceable Northern Gold also contends that the SIFT transaction is invalid, void , or otherwise unenforceable because: ( 1 ) the primary purpose of the transaction was to dilute Northern Gold; ( 2 ) the plaintiffs did not prove the transaction’s compliance
with the federal law as required by the LLC Agreement ; and ( 3 ) the transaction violates public policy. To the e xtent that I have jurisdiction to decide them, none of these arguments invalidate the Warrant Agreement or SIFT Fixed’s acquisition of
units.
1. Primary Purpose
Northern Gold contends that the SIFT transaction is invalid because its “primary purpose” was to d ilute Northern Gold rather than to provide financing. 354


### Northern Gold cites no legal basis for applying a “primary purpose” test to invalidate

a contrac t , much less a contract approved by the challenging party

. Instead , it relies on precedent in the inap posite context s of director entrenchment and stockholder
disenfranchisement. 355

354 Def.’s Answering Br. 53

- 54.
355 Id. (citing cases).

### 68

Even if such a test applied ( it does not ) , the record demonstrates that the Company’s primary purpose was to secure funding

. 356 

### Italia, D’Arcy, and Soura expected from the out set that the Company would need substantial capital beyond the purchase price. 357 

### When Soura initiated discussions with SIFT Capital, t he $10
million PPP loan was dwindling , traditional loans were unavailable, and the Company was rapidly burning cash. 358 

### The SIFT transaction provide d funds needed to restore the Company’s operations

— not to mention build the new manufacturing facility in Georgia.

2. Compliance w ith Section 5.3 of the LLC Agreement
Northern Gold also avers that the plaintiffs failed to prove t hat the issuance of units to SIFT Fixed complies with Section 5.3 of the LLC Agreement

. 359 

### Section 5.3 provides that “no Units shall be Transferred unless such Transfer is in compliance with all foreign, federal and state laws.” 360 

### Northern Gold questions
whether the transaction violated federal regulations. Th e SIFT transaction did not ,

356 I do not doubt that Soura viewed the dilution of Northern Gold as an added benefit , given his failing relationship with Italia . The primary purpose of the transaction , though, was to raise capital for the Company.
357 See supra notes 34

- 35 and accompanying text.
358 S ee s upra note s 40

- 44 and accompanying text; D’Arcy Tr. 570 (testifying that the Company remains “financially strapped”).
359 See Operative LLC Agreement § 5.3 ; Def.’s Answering Br. 72

- 84.
360 Operative LLC Agreement § 5.3 (“Any attempted Transfer of Units not in accordanc e with the terms and conditions of this Section 5.3, shall be void ab initio and shall not bind or be recognized by the Company.”)

.

### 69

however, involve a “Transfer” of existing “Units” as described in Section 5.3. Rather, it involved the issuance of a warrant, which was later ex ercised

. Article V of the LLC Agreement governs the “ Transferability of Units

. ” 361 

### Section 5.1(A) provides that “no Member has the right or power to [ ] endorse, sell, give, pledge, encumber, assign, or transfer (a ‘Transfer’) all or part of his or her
U nits.” 362 

### Section 5.1(C) allows a member to unilaterally transfer her u nits subject to a right of first refusal process. 363 

### The plain terms of these provisions concern the transfer of a member’s existing u nits

. 364 

### Article III, by contrast, addresses the Company’s issuance of new membership
interests

. 365 

### Section 3.1 ( A ) authorizes m embers, “in their sole and absolute
discretio n . . . to issue Units” and “to cause the Company to issue warrants.” 366

361 Operative LLC Agreement Art. V.
362 Id. § 5.1(A). A “Transferee” is defined as “any individual or entity to whom all or any part of a n [sic] Unit is Transferred for any reason or by any means.” Id. at s ched. 1.1 ; see also id. (defining “ Member ” and “Unit” ).
363 Id. § 5.1(C).
364 “Delaware law adheres to the objective theory of contracts,” meaning that “a contract’s construction should be that which would be understood by an objective, reasonable third party.” Salamone v. Gorman , 106 A.3d 354, 367

- 68 (Del. 2014) (quoting Osborn ex rel. Osborn v. Kemp , 991 A.2d 1153, 1159 (Del. 2010)); see LLC Agreement § 11.5(A) (providing that Delaware law governs). “When interpreting a contract, [the] Court ‘will give priority to the parties’ intentions as reflected in the four corners of the ag reement.’” Id. at 368 (quoting GMG Cap. Invs., LLC v. Athenian Venture Partners I, L.P. , 36 A.3d 776, 779 (Del. 2012 ) ).
365 Operative LLC Agreement Art. III (“Members; Capital Contribution; and Units”)

. 366 Id. § 3.1(A)

.

