# EDGAR Filing Document

**Accession Number:** 0001953988
**File Stem:** 0001213900-25-056650
**Filing Date:** 2025-6
**Character Count:** 281916
**Document Hash:** 2a8799c016a1c7ec152cf1073adad6d6
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-056650.hdr.sgml**: 20250623

**ACCESSION NUMBER**: 0001213900-25-056650

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 75

**CONFORMED PERIOD OF REPORT**: 20250430

**FILED AS OF DATE**: 20250623

**DATE AS OF CHANGE**: 20250623

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Helio Corp /FL/
- **CENTRAL INDEX KEY:** 0001953988
- **STANDARD INDUSTRIAL CLASSIFICATION:** GUIDED MISSILES & SPACE VEHICLES & PARTS [3760]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 920286004
- **STATE OF INCORPORATION:** FL
- **FISCAL YEAR END:** 1031

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 333-284062
- **FILM NUMBER:** 251064746

**BUSINESS ADDRESS:**
- **STREET 1:** 2448 SIXTH STREET
- **CITY:** BERKELEY
- **STATE:** CA
- **ZIP:** 94710
- **BUSINESS PHONE:** 510-545-2666

**MAIL ADDRESS:**
- **STREET 1:** 2448 SIXTH STREET
- **CITY:** BERKELEY
- **STATE:** CA
- **ZIP:** 94710

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** WEB3 Corp
- **DATE OF NAME CHANGE:** 20230621

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Stirling Bridge Group Inc
- **DATE OF NAME CHANGE:** 20221109

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

**FORM 10-Q**

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended **April 30, 2025**

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______

Commission file number: **333-284062**

**HELIO CORPORATION** (Name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Florida** | **92-0586004** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification Number) |

---

**2448 Sixth Street Berkeley, CA 94710**

(Address of principal executive offices including zip code)

**(510) 224-4495**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: **None**

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act

(Check one):

☐ Large accelerated Filer ☐ Accelerated Filer <br> ☒ Non-accelerated Filer ☒ Smaller reporting company <br> ☒ Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of June 23, 2025, there were 11,263,633 shares of the registrant's common stock, no par value per share, outstanding.

**Table of Contents**

---

| | |
|:---|:---|
| [PART I—FINANCIAL INFORMATION](#a_001) | 1 |
| &nbsp;&nbsp;&nbsp;[Item 1. Financial Statements](#a_002) | 1 |
| &nbsp;&nbsp;&nbsp;[Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_003) | 2 |
| &nbsp;&nbsp;&nbsp;[Item 3. Quantitative and Qualitative Disclosures About Market Risk](#a_004) | 13 |
| &nbsp;&nbsp;&nbsp;[Item 4. Controls and Procedures](#a_005) | 13 |
| [PART II—OTHER INFORMATION](#a_006) | 15 |
| &nbsp;&nbsp;&nbsp;[Item 1. Legal Proceedings](#a_007) | 15 |
| &nbsp;&nbsp;&nbsp;[Item 1A. Risk Factors](#a_008) | 15 |
| &nbsp;&nbsp;&nbsp;[Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](#a_009) | 15 |
| &nbsp;&nbsp;&nbsp;[Item 4. Mine Safety Disclosures](#a_010) | 15 |
| &nbsp;&nbsp;&nbsp;[Item 5. Other Information](#a_011) | 15 |
| &nbsp;&nbsp;&nbsp;[Item 6. Exhibits](#a_012) | 16 |
| [SIGNATURES](#a_013) | 17 |

---

i

**PART I—FINANCIAL INFORMATION**

**Item 1. Financial Statements**

The following unaudited interim condensed consolidated financial statements of Helio Corporation (referred to herein as the "Company,") are included in this Quarterly Report on Form 10-Q (the "Quarterly Report").

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission (the "SEC"), In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

**Helio Corporation**

**Financial Statements for the Three and Six Months Ended April 30, 2025**

**Index to the Condensed Consolidated Financial Statements (Unaudited)**

---

| | |
|:---|:---|
|  | **Page No.** |
| [Condensed Consolidated Balance Sheets at April 30, 2025 (Unaudited) and October 31, 2024](#a_015) | F-2 |
| [Condensed Consolidated Statements of Operations for the three and six months ended April 30, 2025 and 2024 (Unaudited)](#a_016) | F-3 |
| [Condensed Consolidated Statements of Changes in Shareholders' Deficit for the three and six months ended April 30, 2025 and 2024 (Unaudited)](#a_017) | F-4 |
| [Condensed Consolidated Statements of Cash Flows for the six months ended April 30, 2025 and 2024 (Unaudited)](#a_018) | F-5 |
| [Notes to Condensed Consolidated Financial Statements (Unaudited)](#a_019) | F-6 |

---

**HELIO CORPORATION**

**CONDENSED CONSOLIDATED BALANCE SHEETS** 

---

| | | |
|:---|:---|:---|
|  | **April 30,**<br>**2025** | **October 31,**<br>**2024** |
|  | (unaudited) | (audited) |
| **Assets** |  |  |
| Current Assets: |  |  |
| Cash | $15699 | $551552 |
| Accounts receivable, net | 1008853 | 1390202 |
| Work in progress | 168681 | 343218 |
| Prepaid expenses and other current assets | 13102 | - |
| Total Current Assets | 1206335 | 2284972 |
| Property and equipment, net | 76057 | 87389 |
| Security deposits | 76655 | 76655 |
| Right-of-use assets, net | 759339 | 959377 |
| Total Non-current Assets | 912051 | 1123421 |
| **TOTAL ASSETS** | $2118386 | $3408393 |
| **Liabilities and Shareholders' Deficit** |  |  |
| LIABILITIES |  |  |
| Current Liabilities: |  |  |
| Accounts payable and accrued expenses | $240674 | $140439 |
| Accrued compensation | 772280 | 805405 |
| Notes Payable - related parties | 565469 | 420000 |
| Notes payable | 1350000 | 200000 |
| Operating lease obligations, current | 368532 | 503124 |
| Total Current Liabilities | 3296955 | 2068968 |
| Notes payable - related parties, less current portion | 577877 | 182877 |
| Notes payable, less current portion | 150000 | 1150000 |
| Operating lease obligations | 542150 | 608723 |
| Total Non-current Liabilities | 1270027 | 1941600 |
| **Total Liabilities** | 4566982 | 4010568 |
| Commitments and contingencies (Note 8) |  |  |
| **Shareholders' Deficit** |  |  |
| Common stock, no par value, 44,000,000 shares authorized; 11,263,633 shares issued and outstanding as of April 30, 2025 and October 31, 2024, respectively | 427615 | 339861 |
| Accumulated deficit | (2876211) | (942036) |
| **Total Shareholders' Deficit** | (2448596) | (602175) |
| **Total Liabilities and Shareholders' Deficit** | $2118386 | $3408393 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**HELIO CORPORATION**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** |
|  | **April 30,**<br>**2025** | **April 30,**<br>**2024** | **April 30,**<br>**2025** | **April 30,**<br>**2024** |
| **Revenue:** |  |  |  |  |
| Service fees | $835656 | $622830 | $1595362 | $1582270 |
| Engineering fees | 94524 | 299201 | 249353 | 549870 |
| Materials | 242080 | 735820 | 755121 | 1540043 |
| **Total Revenue** | 1172260 | 1657851 | 2599836 | 3672183 |
| Costs of revenue | 977895 | 1058680 | 1994743 | 2285954 |
| **Gross profit** | 194365 | 599171 | 605093 | 1386229 |
| **Operating expenses** |  |  |  |  |
| General and administrative expenses | 875942 | 978882 | 1757161 | 1804682 |
| Facilities expense | 170803 | 210808 | 358184 | 357725 |
| Professional fees | 44081 | 124506 | 222819 | 146901 |
| Depreciation expense | 5666 | 5666 | 11332 | 11332 |
| Right of use amortization | 18482 | 11091 | 41612 | 29573 |
| Total Operating Expenses | 1114974 | 1330953 | 2391108 | 2350213 |
| **Operating loss** | (920609) | (731782) | (1786015) | (963984) |
| **Other expense:** |  |  |  |  |
| Interest expense, net | (94424) | (21606) | (148160) | (31129) |
| Loss before income taxes | (1015033) | (753388) | (1934175) | (995113) |
| Provision for income taxes | - | - | - | - |
| **Net loss** | $(1015033) | $(753388) | $(1934175) | $(995113) |
| **Basic and diluted net loss per share** | $(0.09) | $(0.07) | $(0.17) | $(0.09) |
| **Weighted average shares outstanding – basic and diluted** | 11263633 | 11263633 | 11263633 | 11263633 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**HELIO CORPORATION**

**CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT) EQUITY**

**(UNAUDITED)**

**FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 2025 AND 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **No par-value** | **No par-value** | | |
|  | **Common Stock** | **Common Stock** | | |
|  | **Shares** | **Amount** |<br>**Accumulated**<br>**Deficit** |<br>**Totals** |
| **Balances as of October 31, 2023 (as previously reported)** | 16000000 | $33256 | $920647 | $953903 |
| &nbsp;&nbsp;&nbsp;Conversion of shares due to recapitalization\* | (4736367) | 81818 | - | 81818 |
| **Balances at October 31, 2023, effect of recapitalization** | 11263633 | $115074 | $920647 | $1035721 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  | 21154 | - | 21154 |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | (241726) | (241726) |
| **Balances at January 31, 2024** | 11263633 | $136228 | $678921 | $815149 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  | 61767 |  | 61767 |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | (753388) | (753388) |
| **Balances at April 30, 2024** | 11263633 | $197995 | $(74467) | $123528 |
| **Balances at October 31, 2024** | 11263633 | $339861 | $(942036) | $(602175) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  | 46497 | - | 46497 |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | (919142) | (919142) |
| **Balances at January 31, 2025** | 11263633 | $386358 | $(1861178) | $(1474820) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  | 41257 |  | 41257 |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | (1015033) | (1015033) |
| **Balances at April 30, 2025** | 11263633 | $427615 | $(2876211) | $(2448596) |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**HELIO CORPORATION**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(UNAUDITED)**

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended <br> April 30,** | **For the Six Months Ended <br> April 30,** |
|  | **2025** | **2024** |
| **CASH FLOWS USED IN OPERATING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(1934175) | $(995113) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash (used in) operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 11332 | 11332 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 87754 | 82921 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right of use asset amortization | 200038 | 170228 |
| &nbsp;&nbsp;&nbsp;Changes in assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 381349 | 1091541 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (13102) | 799 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Work in progress | 174537 | (455085) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 100235 | (352396) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | (33125) | 175945 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease obligations | (201165) | (150252) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash (used in) operating activities** | (1226322) | (420080) |
| **CASH FLOWS FROM FINANCING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes payable | 150000 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes payable - Related party | 545000 | 606555 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of notes payable - Related party | (4531) | (13852) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recapitalization | - | 81818 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by financing activities** | 690469 | 674521 |
| **NET (DECREASE) INCREASE IN CASH** | (535853) | 254441 |
| **CASH - BEGINNING OF PERIOD** | 551552 | 504335 |
| **CASH - END OF PERIOD** | $15699 | $758777 |
| **CASH PAID DURING THE PERIOD FOR:** |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | $82024 | $2157 |
| &nbsp;&nbsp;&nbsp;Income taxes | $- | $- |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**HELIO CORPORATION**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**April 30, 2025**

**(UNAUDITED)**

**NOTE 1: BUSINESS**

Helio Corporation (the "Company" or "Helio") is an aerospace technology, engineering, and research and development (R&D) holding company serving commercial, government, and non-profit organizations. Heliospace Corporation ("Heliospace"), the Company's wholly-owned subsidiary, is an aerospace company specializing in the design, engineering, assembly and test of space flight qualified hardware, providing systems engineering, modeling, analysis, integration and test services for space missions. Heliospace was incorporated on March 6, 2018 in Delaware. The Company's products include aerospace related hardware, systems, and services for customers such as NASA, universities, and private space companies. The customer base ranges from NASA and foreign space agencies to private companies, foundations, universities, and non-profits.

Heliospace designs, fabricates, assembles and tests space qualified hardware, including radar antennas for the NASA Europa Clipper mission, antennas for the SunRISE CubeSat constellation, and deployable systems and sensors for numerous lunar landers and the Mars Sample Return program. Heliospace also provides systems engineering, integration and test, and mission formulation services, including support for the design, testing, and launch of the James Webb Space Telescope, formulation and design of the Roman Space Telescope, Habworlds Observatory, Mars Sample Return, and the Atmospheric Observing System.

 

*Change-in-control Transaction*

On October 3, 2022, Helio was incorporated in Florida, under the name Stirling Bridge Group, Inc. In October of 2023, the Company changed its name to Web3 Corporation. In January 2024, the Company acquired 100% of Heliospace's common stock shares in exchange for 9,975,733 newly issued Common Stock Shares of the Company (the "Share Exchange"), and changed its name from Web3 Corporation to the Helio Corporation. The Company's principal executive offices are located at 2448 Sixth Street, Berkeley, CA 94710. The transaction was accounted for as a recapitalization of Heliospace as Heliospace was deemed the accounting acquirer. The historical financial statements are that of Heliospace; therefore the pre-transaction financial statements are that of Heliospace. The transaction was effective on January 4, 2024 and combines the financial statements from the transaction date forward.

***Liquidity***

The Company has historically funded its working capital, research and development and capital expenditure requirements and other commitments (including debt service and repayment) from its operating cash flows, debt financing, and issuances of equity. The Company has historically experienced negative cash flows from operations and recurring net losses.

In May and June 2025, the Company entered an additional note payable agreement and a Receivables Sale Agreement to obtain additional funding (see Note 12). Additional financing or capital investment will be necessary to sustain operations for one year from the issuance of these condensed consolidated financial statements.

As part of management's ongoing efforts to strengthen the Company's financial position, the Company is pursuing a best-efforts registered offering of its securities between $3.0 million and $5.0 million. The offering would be conducted under an amendment of an existing, effective registration statement on Form S-1 previously filed with the U.S. Securities and Exchange Commission. The Company expects to file a post-effective amendment (Form S-1/A) to update certain offering terms and disclosures. The offering remains subject to market conditions and the successful negotiation of terms with prospective investors. There can be no assurance that the Company will proceed with the offering or that, if commenced, it will be completed on favorable terms or at all.

Concurrently, the Company is engaged in negotiations with two prospective lenders regarding potential bridge financing arrangements. These discussions are ongoing, and there can be no assurance that the Company will enter into definitive agreements or that any such financing will be completed on favorable terms or at all.

If completed, the Company expects to use the net proceeds from the registered offering and bridge financing to repay certain outstanding promissory notes and to support key operational initiatives. These include investments in research and development, expansion of sales, marketing, and business development activities, facility and infrastructure enhancements, manufacturing improvements, and other general corporate purposes, including working capital and upgrades to the Company's financial and contract management systems.

The Company will need to raise substantial additional capital to accomplish its business plan for the foreseeable future. There can be no assurance as to the availability, if any, or terms upon which such financing and capital might be available in the future. As of April 30, 2025, the Company had cash and cash equivalents of $15,699, a decrease of $535,853 from $551,552 as of October 31, 2024.

The Company has outstanding unsecured notes to certain related parties with an aggregate outstanding principal balance of $1,143,346 as of April 30, 2025, the proceeds of which were used to meet working capital and cash flow management needs. The notes bear interest at between 6.5% and 11.25% per annum. $564,469 of these notes mature in the current 2025 fiscal year, and the remaining $577,877 mature in the 2026, 2027, or 2028 fiscal years.

