SECURITIES PURCHASE AGREEMENT


(Signature Page)


 


PETROSONIC ENERGY, INC.


57 Valley Woods way
NW


Calgary, AB CANADA


T3B 6A5


 


Ladies & Gentlemen:


 


The undersigned (the “Investor”),
hereby confirms its agreement with you as follows:


 


1.This Securities
Purchase Agreement, including the Terms and Conditions set forth in Annex I (the “Terms and Conditions”), the
Risk Factors set forth in Annex II (the “Risk Factors”), and exhibits, which are all attached hereto and incorporated
herein by reference as if fully set forth herein (the “Agreement”), is made as of the date set forth below between
Petrosonic Energy, Inc., a Nevada corporation (the “Company”), and the Investor.


 


2.The Company has
authorized the sale and issuance of up to 15,000,000 shares of the Company’s securities to certain Investors in a private
placement (the “Offering”).


 


3.Pursuant to the
Terms and Conditions, the Company and the Investor agree that the Investor will purchase from the Company and the Company will
issue and sell to the Investor ____________________________, for a purchase price of $0.25 per share, for an aggregate purchase
price of $__________________________ consisting of ___________ Shares. Unless otherwise requested by the Investor, certificates
representing the Common Stock purchased by the Investor will be registered in the Investor’s name and address as set forth
below.


 


Please confirm that
the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose.


 


 





	Date: ________________, 2013	Investor:	 
	 	 	 
	 	By: 	 
	 	 	 
	 	Print Name: 	 
	 	Title: 	 
	 	 	 
	 	Address: 	 
	 	 	 
	 	 	 
	 	Phone:	 
	 	Fax: 	 
	 	Social Security Number or TIN (if applicable):
	 	 	 







 


 



    	 



    	 



    

ANNEX I


 


TERMS AND CONDITIONS FOR PURCHASE OF
SHARES


 


Investment in the Company involves
a high degree of risk. Investor should carefully consider the risk factors set forth in Annex II in addition to the other
information set forth in this Annex I before purchasing securities of the Company.


 


1.Authorization
and Sale of the Shares. Subject to these Terms and Conditions, the Company has authorized the sale of up to 15,000,000 Shares
of the Company, each consisting of 1 share of the Company’s common stock, $0.001 par value (the “Shares”). The
Company reserves the right to increase or decrease this number. All references to currency in this Securities Purchase Agreement
shall refer to the lawful currency of the United States of America.


 


2.Agreement
to Sell and Purchase the Shares.


 


2.1At the Closing
(as defined in Section 3 of this Annex I), the Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions hereinafter set forth, the number of Shares, if applicable, set forth in Section 3 of the
Signature Page to the Securities Purchase Agreement at the purchase price set forth thereon.


 


2.2The Company may
enter into the same form of Securities Purchase Agreement (“Agreement”), including these Terms and Conditions, with
other Investors and expects to complete sales of subsequent shares to other Investors.


 


3.Delivery of
the Shares and at Closing. The completion of the purchase and sale of the shares (the “Closing”) shall occur at
the offices of the Company upon receipt of cleared funds and fully executed documents for the purchase of the shares on each date
set by the Company, provided that a final closing shall occur no later than January 31, 2013, which date may be extended at the
sole discretion of the Company. Within seven (7) days after each Closing, the Company shall deliver to the Investor one or more
stock certificates representing the number of Shares, representing the number of shares of common stock as set forth in Section
3 of the Signature Page to the Securities Purchase Agreement, each such certificate, certificates to be registered in the name
of the Investor, as set forth in Section 3 of the Signature Page to the Securities Purchase Agreement.


 


The Company’s
obligation to issue the Shares to the Investor shall be subject to the following conditions, any one or more of which may be waived
by the Company: (a) receipt by the Company of a certified or official bank check or wire transfer of funds in the full amount of
the purchase price for the shares being purchased hereunder as set forth in Section 3 of the Signature Page to the Securities Purchase
Agreement; and (b) the accuracy of the representations and warranties made by the Investor and the fulfillment of those undertakings
of the Investor to be fulfilled prior to the Closing.


 


The Investor’s
obligation to purchase the shares shall be subject to the following conditions, any one or more of which may be waived by the Investor:
(1) the representations and warranties of the Company set forth herein shall be true and correct as of the Closing Date in all
material respects and (2) the Investor shall have received such documents as such Investor shall reasonably have requested in connection
with its due diligence.


 


4.Representations,
Warranties and Covenants of the Company. The Company hereby represents and warrants to, and covenants with, the Investor, as
follows:


 


4.1Organization.
The Company is duly organized and validly existing in good standing under the laws of the jurisdiction of its organization. The
Company has full power and authority to own, operate and occupy its properties and to conduct its business as presently contemplated
and is registered or qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted
by it or the location of the properties owned or leased by it requires such qualification and where the failure to be so qualified
would have a material adverse effect upon the condition (financial or otherwise), earnings, business, properties or operations
of the Company (a “Material Adverse Effect”), and no proceeding has been instituted in any such jurisdiction, revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification.


 






    	 



    	 



    



 


4.2Due Authorization
and Valid Issuance. The Company has all requisite power and authority to execute, deliver and perform its obligations under
the Agreement, and the Agreement has been duly authorized and validly executed and delivered by the Company and constitutes a legal,
valid and binding agreement of the Company enforceable against the Company in accordance with their terms, except as rights to
indemnity and contribution may be limited by state or federal securities laws or the public policy underlying such laws, except
as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’
and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law). No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Shares. The Shares being
purchased by the Investor hereunder will, upon issuance and payment therefore pursuant to the terms hereof, be duly authorized,
validly issued, fully-paid and nonassessable.


