IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

REM OA HOLDINGS, LLC and

SIFT FIXED US002, LLC,

Plaintiffs 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, YOUNG 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, LLC

WILL, Vice Chancellor
1

In 2020, 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 decisionmaking authority. Italia ran the company’s day-to-day matters while Soura handled 

legal and financial undertakings.

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 Capital 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. Soura 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. 

Multiple 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 any 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 about 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 the 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 relevant 

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 frustration 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 represented 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. Delaware 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

1,903 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, LLC, and Richmond Italia, the principal of defendant 

Northern Gold Holdings, LLC—was irreconcilable. It is obvious that one or both

repeatedly lied under oath.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 of 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 truth is complicated by Soura and Italia’s mudslinging. Their personal 

attacks on the other range from the troubling to the bizarre. See, e.g., infra 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 ¶ 22. 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), he seemed motivated by a desire to protect the Company. 

See, e.g., D’Arcy Tr. 586-90.
5

successful businessperson 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 interested 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

 They also agreed 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, 

controls 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 managed 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; JXs 139-40.

28 JX 32 at 3 (Italia asking Soura: “Do u want me to deal with the day to day and let u deal 

with the big picture stuff, no need 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 become

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 

RemArms LLC, a subsidiary of the Company. Id. at 223; Anderson Tr. 611. Later, 

pursuant to a May 14, 2021 written consent, D’Arcy and Anderson were designated as the 

Company’s CEO and CFO. See 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 infra note 142 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”); Soura 

Tr. 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, consistent 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 thumbs 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 received $10 million from the PPP loan on March 29, 2021 but 

needed additional capital to execute on its plans and meet its financing goals.

40

 The 

At trial, Italia testified that he believed that the Company 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 contemporaneous documentary evidence. For example, 

cash 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 JXs 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 burning 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 of 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; JXs 1719-21; 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 the 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 testimony is consistent. Anderson Dep. 63.

44 JX 635; see Italia Tr. 485-88; see 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; JXs 41-42; JXs 47-48. These discussions continued through the 

end of 2020 and into 2021. See JX 54; JX 56; JXs 86-88; JX 91; JX 126; JX 623; JX 1703 
11

2021, the Company committed to relocating to LaGrange, Georgia.

47

 It expected to 

incur significant expenses from building the facility.

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 is 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. On November 8, 2021, the Governor of Georgia announced the 

relocation. JX 707. 

48 JX 1817; JX 1703 ¶¶ 34-35; cf. infra note 240 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-

95; Soura Tr. 21, 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, assetbacked loan at this time.

50 D’Arcy Tr. 575; Italia Dep. 94-95; Soura Tr. 21, 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 Rules of Evidence 602 and 802. 

Id. at 22. The testimony is inadmissible because the 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 Chief 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 typically 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, 

the declarant’s statements do not go to her “then-existing state of mind (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 remembered or believed” from the state of mind exception). 

53 JXs 1677-78; 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 opened a data room to 

facilitate the exchange of documents.

59

 According to Soura, the 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 units at a nominal exercise price.

63

 These conditional terms were 

subsequently 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 no 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. 28-29; JX 639 (SIFT Capital due 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 309 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; JXs 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 term sheet the same day.

66

 

Two days later, on May 9, SIFT Capital sent an updated term sheet 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. See infra Section II.C.1 (resolving 

authenticity objections). At post-trial argument, I asked whether there was any metadata 

showing the creation date of the documents (JX 206; JXs 208-10; JXs 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 their faces. Dkt. 190. For example, JX 

206 purports to have been sent on May 7, 2021; the 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 asked 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 metadata 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 introduced 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 the 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 term sheet (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 the third page is a signature page for 

the Company and several subsidiaries;

71 and the last five pages are the term sheet 

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 units at an exercise price of $0.01 per unit.

75

 The Commitment 

Letter also contemplated definitive documentation 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 the 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, 197; 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 Warrants 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’Arcy, 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 Lauderdale, 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 staff 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. 152; 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 guests, 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 14, 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. The timing generally supports Soura’s 

account since the 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 Hldgs., LLC. v. REM EQ Hldgs., 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 SPIDER-MAN:

DOUBLE IDENTITY (1967), https://screenrant.com/spider-man-pointing-meme-cartoonorigin/ (last accessed September 16, 2023).