As of April 30, 2025, the Company has outstanding debt from unrelated parties pursuant to notes payable in the aggregate principal amount of $1,500,000. These notes bear interest at 9.75% and 12.00% and mature within the next two fiscal years. Certain of these notes were initially convertible but were amended to eliminate the conversion features in consideration of the issuance by the Company and/or the transfer by certain shareholders of shares of the Company's common stock (See Note 5). Interest on these notes either accrues or is paid quarterly or at maturity along with principal, as specifically described in the note. Upon the occurrence and during the continuance of any default by the Company under any of the above notes, which default is not cured within fifteen (15) days following written notice of such default from the payee, the payee may declare the entire unpaid principal and unpaid interest immediately due and payable. Certain of these notes are secured by the Company's accounts receivable, and by shares of common stock pledged by one of the Company's shareholders. In addition, certain of these notes become due, and the payees under certain of these notes have the right to accelerate their notes, upon the completion of an offering.

Because of historical and expected operating losses and net operating cash flow deficits, there is substantial doubt about the Company's ability to continue as a going concern for one year from the issuance of the unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared under the going concern basis of accounting. These unaudited condensed consolidated financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty.

**NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of Presentation and Consolidation***

 ****

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to U.S. generally accepted accounting principles ("U.S. GAAP) and reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results of the interim periods presented, under the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). These unaudited condensed consolidated financial statements include all adjustments consisting of only normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. The unaudited condensed consolidated financial statements include the accounts of Helio Corporation and its wholly-owned subsidiary Heliospace. The Company's unaudited condensed consolidated financial statements reflect the elimination of all significant inter-company accounts and transactions. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending October 31, 2025. Certain information and note disclosures normally included in the Company's annual audited consolidated financial statements and accompanying notes prepared in accordance with U.S. GAAP have been condensed in, or omitted from, these interim financial statements. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes to the consolidated financial statements for the fiscal year ended October 31, 2024 included in the Company's financial statements included in Form S-1/A filed with the SEC on March 7, 2025.

***Reclassification***

In the preparation of the unaudited condensed consolidated financial statements, the Company identified a $50,000 amount previously classified as Notes payable was more appropriately classified as Notes payable – related parties within the consolidated balance sheet as of October 31, 2024. Upon evaluation, the Company determined that the impact of this reclassification was immaterial to the consolidated financial statements taken as a whole. The reclassification is reflected within the October 31, 2024 balances presented in the accompanying unaudited condensed consolidated balance sheets, and was made to enhance comparability and transparency of the financial statements.

 ****

***Cash and Cash Equivalents***

For the purposes of the unaudited condensed consolidated statements of cash flows, the Company considers all highly liquid investments purchased with a maturity of three (3) months or less to be cash equivalents. The Company has no cash equivalents as of April 30, 2025 and October 31, 2024.

Cash accounts are insured at the Federal Deposit Insurance Corporation limits of $250,000 per bank. At times throughout the year, such bank balances may have exceeded the federally insured limit. As of April 30, 2025, there were no bank balances in excess of the federally insured limit.

 ****

***Work In Progress***

Work In Progress (WIP) tracks the costs incurred of a specific job that has not reached a certain milestone achievement. This is the computed value of work performed to advance milestone(s) that have not yet been billed and is used to track total job cost (billed and unbilled). Revenue of WIP is only recognized for specific milestones that are distinct contractual performance obligations that provide identifiable benefits to the customer independently of other project phases.

 ****

***Accounts Receivable, net***

Accounts receivables are recorded at the amount the Company expects to collect on the balance outstanding at period-end. Management closely monitors outstanding balances during the year and allocates an allowance account if appropriate. The Company estimates and records a provision for its expected credit losses related to its financial instruments, including its trade receivables and contract assets. The Company considers historical collection rates, the current financial status of its customers, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses. However, because of the short time to the expected receipt of accounts receivable, the Company believes that the carrying value, net of expected losses, approximates fair value and therefore, relies more on historical and current analysis of such financial instruments. Based on this analysis, the Company has determined that no allowance for credit losses is necessary for the current or prior reporting periods.

As of April 30, 2025 and October 31, 2024, there was no amount recorded relating to the allowance for credit losses. The Company writes off bad debts as they occur during the year, if applicable. Accounts receivable as of April 30, 2025 and October 31, 2024 was $1,008,853 and $1,390,202.

***Property and Equipment, net***

Property and equipment is stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in the unaudited condensed consolidated statements of operations during the period in which the disposal occurred. The Company computes depreciation utilizing estimated useful lives, as stated below:

---

| | |
|:---|:---|
| **Property and Equipment, net Categories** | **Estimated<br> Useful Life** |
| Furniture and equipment | 10 Years |

---

Management regularly reviews property and equipment for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based on management's assessment, there were no indicators of impairment of the Company's property and equipment as of April 30, 2025 or October 31, 2024, respectively.

 ****

 ****

***Use of Estimates***

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 ****

***Fair Value Measurements***

Accounting Standards Codification ("ASC") 820 *Fair Value Measurements* defines fair value, establishes a framework for measuring fair value in U.S. GAAP and expands disclosure about fair value measurements.

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:

---

| | |
|:---|:---|
| Level 1 — | fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities); |
| Level 2 — | fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and |
| Level 3 — | fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). |

---

Financial instruments classified as Level 1 quoted prices in active markets include cash.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management for the respective periods. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, short-term notes payable, accounts payable and accrued expenses. The carrying value of long-term debt approximates fair value, as the variable interest rates approximate current market rates.

 ****

***Revenue Recognition***

The Company records revenue based on a five-step model in accordance with the Financial Accounting Standards Board ("FASB") ASC 606, *Revenue from Contracts with Customers*, which requires the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Identify the contract with a customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Identify the performance obligations in the contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Determine the transaction price of the contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Allocate the transaction price to the performance obligations in the contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Recognize revenue when the performance obligations are met or delivered.

The Company's operating revenues are primarily generated from service fees, engineering fees, and materials fees. The Company uses two different types of contracts which are deliverable based or time based. The Company recognizes revenue related to services when performance obligations are fulfilled.

Design service contracts deliver system engineering inputs including designs, analyses, test and verification plans, and mission formulation architectures on a continual basis over the course of a contract. Customer work is based on distinct identifiable contracts with clear performance obligations, objectives, and pricing. Service revenue contract types are either Time & Materials (T&M) or Purchase Order (PO) contracts. Time & Materials contracts meet performance obligations continuously and are billed with revenue recognized at each invoice. PO contracts are billed at fulfillment of a performance obligation based on the customer agreements, and thus revenue is recognized when earned.

Engineering services deliver both space qualified hardware and accompanying analyses, and are conducted under Cost-type, Fixed price, PO, and T&M contracts. Cost-type and T&M Engineering contracts are billed monthly as work is completed and revenue is recognized. Revenue for fixed price contracts including purchase orders that specify priced milestones for delivery of hardware, reports, or analyses is recognized upon completion of a specific milestone. Revenue on fixed price contracts that are still in progress at month end are otherwise recognized on the percentage-of-completion method, measured by the percentage of total costs incurred to date to the estimated total costs for each contract.

***Income Taxes***

The Company accounts for income taxes under the provisions of ASC 740 *Accounting for Income Taxes,* which requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.

Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred income taxes are also recognized for carry-forward losses which can be utilized to offset future taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the net deferred tax assets will not be realized. The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and cause a change in management's judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income. Income tax expense is comprised of the sum of current income tax plus the change in deferred tax assets and liabilities.

 ****

***Earnings (loss) Per Share***

Basic net (loss) income per common share is computed by dividing net (loss) income by the weighted average number of vested common shares outstanding during the period. Diluted net (loss) income per common share is computed by dividing net (loss) income by the weighted average number of outstanding common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of April 30, 2025 and 2024, the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive.

---

| | | |
|:---|:---|:---|
|  | **April 30,** | **April 30,** |
|  | **2025** | **2024** |
| **Stock options** | 1422307 | 1422307 |
| **Total common stock equivalents** | 1422307 | 1422307 |

---

***Leases***

The Company accounts for leases based on Accounting Standards Codification (ASC) Topic 842, *Leases.* Based on this standard, the Company determines if an agreement is a lease at inception. Operating leases are included in right-of-use asset, current operating lease obligations, and operating lease obligations, in the Company's unaudited condensed consolidated balance sheets. Finance leases are included in property and equipment, net, current portion of long-term debt, net and long-term debt, less current portion, and debt issuance costs in the Company's unaudited condensed consolidated balance sheets.

 ****

As permitted under ASU 2016-02 *Leases* (Topic 842) the Company has made an accounting policy election not to apply the recognition provisions of ASU 2016-02 to short term leases (leases with a lease term 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term.

 **

***Research and Development***

 **

Research and development costs are expensed as incurred. These costs include, but are not limited to, employee related expenses, including salaries, benefits and stock-based compensation of research and development personnel, supplies; facilities, depreciation and other expenses, which include direct and allocated expenses for rent, utilities and insurance.

 ****

***Stock based-Based Compensation***

The Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718, *Stock Compensation*. The computation of the expense associated with stock-based compensation requires the use of a valuation model. The Company currently obtains valuation reports according to FASB ASC Topic 718 — *Stock Compensation* ("ASC 718"). Equity-based compensation consists solely of stock option awards, including Incentivized Stock Options (ISOs) and Non-Qualified Stock Options (NSOs), whose exercise prices are determined by the 409A valuation reports. Compensation expense is recognized ratably over the vesting period as the employee provides services. See Note 6 – Stock Options for additional information.

 ****

 ****

***Benefit Plan***

The Company offers a 401(k) plan. Employees are eligible to participate in the plan on the first day of the month following the date of hire. Employees may defer up to $23,500 for 2025 and $23,000 for 2024. The Company is required to contribute on behalf of each eligible participating employee. The Company will match 100% of the participants deferral not to exceed 4% of employee compensation. Employees will share in the matching contribution regardless of the amount of service completed during the plan year. Employees will become 100% vested in the employer matching contributions after six years of service. In the three and six months ended April 30, 2025, benefit contributions were $49,895 and $92,546, respectively. In the three and six months ended April 30, 2024, benefit contributions were $43,285 and $91,304, respectively.

 ****

***Subsequent Events***

The Company evaluates events and transactions that occur after the condensed consolidated balance sheet date through the date the unaudited condensed consolidated financial statements are issued or available for issuance, to determine whether they should be recognized or disclosed in the unaudited condensed consolidated financial statements.

 ****

***Recently Issued Accounting Pronouncements***

Recent accounting pronouncements that the Company has adopted or that will be required to adopt in the future are summarized below.

In November 2023, the FASB issued ASU No. 2023-07, *Segment Reporting* (Topic 280): *Improvements to Reportable Segment Disclosures*. This standard requires a public entity to disclose significant segment expenses and other segment items on an interim and annual basis. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker ("CODM"). The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company adopted this ASU in the previous quarter ended January 31, 2025. The adoption of this ASU had no effect on the Company's results of operations. See Note 11 for the required disclosures associated with this update.

The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

**NOTE 3: PROPERTY AND EQUIPMENT**

The major classifications of property and equipment are summarized as follows:

---

| | | |
|:---|:---|:---|
|  | **April 30, 2025** | **October 31, 2024** |
| Property and equipment | $465091 | $465091 |
| Less accumulated depreciation | (389034) | (377702) |
| Property and equipment, net | $76057 | $87389 |

---

Depreciation expense for each of the three months ended April 30, 2025 and 2024 was $5,666. Depreciation expense for each of the six months ended April 30, 2025 and 2024 was $11,332.

**NOTE 4: NOTES PAYABLE – RELATED PARTIES**

Between April 2022 and February 2025, certain related parties, including the Company's Chief Executive Officer and Director and its Chief Engineer and Director, made various loans to the Company. The balance at April 30, 2025 and October 31, 2024 was $1,143,346 and $602,877, respectively. The loans' terms are between 5 and 36 months and are classified as current and non-current liabilities on the unaudited condensed consolidated balance sheets with 6.50% to 11.25% interest per annum. All unpaid principal, accrued interest, and other amounts owing under the above notes are paid at maturity. These notes are collateralized with the Company receivables and other assets.

Included within the notes payable – related parties balance is a convertible note agreement entered on March 18, 2024 for $50,000. The convertible note was scheduled to mature on March 18, 2026 and carries an interest rate of 9.75% per annum. The principal and prior accrued interest of the note was convertible into shares of the Company's common stock at $2.00 per share. On October 31, 2024, the Company amended the agreement with the holder of the note to change its maturity to the earlier of the date that the Company lists its securities on a national stock exchange or March 31, 2025 and eliminated the conversion feature of the note. Interest on the note accrues and is paid at maturity along with principal, as specifically described in the note. The loan incurred interest expense of $2,438, which was accrued on the unaudited condensed consolidated balance sheet as of April 30, 2025 within the Accounts payable and accrued expenses line item. On April 25, 2025, the Company executed an extension of the maturity date until the earlier of the date the Company is able to achieve a listing on a national stock exchange or June 30, 2025. The terms of the amended note were not substantially different than the original and therefore did not result in an extinguishment of the original note.

On April 16, 2025, the Company issued an unsecured promissory note in the principal amount of $150,000 to Indicia Capital, LLC. The note bears interest at a rate of 9.75% per annum and matures on the earlier of (i) 180 days from the date of issuance or (ii) the date the Company receives at least $1,000,000 in new financing. In connection with the issuance of the note, the Chief Executive Officer and Director transferred 15,000 shares of the Company's common stock to Indicia Capital as additional consideration to enter the loan. James Byrd, who serves as a co-manager and holds a 50% membership interest in Indicia Capital, was the original organizer of the Company by virtue of having founded the Company in October 2022. Accordingly, the transaction is considered a related party transaction. The loan incurred interest expense of $561 for the three and six months ended April 30, 2025. Accrued interest as of April 30, 2025 is $561, which was accrued on the unaudited condensed consolidated balance sheet as of April 30, 2025 within the Accounts payable and accrued expenses line item.

---

| | | |
|:---|:---|:---|
|  | **April 30, 2025** | **October 31, 2024** |
| Notes payable – related parties, current portion | $565469 | $420000 |
| Notes payable – related parties, non-current portion | 577877 | 182877 |
| Total notes payable – related parties | $1143346 | $602877 |

---

The aggregate maturity on the notes payable – related parties as of April 30, 2025, are as follows:

---

| | |
|:---|:---|
| 2025 | $565469 |
| 2026 | 82877 |
| 2027 | 110000 |
| 2028 | 385000 |
|  | 1143346 |
| Less current portion | (565469) |
| Notes payable – related parties, non-current portion | $577877 |

---

**NOTE 5: NOTES PAYABLE**

On June 20, 2024, the Company executed a convertible note payable agreement for $450,000 with a venture capital fund. The convertible note matures on June 20, 2026 and carries an interest rate of 9.75% per annum. The principal and prior accrued interest of the note were convertible into shares of the Company's common stock at $2.00 per share. On October 7, 2024, $50,000 of the note payable was assigned to an unrelated holder. On October 31, 2024, the Company amended the agreement with the holder of the $50,000 note to change its maturity to the earlier of the Company listing on a national stock exchange or March 31, 2025 and eliminated the conversion feature of the note. On October 17, 2024, the Company amended the agreement with the holder of the $400,000 note, which eliminated the conversion feature and advanced the date of the loan to November 5, 2025. Interest on the notes is paid quarterly or accrues and is to be repaid at maturity along with principal, as specifically described in the notes. The Company accounted for the amendment as an extinguishment of debt and recorded a loss of $8,100 on the consolidated statements of operations for the year ended October 31, 2024. The loan incurred interest expense of $9,750 and $19,500 for the three and six months ended April 30, 2025, respectively. Accrued interest as of April 30, 2025 is $3,250, which was accrued on the unaudited condensed consolidated balance sheets as of April 30, 2025 within the Accounts payable and accrued expenses line item. On April 25, 2025, the Company executed a loan amendment for an extension of the maturity date of the $50,000 portion of the note payable until the earlier of the date the Company is able to achieve a listing on a national stock exchange or June 30, 2025. The terms of the amended note were not substantially different than the original and therefore did not result in an extinguishment of the original note.