 


4.3Non-Contravention.
The execution and delivery of the Agreement, the issuance and sale of the shares under the Agreement, the fulfillment of the terms
of the Agreement and the consummation of the transactions contemplated thereby will not (A) conflict with or constitute a violation
of, or default under, (i) any material bond, debenture, note or other evidence of indebtedness, lease, contract, indenture, mortgage,
deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company is a party or by which it or
its properties are bound, (ii) the charter, by-laws or other organizational documents of the Company, or (iii) any law, administrative
regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or
its properties, except in the case of clauses (i) and (iii) for any such conflicts, violations or defaults which are not reasonably
likely to have a Material Adverse Effect or (B) result in the creation or imposition of any lien, encumbrance, claim, security
interest or restriction whatsoever upon any of the material properties or assets of the Company or an acceleration of indebtedness
pursuant to any obligation, agreement or condition contained in any material bond, debenture, note or any other evidence of indebtedness
or any material indenture, mortgage, deed of trust or any other agreement or instrument to which the Company is a party or by which
any of them is bound or to which any of the material property or assets of the Company is subject.


 


4.4Capitalization.
As of October 30, 2012, there were 65,329,000
shares of the Company’s common stock issued and outstanding. Except as contemplated by documents filed by the Company with
the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), since such date through the date hereof (the “Exchange Act Documents”), there are no other outstanding
rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable
for, any unissued shares of capital stock or other equity interest in the Company or any contract, commitment, agreement, understanding
or arrangement of any kind to which the Company is a party or of which the Company has knowledge and relating to the issuance or
sale of any capital stock of the Company, any such convertible or exchangeable securities or any such rights, warrants or options.


 


4.5Legal Proceedings.
There is no material legal or governmental proceeding pending or, to the knowledge of the Company, threatened to which the Company
is or may be a party or of which the business or property of the Company is subject that is not disclosed in the Exchange Act Documents.


 


4.6No Violations.
The Company is not in violation of its charter, bylaws, or other organizational document, or in violation of any law, administrative
regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company, which
violation, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect, or is in default (and
there exists no condition which, with the passage of time or otherwise, would constitute a default) in any material respect in
the performance of any bond, debenture, note or any other evidence of indebtedness in any indenture, mortgage, deed of trust or
any other material agreement or instrument to which the Company is a party or by which the Company is bound or by which the properties
of the Company are bound, which would be reasonably likely to have a Material Adverse Effect.


 


 



    	 



    	 



    



 


4.7Finder’s
Fee. In connection with this Offering and subject to the approval of the Company's Board of Directors, the Company may have
to pay brokers, advisors and others up to the aggregate of 10% in cash and/or 5% in warrant (with an exercise of $0.50 per share)
fees based on the gross proceeds from the sale of the shares.


 


5.Representations,
Warranties and Covenants of the Investor.


 


5.1The Investor represents
and warrants to, and covenants with, the Company that: (i) the Investor is an “accredited investor” as defined in Rule
501 of Regulation D under the Securities Act and the Investor is knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to investments in shares presenting an investment decision like that involved in the purchase
of the Shares, including investments in securities issued by the Company and investments in comparable companies, and has requested,
received, reviewed and considered all information it deemed relevant in making an informed decision to purchase the Shares; (ii)
the Investor has carefully read and fully understands the risks involved with an investment in the Company including, without limitation,
the risks identified on Annex II, attached hereto, (iii) the Investor is acquiring the number of shares set forth in Section
3 of the Signature Page to the Securities Purchase Agreement in the ordinary course of its business and for its own account for
investment only and with no present intention of distributing any of such shares or any arrangement or understanding with any other
persons regarding the distribution of such Shares; (iv) the Investor will not, directly or indirectly, offer, sell, pledge, transfer
or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the shares except
in compliance with the Securities Act, applicable state securities laws and the respective rules and regulations promulgated thereunder;
(v) all of the representations made by the Investor are true, correct and complete as of the date hereof and will be true, correct
and complete as of the Closing Date; and (vi) the Investor has, in connection with its decision to purchase the number of shares
set forth in Section 3 of the Signature Page to the Securities Purchase Agreement, relied only upon the Exchange Act Documents
and the representations and warranties of the Company contained herein. There are no suits, pending litigation, or claims against
the undersigned that could materially affect the net worth of the Investor.


 


5.2The Investor acknowledges
that it has had access to the Exchange Act Documents and has carefully reviewed the same. The Investor further acknowledges that
the Company has made available to it the opportunity to ask questions of and receive answers from the Company’s officers
and directors concerning the terms and conditions of this Agreement and the business and financial condition of the Company, and
the Investor has received to its satisfaction, such information about the business and financial condition of the Company and the
terms and conditions of the Agreement as it has requested. The Investor has carefully considered the potential risks relating to
the Company and a purchase of the shares, and fully understands that the Shares are speculative investments, which involve a high
degree of risk of loss of the Investor’s entire investment. Among others, the undersigned has carefully considered each of
the risks identified under the caption “Risk Factors” in the Exchange Act Documents and Annex II.


 


5.3The Investor acknowledges,
represents and agrees that no action has been or will be taken in any jurisdiction outside the United States by the Company that
would permit an offering of the shares, or possession or distribution of offering materials in connection with the issuance of
the shares, in any jurisdiction outside the United States where legal action by the Company for that purpose is required. Investor
will comply with all applicable laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers
shares, or has in its possession or distributes any offering material, in all cases at its own expense.


 


5.4The Investor hereby
covenants with the Company not to make any sale of the shares, without complying with the provisions of this Agreement, and the
Investor acknowledges that the certificates evidencing the Shares will be imprinted with a legend that prohibits their transfer
except in accordance therewith. The overall commitment of the Investor to investments, which are not readily marketable, is not
excessive in view of the Investor’s net worth and financial circumstances, and any purchase of the shares will not cause
such commitment to become excessive. The Investor is able to bear the economic risk of an investment in the shares.


 


5.5The Investor further
represents and warrants to, and covenants with, the Company that (i) the Investor has full right, power, authority and capacity
to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) this Agreement constitutes a valid and binding obligation of
the Investor enforceable against the Investor in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights
generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).


 


 



    	 



    	 



    



 


5.6Investor will
not use any of the restricted Shares acquired pursuant to this Agreement to cover any short position in the Common Stock of the
Company if doing so would be in violation of applicable securities laws.