99 See infra notes 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. See supra 

note 80. An intention does not guarantee corresponding action.

100 See Soura Tr. 44-46 (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 recalled 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 Razor 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 find 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 

overall story. That is because four days later, SIFT Capital’s commitment to invest 

$10 million in the Company was explicitly disclosed to Italia. 

H. The May 14 Materials

On May 14, 2021, Soura sent Italia an email attaching 56 documents prepared 

by Company counsel (collectively, the “May 14 Materials”), including:102

• draft agreements 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. The Company’s outside counsel at Shulman Bastian Friedman & 

Bui LLP prepared the May 14 Materials. Soura Tr. 51.

103 JXs 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

• fourteen draft written 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% members 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 The Subsidiary Consents 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 Consents 

were set up for execution by the governors (Soura and Italia), and seven were to be 

executed by the Company’s members (Soura on behalf 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 JXs 283-84.

108 JX 263 at sched. A. 

109 Id. § 4.1(A).

110 Id.

111 Id. § 11.4.

112 Id. at sched. 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 appointment 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 Consent 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 . . . Commitment 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 Consent 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 authorization of the Commitment Letter.118 The 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 reviewed the Commitment Letter, he was unaware that the 

SIFT transaction contemplated a warrant.122 He never asked.

117 Id.

118 JX 259; JX 264; JX 267; JX 273; JX 276; JX 279. Each 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 259 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 review.

123

 His accountant promptly provided comments on the 

documents.

124

 But due to a potential conflict of interest, Italia’s attorney was unable 

to assist him.

125

 On 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 

Vineberg and Italia had multiple email and phone discussions about the documents 

with Soura and Company counsel at Shulman Bastian Friedman & Bui LLP.

128

 

Though tensions ran high at times, the parties and their counsel engaged in 

productive discussions.

129

123 JXs 286-88; JX 291; JX 293; Italia Tr. 338, 381; Italia Dep. 229-30. 

124 JX 291.

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 voting rights and all decision 

making be by majority (which, in this case, means unanimous).” Id.; see also JXs 350-51; 

JX 375; Soura Tr. 183; Italia Tr. 338, 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; JXs 401-02; JX 460.

128 See, e.g., JX 358; JX 370; JX 375; JXs 389-90; JX 392; JX 394; JX 396; JXs 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. The 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 infancy.

130

 But 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 negotiations occurred. See infra notes 132-37 and accompanying 

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; JXs

107-09.

131 JX 137 § 5.1; see JX 93; JXs 107-09; 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. 353-55.
26

gave 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, neither 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, Italia 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 The 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 Italia “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; JXs 587-88; JXs 590-91; JXs 593-94; JXs

596-97; JXs 599-600; JXs 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 officers 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 in the Company to Ault 

Global Holdings, Inc.148 Soura “slow-walk[ed]” negotiating the definitive 

142 JXs 605-14.

143 The amended LLC Agreement referred to membership interests as “Units,” stated that 

REM OA and Northern Gold each owned 50 units, 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; JXs 617-19; see 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 63; JXs 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

 

The option would allow Ault to obtain a 44% equity interest and a 50% voting 

interest, with Northern Gold retaining a 6% equity 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; JXs 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, 2021 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 diligence.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 stalled.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 

played 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 JXs 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. JXs 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 “Warrant Agreement.”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 Matthews 

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 JXs 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 JXs 711-17.

167 See JXs 711-17; JX 720; JXs 726-28; JXs 739-40; JXs 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 liability company formed on January 21, 2022.171 SIFT Master 

Limited, a Samoan 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 Gold has 

raised an authenticity objection to this information, the sources cited in this 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 this decision. See 

Section II.C.1, infra.