On July 31, 2024, the Company issued a convertible note payable agreement for $250,000. The convertible note matures on April 30, 2025 and carries an interest rate of 13% per annum. The principal and prior accrued interest of the note was convertible into shares of the Company's common stock at a price per share equal to a 30% discount per share of the final per-share price of a planned public offering. Subsequent to the issuance of the convertible note the Company amended the agreement with the holder which eliminated the conversion feature, changed the interest rate to 9.75% per annum, increased the principal of the note to $500,000, and extended the maturity date of the loan to November 5, 2025. Interest on the note either is paid quarterly or accrues and is paid at maturity along with principal, as specifically described in the note. Due to the elimination of the conversion feature the Company accounted for the amendment as a significant change resulting in an extinguishment of debt and recorded a loss of $15,750 on the consolidated statements of operations for the year ended October 31, 2024. The loan incurred interest expense of $12,188 and $24,376 for the three and six months ended April 30, 2025, respectively. Accrued interest as of April 30, 2025 is $4,062, which was accrued on the unaudited condensed consolidated balance sheet as of April 30, 2025 within the Accounts payable and accrued expenses line item.

On July 31, 2024, the Company executed a convertible note payable agreement for $250,000. The convertible note matures on May 1, 2025 and carries an interest rate of 13% per annum. The principal and prior accrued interest of the note was convertible into shares of the Company's common stock at $2.00 per share. Subsequent to the issuance of the convertible note the Company amended the agreement with the holder which eliminated the conversion feature, changed the interest rate to 9.75% per annum, and extended the maturity date of the loan to November 5, 2025. Interest on the note either accrues or is paid quarterly or at maturity along with principal, as specifically described in the note. The Company accounted for the amendment as an extinguishment of debt and recorded a loss of $4,500 on the consolidated statements of operations for the year ended October 31, 2024. The loan incurred interest expense of $6,094 and $12,188 for the three and six months ended April 30, 2025, respectively. Accrued interest as of April 30, 2025 is $2,031, which was accrued on the unaudited condensed consolidated balance sheet as of April 30, 2025 within the Accounts payable and accrued expenses line item.

On March 12, 2024, the Company executed a note payable agreement for $150,000. The note originally matured on March 12, 2025 and carries an interest rate of 12% per annum. On April 25, 2025, the Company executed an extension of the maturity date until the earlier of the date the Company is able to achieve a listing on a national stock exchange or June 30, 2025. Interest on the note accrues and is paid at maturity along with principal, as specifically described in the note. The loan incurred interest expense of $4,500 and $9,000 for the three and six months ended April 30, 2025. Accrued interest as of April 30, 2025 is $9,000, which was accrued on the unaudited condensed consolidated balance sheet as of April 30, 2025 within the Accounts payable and accrued expenses line item.

On January 9, 2025, the Company executed a note payable agreement for $50,000. The note matures on January 9, 2027 and carries an interest rate of 9.75% per annum. Interest on the note accrues and is paid at maturity along with principal, as specifically described in the note. The loan incurred interest expense of $1,219 and $2,438 for the three and six months ended April 30, 2025, respectively. Accrued interest as of April 30, 2025 is $2,438, which was accrued on the unaudited condensed consolidated balance sheet as of April 30, 2025 within the Accounts payable and accrued expenses line item.

On February 3, 2025, the Company executed a note payable agreement for $100,000. The note matures on February 9, 2027 and carries an interest rate of 9.75% per annum. Interest on the note accrues and is paid at maturity along with principal, as specifically described in the note. The loan incurred interest expense of $2,438 for the three and six months ended April 30, 2025. Accrued interest as of April 30, 2025 is $2,438, which was accrued on the unaudited condensed consolidated balance sheet as of April 30, 2025 within the Accounts payable and accrued expenses line item.

---

| | | |
|:---|:---|:---|
|  | **April 30, 2025** | **October 31, 2024** |
| Notes payable, current | $1350000 | $200000 |
| Notes payable, less current portion | 150000 | 1150000 |
| Total notes payable | $1500000 | $1350000 |

---

The aggregate maturity on the notes payable as of April 30, 2025, are as follows:

---

| | |
|:---|:---|
| 2025 | $1350000 |
| 2026 |  |
| 2027 | 150000 |
|  | 1500000 |
| Less current portion | (1350000) |
| Notes payable, non-current portion | $150000 |

---

**NOTE 6: STOCK OPTIONS**

The 2018 Equity Incentive Plan was approved by the Board of Directors on July 1, 2018 and the Company amended the equity plan on December 17, 2023. In conjunction with the recapitalization and effective January 3, 2024, the Company adopted the Heliospace 2018 Equity Plan as the Company's Plan ("Equity Plan"). The Equity Plan limits the shares of common stock authorized to be awarded as stock awards to 2,382,352 shares as of April 30, 2025 and October 31, 2024, respectively. Employees are provided stock options vesting over a period of four years with a one-year cliff. After one year, 25% of the award size vests followed by 1/48<sup>th</sup> of the award size for each month thereafter. On a case-by-case basis, options have been granted outright with no vest period.

Due to the change-in-control transaction described in Note 1, there was a recapitalization for which the Company's stock options were adjusted for the new capital structure. The Company adjusted each of the granted options at 0.612 factor.

During the three months ended April 30, 2025 and 2024, there were no stock options granted. During the six months ended April 30, 2025 and 2024, there were zero and 239,990 stock options granted, respectively.

The grant date fair value was calculated using the Black-Scholes option pricing model using the following weighted average inputs:

---

| | | |
|:---|:---|:---|
| Risk free interest rate | 3.90 | % – 3.90 |
| Expected term (years) | 6.01 | – 9.95 |
| Expected volatility | 65.79 | % – 68.51 |
| Expected dividends | 0.00 | % – 0.00 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of Shares** | <br>**Weighted Average <br> Shares ($)** | **Weighted Average (Years)** | <br>**Intrinsic Value** |
| Balance as of October 31, 2023 | 2004135 | $0.08 | 7.56 | $140289.45 |
| Recapitalization of options | (777241) | - | - | - |
| Issued | 239990 | 0.15 | 4.15 | 1163951 |
| Canceled | - | - | - | - |
| Exercised | - | - | - | - |
| Balance as of January 31, 2024 | 1466884 | $0.09 | 4.15 | $7200270 |
| Issued | - | - | - | - |
| Canceled | (44577) | - | - | (219319) |
| Exercised | - |  |  | - |
| Balance as of April 30, 2024 | 1422307 | $0.09 | 7.52 | $6980951 |
| Balance as of October 31, 2024 | 1422307 | 0.09 | 7.02 | 6980951 |
| Issued | - | - | - | - |
| Canceled | - | - | - | - |
| Exercised | - | - | - | - |
| Balance as of January 31, 2025 | 1422307 | $0.09 | 7.02 | $6980951 |
| Issued | - | - | - | - |
| Canceled | - | - | - | - |
| Exercised | - | - | - | - |
| Balance as of April 30, 2025 | 1422307 | $0.09 | 6.52 | $6980951 |

---

Stock-based compensation from stock awards for the three months ended April 30, 2025 and 2024 was $41,257 and $61,767, respectively. Stock-based compensation from stock awards for the six months ended April 30, 2025 and 2024 was $87,754 and $82,921, respectively. As of April 30, 2025 and 2024, there remained $184,729 and $378,771 of unrecognized stock-based compensation from stock option awards, respectively. As of April 30, 2025, there were 1,195,268 shares of common stock related to stock option grants that were vested and 227,039 stock option grants that were unvested. As of April 30, 2024, there were 995,325 shares of common stock related to stock option grants that were vested and 426,982 stock option grants that were unvested.

The fair value of the stock was determined using observable inputs (level 2 fair value measurement) with a market approach technique. The main input for the common stock fair value was the price of the Company's common stock as of the date of the grant.

**NOTE 7: LEASES**

The Company leases its office and manufacturing facility both classified as operating leases. The Company recognized right of use assets and lease liabilities pursuant to these leases. Leases with an initial term of 12 months or less or leases that are immaterial are not included on the unaudited condensed consolidated balance sheets. The lease liability was calculated at the commencement date of each lease by discounting the future payments using the Company's incremental borrowing rate of 10%.

In addition, the Company is a lessee under four leases with an initial term of 12 months or less. These leases combine for approximately $17,000 and $31,500 of lease expense for the three months ending April 30, 2025 and 2024, respectively.

The lease for the manufacturing facility commenced on June 1, 2022 and has a term of five years. For the first year the monthly lease payments were $36,000. The monthly lease payments are subject to an annual increase of 3%.

The office lease commenced on September 1, 2023 and has a term of two years. The rent is fixed at $3,909 for the term of the lease.

Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of April 30, 2025 were as follows:

---

| | |
|:---|:---|
| 2025 | $368532 |
| 2026 | 520834 |
| 2027 | 162072 |
| Total future minimum lease payments | $1051438 |
| Less imputed interest | (140756) |
| Total operating lease liability | $910682 |

---

The Company recognized rent expense pursuant to these leases on the straight-line basis in accordance with the guidance in ASC 842. The Company recognized rent expense of $100,019 for the three months ended April 30, 2025 and 2024, and $200,038 for the six months ended April 30, 2025 and 2024, related to these leases, which is included within facilities expense on the unaudited condensed consolidated statements of operations.

**NOTE 8: COMMITMENTS AND CONTINGENCIES**

**Legal Proceedings**

The Company is not presently a party to any legal proceedings, the resolution of which the Company believes would have a material adverse effect on its business, financial condition, operating results, or cash flows. However, legal proceedings are subject to inherent uncertainties, and an unfavorable outcome could include monetary damages, and excessive verdicts can result from litigation, and as such, could result in a material adverse impact on its business, financial position, results of operations, and/or cash flows.

**NOTE 9: INCOME TAXES**

There was no income tax expense reflected in the results of operations for the quarters ended April 30, 2025 and 2024, because the Company carried forward net losses for tax purposes.

The following table reconciles the U.S. statutory rates to the Company's effective tax rate for the quarters ended April 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **April 30,**<br>**2025** | **April 30,**<br>**2024** |
| Federal income taxes at statutory rate | 21.00% | 21.00% |
| State income taxes at statutory rate | 7.29% | 6.97% |
| Change in valuation allowance | (29.20)% | (27.94)% |
| Other | 0.92% | (0.03)% |
| Totals | 0.00% | 0.00% |

---

Deferred tax assets as of April 30, 2025 and October 31, 2024 consist of the following components:

---

| | | |
|:---|:---|:---|
|  | **April 30, <br> 2025** | **October 31,<br> 2024** |
| Deferred tax assets | $- | $- |
| &nbsp;&nbsp;&nbsp;Net operating loss carryforwards | 912185 | 421921 |
| &nbsp;&nbsp;&nbsp;Capitalized research and development costs | 103757 | 100146 |
| &nbsp;&nbsp;&nbsp;Stock based compensation | 79527 | 54970 |
| &nbsp;&nbsp;&nbsp;ROU Liabilities | 254809 | - |
| &nbsp;&nbsp;&nbsp;Other | 210 | 210 |
| Total deferred tax asset | $1350488 | $577246 |
| &nbsp;&nbsp;&nbsp;Valuation allowance | (1124083) | (560134) |
| Deferred tax assets, net | $226405 | $17113 |
| Deferred tax liabilities |  |  |
| &nbsp;&nbsp;&nbsp;ROU Assets | (212463) | - |
| &nbsp;&nbsp;&nbsp;Depreciation | (13942) | (17113) |
| Net deferred tax assets | $- | $- |

---

The Company has net operating loss carry forwards available to offset future taxable income. Current tax laws limit the Company's ability to utilize these carryforwards. Because the Company's realization of the deferred tax assets is not certain, the Company fully offset the deferred tax assets resulting from these carryforwards with a valuation allowance. The Company has approximately $3,224,804 of federal and state net operating loss carrying forwards to offset future federal taxable income as of April 30, 2025. The Company has not recorded income tax expense or benefit in the three months ended April 30, 2025 and 2024 (because of its tax loss carryforwards).

The NOL carry forward is subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Under the Internal Revenue Code ("IRC") Sections 382 and 383, annual use of the Company's net operating loss carryforwards and research credit carryforwards to offset taxable income and tax, respectively, may be limited based on cumulative changes in ownership. The Company has not completed an analysis to determine whether any such limitations have been triggered as of April 30, 2025. The annual limitation, if any, will be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.

The Company recognizes uncertain tax positions taken when filing its tax returns if it is more likely than not that the tax authorities will not uphold the position based on current tax law. As of April 30, 2025, the Company has not identified any uncertain tax positions.

**NOTE 10: CLIENT CONCENTRATIONS**

Three customers accounted for 73% of the Company's outstanding receivables on April 30, 2025 and four customers accounted for 90% of the Company's outstanding receivables on October 31, 2024. The table below summarizes the accounts receivable concentrations by customer as of April 30, 2025, and October 31, 2024:

---

| | | |
|:---|:---|:---|
| | **Accounts Receivable Concentration** | **Accounts Receivable Concentration** |
| <br>**Company** | **April 30,**<br>**2025** | **October 31**<br>**2024** |
| A | 21% | 21% |
| B | 27% | 23% |
| C | 25% | 20% |
| D | 0% | 27% |
|  | 73% | 90% |

---

For the three months ended April 30, 2025 and 2024, the Company's revenue was concentrated amongst nine and thirteen customers, respectively. For the three months ended April 30, 2025, 57% of all revenue was obtained from government sources either as a direct contractor or subcontractor, with the remaining 43% of revenue from private customers. For the three months ended April 30, 2024, 96% of all revenue was obtained from government sources either as a direct contractor or subcontractor, with the remaining 4% of revenue from private customers.

For the six months ended April 30, 2025 and 2024, the Company revenue was concentrated amongst eleven and fifteen customers, respectively. For the six months ended April 30, 2025, 60% of all revenue was obtained from government sources either as a direct contractor or subcontractor, with the remaining 40% of revenue from private customers. For the six months ended April 30, 2024, 97% of all revenue was obtained from government sources either as a direct contractor or subcontractor, with the remaining 3% of revenue from private customers.

**NOTE 11: SEGMENT INFORMATION**

The Company conducts its business activities and reports financial results as one business segment. The presentation of financial results as one reportable segment is consistent with the way the Company operates its business and is consistent with the manner in which the Chief Operating Decision Maker ("CODM") evaluates performance and makes resource and operating decisions for the business. The Company's CODM is the Chief Executive Officer. Furthermore, the Company notes that monitoring financial results as one reportable segment helps the CODM manage costs on a consolidated basis, consistent with the integrated nature of the operations. The CODM uses net loss, as reported on the Consolidated Statements of Operations, in evaluating the performance of the Company and determining how to allocate resources of the Company as a whole. As the CODM evaluates performance on a consolidated basis, all required financial segment information is included in the condensed consolidated financial statements.

**NOTE 12: SUBSEQUENT EVENTS**

In preparing these unaudited condensed consolidated financial statements, management has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Such events or transactions are described below as of the date these unaudited condensed consolidated financial statements were issued.

The following subsequent events occurred after April 30, 2025, and prior to the filing of this Quarterly Report on Form 10-Q.