 


5.7The Investor understands
that nothing in the Exchange Act Documents, this Agreement or any other materials presented to the Investor in connection with
the purchase and sale of the shares constitutes legal, tax or investment advice. The Investor has consulted such legal, tax and
investment advisors, as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the
shares.


 


5.8The Investor understands
that the issuance of the shares to the Investor has not been registered under the Securities Act in reliance upon one or more specific
exemptions therefrom, including Regulation D and/or Regulation S, which exemption depends upon, among other things, the accuracy
of the Investor’s representations made in this Agreement. The Investor understands that the shares must be held indefinitely
unless subsequently registered under the Securities Act and qualified under applicable state securities laws, or unless an exemption
from such registration and qualification requirements is otherwise available. The Investor acknowledges
that the Company has no obligation to register or qualify the shares or underlying Shares for resale. The Investor acknowledges
that the Company will refuse to register any transfer of Shares that is not made in accordance with the provisions of Regulation
S, registered pursuant to the Securities Act or otherwise exempt from such registration. The Investor
further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements
including, but not limited to, the time and manner of sale, the holding period for the Shares and requirements relating to the
Company which are outside of the Investor’s control, and which the Company is under no obligation and may not be able to
satisfy. The Investor has been independently advised as to the applicable holding period imposed in respect of the Shares
by securities legislation in the jurisdiction in which the undersigned resides and confirms that no representation has been made
respecting the applicable holding periods for the Shares in such jurisdiction and it is aware of the risks and other characteristics
of the shares and of the fact that the undersigned may not resell the Shares except in accordance with applicable securities legislation
and regulatory policy.


 


5.9A copy of the
Company’s annual report on Form 10-K, its quarterly reports on Form 10-Q, current reports on Form 8-K and information statements
are available on the SEC’s website at www.sec.gov.


 


5.10For purposes
of compliance with the Regulation S exemption for the offer and sale of the Shares (defined in this Section 5.10 to include the
underlying Shares) to non-U.S. Persons, if the Investor is not a “U.S. Person,” as such term is defined in Rule 902(k)
of Regulation S,1 the Investor represents and warrants that the Investor is a person or entity that is outside the
United States, and further represents and warrants as follows:


 





 



 





		1	Regulation S provides in part as follows:



1.“U.S.
person” means: (i) any natural person resident in the United States; (ii) any partnership or corporation organized or incorporated
under the laws of the United States; (iii) any estate of which any executor or administrator is a U.S. person; (iv) any trust of
which any trustee is a U.S. person; (v) any agency or branch of a foreign entity located in the United States; (vi) any non-discretionary
account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a
U.S. person; (vii) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary
organized, incorporated, or (if an individual) resident in the United States; and (viii) any partnership or corporation if: (A)
organized or incorporated under the laws of any foreign jurisdiction; and (B) formed by a U.S. person principally for the purpose
of investing in securities not registered under the Securities Act of 1933, as amended, unless it is organized or incorporated,
and owned, by accredited investors (as defined in Rule 501(a)) who are not natural persons, estates or trusts.





2.The
following are not “U.S. persons”: (i) any discretionary account or similar account (other than an estate or trust)
held for the benefit or account of a non-U.S. person by a dealer or other professional fiduciary organized, incorporated, or (if
an individual) resident in the United States; (ii) any estate of which any professional fiduciary acting as executor or administrator
is a U.S. person if: (A) an executor or administrator of the estate who is not a U.S. person has sole or shared investment discretion
with respect to the assets of the estate; and (B) the estate is governed by foreign law; (iii) any trust of which any professional
fiduciary acting as trustee is a U.S. person, if a trustee who is not a U.S. person has sole or shared investment discretion with
respect to the trust assets, and no beneficiary of the trust (and no settlor if the trust is revocable) is a U.S. person; (iv)
an employee benefit plan established and administered in accordance with the law of a country other than the United States and
customary practices and documentation of such country; (v) any agency or branch of a U.S. person located outside the United States
if: (A) the agency or branch operates for valid business reasons; and (B) the agency or branch is engaged in the business of insurance
or banking and is subject to substantive insurance or banking regulation, respectively, in the jurisdiction where located; and
(vi) the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development
Bank, the Asian Development Bank, the African Development Bank, the United Nations, and their agencies, affiliates and pension
plans, and any other similar international organizations, their agencies, affiliates and pension plans.













 






    	 



    	 



    



 


(a)The Investor is
not acting and purchasing (or proposes to purchase) the shares on behalf of any other persons, entities or accounts and is not
acquiring the shares for the account or benefit of a U.S. Person. The Investor represents and warrants that the Investor is not
a “U.S. Person” (as defined in Rule 902(k) under the Securities Act) and was located outside the United States at the
time any offer to buy the shares was made and at the time the buy offer was originated by the undersigned.


 


(b)If the Investor
is a legal entity, it has not been formed specifically for the purpose of investing in the Company.


 


(c)The Investor hereby
represents that he, she or it has satisfied and fully observed the laws of the jurisdiction in which he, she or it is located or
domiciled, in connection with the acquisition of the Shares, including (i) the legal requirements of the Investor’s jurisdiction
for the acquisition of the shares, (ii) any foreign exchange restrictions applicable to such acquisition, (iii) any governmental
or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, which may be relevant
to the holding, redemption, sale, or transfer of the shares; and further, the Investor agrees to continue to comply with such laws
as long as he, she or it shall hold the shares.


 


(d)To the knowledge
of the Investor, without having made any independent investigation, neither the Company nor any person acting for the Company,
has conducted any “directed selling efforts” in the United States as the term “directed selling efforts”
is defined in Rule 902 of Regulation S, which, in general, means any activity undertaken for the purpose of, or that could reasonably
be expected to have the effect of, conditioning the marketing in the United States for any of the Shares being offered. Such activity
includes, without limitation, the mailing of printed material to investors residing in the United States, the holding of promotional
seminars in the United States, and the placement of advertisements with radio or television stations broadcasting in the United
States or in publications with a general circulation in the United States, which discuss the offering of the shares. To the knowledge
of the Investor, the shares were not offered to the undersigned through, and the undersigned is not aware of, any form of general
solicitation or general advertising, including without limitation, (i) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over television or radio, and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.