### 70

Section 3 .1(D) authorizes “the Company to issue to any Person the number and class of Units (and any related warrants, options, or other instruments relating to U nits) as may be dete rmined by the Members . . . .” 367 

### Section 3.2(A) outlines the mechanism for admitting “an additional Member ” that receives u nits from the Company through

a warrant. 368 

### Article III and Article V address separate matters. To apply Article V to the
issuance of new membership interests would render the relevant provisions of
Article III surplusage. 369 

### Because SIFT Fixed’s receipt of the warrant falls under Article III, the requirements of Section 5.3 do not apply

. Northern Gold similarly argues that Section 5.3 governs SIFT Capital’s transfer of membership interests to SIFT Fixed through the Assignment Agreement. 370 

### But a t the time of the Assignment Agreement, SIFT Capital w as not

367 Id. § 3.1(D).
368 Id. § 3.2(A) (“The Members may cause the Company to admit an additional Member . . . as, and upon such terms and conditions as, the Members deem advisable (including, without limitation, pursuant to the provisions of any . . . financing arrangement or other a greement authorized by the Members whether by the issue of Units, options or warrants or similar instruments.”).
369 See Osborn , 991 A.2d at 1159 (stating that the court must construe the contract “as a whole and . . . will give each provision and term effec t, so as not to render any part of the contract mere surplusage” (quoting Kuhn Constr., Inc. v. Diamond State Port Corp. , 990 A.2d 393 , 396

- 97 (Del. Mar. 8, 2010) )); see also In re Kinder Morgan, Inc. Corp. Reorg. Litig. , 2014 WL 5667344, at *3 (Del. Ch. Nov. 5, 2014).
370 Def.’s Answering Br. 70

- 71. This argument concerns an aspect of the SIFT transaction that is distinct from the issuance of the warrant (or subsequent receipt o f units after

### 71

a “Member” 371 

### and the warrant was not “Units.” 372 

### The Commitment Letter was an agreement to purchase a warrant conditioned on final documentation and the provision of a $10 million loan. 373 

### At most, SIFT Capital assigned to SIFT Fixed a
conditional r ight to purchase a warrant; it did not assign an actual warrant or u nits. 374



### 3. Public Policy Relatedly, Northern Gold argues that the SIFT transaction is void as a matter of public policy because it violated regulations imposed by the International Traffic
in Arms Regulations ( ITAR ) and the Committee on Foreign Investment in the United

exercising the warrant ) . I have addressed it here given the overlap with Northern Gold’s other argument about Section 5.3.
371 Operative LLC Agreement at sched. 1.1 ; see supra note 254 (defining “ Member ”)

. 372 Operative LLC Agreement at sched. 1.1 ; see supra note 251 (defining “ Unit ”)

. 373 Commitment Letter at 3

- 4.
374 JX 1594 § 2.1. Northern Gold argues that Section 5.3 applies because the Commitment Letter gave SIFT Capital “equitable or beneficial equity ownership based on contractual rights to shares.” Def.’s Answering Br. 71

- 72. The case law relied on by Norther n Gold does not support this position. Each of the cited cases considered equitable or beneficial ownership in the stockholder standing context. See In re New Valley Corp. Deriv. Litig. , 2004 WL 1700530, at *6 (Del. Ch. June 28, 2004) (observing that a warrant confers beneficial ownership of the underlying stock only where the plaintiff already paid for the stock, no intermediate step to execute the warrant is necessary, and there is no convertibility feature to the warrant); Pennington v. Neukomm , 1973 WL 463, at *3 (Del. Ch. Oct. 3, 1973) (addressing the plaintiff’s standing to press derivative litigation where he had entered into a separation agreement requiring the defendant to transf er stock to the plaintiff), aff’d , 344 A.2d 386 (Del. 1975); Jones v. Taylor , 348 A.2d 188, 192 (Del. Ch. 1975) (holding that the plaintiff had standing to bring a derivative suit where she entered into a contract in which her mother transferred a possesso ry interest in stock in exchange for a promise to execute a will bequeathing the plaintiff one

- half of the stock upon the mother’s death). Here, I am resolving a m atter of contract interpretation , not standing

.