***Post-Effective Amendment to Registration Statement on Form S-1***

On May 13, 2025, the Company filed post-effective amendment 1 to its registration statement on Form S-1 (File No. 333-284062), which the SEC accepted on May 27, 2025 , in connection with a proposed firm commitment underwritten public offering of 3,333,334 units (the "Units"), with each Unit consisting of one share of common stock and a five-year warrant to purchase one share of common stock at an exercise price equal to 125% of the public offering price per Unit. The proposed public offering price per Unit is between $4.00 and $5.00.

As of the date of this quarterly report, the Company has not priced the Units, and the Offering has not commenced. The timing, size, and terms of the Offering are subject to market conditions, and there can be no assurance as to whether or when the Offering may be completed, or as to the actual size or terms of the Offering.

***Note Payable***

In May, 2025, the Company obtained a short-term loan, which totaled $250,000 , from a single lender to fund operations. This loan included origination fees totaling $7,500 for net proceeds of $242,500 . The loan is secured by expected (i) future cash receipts of the Company, and (ii) all other tangible and intangible personal property. Payments are expected on a weekly basis for 52 weeks. The Company is expected to repay an aggregate of $311,000 to the lender over the nominal term. The repayment amount decreases for earlier payoff dates.

***Receivables Sale Agreement***

On June 8, 2025, the Company entered into a Receivables Sale Agreement pursuant to which the Company sold receivables totaling $192,000 to a third party for $150,000 from which fees of $2,000 were deducted for net proceeds of $148,000. The purchasers right to receive remittances under this agreement is contingent upon the Company's receipt of the receivables. The expected repayment is approximately $3,700.00 based on $3.27% of the Company estimated sales revenue. The estimated term is 1 year. The agreement is guaranteed by certain officers and directors of the Company.

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.**

**Special Note Regarding Forward-Looking Statements**

Certain matters discussed in this Quarterly Report, including (without limitation) statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" contain forward-looking statements. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected.

These forward-looking statements include statements relating to our anticipated financial performance and business prospects, including debt reduction, currency values and financial impact, foreign exchange counterparty exposures, the impact of pending legal proceedings, adequate liquidity levels, dividends, share repurchases or other capital deployment initiatives and/or statements preceded by, followed by or that include the words "believe," "will," "will be," "will continue," "will likely result," "may," "predicts," "so we can," "when," "anticipate," "intend," "estimate," "expect," "project," "aim," "could," "plans," "seeks" and similar expressions. These forward-looking statements speak only as of the date stated, and we do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these expectations may not prove to be correct or we may not achieve the financial results, savings or other benefits anticipated in the forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which may be beyond our control. These risks and uncertainties, including those disclosed in the "Risk Factors" section in our registration statement on Form S-1, as amended (File No. 333-284062) (the "S-1 Registration Statement") could cause actual results to differ materially from those suggested by the forward-looking statements and include, without limitation:

● Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.

● Our success depends heavily on our executive officers, senior management team and highly trained employees; difficulty hiring officers and employees of equal competency or ineffective succession planning, could adversely affect our business.

● Competition could cause downward pressure on prices, fewer customer orders, reduced margins, inability to take advantage of new business opportunities, and the loss of market share.

● Our competitors may be better capitalized, have greater revenues, and have more industry or management experience.

● Our competitors may develop technologies and products that are more effective than those we develop or that render our technology and products obsolete or noncompetitive.

● Our projections of future financial results are based on a number of assumptions by our management, some or all of which may prove to be incorrect, and actual results may differ materially and adversely from such projections.

● Our estimated and projected market for our products and services may be inaccurate and may not reach our expected potential. .

● We will incur significant expenses and capital expenditures to execute our business plan; there are no assurances that we will obtain adequate financing to meet these expenditures.

● We may invest significant resources in developing new products, services and technologies in pursuit of applications and revenue opportunities that may never materialize.

● Our ability to grow our business depends on our ability to develop new products, and services to satisfy changing customer demands and respond to changing industry cycles in a timely and cost-effective manner.

● Our business may be adversely affected by changes in budgetary priorities of the U.S. Government.

● Technology failures or cyber security breaches or other unauthorized access to our information technology systems or sensitive or proprietary information could have an adverse effect on the Company's business and operations.

● Federal contracting is subject to significant regulation, including rules related to bidding, billing and accounting kickbacks and false claims, and non-compliance could subject us to fines and penalties.

● Our inability to secure additional U.S. government contracts and funding may adversely affect our business, financial condition and results of operations.

● The U.S. government's budget deficit and the national debt, as well as any inability of the U.S. government to complete its budget process for any government fiscal year and consequently having to shut down or operate on funding levels equivalent to its prior fiscal year pursuant to a "continuing resolution," could have an adverse impact on our business, financial condition, results of operations and cash flows.

● Our common stock has historically experienced limited trading and you may have difficulty liquidating your shares.

● Our stock price may be volatile and purchasers of our common stock could incur substantial losses.

● We do not expect to pay dividends in the foreseeable future, and you must rely on price appreciation of your shares of common stock for return on your investment.

● Our Company's founders, directors and executive officers own or control a majority of the Company and you will have little or no management control over our business or corporate mattes.

● Our operating results may continue to be adversely affected as a result of unfavorable market, economic, social and political conditions.

We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this Quarterly Report or to conform such statements to actual results or revised expectations, except as required by law.

**Overview of Operations**

Heliospace, our wholly owned subsidiary, is an aerospace company specializing in the design, engineering, assembly and test of space flight qualified hardware, providing systems engineering, modeling, analysis, integration and test services to customers in government, commercial, private and non-profit markets. Heliospace designs, fabricates, assembles and tests space qualified hardware, including radar antennas for the NASA Europa Clipper mission, the antennas for the SunRISE CubeSat constellation, and deployable systems and sensors for numerous lunar landers and the Mars Sample Return program. Heliospace also provides systems engineering, integration and test, and mission formulation services, including support for the design, testing, and launch of the James Webb Space Telescope, formulation and design of the Roman Space Telescope, Habworlds Observatory, Mars Sample Return, and the Atmospheric Observing System.

In January 2024, via a share exchange accounted for as a reverse acquisition, Web3 Corporation, a Florida corporation that was originally incorporated under the name Stirling Bridge Group, Inc. and was a specialized small business venture lender, acquired 100% of the stock of Heliospace, and changed its name from Web3 Corporation to Helio Corporation (the "Business Combination"). Heliospace was the accounting acquirer in the Business Combination and was determined to be the sole predecessor of Helio Corporation. Accordingly, this discussion and analysis, and the financial statements included elsewhere in this quarterly report, reflect the financial condition and results of operations of Helio Corporation and its sole consolidated subsidiary, Heliospace, after the Business Combination and of Heliospace prior to the Business Combination.

**Trends, Events, and Uncertainties**

**Government Budget Uncertainty and Proposed NASA Cuts**

A significant portion of our revenue is derived from contracts with the U.S. federal government, including through NASA, where our subsidiary, Heliospace, provides mission-critical components and engineering services for science and exploration missions. Accordingly, our financial condition and results of operations are influenced by trends in federal discretionary spending, particularly in space science and technology programs.

One key emerging trend is the proposed shift in federal budget priorities under the Trump administration. In April 2025, the administration released its draft budget proposal for fiscal year 2026, which recommends a significant reduction in overall discretionary spending, including an approximately 50% cut to NASA's Science Mission Directorate. If enacted, this proposal would reduce funding for core science programs such as astrophysics, heliophysics, Earth science, and planetary science—areas directly aligned with Heliospace's technical capabilities and historical contract activity.

Although this proposal remains subject to Congressional negotiation and approval, the magnitude of the proposed cuts and the administration's stated intent to reprioritize government resources away from space science programs present a material uncertainty for our future growth. Any resulting reduction, delay, or cancellation of NASA programs could reduce the number of available contracts, increase competition for limited awards, and adversely impact our future revenue and profitability.

In addition, broader fiscal challenges at the federal level—such as the rising national debt, persistent budget deficits, and the risk of government shutdowns or extended continuing resolutions—could result in delays to contract funding or payments, reduced availability of new program opportunities, and increased uncertainty in long-term planning. These macroeconomic pressures may also negatively affect private sector customers that rely on or benefit from government-funded space and research initiatives.

As we execute our expansion plans, we have continued to increase the percentage of revenue from private and commercial sources, and are actively working to expand our offerings to defense agencies whose budgets remain a priority for the current administration and Congress. However, these plans are subject to risks and uncertainties, and there can be no assurance that they will succeed or fully offset the effects of any reduction in government spending.

***Cybersecurity Risk and Ongoing Threat Landscape***

As a government contractor and developer of advanced aerospace technology, we operate in a highly sensitive and data-driven environment. Cybersecurity risks—including ransomware attacks, data breaches, intellectual property theft, and attempted intrusions by nation-state actors—continue to increase in frequency and sophistication across our industry. Like many companies operating in the defense and aerospace sectors, we remain a potential target for both criminal and geopolitical cyber threats.

We have implemented security protocols, systems monitoring, and access controls to protect our infrastructure and proprietary information, including information related to our work with NASA and other government agencies. However, cybersecurity is an evolving threat landscape, and there can be no assurance that our efforts will prevent all attacks or unauthorized access. A successful breach could disrupt our operations, compromise confidential data, harm our reputation, result in regulatory investigations, or expose us to legal claims and financial losses.

We will continue to invest in cybersecurity tools, training, and third-party audits to strengthen our defenses, and we are evaluating compliance with emerging federal cybersecurity requirements. Nonetheless, future cybersecurity incidents could materially affect our business, financial condition, or results of operations.

**Recent Developments**

On May 13, 2025, we filed post-effective amendment 1 of our registration statement on Form S-1 (File No. 333-284062), which the SEC accepted on May 27<sup>th</sup> comment (the "Registration Statement"), in connection with a proposed firm commitment underwritten public offering (the "Offering") of 3,333,334 units (the "Units"), each Unit of which consists of one share of common stock and a five-year warrant to purchase one share of common stock at an exercise price equal to 125% of the public offering price per Unit. The proposed public offering price per Unit is between $4.00 and $5.00.

As of the date of this quarterly report, the Company has not priced the Units, and the Offering has not commenced. The timing, size, and terms of the Offering are subject to market conditions, and there can be no assurance as to whether or when the Offering may be completed, or as to the actual size or terms of the Offering.

**Results of Operations**

**Comparison of the Three Months Ended April 30, 2025 to the Three Months Ended April 30, 2024**

The following table provides certain selected financial information of Helio Corporation for the periods presented:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | | |
|  | **April 30** | **April 30** | | |
|  | **2025** | **2024** |<br>**Change** |<br>**%** |
| Revenues | $1172260 | $1657851 | (485591) | (29)% |
| Costs of revenue | 977895 | 1058680 | (80785) | (8)% |
| Operating expenses | 1114974 | 1330953 | (215979) | (16)% |
| Operating income (loss) | (920609) | (731782) | 188827 | 26% |
| Interest expense, net | (94424) | (21606) | 72818 | 337% |
| Net income (loss) | $(1015033) | $(753388) | 261645 | 35% |

---

n.m = not meaningful

<u>Revenue</u>

Revenue for the three months ended April 30, 2025 decreased by 29% to $1,172,260 from $1,657,851 for the three months ended April 30, 2024, reflecting a lower overall volume of work compared to the prior three months due to the ongoing reformulation of the NASA Mars Sample Return program, coupled with an overall downturn in NASA hardware contract awards and a delay in at least one commercial contract. For the three months ended April 30, 2025, we serviced nine customers, one of which was a direct government customer, one was a private foundation, four were commercial customers and three were non/not-for-profit customers for whom we manufactured products as a subcontractor for their government customer. For the three months ended April 30, 2024, we serviced thirteen customers, of which two were direct government customers and seven were private foundations, and four were non/not-for-profit customers for whom we manufactured products as a subcontractor for their government customer.

<u>Cost of Revenue</u>

The 8% decrease in cost of revenue for the three months ended April 30, 2025 to $977,895 from $1,058,680 for the three months ended April 30, 2024 mainly reflected the decreased business volume described above. As a percentage of revenue, cost of sales amounted to 83% and 64% in the three months ended April 30, 2025 and 2024, respectively. Cost of sales as a percentage of revenue increased by approximately 19% due to a lower proportion of services fees and a higher proportion of engineering labor and other direct costs. Margins on both engineering fees and other direct costs were lower than services fees, leading to lower margins overall and hence a higher cost of sales relative to revenue.

<u>Operating Expenses</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | | |
|  | **April 30** | **April 30** | | |
|  | **2025** | **2024** |<br>**Change** |<br>**%** |
| **Operating expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Professional fees | $44081 | $124506 | $(80425) | (65)% |
| &nbsp;&nbsp;&nbsp;Facilities expense | 170803 | 210808 | (40005) | (19)% |
| &nbsp;&nbsp;&nbsp;Depreciation | 5666 | 5666 |  | 0% |
| &nbsp;&nbsp;&nbsp;Other general and administrative<sup>(1)</sup> | 894424 | 989973 | (95549) | (10)% |
| &nbsp;&nbsp;&nbsp;Total | $1114974 | $1330953 | $(215979) | (16)% |

---

(1) Including right of use asset amortization.

Overall operating expenses decreased by $215,979, or 16%, to $1,114,974 for the three months ended April 30, 2025, as compared to $1,330,953 for the three months ended April 30, 2024, mainly driven by lower professional fees and other general and administrative expenses, mainly in connection with the reduction in professional fees as the Business Combination and preparation for the Company's currently proposed underwritten public offering was completed, a decrease in labor costs, a decrease in insurance costs, and a decrease in R&D costs related to product costs.

<u>Other Expense</u>

We have not recorded income tax expense or benefit in the three months ended April 30, 2025 and 2024 (because of our tax loss carryforwards). We had approximately $3,224,804 of net operating loss carry forwards to offset future federal taxable income as of April 30, 2025.

The NOL carry forward is subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Under the Internal Revenue Code ("IRC") Sections 382 and 383, annual use of the Company's net operating loss carryforwards and research credit carryforwards to offset taxable income and tax, respectively, may be limited based on cumulative changes in ownership. The Company has not completed an analysis to determine whether any such limitations have been triggered as of April 30, 2025. The annual limitation, if any, will be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.

We recorded $94,424 in interest expense in the three months ended April 30, 2025 compared to $21,606 in the three months ended April 30, 2024, reflecting our increased amount of average outstanding debt and increased rates of interest thereunder.

<u>Net Loss</u>

Our net loss for the three months ended April 30, 2025 was $1,015,033, compared to a net loss of $753,388 for the three months ended April 30, 2024. The change was due to the reasons discussed above.

**Comparison of the Six Months Ended April 30, 2025 to the Six Months Ended April 30, 2024**

The following table provides certain selected financial information of Helio Corporation for the periods presented:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** | | |
|  | **April 30** | **April 30** | | |
|  | **2025** | **2024** |<br>**Change** |<br>**%** |
| Revenues | $2599836 | $3672183 | (1072347) | (29)% |
| Costs of revenue | 1994743 | 2285954 | (291211) | (13)% |
| Operating expenses | 2391108 | 2350213 | 40895 | 2% |
| Operating income (loss) | (1786015) | (963984) | 822031 | 85% |
| Interest expense, net | (148160) | (31129) | 117031 | 376% |
| Net income (loss) | $(1934175) | $(995113) | 939062 | 94% |

---

n.m = not meaningful

<u>Revenue</u>

Revenue for the six months ended April 30, 2025 decreased by 29% to $2,599,836 from $3,672,183 for the six months ended April 30, 2024, reflecting a lower overall volume of work compared to the prior six months due to the ongoing reformulation of the NASA Mars Sample Return program, coupled with an overall downturn in NASA hardware contract awards and a delay in at least one commercial contract. For the six months ended April 30, 2025, we serviced eleven customers, of which two were direct government customers, one was a private foundation, five were commercial customers and three were non/not-for-profit customers for whom we manufactured products as a subcontractor for their government customer. For the six months ended April 30, 2024, we serviced fifteen customers, of which two were direct government customers, eight were private foundations, and five were non/not-for-profit customers for whom we manufactured products as a subcontractor for their government customer.