 


(e)The Investor will
offer, sell or otherwise transfer the shares, only (A) pursuant to a registration statement that has been declared effective under
the Securities Act, (B) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S in
a transaction meeting the requirements of Rule 904 (or other applicable Rule) under the Securities Act, or (C) pursuant to another
available exemption from the registration requirements of the Securities Act, subject to the Company’s right prior to any
offer, sale or transfer pursuant to clauses (B) or (C) to require the delivery of an opinion of counsel, certificates or other
information reasonably satisfactory to the Company for the purpose of determining the availability of an exemption.


 


(f)The Investor will
not engage in hedging transactions involving the Shares unless such transactions are in compliance with the Securities Act.


 


(g)The Investor represents
and warrants that the undersigned is not a citizen of the United States and is not, and has no present intention of becoming, a
resident of the United States (defined as being any natural person physically present within the United States for at least 183
days in a 12-month consecutive period or any entity who maintained an office in the United States at any time during a 12-month
consecutive period). The Investor understands that the Company may rely upon the representations and warranty of this paragraph
as a basis for an exemption from registration of the shares under the Securities Act of 1933, as amended, and the provisions of
relevant state securities laws.











 






    	 



    	 



    
 


 


5.11The Investor
is not a “disqualified organization.” “Disqualified organization” means (i) the federal government of the
United States; (ii) any state or political subdivision of the United States; (iii) any foreign government; (iv) any international
organization; (v) any agency or instrumentality of any of the organizations listed in clauses (i), (ii), (iii) or (iv) above; (vi)
any other tax exempt organization, other than a farmer’s cooperative described in Section 521 of the Code that is exempt
from both income taxation and from taxation under the unrelated business taxable income provisions of the Code; or (vii) any rural
electrical or telephone cooperative.


 


5.12The Investor
represents that neither it nor, to the Investor’s knowledge, any person or entity controlling, controlled by or under common
control with the Investor, nor any person or entity having a beneficial interest in the Investor, nor any other person or entity
on whose behalf the undersigned is acting (i) is a person or entity listed in the annex to Executive Order No. 13224 (2001) issued
by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism); (ii) is named on the List of Specially Designated Nationals and Blocked Persons maintained
by the U.S. Office of Foreign Assets Control (OFAC); (iii) is a non-U.S. shell bank or is providing banking services indirectly
to a non-U.S. shell bank; (iv) is a senior non-U.S. political figure or an immediate family member or close associate of such figure;
or (v) is otherwise prohibited from investing in the Company pursuant to applicable U.S. anti-money laundering, antiterrorist and
asset control laws, regulations, rules or orders (categories (i) through (v) collectively, a “Prohibited Investor”).
The Investor agrees to provide the Company, promptly upon request, all information that the Company reasonably deems necessary
or appropriate to comply with applicable U.S. anti-money laundering, antiterrorist and asset control laws, regulations, rules and
orders. The Investor consents to the disclosure to U.S. regulators and law enforcement authorities by the Company and its affiliates
and agents of such information about the Investor as the Company reasonably deems necessary or appropriate to comply with applicable
U.S. anti-money laundering, antiterrorist and asset control laws, regulations, rules and orders. If the Investor is a financial
institution that is subject to the PATRIOT Act, Public Law No. 107-56 (Oct. 26, 2001) (the “Patriot Act”), the Investor
represents that the Investor has met all of its respective obligations under the Patriot Act. The Investor acknowledges that if,
following the investment in the Company by the Investor, the Company reasonably believes that the Investor is a Prohibited Investor
or is otherwise engaged in suspicious activity or refuses to provide promptly information that the Company requests, the Company
has the right or may be obligated to prohibit additional investments, segregate the assets constituting the investment in accordance
with applicable regulations or immediately require Investor to transfer the Shares. The Investor further acknowledges that the
Investor will not have any claim against the Company or any of its affiliates or agents for any form of damages as a result of
any of the foregoing actions.


 


6.Notices.
All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed (A) if within the United
States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or
by facsimile, or (B) if delivered from outside the United States, by International Federal Express or facsimile, and shall be deemed
given (i) if delivered by first-class registered or certified mail, three business days after so mailed, (ii) if delivered by nationally
recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business
days after so mailed, (iv) if delivered by facsimile, upon electronic confirmation of receipt and shall be delivered as addressed
as follows:


 





	 	(a)	if to the Company, to:	Petrosonic Energy, Inc.
	 	 	 	57 Valley Woods Way NW
	 	 	 	Calgary, AB, Canada
	 	 	 	T3B 6A5
	 	 	 	Attn: Chief Executive Officer
	 	 	 	Phone: (403) 708-7869
	 	 	 	 
	 	(b)	with a copy to:	Greenberg Traurig LLP
	 	 	 	1201 K Street, Suite 1100
	 	 	 	Sacramento, CA 95814
	 	 	 	Attn: Mark C Lee
	 	 	 	Phone: (916) 442-1111
	 	 	 	Fax: (916) 448-1709







 






    	 



    	 



    



 


(c)if to the Investor,
at its address on the signature page hereto, or at such other address or addresses as may have been furnished to the Company in
writing.


 


7.Changes.
This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Investor.


 


8.Headings.
The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed
to be part of this Agreement.


 


9.Severability.
In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.


 


10.Governing
Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Nevada, without
giving effect to the principles of conflicts of law.


 


11.Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed
by each party hereto and delivered to the other parties.


 


12.Rule 144.
The Company covenants that it will timely file the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder (or, if the Company is not required to file such rep orts, it will,
upon the request of the Investor holding Shares and Warrant Shares purchased hereunder made after the first anniversary of the
Closing Date, make publicly available such information as necessary to permit sales pursuant to Rule 144 under the Securities Act),
and it will take such further action as the Investor may reasonably request, all to the extent required from time to time to enable
such Investor to sell Shares or Warrant Shares purchased hereunder without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of the Investor, the Company will deliver to such holder
a written statement as to whether it has complied with such information and requirements.


