Data443 Takes On $2M Termination Fee Note with Conversion Feature Tied to SPAC Deal Close
ATDS has more than doubled off its 52-week low of $0 on light trading volume (0.2× avg).
Summary
Data443 Risk Mitigation entered into a Compensation Agreement with XYDD, issuing a $2 million promissory note to facilitate its SPAC merger. The note carries a conversion feature that could lead to significant dilution if not repaid within 12 months, and 1.8 million shares are allocated to a finder.
Key Events · Financing and Capital Events · ATDS
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$2M Termination Fee Note Issued
To clear the way for its own merger with Four Leaf Acquisition Corp., Data443 agreed to pay XYDD $2 million via a promissory note, effectively terminating XYDD's prior SPAC deal.
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Conversion Feature Adds Dilution Risk
Should the note remain unpaid 12 months after the deal closes, XYDD can convert the outstanding amount into PubCo shares at 80% of the 20-day VWAP, subject to a floor of 50% of the post-close VWAP and a cap of 19.99% of PubCo shares outstanding.
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1.8M Finder Shares Allocated
The agreement allocates 1,800,000 shares of the post-merger company to S.SHUN Holdings Limited for prior finder services, adding to the post-transaction share count.
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Financial Strain Context
This obligation arrives as Data443's latest 10-Q showed an 80% increase in shares outstanding due to debt conversions and warrant exercises, signaling ongoing financial distress.
Analysis · ATDS · Technology
To clear the path for its SPAC merger with Four Leaf Acquisition Corp., Data443 has assumed a $2 million obligation. The note becomes payable after the deal closes, but if it remains outstanding beyond 12 months, XYDD can convert the debt into shares of the combined company at a discount—a move that would dilute existing holders. The agreement also allocates 1.8 million shares to a finder, further swelling the post-merger share count. This adds financial risk and potential dilution to a company already under severe strain, as underscored by its recent 10-Q, which revealed an 80% increase in shares outstanding.
How filings like this one have moved
In the 30 days to Sep 12, 2026, 29.5% of the 1882 measured filings Wiseek scored 7 moved their stock by 5% or more by the next session's close. The median move was -0.18%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, ATDS was trading at $0.00 on OTC in the Technology sector, with a market capitalization of approximately $262.7K. The 52-week trading range was $0.00 to $0.00. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.