<u>Cost of Revenue</u>

The 13% decrease in cost of revenue for the six months ended April 30, 2025 to $1,994,743 from $2,285,954 for the three months ended April 30, 2024 mainly reflected the decreased business volume described above. As a percentage of revenue, cost of sales amounted to 77% and 62% in the six months ended April 30, 2025 and 2024, respectively. Cost of sales as a percentage of revenue increased by approximately 14% due to a lower proportion of services fees and a higher proportion of engineering labor and other direct costs. Margins on both engineering fees and other direct costs were lower than services fees, leading to lower margins overall and hence a higher cost of sales relative to revenue.

Operating Expenses

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** | | |
|  | **April 30** | **April 30** | | |
|  | **2025** | **2024** |<br>**Change** |<br>**%** |
| **Operating expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Professional fees | $222819 | $146901 | $75917 | 52% |
| &nbsp;&nbsp;&nbsp;Facilities expense | 358184 | 357725 | 459 | 0% |
| &nbsp;&nbsp;&nbsp;Depreciation | 11332 | 11332 | 1 | 0% |
| &nbsp;&nbsp;&nbsp;Other general and administrative<sup>(1)</sup> | 1798773 | 1834255 | (35482) | (2)% |
| &nbsp;&nbsp;&nbsp;Total | $2391108 | $2350213 | $40895 | 2% |

---

(1) Including right of use asset amortization.

Overall operating expenses increased by $40,895, or 2%, to $2,391,108 for the six months ended April 30, 2025, as compared to $2,350,213 for the six months ended April 30, 2024, mainly driven by higher professional fees, reflecting higher labor costs, mainly in connection with the Business Combination and preparation for the Company's currently proposed underwritten public offering.

<u>Other Expense</u>

We have not recorded income tax expense or benefit in the six months ended April 30, 2025 and 2024, because of our tax loss carryforwards. We had approximately $3,224,804 of net operating loss carry forwards to offset future federal taxable income as of April 30, 2025.

We recorded $148,160 in interest expense in the six months ended April 30, 2025 compared to $31,129 in the six months ended April 30, 2024, reflecting our increased amount of average outstanding debt and increased rates of interest thereunder.

<u>Net Loss</u>

Our net loss for the six months ended April 30, 2025 was $1,934,175, compared to a net loss of $995,113 for the six months ended April 30, 2024. The change was due to the reasons discussed above.

**Liquidity and Capital Resources**

As of April 30, 2025, we had cash and cash equivalents of $15,699, representing a decrease of $535,853 from $551,552 as of October 31, 2024. The decrease primarily reflects our operating losses during the period, partially offset by proceeds from the issuance of promissory notes.

Capital Resources Outlook

In May and June 2025, the Company entered an additional note payable agreement and a Receivables Sale Agreement to obtain additional funding (see Note 12). Additional financing or capital investment will be necessary to sustain operations for one year from the issuance of these unaudited condensed consolidated financial statements.

As part of management's ongoing efforts to strengthen the Company's financial position, the Company is pursuing a best-efforts registered offering of its securities, with anticipated gross proceeds in the range of approximately $3.0 million to $5.0 million. The offering would be conducted under an amendment to an existing, effective registration statement on Form S-1 previously filed with the U.S. Securities and Exchange Commission. The Company expects to file a post-effective amendment (Form S-1/A) to update certain offering terms and disclosures. The offering remains subject to market conditions and the successful negotiation of terms with prospective investors. There can be no assurance that the Company will proceed with the offering or that, if commenced, it will be completed on favorable terms or at all.

Concurrently, the Company is engaged in negotiations with two prospective lenders regarding potential bridge financing arrangements. These discussions are ongoing, and there can be no assurance that the Company will enter into definitive agreements or that any such financing will be completed on favorable terms or at all.

If completed, the Company expects to use the net proceeds from the registered offering and bridge financing to repay certain outstanding promissory notes and to support key operational initiatives. These include investments in research and development, expansion of sales, marketing, and business development activities, facility and infrastructure enhancements, manufacturing improvements, and other general corporate purposes, including working capital and upgrades to the Company's financial and contract management systems

Over the longer term, the Company expects that it will need to raise substantial additional capital to accomplish its business plan over the next several years. There can be no assurance as to the availability, if any, or terms upon which such financing and capital might be available in the future. Failure to obtain adequate capital could require us to delay, reduce, or curtail operations, limit strategic initiatives, or impact our ability to service existing obligations.

The Company has outstanding unsecured notes to certain related parties with an aggregate outstanding principal balance of $1,143,346 as of April 30, 2025. The proceeds from these notes were used to meet working capital and cash flow management needs. The notes bear interest at between 6.5% and 11.25% per annum. $564,469 of these notes mature in the current 2025 fiscal year, and the remaining $577,877 mature in the 2026, 2027, or 2028 fiscal year.

As of April 30, 2025, the Company has outstanding debt from unrelated parties under notes payable in the aggregate principal amount of $1,500,000. These notes bear interest at 9.75% and 12.00% and mature within the next two fiscal years. Certain of these notes were initially convertible but all such convertible notes were amended to eliminate the conversion features in consideration of the issuance by the Company and/or the transfer by certain shareholders of shares of the Company's common stock. See Note 5. Interest on these notes either accrues or is paid quarterly or at maturity along with principal, as specifically described in the note. Upon the occurrence and during the continuance of any default by the Company under any of the above notes, which default is not cured within fifteen (15) days following written notice of such default from the payee, the payee may declare the entire unpaid principal and unpaid interest immediately due and payable. Certain of these notes are secured by the Company's accounts receivable, and by shares of common stock pledged by one of the Company's shareholders. In addition, certain of these notes become due, and the payees under certain of these notes have the right to accelerate their notes, upon the completion of an offering.

Because of historical and expected operating losses and net operating cash flow deficits, there is substantial doubt about the Company's ability to continue as a going concern for one year from the issuance of the unaudited condensed consolidated financial statements, which is not alleviated by management's plans. The unaudited condensed consolidated financial statements have been prepared under the going concern basis of accounting. These unaudited condensed consolidated financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty.

Cash Flows

**Comparison of the Six Months Ended April 30, 2025 to the Six Months Ended April 30, 2024.**

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| | | |
|:---|:---|:---|
|  | **Six Months Ended<br> April 30,** | **Six Months Ended<br> April 30,** |
|  | **2025** | **2024** |
| Cash provided by (used in) operating activities | $(1226322) | $(420080) |
| Cash provided by (used in) investing activities | $- | $- |
| Cash provided by (used in) financing activities | $690469 | $674521 |
| Cash on hand (end of period) | $15699 | $758777 |

---

<u>Cash Flows from/used in Operating Activities</u>

For the six months ended April 30, 2025, net cash used in operating activities was $(1,226,322), compared to cash used in operating activities of $(420,080) for the six months ended April 30, 2024.

Our operating cash flow results were affected by the aging and timing of certain working capital items. In fiscal year 2025 and 2024, our negative operating cash flow was attributed mainly to our net loss, as described above.

During the six months ended April 30, 2025, the Company reported $(1,226,322) of cash used in operating activities. The Company's negative operating cash flow was attributed mainly to a net loss of $(1,934,175) and is partially offset by a decrease in accounts receivable of $381,349, and a decrease in work in process of $174,537.

During the six months ended April 30, 2024, the Company reported $(420,080) of cash used in operating activities. The Company's negative operating cash flow was attributed mainly to a net loss of $(995,113), an increase in work in process of $455,085, a decrease in accounts payable and accrued expense of $352,396, a decrease in operating lease liability of $150,252 and partially offset by a decrease in accounts receivable of $1,091,541 and increase in accrued compensation of $175,945.

<u>Cash Flows used in Investing Activities</u>

During the six months ended April 30, 2025 and 2024, net cash used in investing activities was $0.

<u>Cash Flows from/used in Financing Activities</u>

During the six months ended April 30, 2025, net cash from financing activities was $690,469, which mainly included $695,000 the incurrence of new debt discussed above.

During the six months ended April 30, 2024, net cash provided by financing activities was $674,521, which mainly included $606,555 in net proceeds from incurrence of debt discussed above.

**Material Cash Commitments** 

The Company's material future cash commitments, to be paid from cash flows from operations, are to repay its current debt obligations and payments under leases for its facilities. The Company does not have any material commitments for capital expenditures. The following table shows the material future commitments for the years ending October 31st:

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| | | | |
|:---|:---|:---|:---|
|  | **Leases** | **Debt** | **Total** |
| Remainder of 2025 | $368532 | $1915469 | $2284001 |
| 2026 | 520834 | 82877 | 603711 |
| 2027 | 162072 | 260000 | 422072 |
| 2028 |  | 385000 | 385000 |
| 2029 |  |  |  |
| Total | $**1051438** | $**2643346** | $**3694784** |

---

**Off-Balance Sheet Arrangements**

We do not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.

**Critical Accounting Policies and Significant Judgments and Estimates**

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this quarterly report, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates.

We believe our most critical accounting policies and estimates relate to the following:

● Revenue Recognition

● Work in Progress

● Lease Accounting

**Revenue Recognition**

Revenue related to contracts with customers is evaluated utilizing the following steps: (i) Identify the contract, or contracts, with a customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; (v) Recognize revenue when the Company satisfies a performance obligation.

Revenues from cost-plus and time and materials contracts are recognized with each invoice. For fixed price contracts including purchase orders with specific priced milestone deliveries, revenue is recognized upon invoicing for each milestone completed. Revenue on fixed price contracts that are still in progress at month end are otherwise recognized on the percentage-of-completion method, measured by the percentage of total costs incurred to date to the estimated total costs for each contract. This method is used because management considers total costs to be the best available measure of progress on these contracts.

***Work in Progress***

Inventory consists of work in progress and consists of estimated revenue calculated on a percentage of completion based on direct labor and materials in relation to the total contract value. The Company does not maintain raw materials nor finished goods.

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, operating lease liabilities — current, and operating lease liabilities — noncurrent on the balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Leases with a lease term of 12 months or less at inception are not recorded on our balance sheet and are expensed on a straight-line basis over the lease term in our statement of operations.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk.**

Not applicable

**Item 4. Controls and Procedures.**

**Evaluation of Disclosure Controls and Procedures**

As of April 30, 2025, the end of the period covered by this Quarterly Report on Form 10-Q, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended).

Based on this evaluation, management concluded that our disclosure controls and procedures were not effective as of April 30, 2025, due to the presence of material weaknesses in our internal control over financial reporting, as described below.

**Identified Material Weaknesses**

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

Although management has not yet completed a formal evaluation of the Company's internal control over financial reporting, certain control deficiencies were identified that are significant enough to suggest the existence of material weaknesses, including:

● Lack of Segregation of Duties. The Company did not maintain adequate segregation of duties within its finance and accounting function. This deficiency increases the risk that errors or fraudulent activity could occur and remain undetected in a timely manner.

● Insufficient Accounting and Financial Reporting Expertise. The Company did not have a sufficient number of qualified personnel with the requisite knowledge of U.S. generally accepted accounting principles (GAAP) and SEC reporting requirements to ensure the timely and accurate preparation, review, and disclosure of financial statements.

**Remediation Plan**

We are actively working to remediate these material weaknesses. Planned remediation steps include hiring additional qualified accounting personnel and implementing more robust internal review and approval procedures. We will continue to monitor and assess the effectiveness of our remediation efforts in future periods.

**Changes in Internal Control over Financial Reporting**

There were no changes in our internal control over financial reporting during the fiscal quarter ended April 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II—OTHER INFORMATION**

**Item 1. Legal Proceedings.**

We are not currently party to any legal proceedings, and we are not aware of any pending or threatened litigation against us that we believe could have a material adverse effect on our business, operating results, or financial condition.

**Item 1A. Risk Factors.**

As a smaller reporting company, we are not required to provide the information required by this item.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.**

None

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information.**

**Subsequent Events**

*<u>Post-Effective Amendment to Registration Statement on Form S-1</u>*

On May 13, 2025, the Company filed post-effective amendment 1 to its registration statement on Form S-1 (File No. 333-284062), which the Securities and Exchange Commission (the "Commission") accepted on May 27th without comment (the "Registration Statement"), in connection with a proposed firm commitment underwritten public offering (the "Offering") of 3,333,334 units (the "Units"), with each Unit consisting of one share of common stock and a five-year warrant to purchase one share of common stock at an exercise price equal to 125% of the public offering price per Unit. The proposed public offering price per Unit is between $4.00 and $5.00.

As of the date of this quarterly report, the Company has not priced the Units and the Offering has not commenced. The timing, size, and terms of the Offering are subject to market conditions, and there can be no assurance as to whether or when the Offering may be completed, or as to the actual size or terms of the Offering.

Note Payable

In May, 2025, the Company obtained a short-term loan, which totaled $250,000, from a single lender to fund operations. This loan included origination fees totaling $7,500 for net proceeds of $242,500 . The loan is secured by expected (i) future cash receipts of the Company, and (ii) all other tangible and intangible personal property. Payments are expected on a weekly basis for 52 weeks. The Company is expected to repay an aggregate of $311,000 to the lender over the nominal term. The repayment amount decreases for earlier payoff dates.

Receivables Sale Agreement

On June 8, 2025, the Company entered into a Receivables Sale Agreement pursuant to which the Company sold receivables totaling $192,000 to a third party for $150,000 from which fees of $2,000 were deducted for net proceeds of $148,000. The purchasers right to receive remittances under this agreement is contingent upon the Company's receipt of the receivables. The expected repayment is approximately $3,700.00 based on $3.27% of the Company estimated sales revenue. The estimated term is 1 year. The agreement is guaranteed by certain officers and directors of the Company.