 


13.Confidential
Information. The Investor represents to the Company that, at all times during the Company’s offering of the Shares, the
Investor has maintained in confidence all non-public information regarding the Company received by the Investor from the Company
or its agents, and covenants that it will continue to maintain in confidence such information and shall not use such information
for any purpose other than to evaluate the purchase of the Shares until such information (a) becomes generally publicly available
other than through a violation of this provision by the Investor or its agents or (b) is required to be disclosed in legal proceedings
(such as by deposition, interrogatory, request for documents, subpoena, civil investigation demand, filing with any governmental
authority or similar process), provided, however, that before making any use or disclosure in reliance on this subparagraph (b)
the Investor shall give the Company at least fifteen (15) days prior written notice (or such shorter period as required by law)
specifying the circumstances giving rise thereto and will furnish only that portion of the non-public information which is legally
required and will exercise its best efforts to obtain reliable assurance that confidential treatment will be accorded any non-public
information so furnished.


  



    	 



    	 



    

 


Annex
II


 


Risk
Factors


 


The risks described below are the ones
the Company believes are the most important for the Investor to consider, although these risks are not the only ones that the Company
faces. If events anticipated by any of the following risks actually occur, the Company’s business, operating results or financial
condition could suffer and the trading price of the Company’s common stock could decline. 


 


 


Risks Related to our Business


 


We have incurred losses in prior periods
and may incur losses in the future.


 


We cannot be assured that we can achieve
or sustain profitability on a quarterly or annual basis in the future.  Our operations are subject to the risks and competition
inherent in the establishment of a business enterprise.  There can be no assurance that future operations will be profitable.  We
may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us.


 


Our future is dependent upon our ability
to obtain financing.  If we do not obtain such financing, we may have to cease our activities and investors could lose
their entire investment.


 


There is no assurance that we will operate
profitably or generate positive cash flow in the future.  We will require additional financing in order to proceed beyond
the establishment of our own stand-alone facilities, including the processing facility in Albania.  We will also require
additional financing to pay the fees and expenses necessary to become and operate as a public company.  We will also need
more funds if the costs of the development and operation of our existing technologies are greater than we have anticipated.  We
will also require additional financing to sustain our business operations if we are not successful in earning revenues. We may
not be able to obtain financing on commercially reasonable terms or terms that are acceptable to us when it is required.  Our
future is dependent upon our ability to obtain financing.  If we do not obtain such financing, our business could fail
and investors could lose their entire investment.


 


Because we may never earn revenues from
our operations, our business may fail and investors may lose all of their investment in our Company.


 


We have no history of revenues from operations.  We
have yet to generate positive earnings and there can be no assurance that we will ever operate profitably.  Our company
has a limited operating history.  If our business plan is not successful and we are not able to operate profitably, then
our stock may become worthless and investors may lose all of their investment in our company.


 


Prior to completion of the oil processing
facility in Albania, we anticipate that we will incur increased operating expenses without realizing any revenues.  We
therefore expect to incur significant losses into the foreseeable future.  We recognize that if we are unable to generate
significant revenues from our processing facilities in the future, we will not be able to earn profits or continue operations.  There
is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance
that we will generate any revenues or ever achieve profitability.  If we are unsuccessful in addressing these risks,
our business will fail and investors may lose all of their investment in our company.


 


We may not be fully indemnified against
financial losses in all circumstances where damage to or loss of property, personal injury, death or environmental harm occur.



 


As is customary in our industry, our contracts
will typically provide that our customers indemnify us for claims arising from the injury or death of their employees, the loss
or damage of their equipment, damage to the reservoir and pollution emanating from the customer’s equipment or from the reservoir
(including uncontained oil flow from a reservoir). Conversely, we will typically indemnify our customers for claims arising from
the injury or death of our employees, the loss or damage of our equipment, or pollution emanating from our equipment. Our contracts
will typically provide that our customer will indemnify us for claims arising from catastrophic events, such as a well blowout,
fire or explosion.


 






    	 



    	 



    
 


 


Our indemnification arrangements may not
protect us in every case. For example, from time to time we may enter into contracts with less favorable indemnities or perform
work without a contract that protects us; our indemnity arrangements may be held unenforceable in some courts and jurisdictions;
or we may be subject to other claims brought by third parties or government agencies. Furthermore, the parties from which we seek
indemnity may not be solvent, may become bankrupt, may lack resources or insurance to honor their indemnities, or may not otherwise
be able to satisfy their indemnity obligations to us. The lack of enforceable indemnification could expose us to significant potential
losses.


Further, our assets generally are not insured
against loss from political violence such as war, terrorism or civil commotion. If any of our assets are damaged or destroyed as
a result of an uninsured cause, we could recognize a loss of those assets.


 


Our operations are subject to environmental
and other laws and regulations that may expose us to significant liabilities and could reduce our business opportunities and revenues.



 


We are subject to various laws and regulations
relating to the energy industry in general and the environment in particular. An environmental claim could arise with respect to
one or more of our current businesses, products or services, or a business or property that one of our predecessors owned or used,
and such claims could involve material expenditures. Generally, environmental laws have in recent years become more stringent and
have sought to impose greater liability on a larger number of potentially responsible parties. The scope of regulation of our industry
and our products and services may increase further following the April 2010 accident in the Gulf of Mexico, including possible
increases in liabilities or funding requirements imposed by governmental agencies. We also cannot ensure that our future business,
if any, will be profitable in light of new regulations that have been and may continue to be promulgated and in light of the current
risk environment and insurance markets. Additional regulation could increase the costs of conducting our business and could materially
reduce our business opportunities and revenues if our customers decrease their levels of activity in response to such regulation.


 


We are subject to significant foreign
exchange and currency risks that could adversely affect our operations and our ability to reinvest earnings from operations, as
well as mitigate our foreign exchange risk through hedging transactions may be limited.