174 JX 1627; JX 1609; JX 1611. Issa’s resignation occurred weeks after Northern Gold 

noticed his deposition. Dkt. 53; JX 1627. Afterward, Northern Gold re-noticed a 

deposition for Issa and filed a motion to compel it. Dkts. 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

On January 28, 2022, Matthews circulated Word 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 performer, 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 The 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 Loan Materials.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 JXs 1728-32. 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 JXs 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; JXs 1728-33. 

183 JXs 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 22, 

2025 (JX 1333); an Unconditional Guaranty for the loan between the Company’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% 

members of the Company.193 

The “resolution” was a draft written consent 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 Members 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 transactions.”196

On February 28, Italia signed and returned the revised LLC Agreement

without changes.

197 But 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 sched. A. 

194 JX 1168.

195 Id. at 2.

196 Id.

197 JX 1185; see JXs 1183-84. On March 2, Soura circulated a fully executed version of 

the operative LLC Agreement. JX 1273 (“Operative LLC Agreement”).

198 JX 1185; see JX 1178; Italia Tr. 454, 461.
36

both Vineberg and a Delaware attorney to review the February 2022 Consent on his 

behalf.

199

 Italia forwarded the May 14 Materials to his counsel.

200

 

After review, Italia asked Soura whether the February 2022 Consent

exculpated or released claims 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 Consent.204 

O. The LaGrange Meeting

While the SIFT transaction was being finalized, Italia was pressing Soura 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 JXs 1222-23; 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 JXs 1222-23.

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

204 JXs 1272-74.
37

government.

205

 The deal crystallized in late January 2022 when MKE submitted a 

letter of intent 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 approximately $300 to $325 million. The Company’s officers and 

counsel were 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

facility.

210

 Soura recorded their conversation—unbeknownst to the other 

participants.

211

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

205 Soura Tr. 100-01.

206 JXs 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. 104-06; Italia Tr. 371-72, 500-01.

211 Soura Tr. 104-05; Italia Tr. 501; JXs 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 are 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 that 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 1681 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. 590. 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 exercise the warrant. Id. at 549. This 

testimony is admissible on that basis under Delaware Rule of Evidence 803(3). See supra 

note 80.

215 JXs 97-98; JX 143; JX 156; JX 196; JXs 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 conduct. 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. 111-13. 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 notes 80, 214.
39

On March 21, 2022, Issa executed a Notice of Exercise 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 issuance of units to SIFT Fixed, listing SIFT Fixed as a 

2.5% member 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 corporate 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 would 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 sched. A; JX 1424 at sched. 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 the 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 Warrant Agreement.

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 

denied 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, despite 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 JXs 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 Agreement.

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 390. 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 Fixed 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% member of the Company, and 

Northern Gold and REM OA were 48.75% members.

235

 The plaintiffs also seek an 

award of fees and costs.

236

On August 1, Northern Gold filed a counterclaim seeking declarations that the 

warrant and units issued to SIFT Fixed were unauthorized and invalid, that SIFT 

Fixed is not a member of the Company, and that Northern Gold owns 50% of the 

Company’s units.237

On August 5, I entered an 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 Capital Raise. 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. 72, 75. The plaintiffs supported the Company’s position.
43

place, no redemption of units would occur and no single member of the Company

would be deemed to control more than 50% of the Company’s units.

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 units 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 Post-trial briefing

followed, and a post-trial argument was held on May 10, 2023.

246

 After additional 

241 Dkts. 106-07.

242 JXs 1616-17; JXs 1620-22. Northern Gold raised a relevance objection to these exhibits 

(as well as JXs 1623-24 and JX 1626) under Delaware Rule of Evidence 401. The 

documents are relevant to my description of the procedural history of this matter.

243 JXs 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 refusals 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 

complied with certain federal regulations. Dkt. 178. I have not considered the Company’s 

assertions when determining whether the plaintiffs 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 burden 

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 review 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 could have 

learned them through basic diligence. None of Northern Gold’s challenges 

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 evidence 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 and 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 units, 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 members 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 instruments 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 365-68, 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 Member 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 is 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 382 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 members. 