### 72

States ( CFIUS )

. 375 

### T he Company insist s that the transaction complied with both set s
of regulation s
. 376 

### Bargains are “ unenforceable on grounds of public policy if legislation provides that [they are] unenforceable

. ” 377 

### Yet , I do not know

— and cannot
determine

— whether federal law was violated. There is no indication in the record
that the relevant federal authorities have flagged the S IFT transaction , pursued an investigation, or begun enforcement proceedings . I lack the subject matter jurisdiction to resolve a challenge to the transaction ’s compliance with ITAR or
CFIUS. 378 

### Both ITAR and CFIUS contemplate a comprehensive review proces s and provide for administrative remed ies

. 379 

### The agencies tasked with administering
the se regulatory regimes are best suited to address potential violations.

375 Def.’s Answering Br. 7 3

- 8 5

. The statutor y authority for ITAR is 25 U.S.C. § 2751 et seq ., and the statutory authority for CFIUS is 50 U.S.C. § 4565.
376 See supra note 246.
377 Restatement (Second) of Contracts § 178 (1981) ; see PHL Variable Ins. Co. v. Price Dawe 2006 Ins. Trust , 28 A.3d 1059, 1067 (Del. 2011) (“Under Delaware common law, contracts that offend public policy or harm the public are deemed void as opposed to voidable.”) (emphasis in original).

378 See Walker v. City of Wilmington , 2014 WL 4407977, at *7

- 9 (Del. Ch. Sept. 5, 201 4) (dismissing equitable claim for lack of subject matter jurisdiction where plaintiff failed to first exhaust adequate remedy at law through the designated administrative body).
379 22 C.F.R. §§ 127

- 28 (ITAR); 31 C.F.R. § 800 (CFIUS); 50 U.S.C. § 4565(e)(2) (providing that “[a] civil action challenging an action or finding [by the administrative agency administering CFIUS] may be brought only in the United States Court of Appeals for the District of Columbia Circuit”) ; see also Aizupitis v. Atkins , 2009 WL 3 589530, at *6 (Del. Ch. Oct. 28, 2009); 10 Del. C. § 342.

### 73

E. Whether SIFT’s Admittance as a Member Complied with the LLC Agreement Finally, Northern Gold argues that SIFT Fixed’s membership is “null” and
“void” under the LLC Agreement. 380 

### Specifically, it asserts that it did not authorize the Company to give SIFT Fixed a membership interest , as the LLC Agreement requires

. 381 

### Section 4.1(A) of the LLC Agreement permits the Company’s m embers to act “without a meeting,” “vote to authorize any action in writing,” and to “by the[ir] written consent” give “a single Member, acting alone” the power “to act on behalf of or to bind the Company.” 382 

### Sections 3.1 and 3.2 permit the m embers to issue “Units [] and any related warrants” and “cause the Company to admit an additional
Member

. ” 383 

### Consistent with these provisions , the May 2021 Consent authorized

“ any M ember or O fficer , acting alone” to execute “ the Commitment Letter and all documents relating thereto or contemplated thereby . . . without any further act, vote

380 D ef.’s Answering Br. 39 (“ [ P ] ursuant to the Operative LLC Agreement or the ‘Amended LLC Agreement,’ the transaction by which SIFT002 claims to own Units and membership in the Company is unauthorized, null, void or voidable , and of no further force and effect.”).
381 Id. at 38

- 39 (citing Sectio ns 3.1(A), 3.1(D), 3.2, and 4.1(A) of LLC Agreement dated May 14, 2021)

. 382 Operative LLC Agreement § 4.1(A) ; but see Def.’s Answering Br. 39 ( suggesting that the transaction is void because no meeting to admit SIFT Fixed took place and citing Box v. Box , 1996 WL 73575, at *14 (Del. Ch. Feb. 15, 1996))

. 383 Operative LLC Agreement §§ 3.1

- 3.2 . Section 4.2(ix) further permits the Company’s
m embers to take “all actions deemed necessary” to secure financing. Id. § 4.2(ix).