 


Since we currently conduct a significant
portion our operations outside the United State of America, our business is subject to foreign currency risks, including currency
exchange rates fluctuations and difficulties in converting local currencies into U.S. dollars. The exchange rates between the Albanian
Lek, the Canadian dollar, the Euro and the U.S. dollar and other foreign currencies is affected by, among other things, changes
in local political and economic conditions. Such currency fluctuations may materially affect the Company’s financial position
and results of operations and a material change in currency rates in our markets could affect our future results as well as affect
the carrying values of our assets.


 


We generally attempt to denominate our
contracts in U.S. dollars or in the currencies of our costs. However, we may enter into contracts that subject us to currency risk
exposure, primarily when our contract revenue is denominated in a currency different than the contract costs. We anticipate that
a significant portion of our consolidated revenue and consolidated operating expenses will be in foreign currencies. As a result,
we will be subject to significant foreign currency risks, including risks resulting from changes in foreign exchange rates and
limitations on our ability to reinvest earnings from operations in one country to fund the financing requirements of our operations
in other countries.


Customer credit risks could result in losses. 


The concentration of our future customers
in the energy industry may impact our overall exposure to credit risk as customers may be similarly affected by prolonged changes
in economic and industry conditions. Those countries that rely heavily upon income from hydrocarbon exports would be hit particularly
hard by a drop in oil prices. Further, laws in some jurisdictions in which we may operate could make collection difficult or time
consuming. We will perform ongoing credit evaluations of our customers and generally do not plan to require collateral in support
of our trade receivables. While we may maintain reserves for potential credit losses, we cannot assure such reserves will be sufficient
to meet write-offs of uncollectible receivables or that our losses from such receivables will be consistent with our expectations.


 


Global political, economic and market
conditions could affect projected results.


 


Our operating results are based on our
current assumptions about oil supply and demand, oil prices, rig count and other market trends. Our assumptions on these matters
are in turn based on currently available information, which is subject to change. The oil industry is extremely volatile and subject
to change based on political and economic factors outside our control. A weakened global economic climate generally results in
lower demand and lower prices for oil, which reduces drilling, processing and production activity, which in turn results in lower
revenues and income for us. Worldwide drilling activity and global demand for oil may also be affected by changes in governmental
policies and sovereign debt, laws and regulations related to environmental or energy security matters, including those addressing
alternative energy sources and the risks of global climate change. Worldwide economic conditions, and the related demand for oil
, may in future periods be significantly weaker than we have assumed.


 






    	 



    	 



    



 


We may be unable to recognize our expected
revenues from current and future contracts. 


 


Our potential customers, some of whom may
be national oil companies, often have significant bargaining leverage over us and may elect to cancel or revoke contracts, not
renew contracts, modify the scope of contracts or delay contracts, in some cases preventing us from realizing expected revenues
and/or profits.


 


Increases in the prices and availability
of our raw materials could affect our results of operations. 


 


We use significant amounts of raw materials
(including steel and other metals, chemicals, plastics, polymers and energy inputs) for manufacturing our products, facilities
and some of our fixed assets. The price of these raw materials has a significant impact on our cost of producing products for sale
or constructing fixed assets used in our business. There can be no assurance that the prices of our raw materials will remain within
a manageable range and will be readily available. If we are unable to obtain necessary raw materials or if we are unable to minimize
the impact of increased raw material costs or to realize the benefit of cost decreases in a timely fashion through our supply chain
initiatives or pricing, our margins and results of operations could be adversely affected.


 


Our long-term growth depends upon technological
innovation and commercialization. 


 


 Our ability to deliver our long-term
growth strategy depends in part on the commercialization of new technology. A central aspect of our growth strategy is to improve
our products and services through innovation, to obtain technologically advanced products through internal research and development
and/or acquisitions, to protect proprietary technology from unauthorized use and to expand the markets for new technology by leveraging
our infrastructure. Our success will depend on our ability to commercialize the technology that we have acquired and demonstrate
the enhanced value our technology brings to our customers’ operations. Our major technological advances include, but are
not limited to, those related to the design of enhanced mass transfer energy processes and reactors. We cannot be assured of the
successful commercialization of, and above-average growth from, our new products and services, as well as legal protection of our
intellectual property rights. Any failure in the commercialization of our technology could adversely affect our business and results
of operations.  


 


If we are unable to enforce our intellectual
property rights or if our intellectual property rights become obsolete, our competitive position could be adversely impacted.


 


We utilize a variety of intellectual property
rights in our services. We view our portfolio of process and design technologies as one of our competitive strengths and we use
it as part of our efforts to differentiate our service offerings. We may not be able to successfully preserve these intellectual
property rights in the future and these rights could be invalidated, circumvented, challenged or infringed upon. In addition, the
laws of some foreign countries in which our services may be sold do not protect intellectual property rights to the same extent
as the laws of the United States. If we are unable to protect and maintain our intellectual property rights, or if there are any
successful intellectual property challenges or infringement proceedings against us, our ability to differentiate our service offerings
could diminish. In addition, if our intellectual property rights or work processes become obsolete, we may not be able to differentiate
our service offerings and some of our competitors may be able to offer more attractive services to our customers. As a result,
our business and financial performance could be materially and adversely affected.


 


 



    	 



    	 



    



 


International and political events may adversely affect our
operations.


 


A significant portion of our revenue will
be derived from foreign operations, which exposes us to risks inherent in doing business in each of the countries where we transact
business. The occurrence of any of the risks described below could have a material adverse effect on our business operations and
financial performance. With respect to any particular country, these risks may include:


 


		·	expropriation and nationalization of our assets in that country;



 


		·	political and economic instability;



 


		·	civil unrest, acts of terrorism, force majeure, war, or other armed conflict;



 


		·	currency fluctuations, devaluations, and conversion restrictions;



 


		·	confiscatory taxation or other adverse tax policies;



 


		·	governmental activities that limit or disrupt markets, restrict payments, or limit the movement
of funds;



 


		·	governmental activities that may result in the deprivation of contract rights; and



 


		·	governmental activities that may result in the inability to obtain or retain licenses required
for operation.