The members 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 perform its obligations under . . . all documents relating [to] or 

contemplated [by]” the Commitment Letter.255 The final Loan Materials 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 3414848, 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 LLC 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 to 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, the “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 actions 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 Our 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 

without 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, 1126 (Del. 2010).

260 Off. Comm. of Unsecured Creds. of Motors Liquid. Co. v. JPMorgan Chase Bank, N.A., 

103 A.3d 1010, 1015 (Del. 2014).
48

negotiations.”261 This 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 was 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 the 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 she “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 notes 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 

emphases of the Commitment Letter in the May 2021 Consent).

269 Pellaton v. Bank of N.Y., 592 A.2d 473, 477 (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] justify 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 Raceway, 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 reference, 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 

because 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. None 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; see 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 inquire.

2. Mistake or Fraud

Northern Gold suggests that its authorization of the Commitment Letter was 

ineffective because Soura and Company counsel led it to believe that the May 2021 

Consent preserved 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 Consent 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 Materials. By signing the materials, his “mutual assent to 

the exchange and consideration” was manifested. United Health All, 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, whose 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 or mistake. See Pls.’ Post-trial Reply Br. (Dkt. 186) 6-8. I have therefore 

considered the 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 

exercise 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 discovered 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 § 70.113 (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, at *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 (Del. 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 saw the 

references to the Commitment Letter in the May 2021 Consent, he knew they 

concerned a loan from SIFT Capital.

283

 He opted not to investigate.284 Instead, 

Northern Gold executed multiple written consents authorizing the Commitment 

Letter.285

3. Breach of Fiduciary Duty

Northern Gold also contends that its consent is negated by “REM OA’s 

violation 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 majority 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 given 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 in 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 inauthentic or forged. And 

288 Id. § 4.4(B). Section 4.4(B) waives the fiduciary duties of majority Members: “To the 

fullest extent permitted by law, the Members, when acting pursuant to the 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. 42.

290 REM OA owned 50% of the Company. The Company was managed by the “Members,” 

meaning a majority. JX 1424 at sched. 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 individual 

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, 2009)). 

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 

contract. 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 Agreement, 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 Delaware 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 authenticity, 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] bear 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 probative 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 

entities. I reject Northern Gold’s contentions that the documents are fake or forged.

297 Id.; see United States v. Turner, 718 F.3d 226, 232 (3d Cir. 2013) (explaining that the 

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 verification 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 to 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 discretion 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 States 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 existences 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 Self-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 

depositions 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 JXs 711-17; JXs 719-20; JX 727; JXs 739-40; JXs 751-52; JX 754; JXs 873-79; 

Anderson Tr. 616, 618-19; Soura Tr. 69-70, 73-74, 76-77, 80; JXs 880-81; JX 1133; JXs

1150-53.

306 Soura Tr. 23-24, 27, 66. 

307 E.g., JX 1679 at 8.
58

b. The Commitment Letter

Circumstantial 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 of 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 inference 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 were equally prejudiced by loss of evidence) (citation omitted). Furthermore, 

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 helicopter 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 illogical 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 confirms 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 June 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 the 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 JXs 711-20; JXs 726-28; JXs 739-40; JXs 751-52; JX 754; JXs 763-64; JX 803; JXs

836-37; JX 823; JX 1116; Soura Tr. 69-70, 73-74, 76-77, 80; JXs 873-79; Anderson Tr. 

616, 618-19; JX 880-81; JX 1133; JXs 1150-53.
60

For example, 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 different versions of the fully executed document, 

each with a slightly different signature by Issa.318 One version is redlined,

319 and the 

other is clean.

320

 Based on the record, it is more likely that the two versions exist 

because SIFT Fixed’s counsel was acting 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 address 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 1337; see also JX 1336; JXs 1372-73.

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 Materials 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. JXs 1727-33. After closing, Soura 

sought to locate a complete version of the Warrant Agreement with signature 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. Matthews 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; JXs 1394-96; JX 1401; JX 1451; JX 1530; JX 1537. The clean final 

version was the one filed as an attachment to the Complaint. JX 1647.

322 JX 1915 (citing JX 1336; JXs 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 Issa 

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 existence 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 have 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 Soura 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 subjective 

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 members.