**Item 6. Exhibits.**

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 10.1 | [Promissory Note issued to Paul S. Turin dated February 3, 2025 (previously filed as Exhibit 10.2 to the Registrant's Form 10-Q ending January 31, 2025.)](https://www.sec.gov/Archives/edgar/data/1953988/000121390025039649/ea023965801ex10-2_helio.htm) |
| 10.2 | [Promissory Note issued to Gregory T. Delory dated February 14, 2025 (previously filed as Exhibit 10.3 to the Registrant's Form 10-Q ending January 31, 2025.)](https://www.sec.gov/Archives/edgar/data/1953988/000121390025039649/ea023965801ex10-3_helio.htm) |
| 10.3 | [Promissory Note issued to Indicia Capital, LLC dated April 16, 2025 (previously filed as Exhibit 10.4 to the Registrant's Form 10-Q ending January 31, 2025.)](https://www.sec.gov/Archives/edgar/data/1953988/000121390025039649/ea023965801ex10-4_helio.htm) |
| 10.4\* | [Agreement for $250,000 term loan dated May 17, 2025.](ea024648601ex10-4_helio.htm) |
| 10.5\* | [Receivables Sale Agreement dated June 9, 2025.](ea024648601ex10-5_helio.htm) |
| 31.1\* | [Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea024648601ex31-1_helio.htm) |
| 31.2\* | [Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea024648601ex31-2_helio.htm) |
| 32.1\* | [Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea024648601ex32-1_helio.htm) |
| 32.2\* | [Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea024648601ex32-2_helio.htm) |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

\* Filed herein

The XBRL related information in Exhibit 101 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | HELIO CORPORATION | HELIO CORPORATION |
| Date: June 23, 2025 | By: | /s/ Gregory T. Delory |
|  |  | Gregory T. Delory |
|  |  | Chief Executive Officer and<br> Chairman of the Board of Directors |
|  |  | (Principal Executive Officer) |
| Date: June 23, 2025 | By: | /s/ Erick Frim |
|  |  | Erick Frim |
|  |  | Interim Chief Financial Officer |
|  |  | (Principal Financial Officer and<br> Principal Accounting Officer) |

---

## Exhibit 10.4

**Exhibit 10.4**

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| | |
|:---|:---|
| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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*This Business Loan and Security Agreement Supplement is part of (and incorporated by reference into) the Business Loan and Security Agreement. Borrower should keep this important legal document for Borrower's records.*

 

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| | |
|:---|:---|
| YOUR LOAN DETAILS | YOUR LOAN DETAILS |
| **Borrower:** | **HELIOSPACE CORPORATION** |
| **Lender:** | **Celtic Bank** |
| **Loan Amount:** | **$250000.00** |
| **Origination Fee:**<br> (Deducted at time of disbursement) | **$7500.00** |
| **Disbursement Amount:**<br> (Loan Amount less Origination Fee)<br> Note that the Disbursement Amount may not be the amount deposited to your Designated Checking Account. The amount that will be deposited to your Designated Checking Account will be reduced by any amounts owed to Lender from a prior loan or used to pay off an amount owed to a third party lender. | **$242500.00** |
| **WeeklyPayment Amount:** (Business days only) | **$5980.77 52** |
| &nbsp;&nbsp;**Number of Weekly Payments:** (Business days only) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**52** |
| **Payment Schedule:**<br>"Business day" means any Monday through Friday except for Federal Reserve holidays. | **52** payments of **$5,980.77** due (i) in the case of loans with a Daily Payment Amount, each Business day immediately following the date disbursement of the Disbursement Amount is initiated by Lender, (ii) in the case of loans with a Weekly Payment Amount, the same day each week as the day of the week disbursement of the Disbursement Amount is initiated by Lender (or the next Business day if such day is not a Business day) beginning seven days after the Disbursement Amount is initiated or (iii) in the case of loans with a Monthly Payment Amount, on the 26th day of the month (or the next Business day if such day is not a Business day) beginning with the calendar month the Disbursement Amount is initiated, except if the disbursement of the Disbursement Amount is initiated by Lender after the 19th day of the month, then the payment amount is due on the 26th day of each month (or the next Business Day if such day is not a Business Day) beginning with the calendar month after the Disbursement Amount is initiated. The maturity date of this Loan is the date the final payment is due in accordance with the Payment Schedule. |
| **Total Interest Expense:**<br> (Does not include any Fees) | **$61000.04** |
| **Total Repayment Amount:**<br> (Loan Amount <u>plus</u> Total Interest Expense) | **$311000.04** |

---

 

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>1

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| | |
|:---|:---|
| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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| | |
|:---|:---|
| PREPAYMENT, RENEWAL, AND OTHER FEES | PREPAYMENT, RENEWAL, AND OTHER FEES |
| **Prepayment:**<br> (See Section 10 of the Business Loan and<br> Security Agreement for specific details) | A "Prepayment Interest Reduction Percentage" of 100% (with respect to unpaid interest remaining on this Loan) will be applied to the extent that the Borrower prepays this Loan in whole in accordance with, and subject to, Section 10 of the Business Loan and Security Agreement. Note that 0% of remaining unpaid interest will still be due upon Prepayment in whole. You should keep in mind that partial prepayments will not reduce the Total Interest Expense. |
| **Renewals:** | &nbsp;&nbsp; Remaining unpaid interest on this Loan will be eligible to be forgiven by Lender if: (i) Borrower is current on its scheduled payments with respect to this Loan and, (ii) while this Loan is outstanding, Borrower enters into a business loan and security agreement for a new qualifying term loan with Lender, a portion of the proceeds of which is used to repay this Loan in whole. |
| **Other Fees:** | &nbsp;&nbsp; Returned Payment Fee: **$25.00**<br>Late Fee: **$10.00** (maximum $50 within any 20 day period) |

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If you have any questions, please call us at 1.888.828.5717 (we have support available Monday - Friday 8am - 8pm EST and Saturdays 8:30am - 5:30pm EST) or email support@ondeck.com.

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| | |
|:---|:---|
| CERTAIN DISCLOSURES | CERTAIN DISCLOSURES |
| **Loan Pricing Disclosure** | Lender uses a system of risk-based pricing to determine interest charges and fees. Risk-based pricing is a system that evaluates the risk factors of your application and adjusts the interest rate up or down based on this risk evaluation. Although Lender believes that its loan process provides expedited turnaround time and efficient access to capital, this loan may be a higher cost loan than loans that may be available through other lenders. |
| **Loan For**<br> **Specific Purposes Only** | The proceeds of the requested Loan may solely be used for the specific purposes as set forth in the Use of Proceeds Certification of the Business Loan and Security Agreement. IN ADDITION, THE LOAN WILL NOT BE USED FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. Borrower understands that Borrower's agreement not to use the Loan proceeds for personal, family or household purposes means that certain important duties imposed upon entities making loans for consumer/personal purposes, and certain important rights conferred upon consumers, pursuant to federal or state law will not apply to this transaction. |

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ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>2

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| | |
|:---|:---|
| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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**1. INTRODUCTION.** This Business Loan and Security Agreement (together with the accompanying Business Loan and Security Agreement Supplement and the accompanying Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits), this "Agreement") governs your business loan ("Loan") made by Celtic Bank and serviced by ODK Capital, LLC or a subsidiary or affiliate thereof ("Servicer" or "OnDeck"). Please read it and keep it for your reference. In this Agreement, the words "you," "your" and "Borrower" mean the Borrower identified on the signature page of this Business Loan and Security Agreement. Each guarantor identified on the signature page of this Business Loan and Security Agreement shall be referred to individually as "Guarantor" and collectively as "Guarantors" in this Agreement. The words "Lender", "we", "us", and "our" mean Celtic Bank or its successor(s) and assign(s).

**2. EFFECTIVE DATE.** This Agreement begins on the date we accept this Agreement in Utah, which is the date of our signature on the signature page of the Agreement. Borrower understands and agrees that Lender may postpone, without penalty, the disbursement of amounts to Borrower until all required security interests have been perfected and Lender has received all required personal guarantees or other documentation.

**3. AUTHORIZATION.** Borrower agrees that the Loan made by Lender to Borrower shall be conclusively deemed to have been authorized by Borrower and to have been made pursuant to a duly authorized request on its behalf.

4. LOAN FOR SPECIFIC PURPOSES ONLY. <u>The proceeds of the requested Loan may solely be used for the specific purposes as set forth in the Use of Proceeds Certification contained in Section 50 below, and not for any other purposes.</u> In addition, the Loan will not be used for personal, family or household purposes, and Borrower and Guarantors are forever estopped from taking the position that such Loan (including Advances) are or were used for such personal, family or household purposes. Borrower understands that Borrower's agreement not to use the Loan proceeds for personal, family or household purposes means that certain important duties imposed upon entities making loans for personal, family or household purposes, and certain important rights conferred upon such persons, pursuant to federal or state law will not apply to the Loan or the Agreement. Borrower also understands that Lender will be unable to confirm whether the use of the Loan conforms to this section. Borrower agrees that a breach by Borrower of the provisions of this section will not affect Lender's right to (i) enforce Borrower's promise to pay for all amounts owed under this Agreement, regardless of the purpose for which the Loan is in fact obtained or (ii) use any remedy legally available to Lender, even if that remedy would not have been available had the Loan been made for personal, family or household purposes.

**5. DISBURSEMENT OF LOAN PROCEEDS AND MAINTENANCE OF BORROWER'S BANK ACCOUNT.** If Borrower applied and was approved for a Loan, Borrower's Loan will be disbursed upon approval as provided in the accompanying Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits). Borrower agrees to maintain Direct Payments (ACH Debits) in its operating account which is the account that was reviewed in conjunction with underwriting and approval of this Loan (including keeping such account open until the Total Repayment Amount had been completely repaid). Borrower agrees that the Loan made by Lender to Borrower may not be returned except at Lender's sole discretion.

**6. PROMISE TO PAY.** Borrower agrees to pay Lender the Total Repayment Amount shown in the accompanying Business Loan and Security Agreement Supplement in accordance with the Payment Schedule shown in the accompanying Business Loan and Security Agreement Supplement or pursuant to any modification of the Payment Schedule by Lender. Borrower agrees to enroll in Lender's Automatic Payment Plan and authorizes Lender to collect required payments as provided in the accompanying Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits). If required by Lender, Borrower further agrees and authorizes Lender or its Servicer to collect required payments from a transfer account established pursuant to certain Transfer Account Loan Documentation that will be provided by Lender in connection with this Business Loan and Security Agreement if applicable.

**7. ALTERNATIVE PAYMENT METHODS.** If Borrower knows that for any reason Lender will be unable to process a payment under Lender's Automatic Payment Plan, then Borrower must either restore sufficient funds such that the missed payment can be collected as provided in the accompanying Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits), or promptly mail or deliver a check to Lender in the amount of the missed payment or, if offered, make the missed payment by any pay-by-phone or on-line service that Lender may make available from time to time. If Borrower elects to send payments on Borrower's Account by postal mail, then Borrower agrees to send such payments to our Servicer, OnDeck, 4700 W. Daybreak Pkwy., Suite 200, South Jordan, UT 84009, Attn: Director of Operations. All alternative payments must be made in good funds by check, money order, wire transfer, automatic transfer from an account at an institution offering such service, or other instrument in U.S. Dollars. Borrower understands and agrees that payments made at any other address than as specified by Lender may result in a delay in processing and/or crediting. If Borrower makes an alternative payment on Borrower's Loan by mail or by any pay-by-phone or on-line service that Lender makes available while Borrower is enrolled in the Automatic Payment Plan, Lender may treat such payment as an additional payment and continue to process Borrower's scheduled Automatic Payment Plan payments or may reduce any scheduled Automatic Payment Plan payment by the amount of any such additional payment received.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>3

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| | |
|:---|:---|
| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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**8. APPLICATION OF PAYMENTS.** Subject to applicable law, Lender reserves the right to allocate and apply payments received on Borrower's Loan between principal, interest and fees in any manner Lender chooses in Lender's sole discretion it being understood and agreed that any fees and interest will generally be paid during the earlier portion of the term.

**9. POSTDATED CHECKS, RESTRICTED ENDORSEMENT CHECKS AND OTHER DISPUTED OR QUALIFIED PAYMENTS.** Lender can accept late, postdated or partial payments without losing any of Lender's rights under this Agreement (a postdated check is a check dated later than the day it was actually presented for payment). Lender is under no obligation to hold a postdated check and Lender reserves the right to process every item presented as if dated the same date received by Lender or Lender's check processor unless Borrower gives Lender adequate notice and a reasonable opportunity to act on it. Except where such notice and opportunity is given, Borrower may not hold Lender liable for depositing any postdated check. **Borrower agrees not to send Lender partial payments marked "paid in full," "without recourse," or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Agreement. All notices and written communications concerning postdated checks, restricted endorsement checks (including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount) or any other disputed, nonconforming or qualified payments, must be mailed or delivered to our Servicer, OnDeck, Customer Service, 4700 W. Daybreak Pkwy., Suite 200, South Jordan, UT 84009, Attn: Director of Operations.**

**10. PREPAYMENT.** Borrower may prepay Borrower's Loan in whole on any Business day by paying Lender the sum total of the Total Repayment Amount, any Returned Payment Fees, and any Late Fees, in each case as described in the accompanying Business Loan and Security Agreement Supplement less (i) the amount of any Loan payments made prior to such prepayment and (ii) the product of (x) the percentage identified as the applicable Prepayment Interest Reduction Percentage in the accompanying Business Loan and Security Agreement Supplement; and (y) the aggregate amount of unpaid interest remaining on the Borrower's Loan as of such date as determined by Lender's records in accordance with Section 8. Borrower may prepay Borrower's Loan in part on any Business day and such payment shall be applied against the Total Repayment Amount, any Returned Payment Fees, and any Late Fees, in each case as described in the accompanying Business Loan and Security Agreement Supplement.

**11. SECURITY INTEREST**. Borrower hereby grants to Lender, the secured party hereunder, a continuing security interest in and to any and all "Collateral" as described below to secure payment and performance of all debts, liabilities and obligations of Borrower to Lender hereunder and also any and all other debts, liabilities and obligations of Borrower to Lender of every kind and description, direct or indirect, absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising, related to the Loan described in this Agreement, whether or not contemplated by the parties at the time of the granting of this security interest, regardless of how they arise or by what agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument, and includes obligations to perform acts and refrain from taking action as well as obligations to pay money including, without limitation, all interest, other fees and expenses (all hereinafter called "Obligations"). The Collateral includes the following property that Borrower (or Guarantor, if applicable, pursuant to Section 12) now owns or shall acquire or create immediately upon the acquisition or creation thereof: (i) any and all amounts owing to Borrower now or in the future from any merchant processor(s) processing charges made by customers of Borrower via credit card or debit card transactions; and (ii) all other tangible and intangible personal property, including, but not limited to (a) cash and cash equivalents, (b) inventory, (c) equipment, (d) investment property, including certificated and uncertificated securities, securities accounts, security entitlements, commodity contracts and commodity accounts, (e) instruments, including promissory notes (f) chattel paper, including tangible chattel paper and electronic chattel paper, (g) documents, (h) letter of credit rights, (i) accounts, including health-care insurance receivables, (j) deposit accounts, (k) commercial tort claims, (l) general intangibles, including payment intangibles and software and (m) as-extracted collateral as such terms may from time to time be defined in the Uniform Commercial Code. The security interest Borrower (or Guarantor, if applicable, pursuant to Section 12) grants includes all accessions, attachments, accessories, parts, supplies and replacements for the Collateral, all products, proceeds and collections thereof and all records and data relating thereto. Lender disclaims any security interest in household goods in which Lender is forbidden by law from taking a security interest, and disclaims any security interest in real estate and dwellings.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>4

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| | |
|:---|:---|
| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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**12. PROTECTING THE SECURITY INTEREST.** Borrower agrees that Lender and/or Lender's Representative may file any financing statement, lien entry form or other document Lender and/or Lender's Representative requires in order to perfect, amend or continue Lender's security interest in the Collateral and Borrower agrees to cooperate with Lender and Lender's Representative as may be necessary to accomplish said filing and to do whatever Lender or Lender's Representative deems necessary to protect Lender's security interest in the Collateral. Borrower and Guarantor each agree that, if any Guarantor is a corporate entity, then Lender or Lender's Representative may file any financing statement, lien entry form or other document against such Guarantor or its property that Lender and/or Lender's Representative requires in order to perfect, amend or continue Lender's security interest in the Collateral. Any such Guarantor agrees to cooperate with Lender or Lender's Representative as may be necessary to accomplish said filing and to do whatever Lender or Lender's Representative deems necessary to protect Lender's security interest in the Collateral. In this Agreement, "Lender's Representative" means any entity or individual that is designated by Lender to serve in such capacity.

**13. LOCATION OF COLLATERAL; TRANSACTIONS INVOLVING COLLATERAL.** Unless Lender has agreed otherwise in writing, Borrower agrees and warrants that (i) all Collateral (or records of the Collateral in the case of accounts, chattel paper and general intangibles) shall be located at Borrower's address as shown in the application, (ii) except for inventory sold or accounts collected in the ordinary course of Borrower's business, Borrower shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral, (iii) no one else has any interest in or claim against the Collateral that Borrower has not already told Lender about, (iv) Borrower shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance or charge, other than the security interest provided for in this Agreement and (v) Borrower shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral for less than the fair market value thereof. Borrower shall defend Lender's rights in the Collateral against the claims and demands of all other persons. All proceeds from any unauthorized disposition of the Collateral shall be held in trust for Lender, shall not be co-mingled with any other funds and shall immediately be delivered to Lender. This requirement, however, does not constitute consent by Lender to any such disposition.