### 74

or approval of any Member.” 384 

### By authorizing the Commitment Letter, Italia
authorized the Loan Materials

— includi ng a warrant

— and the admission of SIFT
Fixed as a m ember upon the exercise of its warrant

. T he LLC Agreement’s definition of “Member” contemplates that “a Person
will automatically be admitted as a Member when they are issued Unit(s).” 385 

### Section 3.2(A) p rovides that, once the m embers have “ cause [ d ] the Company to
admit an additional M ember, ” “[n]o such admission . . . shall require the consent or approval of any Member. ” 386 

### SIFT Fixed was therefore a m ember as soon as it was
issued u nits irrespective of when and whether Soura updated Schedule A to the LLC Agreement.
F. Whether t he Plaintiff s Are Entitled to a Remedy The plaintiffs have proven their claim under Section 18

- 110 by a preponderance of the evid ence. They have shown that the SIFT transaction was
authorized by the May 2021 Consent (and February 2022 Consent) and that SIFT

384 May 2021 Consent at 2 ; see also JX 324; JX 264; JX 267; JX 273; JX 276; JX 279 ( p ermitting “any Governor and Officer” to do the same).
385 Operative LLC Agreement at s ched. 1.1.
386 Operative LLC Agreement § 3.2(A). To the extent there is any deviation between the LLC Agreement and the terms of the SIFT transaction, the February 2022 Consent affirmed that the May 2021 Consent was “validly entered into and to the extent necessary constitutes an amendment to the LLC A greement.” JX 1274. The LLC Agreement similarly provides that “any written consent executed by the Members will be deemed an amendment to this Agreement to the extent necessary to effectuate the subject matter of such written consent.” Operative LLC Agr eement § 11.4.

### 75

Fixed was validly admitted as a m ember of the Company in accordance with the LLC Agreement . None of Northern Gold’s arguments to the contrary require a different conclusion. Nor has Northern Gold proven its counterclaim. Accordingly, the plaintiffs are entitled to a declaration that before the Capital Raise, SIFT Fixed was a 2.5% m ember of t he Company, REM OA was a 48.75%

m ember, and Northern Gold was a 48.75% m ember. 387 

### The plaintiffs also seek an award of their fees and costs under Section 11.7 of the LLC Agreement, which provides: In any proceeding by which a Member or the Company eithe r seeks to enforce its rights under this Agreement (whether in contract, tort, or otherwise) or seeks a declaration of any rights or obligations under this Agreement, if the Company and/or the Members are the prevailing party, to the fullest extent permitt ed by law, they shall be awarded reasonable costs and expenses (which shall be payable by the non
- prevailing party), including reasonable outside attorneys’ fees and expert witness fees incurred to resolve the dispute and enforce the final judgment. 388


### The plaintiffs each brought this suit as a “Member,” 389 

### seeking a declaration under the LLC Agreement about the membership of the Company. Because SIFT Fixed
was a 2.5% m ember of the Company and REM OA was a 48.75% m ember

387 Further proceedings would be necessary to make that assessment, to the extent that the parties are inclined to pursue claims concer n ing the Capital Raise. See supra note 244 (explaining that the Capital Raise was not the subject of trial)

. 388 Operative LLC Agreement § 11.7.
389 Although the plaintiffs brought this action together as “Members,” each plaintiff also brought this suit as a “Member.”

### 76

immediately before the Capital Raise , the plaintiffs were and continue to be
“Members.” 390 

### The plaintiffs have prevailed in this action . Nonetheless, further proceedings are necessary to resolve the plaintiffs ’ entitlement to costs and

expenses
. 391


### III. CONCLUSION Judgment is entered for the plaintiffs under 6 Del. C. § 18

- 110. The plaintiffs
are entitled to a declaration that immediately before the Capital Raise, SIFT Fixed
was a 2.5% m ember of the Company, REM OA was a 48.75% m ember of the Company , and Northern Gold was a 48.75% m ember of the Company

. The parties shall confer on a proposed order to implement this decision and file it within 14 days.

390 See N. Gold , C.A. No. 2022

- 0308

- LWW, at 26

- 31 (Del. Ch. Oct. 10, 2022) (TRANSCRIPT) (interpreting Section 11.7 of the LLC Agreement ).
391 A lett er requesting supplemental submissions on this issue will follow.