336

 He engaged in arm’s-length 

negotiations over several months.337 Company counsel advised on those

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 1716966, 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 contract 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 4025634, 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 equal 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 members 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 there 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 redlined 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 the 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 on 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; see 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 agreement 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, listing “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 provides

for the application of Hong Kong law.347 The Warrant Agreement includes 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 have Delaware forum provisions. Def.’s Answering 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 The parties entered into the 

superseding Warrant Agreement, which contains an integration clause.

353

to and finally resolved by arbitration administered 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 See 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 is 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 contemplated 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 given a $10 million loan. In exchange, SIFT 

Fixed received interest and a warrant.

D. Whether the Issuance of Units to SIFT Fixed is Enforceable

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 extent 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 dilute Northern Gold rather than to provide financing.354 

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

a contract, much less a contract approved by the challenging party. Instead, it relies 

on precedent in the inapposite contexts 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 outset that the Company would need substantial capital beyond

the purchase price.357 When Soura initiated discussions with SIFT Capital, the $10 

million PPP loan was dwindling, traditional loans were unavailable, and the 

Company was rapidly burning cash.358 The SIFT transaction provided funds needed 

to restore the Company’s operations—not to mention build the new manufacturing 

facility in Georgia.

2. Compliance with Section 5.3 of the LLC Agreement

Northern Gold also avers that the plaintiffs failed to prove that 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. The 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 See supra notes 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 accordance 

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 exercised. 

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 

Units.”362 Section 5.1(C) allows a member to unilaterally transfer her units subject 

to a right of first refusal process.363 The plain terms of these provisions concern the 

transfer of a member’s existing units.

364

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

interests.

365

 Section 3.1(A) authorizes members, “in their sole and absolute 

discretion . . . 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 an [sic] Unit is Transferred for any reason or by any means.” Id. at sched. 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 agreement.’” 

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 Units) as 

may be determined by the Members . . . .”367 Section 3.2(A) outlines the mechanism 

for admitting “an additional Member” that receives units 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 at the time of the Assignment Agreement, SIFT Capital was 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 

agreement 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 effect, 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 of 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 right to purchase a warrant; it did not assign an actual warrant or units.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 Northern 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 transfer 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 possessory 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 matter of contract interpretation, not standing. 
72

States (CFIUS).

375

 The Company insists that the transaction complied with both sets

of regulations.

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 SIFT 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 process and 

provide for administrative remedies.

379

 The agencies tasked with administering 

these regulatory regimes are best suited to address potential violations.

375 Def.’s Answering Br. 73-85. The statutory 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, 2014) 

(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 3589530, 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 members 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 members 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 Member or Officer, acting alone” to execute “the Commitment Letter and all 

documents relating thereto or contemplated thereby . . . without any further act, vote 

380 Def.’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 Sections 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 

members 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—including a warrant—and the admission of SIFT 

Fixed as a member upon the exercise of its warrant.

The 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) provides that, once the members have “cause[d] the Company to 

admit an additional Member,” “[n]o such admission . . . shall require the consent or 

approval of any Member.”

386 SIFT Fixed was therefore a member as soon as it was 

issued units irrespective of when and whether Soura updated Schedule A to the LLC 

Agreement.

F. Whether the Plaintiffs Are Entitled to a Remedy

The plaintiffs have proven their claim under Section 18-110 by a 

preponderance of the evidence. 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 

(permitting “any Governor and Officer” to do the same).

385 Operative LLC Agreement at sched. 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 Agreement.” 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 Agreement § 11.4.
75

Fixed was validly admitted as a member 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% member of the Company, REM OA was a 48.75% 

member, and Northern Gold was a 48.75% member.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 either 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 permitted 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% member of the Company and REM OA was a 48.75% member

387 Further proceedings would be necessary to make that assessment, to the extent that the 

parties are inclined to pursue claims concerning 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% member of the Company, REM OA was a 48.75% member of the 

Company, and Northern Gold was a 48.75% member 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 letter requesting supplemental submissions on this issue will follow.