**14. TAXES, ASSESSMENTS AND LIENS.** Borrower will complete and file all necessary federal, state and local tax returns and will pay when due all taxes, assessments, levies and liens upon the Collateral and provide evidence of such payments to Lender upon request.

**15. INSURANCE.** Borrower shall procure and maintain such insurance as Lender may require with respect to the Collateral, in form, amounts and coverage reasonably acceptable to Lender and issued by a company reasonably acceptable to Lender naming Lender as loss payee. If Borrower at any time fails to obtain or maintain any insurance as required under this Agreement, Lender may obtain such insurance as Lender deems appropriate at Borrower's sole cost and expense. Borrower shall promptly notify Lender of any loss of or damage to the Collateral.

**16. REPAIRS AND MAINTENANCE.** Borrower agrees to keep and maintain, and to cause others to keep and maintain, the Collateral in good order, repair and condition at all times while this Agreement remains in effect. Borrower further agrees to pay when due all claims for work done on, or services rendered or material furnished in connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>5

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| | |
|:---|:---|
| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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17. INSPECTION OF COLLATERAL AND PLACE OF BUSINESS; USE OF PHOTOGRAPHS AND TESTIMONIALS. Lender and Lender's designated representatives and agents shall have the right during Borrower's normal business hours and at any other reasonable time to examine the Collateral wherever located and the interior and exterior of any Borrower place of business. To the extent that Lender or Lender's designated representatives choose to examine Borrower's assets and place of business outside of normal business hours, Lender shall give Borrower reasonable notice, which shall be at least five business days, prior to the date of inspection. Borrower shall cooperate with Lender in making its assets and place of business available for inspection. During an examination of any Borrower place of business, Lender may examine, among other things, whether Borrower (i) has a place of business that is separate from any personal residence, (ii) is open for business, (iii) has sufficient inventory to conduct Borrower's business and (iv) has one or more credit card terminals if Borrower processes credit card transactions. When performing an examination, Lender may photograph the interior and exterior of any Borrower place of business, including any signage, and may photograph any individual who has signed the Agreement ("Signatory") unless the Signatory previously has notified Lender that he or she does not authorize Lender to photograph the Signatory. Lender may obtain testimonials from any Signatory, including testimonials on why Borrower needed the Loan and how the Loan has helped Borrower. Any photograph and testimonial will become and remain the sole property of Lender. Borrower and each Signatory grant Lender the irrevocable and permanent right to display and share any photograph and testimonial in all forms and media, including composite and modified representations, for all purposes, including but not limited to any trade or commercial purpose, with any Lender employees and agents and with the general public. Lender may, but is not required to, use the name of any Borrower and Signatory as a credit in connection with any photograph and testimonial. Borrower and each Signatory waive the right to inspect or approve versions of any photograph or testimonial or the written copy or other media that may be used in connection with same. Borrower and each Signatory release Lender from any claims that may arise regarding the use of any photograph or testimonial, including any claims of defamation, invasion of privacy or infringement of moral rights, rights of publicity or copyright.

**18. LENDER'S EXPENDITURES.** If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any related documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any related documents, Lender on Borrower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for insuring, maintaining and preserving the Collateral. To the extent permitted by applicable law, all such expenses will become a part of the Obligations and, at Lender's option, will: (i) be payable on demand; (ii) be added to the balance of the Loan and be apportioned among and be payable with any installment payments to become due during the remaining term of the Loan; or (iii) be treated as a balloon payment that will be due and payable at the Loan's maturity. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon an Event of Default.

**19. BORROWER'S REPRESENTATIONS AND WARRANTIES.** Borrower represents and warrants that: (i) Borrower will comply with all laws, statutes, regulations and ordinances pertaining to the conduct of Borrower's business and promises to hold Lender harmless from any damages, liabilities, costs, expenses (including attorneys' fees) or other harm arising out of any violation thereof; (ii) Borrower's principal executive office and the office where Borrower keeps its records concerning its accounts, contract rights and other property, is that shown in the application; (iii) Borrower is duly organized, licensed, validly existing and in good standing under the laws of its state of formation and shall hereafter remain in good standing in that state, and is duly qualified, licensed and in good standing in every other state in which it is doing business, and shall hereafter remain duly qualified, licensed and in good standing in every other state in which it is doing business, and shall hereafter remain duly qualified, licensed and in good standing in every other state in which the failure to qualify or become licensed could have a material adverse effect on the financial condition, business or operations of Borrower; (iv) the true and correct legal name of the Borrower is set forth in the application; (v) the aggregate ownership percentage of the Signatories is greater than or equal to fifty percent (50%) of the Borrower's business; (vi) the execution, delivery and performance of this Agreement, and any other document executed in connection herewith, are within Borrower's powers, have been duly authorized, are not in contravention of law or the terms of Borrower's charter, by-laws or other constating documents, or of any indenture, agreement or undertaking to which Borrower is a party; (vii) all constating documents and all amendments thereto of Borrower have been duly filed and are in proper order and any capital stock issued by Borrower and outstanding was and is properly issued and all books and records of Borrower are accurate and up to date and will be so maintained; (viii) Borrower (a) is subject to no charter, corporate or other legal restriction, or any judgment, award, decree, order, governmental rule or regulation or contractual restriction that could have a material adverse effect on its financial condition, business or prospects, and (b) is in compliance with its charter, by-laws and other constating documents, all contractual requirements by which it may be bound and all applicable laws, rules and regulations other than laws, rules or regulations the validity or applicability of which it is contesting in good faith or provisions of any of the foregoing the failure to comply with which cannot reasonably be expected to materially adversely affect its financial condition, business or prospects or the value of the Collateral; (ix) there is no action, suit, proceeding or investigation pending or, to Borrower's knowledge, threatened against or affecting it or any of its assets before or by any court or other governmental authority which, if determined adversely to it, would have a material adverse effect on its financial condition, business or prospects or the value of the Collateral; (x) all information provided by Borrower and/or Guarantor as part of the application process for the Loan was true and complete; (xi) Borrower does not intend to file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within 6 months of the date hereof; and (xii) Borrower is not presently insolvent within the meaning of the Uniform Commercial Code as well as the United States Bankruptcy Code.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>6

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| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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**20. INTEREST AND FEES.** Borrower agrees to pay in full the interest set forth in the accompanying Business Loan and Security Agreement Supplement. In addition to any other fees described in the Agreement, Borrower agrees to pay the following fees:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Origination Fee</u>: A one-time Origination Fee in the amount set forth in the accompanying Business Loan and Security Agreement Supplement. Borrower agrees that this fee will be immediately deducted from the proceeds of Borrower's Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Returned Payment Fee</u>: A Returned Payment Fee in the amount set forth in the accompanying Business Loan and Security Agreement Supplement if any electronic payment processed on Borrower's Loan is returned unpaid or dishonored for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Late Fee</u>: A Late Fee in the amount set forth in the accompanying Business Loan and Security Agreement Supplement if a scheduled payment is not received by Lender as provided in the payment schedule set forth in the accompanying Business Loan and Security Agreement Supplement.

Payments made by Borrower hereunder will be applied and allocated between Loan principal, interest and fees in the manner set forth in Section 8.

**21. INTEREST AND FEES EXCEEDING PERMITTED LIMIT**. If the Loan is subject to a law that sets maximum charges, and that law is finally interpreted so that the interest or other fees collected or to be collected in connection with this Agreement exceed the permitted limits, then (i) any such charge will be reduced by the amount necessary to reduce the charge to the permitted limit and (ii) if required by applicable law, any sums already collected from Borrower that exceed the permitted limits will be refunded or credited to Borrower.

**22. ONLINE CUSTOMER PORTAL**. When Borrower signs in with Borrower's valid username and password at loans.ondeck.com, Borrower can obtain information about the Borrower's Loan, such as the outstanding balance, daily transactions and fees. No additional paper statement will be mailed to Borrower. Borrower agrees not to share Borrower's username and password to loans.ondeck.com with any third party.

**23. FINANCIAL INFORMATION AND REEVALUATION OF CREDIT.** Borrower and each Guarantor (if any) authorize Lender to obtain business and personal credit bureau reports in Borrower's and any Guarantor's name, respectively, at any time and from time to time for purposes of deciding whether to approve the requested Loan or for any update, renewal, extension of credit or other lawful purpose. Upon Borrower's or any Guarantor's request, Lender will advise Borrower or Guarantor if Lender obtained a credit report and Lender will give Borrower or Guarantor the credit bureau's name and address. Borrower and each Guarantor (if any) agree to submit current financial information, a new credit application, or both, in Borrower's name and in the name of each Guarantor, respectively, at any time promptly upon Lender's request. Borrower authorizes Lender to act as Borrower's agent for purposes of accessing and retrieving transaction history information regarding Borrower from Borrower's designated merchant processor(s). Lender may report Lender's credit experiences with Borrower and any Guarantor of Borrower's Loan to third parties as permitted by law, including with respect to any Guarantor to consumer credit reporting agencies. Borrower also agrees that Lender may release information to comply with governmental reporting or legal process that Lender believes may be required, whether or not such is in fact required, or when necessary or helpful in completing a transaction, or when investigating a loss or potential loss. Borrower and each Guarantor is hereby notified that a negative credit report reflecting on Borrower's and/or any Guarantor's credit record may be submitted to a credit reporting agency (including with respect to any Guarantor to consumer credit reporting agencies) if Borrower or such Guarantor fails to fulfill the terms of their respective credit obligations hereunder. Guarantor acknowledges that any credit reporting on the Loan shall be at the sole discretion of Lender (subject to applicable law) and that Lender has the right to report the Loan to Guarantor's personal credit file should Guarantor not pay any Obligation pursuant to the guaranty set forth in this Agreement.

**24. ATTORNEYS' FEES AND COLLECTION COSTS.** To the extent not prohibited by applicable law and except as provided in Section 33, Borrower shall pay to Lender on demand any and all expenses, including, but not limited to, collection costs, all attorneys' fees and expenses, and all other expenses of like or unlike nature which may be expended by Lender to obtain or enforce payment of Obligations either as against Borrower or any guarantor or surety of Borrower or in the prosecution or defense of any action or concerning any matter arising out of or connected with the subject matter of this Agreement, the Obligations or the Collateral or any of Lender's rights or interests therein or thereto, including, without limiting the generality of the foregoing, any counsel fees or expenses incurred in any bankruptcy or insolvency proceedings and all costs and expenses (including search fees) incurred or paid by Lender in connection with the administration, supervision, protection or realization on any security held by Lender for the debt secured hereby, whether such security was granted by Borrower or by any other person primarily or secondarily liable (with or without recourse) with respect to such debt, and all costs and expenses incurred by Lender in connection with the defense, settlement or satisfaction of any action, claim or demand asserted against Lender in connection therewith, which amounts shall be considered advances to protect Lender's security, and shall be secured hereby. To the extent permitted by applicable law, all such expenses will become a part of the Obligations and, at Lender's option, will: (i) be payable on demand; (ii) be added to the balance of the Loan and be apportioned among and be payable with any installment payments to become due during the remaining term of the Loan; or (iii) be treated as a balloon payment that will be due and payable at the Loan's maturity. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon an Event of Default.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>7

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**25. BORROWER'S REPORTS.** Promptly upon Lender's written request, Borrower and each Guarantor agrees to provide Lender with such information about the financial condition and operations of Borrower or any Guarantor, as Lender may, from time to time, reasonably request. Borrower also agrees promptly upon becoming aware of any Event of Default, or the occurrence or existence of an event which, with the passage of time or the giving of notice or both, would constitute an Event of Default hereunder, to promptly provide notice thereof to Lender in writing.

**26. TELEPHONE COMMUNICATIONS.** Borrower and Guarantors hereby expressly consent to receiving calls and messages, including auto-dialed and pre-recorded message calls and SMS messages (including text messages) from Lender, its affiliates, marketing partners, agents and others calling at Lender's request or on its behalf, at any telephone numbers that Borrower and/or Guarantors have provided or may provide in the future or otherwise in Lender's possession (including any cellular or mobile telephone numbers). Borrower and Guarantor agree that such communications may be initiated using an automated telephone dialing system.

**27. INDEMNIFICATION.** Except for Lender's gross negligence or willful misconduct, Borrower will indemnify and hold Lender harmless from all losses, costs, damages, liabilities or expenses (including, without limitation, court costs and reasonable attorneys' fees) that Lender may sustain or incur by reason of defending or protecting Lender's security interest or the priority thereof or enforcing the Obligations, or in the prosecution or defense of any action or proceeding concerning any matter arising out of or in connection with this Agreement and/or any other documents now or hereafter executed in connection with this Agreement and/or the Obligations and/or the Collateral. This indemnity shall survive the repayment of the Obligations and the termination of this Agreement.

**28. MERGERS, CONSOLIDATIONS OR SALES**. Borrower represents and agrees that Borrower will not (i) merge or consolidate with or into any other business entity or (ii) enter into any joint venture or partnership with any person, firm, corporation, or other entity. Borrower further agrees not to alter its ownership without prior written permission from Lender.

**29. CHANGE IN LEGAL STATUS**. Without Lender's consent, Borrower represents and agrees that Borrower will not (i) change its name, its place of business or, if more than one, chief executive office, its mailing address, or organizational identification number if it has one, or (ii) change its type of organization, jurisdiction of organization or other legal structure. If Borrower does not have an organizational identification number and later obtains one, Borrower shall promptly notify Lender of such taxpayer identification number.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>8

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| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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**30. DEFAULT.** The occurrence of any one or more of the following events (herein, "Events of Default") shall constitute, without notice or demand, a default under this Agreement and all other agreements between Lender and Borrower and instruments and papers given Lender by Borrower, whether such agreements, instruments, or papers now exist or hereafter arise: (i) Lender is unable to collect any Automatic Payment Plan payment on two consecutive dates due and/or, Borrower fails to pay any Obligations on two consecutive dates due; (ii) Borrower fails to comply with, promptly, punctually and faithfully perform or observe any term, condition or promise within this Agreement; (iii) the determination by Lender that any representation or warranty heretofore, now or hereafter made by Borrower to Lender, in any documents, instrument, agreement, application or paper was not true or accurate when given; (iv) the occurrence of any event such that any indebtedness of Borrower from any lender other than Lender could be accelerated, notwithstanding that such acceleration has not taken place; (v) the occurrence of any event that would cause a lien creditor, as that term is defined in Section 9-102 of the Uniform Commercial Code, (other than Lender) to take priority over the Loan made by Lender; (vi) a filing against or relating to Borrower (unless consented to in writing by Lender) of (a) a federal tax lien in favor of the United States of America or any political subdivision of the United States of America, or (b) a state tax lien in favor of any state of the United States of America or any political subdivision of any such state; (vii) the occurrence of any event of default under any other agreement between Lender and Borrower or instrument or paper given Lender by Borrower, whether such agreement, instrument, or paper now exists or hereafter arises (notwithstanding that Lender may not have exercised its rights upon default under any such other agreement, instrument or paper); (viii) any act by, against, or relating to Borrower, or its property or assets, which act constitutes the application for, consent to, or sufferance of the appointment of a receiver, trustee or other person, pursuant to court action or otherwise, over all, or any part of Borrower's property; (ix) the granting of any trust mortgage or execution of an assignment for the benefit of the creditors of Borrower, or the occurrence of any other voluntary or involuntary liquidation or extension of debt agreement for Borrower; (x) the failure by Borrower to generally pay the debts of Borrower as they mature; (xi) adjudication of bankruptcy or insolvency relative to Borrower or any Guarantor; (xii) the entry of an order for relief or similar order with respect to Borrower or any Guarantor in any proceeding pursuant to Title 11 of the United States Code entitled "Bankruptcy" (the "Bankruptcy Code") or any other federal bankruptcy law; (xiii) the filing of any complaint, application or petition by or against Borrower initiating any matter in which Borrower is or may be granted any relief from the debts of Borrower pursuant to the Bankruptcy Code or any other insolvency statute or procedure; (xiv) the calling or sufferance of a meeting of creditors of Borrower; (xv) the meeting by Borrower with a formal or informal creditor's committee; (xvi) the offering by or entering into by Borrower of any composition, extension or any other arrangement seeking relief or extension for the debts of Borrower, or the initiation of any other judicial or non-judicial proceeding or agreement by, against or including Borrower that seeks or intends to accomplish a reorganization or arrangement with creditors; (xvii) the entry of any judgment against Borrower, which judgment is not satisfied or appealed from (with execution or similar process stayed) within 15 days of its entry; (xviii) the occurrence of any event or circumstance with respect to Borrower or any Guarantor such that Lender shall believe in good faith that the prospect of payment of all or any part of the Obligations or the performance by Borrower under this Agreement or any other agreement between Lender and Borrower is impaired or there shall occur any material adverse change in the business or financial condition of Borrower (such event specifically includes, but is not limited to, taking additional financing from a credit card advance, cash advance company or an additional working capital loan without the prior written consent of Lender); (xix) the entry of any court order that enjoins, restrains or in any way prevents Borrower from conducting all or any part of its business affairs in the ordinary course of business; (xx) the occurrence of any uninsured loss, theft, damage or destruction to any material asset(s) of Borrower; (xxi) any act by or against, or relating to Borrower or its assets pursuant to which any creditor of Borrower seeks to reclaim or repossess or reclaims or repossesses all or a portion of Borrower's assets; (xxii) the termination of existence, dissolution or liquidation of Borrower or the ceasing to carry on actively any substantial part of Borrower's current business;