 


Due to the unsettled political conditions
in many oil-producing countries, our financial performance is subject to the adverse consequences of war, the effects of terrorism,
civil unrest, strikes, currency controls, and governmental actions. Our customer’s operations are conducted in areas that
have significant amounts of political risk. In addition, military action or continued unrest in the Middle East could impact the
supply and price of oil, disrupt our customer’s operations in the region and elsewhere, and increase our costs related to
security worldwide.


 


Economic and political developments
in Albania may adversely affect our business.


 


A significant portion of our operations
and assets are currently located in Albania. As a result, our financial condition, results of operations and business may be affected
by and are subject to the general condition of the Albanian economy, the devaluation of the Albania Lek as compared to the U.S.
Dollar, Albanian inflation, interest rates, regulation, taxation, social instability and other political, social and economic developments
in or affecting Albania, including changes in the laws and policies that govern foreign investment, as well as changes in United
States laws and regulations relating to foreign trade and investment, over which we have no control. There can be no assurance
as to the future effect of any such changes on our results of operations, financial condition, or cash flows.


 


The dangers inherent in our operations
could cause disruptions and could expose us to potentially significant losses, costs, or liabilities. Any significant interruptions
in the operations of any of our facilities could materially and adversely affect our business, financial condition, and results
of operations.


 


Our operations are subject to significant
hazards and risks inherent in refining operations and in transporting and storing crude oil. These hazards and risks include, but
are not limited to, the following:


 


		·	natural disasters;



 






    	 



    	 



    



 


		·	weather-related disruptions;



 


		·	fires;



 


		·	explosions;



 


		·	pipeline ruptures and spills;



 


		·	third-party interference;



 


		·	disruption of natural gas deliveries;



 


		·	disruptions of electricity deliveries; and



 


		·	mechanical failure of equipment at our refineries or third-party facilities



 


Any of the foregoing could result in production
and distribution difficulties and disruptions, environmental pollution, personal injury or wrongful death claims, and other damage
to our properties and the properties of others. There is also risk of mechanical failure and equipment shutdowns both in general
and following unforeseen events.


 


Our activities will initially be conducted
at our facility in Albania. This facility constitutes a significant portion of our operating assets. Because of the significance
to us of this operation, the occurrence of any of the events described above could significantly disrupt our processing of crude
oil, and any sustained disruption could have a material adverse effect on our business, financial condition, and results of operations.


We may incur significant costs to comply
with environmental and health and safety laws and regulations.


 


Our operations and properties are subject
to extensive national, state, and local environmental, health, and safety regulations governing, among other things, the generation,
storage, handling, use, and transportation of petroleum and hazardous substances, the emission and discharge of materials into
the environment, waste management, characteristics, and the monitoring, reporting, and control of greenhouse gas emissions. If
we fail to comply with these regulations, we may be subject to administrative, civil, and criminal proceedings by governmental
authorities, as well as civil proceedings by environmental groups and other entities and individuals. A failure to comply, and
any related proceedings, including lawsuits, could result in significant costs and liabilities, penalties, judgments against us,
or governmental or court orders that could alter, limit, or stop our operations.


  


In addition, new environmental laws and
regulations, including new regulations relating to alternative energy sources, new regulations relating to fuel quality, and the
risk of global climate change regulation, as well as new interpretations of existing laws and regulations, increased governmental
enforcement, or other developments could require us to make additional unforeseen expenditures. Many of these laws and regulations
are becoming increasingly stringent, and the cost of compliance with these requirements can be expected to increase over time.
We are not able to predict the impact of new or changed laws or regulations or changes in the ways that such laws or regulations
are administered, interpreted, or enforced. The requirements to be met, as well as the technology and length of time available
to meet those requirements, continue to develop and change. To the extent that the costs associated with meeting any or all of
these requirements are substantial and not adequately provided for, there could be a material adverse effect on our business, financial
condition, and results of operations.


 


 



    	 



    	 



    



 


We may not have sufficient crude oil
to be able to run our Albania facility at full capacity.


 


Our Albania facility will process crude
oil from the local regions around the facility. To the extent sufficient local crude oil cannot be contracted to process and we
are unable to contract sufficient crude oil from non-local sources to supply the Albania facility, we may not have sufficient crude
oil to run the Albania facility at full capacity, which could have a material adverse impact on our business, financial condition,
and results of operations.


 


We could incur substantial costs or
disruptions in our business if we cannot obtain or maintain necessary permits and authorizations.


 


Our operations require numerous permits
and authorizations under various laws and regulations, including environmental and health and safety laws and regulations. These
authorizations and permits are subject to revocation, renewal, or modification and can require operational changes, which may involve
significant costs, to limit impacts or potential impacts on the environment and/or health and safety. A violation of these authorization
or permit conditions or other legal or regulatory requirements could result in substantial fines, criminal sanctions, permit revocations,
injunctions and/or refinery shutdowns. In addition, major modifications of our operations could require modifications to our existing
permits or expensive upgrades to our existing pollution control equipment, which could have a material adverse effect on our business,
financial condition, or results of operations.


 


Risks Associated with our Company
and our Securities


 


We will be required to incur significant
costs and require significant management resources to evaluate our internal control over financial reporting as required under
Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse
effect on our stock price. 


 


As a smaller reporting company as defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal control over financial
reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Section 404 requires us to include an
internal control report with the Annual Report on Form 10-K. This report must include management’s assessment of the effectiveness
of our internal control over financial reporting as of the end of the fiscal year. This report must also include disclosure of
any material weaknesses in internal control over financial reporting that we have identified. Failure to comply, or any adverse
results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect
on the trading price of our equity securities. Management believes that its internal controls and procedures are currently not
effective to detect the inappropriate application of U.S. GAAP rules. Management realize there are deficiencies in the design or
operation of our internal control that adversely affect our internal controls which management considers to be material weaknesses
including those described below:


 


	 	i)	The Company’s management is relying on external consultants for purposes of preparing its financial reporting package and may not be able to identify errors and irregularities in the financial reporting package before its release as a continuous disclosure document
	 	 	 
	 	ii)	As the Company is governed by one officer who is also a director, there is an inherent lack of segregation of duties and lack of independent governing board
	 	 	 


Achieving continued compliance with Section
404 may require us to incur significant costs and expend significant time and management resources. We cannot assure you that we
will be able to fully comply with Section 404 or that we and our independent registered public accounting firm would be able to
conclude that our internal control over financial reporting is effective at fiscal year end. As a result, investors could lose
confidence in our reported financial information, which could have an adverse effect on the trading price of our securities, as
well as subject us to civil or criminal investigations and penalties. In addition, our independent registered public accounting
firm may not agree with our management’s assessment or conclude that our internal control over financial reporting is operating
effectively.


 






    	 



    	 



    



 


All of our assets, and our sole officer
and director, are outside the United States, with the result that it may be difficult for investors to enforce within the United
States any judgments obtained against us or our directors and officers.


 


All of our assets are located outside the
United States. In addition, our sole officer and director is a national and resident of a country other than the United States,
and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors
to enforce within the United States any judgments obtained against us or our director and officers, including judgments predicated
upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently, you may be
effectively prevented from pursuing remedies under United States federal and state securities laws against us or our directors
and officers.


 


Our business is dependent on key executives
and the loss of any of our key executives could adversely affect our business, future operations and financial condition.


 


We are dependent on the services of key
executives, including our sole officer and director, Art Agolli. Mr. Agolli has many years of experience and an extensive background
in the oil industry in general. We may not be able to replace that experience and knowledge with other individuals. We do not have
“Key-Man” life insurance policies on our key executives. The loss of our key executives or our inability to attract
and retain additional highly skilled employees may adversely affect our business, future operations, and financial condition.


The elimination of monetary liability
against our directors, officers and employees under Nevada law and the existence of indemnification rights to our directors, officers
and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers
and employees.


 


Our Articles of Incorporation contain a
provision permitting us to eliminate the personal liability of our directors to our company and shareholders for damages for breach
of fiduciary duty as a director or officer to the extent provided by Nevada law.  The foregoing indemnification obligations
could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors
and officers, which we may be unable to recoup.  These provisions and resultant costs may also discourage our company
from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the
filing of derivative litigation by our shareholders against our directors and officers even though such actions, if successful,
might otherwise benefit our company and shareholders.


 


Our stock is categorized as a penny
stock.  Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a shareholder’s
ability to buy and sell our stock.


 


Our stock is categorized as a penny stock.  The
SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price
(as defined) less than US$ 5.00 per share or an exercise price of less than US$ 5.00 per share, subject to certain exceptions.  Our
securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell
to persons other than established customers and accredited investors.  The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document
in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock
market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customer’s account.  The bid and offer quotations, and the broker-dealer
and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customer’s confirmation.  In addition, the penny
stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must
make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s
written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for the stock that is subject to these penny stock rules.  Consequently, these penny
stock rules may affect the ability of broker-dealers to trade our securities.  We believe that the penny stock rules
discourage investor interest in and limit the marketability of our common stock.


 


 






    	 



    	 



    



 


FINRA sales practice requirements
may also limit a shareholder’s ability to buy and sell our stock.


 


In addition to the “penny stock”
rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must
have reasonable grounds for believing that the investment is suitable for that customer.  Prior to recommending speculative
low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about
the customer’s financial status, tax status, investment objectives and other information.  Under interpretations
of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for
at least some customers.  The FINRA requirements make it more difficult for broker-dealers to recommend that their customers
buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.


 


To date, we have not paid any cash dividends
and no cash dividends will be paid in the foreseeable future.


 


We do not anticipate paying cash dividends
on our common stock in the foreseeable future and we may not have sufficient funds legally available to pay dividends.  Even
if the funds are legally available for distribution, we may nevertheless decide not to pay any dividends.  We presently
intend to retain all earnings for our operations.


 


A limited public trading market exists
for our common stock, which makes it more difficult for our stockholders to sell their common stock in the public markets.


 


Our common shares are currently traded
under the symbol “PSON,” but currently with low or no volume, based on quotations on the “Over-the-Counter Bulletin
Board,” meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given
time may be relatively small or non-existent.  This situation is attributable to a number of factors, including the fact
that we are a small company which is still relatively unknown to stock analysts, stock brokers, institutional investors, and others
in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons,
they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase
of our shares until such time as we became more viable.  Additionally, many brokerage firms may not be willing to effect
transactions in the securities.  As a consequence, there may be periods of several days or more when trading activity
in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity
that will generally support continuous sales without an adverse effect on share price.  We cannot give you any assurance
that a broader or more active public trading market for our common stock will develop or be sustained, or that trading levels will
be sustained.


 


Shareholders should be aware that, according
to SEC Release No. 34-29093, the market for “penny stocks” has suffered in recent years from patterns of fraud and
abuse.  Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often
related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and
misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by
inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5)
the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level,
along with the resulting inevitable collapse of those prices and with consequent investor losses.  Our management is
aware of the abuses that have occurred historically in the penny stock market.  Although we do not expect to be in a
position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within
the confines of practical limitations to prevent the described patterns from being established with respect to our securities.  The
occurrence of these patterns or practices could increase the future volatility of our share price.


 






    	 



    	 



    
 


 


If we issue additional shares in the
future, it will result in the dilution of our existing shareholders.


 


Our articles of incorporation authorize
the issuance of up to 843,750,000 shares of common stock with a par value of $0.001 per share. Our Board of Directors may choose
to issue some or all of such shares to acquire one or more companies or properties and to fund our overhead and general operating
requirements. The issuance of any such shares may reduce the book value per share and may contribute to a reduction in the market
price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate
ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.


 


THE FOREGOING RISK FACTORS
DO NOT PURPORT TO BE A COMPLETE EXPLANATION OF ALL OF THE RISKS INVOLVED IN PURCHASING THE SHARES OFFERED HEREIN. POTENTIAL INVESTORS
SHOULD READ THIS MEMORANDUM IN ITS ENTIRETY AND REVIEW THE COMPANY’S EXCHANGE ACT DOCUMENTS BEFORE DETERMINING WHETHER TO
PURCHASE THE SHARES.