(xxiii) this Agreement shall, at any time after its execution and delivery and for any reason, cease to be in full force and effect or shall be declared null and void, or the validity or enforceability hereof shall be contested by Borrower or any guarantor of Borrower denies it has any further liability or obligation hereunder; (xxiv) any guarantor or person signing a support agreement in favor of Lender shall repudiate, purport to revoke or fail to perform his or her obligations under his guaranty or support agreement in favor of Lender or any corporate guarantor shall cease to exist; (xxv) any material change occurs in Borrower's ownership or organizational structure (acknowledging that any change in ownership will be deemed material when ownership is closely held); (xxvi) if Borrower is a sole proprietorship, the owner dies; if Borrower is a trust, a trustor dies; if Borrower is a partnership, any general or managing partner dies; if Borrower is a corporation, any principal officer or 10% or greater shareholder dies; if Borrower is a limited liability company, any managing member dies; if Borrower is any other form of business entity, any person(s) directly or indirectly controlling 10% or more of the ownership interests of such entity dies.

**31. RIGHTS AND REMEDIES UPON DEFAULT.** Subject to applicable law, if an Event of Default occurs under this Agreement, at any time thereafter, Lender may exercise any one or more of the following rights and remedies:

A. <u>Refrain from Disbursing Loan Proceeds</u>: Lender may refrain from disbursing
Borrower's Loan proceeds to Borrower's Designated Checking Account.

B. <u>Debit Amounts Due From Borrower's Accounts</u>: Lender may debit from Borrower's Designated
Checking Account all Automatic Payment Plan payments that Lender was unable to collect and/or the amount of any other Obligations that
Borrower failed to pay.

C. <u>Accelerate Indebtedness</u>: Lender may declare the entire Obligations immediately due and payable,
without notice of any kind to Borrower.

D. <u>Assemble Collateral</u>: Lender may require Borrower and/or Guarantor to deliver to Lender all or any
portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require Borrower
and/or Guarantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have
full power to enter, provided Lender does so without a breach of the peace or a trespass, upon the property of Borrower and/or Guarantor
to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession,
Borrower and/or Guarantor agree Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Borrower
and/or Guarantor after repossession.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>9

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E. <u>Sell the Collateral</u>: Lender shall have full power to sell, lease, transfer,
or otherwise deal with the Collateral or proceeds thereof in Lender's own name or that of Borrower and/or Guarantor. Lender may sell the
Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Lender will give Borrower, Guarantor and other persons as required by law, reasonable notice of the time
and place of any public sale, or the time after which any private sale or any other disposition of the Collateral is to be made. However,
no notice need be provided to any person who, after an Event of Default occurs, enters into and authenticates an agreement waiving that
person's right to notification of sale. The requirements of reasonable notice shall be met if such notice is given at least 10 days before
the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the expenses
of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Obligations secured by this
Agreement. To the extent permitted by applicable law, all such expenses will become a part of the Obligations and, at Lender's option,
will: (i) be payable on demand; (ii) be added to the balance of the Loan and be apportioned among and be payable with any installment
payments to become due during either (a) the term of any applicable insurance policy or (b) the remaining term of the Loan; or (iii) be
treated as a balloon payment that will be due and payable at the Loan's maturity.

F. <u>Appoint Receiver</u>: Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Collateral, with the power to protect and preserve the Collateral, to operate the Collateral
preceding foreclosure or sale, and to collect the rents from the Collateral and apply the proceeds, over and above the cost of the receivership,
against the Obligations. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall
exist whether or not the apparent value of the Collateral exceeds the Obligations by a substantial amount. Employment by Lender shall
not disqualify a person from serving as a receiver.

G. <u>Collect Revenues, Apply Accounts</u>: Lender, either itself or through a receiver,
may collect the payments, rents, income, and revenues from the Collateral. Lender may at any time in Lender's discretion transfer any
Collateral into Lender's own name or that of Lender's nominee and receive the payments, rents, income and revenues therefrom and
hold the same as security for the Obligations or apply it to payment of the Obligations in such order of preference as Lender may determine.
Insofar as the Collateral consists of accounts, general intangibles, insurance policies, instruments, chattel paper, choses in action,
or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose or realize on the Collateral
as Lender may determine, whether or not any amount included within the Obligations is then due, as permitted by law. For these purposes,
Lender may, on behalf of and in the name of Borrower and/or Guarantor, receive, open and dispose of mail addressed to Borrower; change
any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, instruments
and items pertaining to payment, shipment or storage of any Collateral. To facilitate collections, Lender may notify account debtors and
obligors on any Collateral to make payments directly to Lender.

H. <u>Obtain Deficiency</u>: If Lender chooses to sell any or all of the Collateral, Lender may obtain a
judgment against Borrower and/or Guarantor for any deficiency remaining on the Obligations due to Lender after application of all amounts
received from the exercise of the rights provided in this Agreement. Borrower and/or Guarantor shall be liable for a deficiency even if
the transaction described in this subsection is a sale of accounts or chattel paper.

I. <u>Other Rights and Remedies</u>: Lender shall have all the rights and remedies of a secured creditor
under the provisions of the Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise
any or all other rights and remedies it may have available at law, in equity or otherwise.

J. <u>Election of Remedies</u>: Except as may be prohibited by applicable law, all
of Lender's rights and remedies, whether evidenced by this Agreement, any related documents, or by any other writing, shall be cumulative
and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to perform an obligation of Borrower under the Agreement, after Borrower's
failure to perform, shall not affect Lender's right to declare a default and exercise its remedies.

**32. CONSENT TO JURISDICTION AND VENUE.** Subject to Section 33 below, Borrower, Guarantors and Lender agree that any action or proceeding to enforce or arising out of this Agreement may be brought in any court of the State of Utah or in the United States District Court for the District of Utah, and Borrower and Guarantors waive personal service of process. Borrower, Guarantors and Lender agree that, subject to section 33, venue is proper in such courts.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>10

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| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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33. ARBITRATION AGREEMENT AND CLASS ACTION WAIVER. THE PARTIES AGREE THAT AT THE ELECTION OF ANY PARTY, ALL CLAIMS BETWEEN BORROWER, GUARANTORS, LENDER, AND SERVICER SHALL BE RESOLVED THROUGH MANDATORY BINDING INDIVIDUAL ARBITRATION PURSUANT TO THIS SECTION.

A. Arbitration procedures are generally simpler than the rules that apply in court, and discovery is more limited. Other rights that Borrower, Guarantor, Lender, or Servicer would have in court may also not be available in arbitration. For example, under this arbitration agreement, Borrower, Guarantor, Lender, or Servicer will not have the right to (i) have a court or jury decide the claim being arbitrated, (ii) engage in pre-arbitration discovery to the same extent that Borrower, Guarantor, Lender, or Servicer could in court, (iii) as set forth below, participate as a representative or member of any class or of claimants in a class action, in court or in arbitration, relating to any claim subject to arbitration, or (iv) join or consolidate claims other than Borrower's, Guarantor's, Lender's, or Servicer's own claims. Any arbitration award and any judgment confirming it will apply only to a specific Claim and cannot be used in any other case except to enforce the award.

B. The term "Claims" is to be given the broadest possible meaning, and includes without limitation Claims arising from or relating to (i) this Agreement, including without limitation, the terms, construction, interpretation, performance, termination, breach, or enforceability of this Agreement, (ii) any transactions effected pursuant to this Agreement, (iii) terms of or change or addition of terms to this Agreement, (iv) collection or enforcement of any obligation arising from this Agreement, (v) advertisements, promotions, or oral or written statements relating to this Agreement or any transactions between us pursuant to this Agreement, (vi) Claims between Borrower and Guarantor and Lender or Servicer or Lender's or Servicer's parent corporations, wholly or majority owned subsidiaries, affiliates, predecessors, successors, assigns, agents, independent contractors, employees, officers, directors or representatives arising from any transaction between us pursuant to this Agreement, and (vii) Claims regarding the validity, enforceability, or scope of this Arbitration section or this Agreement, including but not limited to whether a given claim or dispute is subject to arbitration.

C. The parties agree that any Claim against Borrower, Guarantors, Lender, or Servicer shall be, at the election of any party, resolved by mandatory binding arbitration within a reasonable time period not to exceed one-hundred-and-eighty (180) days. The parties agree that the arbitration shall be administered by JAMS and the arbitration shall be conducted in accordance with the JAMS Streamlined Arbitration Rules & Procedures except as otherwise agreed in this Agreement; if JAMS is unavailable to administer the arbitration, then the arbitration shall be administered by the American Arbitration Association in accordance with its procedures or any other mutually agreeable arbitrator. The parties agree that the arbitration shall be conducted by a single arbitrator. The arbitrator shall be chosen in accordance with the procedures of JAMS and shall base the award on applicable law. The arbitration hearing shall occur in the federal judicial district where Borrower or Guarantor are located, and may be conducted on the basis of documents only or through a telephone or in- person hearing. The arbitrator's decisions are final and binding, are as enforceable as any court order, and are subject to very limited review by a court as set forth in the Federal Arbitration Act. Judgment on the award may be entered in any court having jurisdiction, subject to Section 32 above.

D. The parties agree that the costs of the arbitration (including the arbitrator's fees) shall be divided equally between them, except that Lender will consider in good faith a request by Borrower to pay the costs of arbitration.

E. EACH PARTY MAY PURSUE ARBITRATION SOLELY IN AN INDIVIDUAL CAPACITY, AND NOT AS A REPRESENTATIVE OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. **THE ARBITRATOR MAY NOT CONSOLIDATE MORE THAN ONE PERSON'S OR ENTITY'S CLAIMS, AND MAY NOT OTHERWISE PRESIDE OVER ANY FORM OF A REPRESENTATIVE OR CLASS PROCEEDING. BORROWER, GUARANTORS, LENDER, AND SERVICER WAIVE ANY RIGHT TO ASSERT ANY CLAIMS AGAINST <u>ANY</u> OTHER PARTY AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW AGAINST PUBLIC POLICY. TO THE EXTENT <u>ANY</u> PARTY IS PERMITTED BY LAW OR COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST <u>ANY</u> OTHER, THE PARTIES HEREBY AGREE THAT: (1) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO RECOVER ATTORNEYS' FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT); AND (2) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION.**

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>11

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| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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F. If this provision is deemed by a court or arbitrator to be unenforceable only as to some Claims asserted by a party, then the parties agree in advance that all proceedings relating to the Claims against which this provision is unenforceable should be stayed and not proceed pending the completion of the arbitration proceeding on all remaining claims.

G. If Borrower, Guarantor, Lender, or Servicer files a Claim in court, such action is not deemed to be a waiver of the right to compel arbitration of any counterclaims, cross-claims, or separate claims that may be asserted against it. In such a case, upon the election of any party, the entire dispute shall be resolved in arbitration pursuant to the provisions of this section.

H. This arbitration section is governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16, other applicable federal law, and, to the extent it is applicable, by Utah law.

**34. JURY TRIAL WAIVER.** To the extent not prohibited by applicable law, Borrower, Guarantors, and Lender waive their right to a trial by jury of any claim or cause of action based upon, arising out of or related to the Agreement and all other documentation evidencing the Obligations, in any legal action or proceeding. Subject to Section 33, any such claim or cause of action shall be tried by court sitting without a jury.

**35. NO WAIVER BY LENDER.** No delay or omission on the part of Lender in exercising any rights under this Agreement, any related guaranty or applicable law shall operate as a waiver of such right or any other right. Waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion. All Lender's rights and remedies, whether evidenced hereby or by any other agreement, instrument or paper, shall be cumulative and may be exercised singularly or concurrently.

**36. ASSIGNMENT.** This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties hereto; provided, however, that Borrower may not assign this Agreement or any rights or duties hereunder without Lender's prior written consent and any prohibited assignment shall be absolutely null and void. No consent to an assignment by Lender shall release Borrower from its Obligations. Lender may assign this Agreement and its rights and duties hereunder and no consent or approval by Borrower is required in connection with any such assignment. Lender reserves the right to sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in Lender's rights and benefits hereunder. In connection with any assignment or participation, Lender may disclose all documents and information that Lender now or hereafter may have relating to Borrower or Borrower's business. To the extent that Lender assigns its rights and obligations hereunder to another party, Lender thereafter shall be released from such assigned obligations to Borrower and such assignment shall affect a novation between Borrower and such other party. For the avoidance of doubt, Borrower, Guarantors, Lender, and Servicer and their successors or assigns retain the right to compel arbitration under Section 33 even if they assign any rights under this Agreement to another individual or entity. OnDeck (in its capacity as servicer) or a successor servicer (if any) shall, acting solely for this purpose as a non-fiduciary agent of Borrower, maintain at one of its offices in the United States a copy of each assignment agreement delivered to it with respect to this Loan and a register for the recordation of the name of each assignee of this Loan, and principal and interest amount of this Loan owing to, such assignee pursuant to the terms hereof. The entries in such register shall be conclusive, and Borrower, Lender and each such assignee may treat each person whose name is recorded therein pursuant to the terms hereof as a "Lender" hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The register maintained for this Loan shall be available for inspection by Borrower and any such assignee of this Loan, at any reasonable time upon reasonable prior notice to OnDeck (in its capacity as servicer) or the applicable successor servicer (if any). This Section 36 shall be construed so that this Loan is at all times maintained in "registered form" within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code and any related Treasury regulations (or any other relevant or successor provisions of the Internal Revenue Code or of such Treasury regulations).

**37. INTERPRETATION.** Paragraph and section headings used in this Agreement are for convenience only, and shall not affect the construction of this Agreement. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against Lender or Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto.

**38. SEVERABILITY.** If one or more provisions of this Agreement (or the application thereof) is determined invalid, illegal or unenforceable in any respect in any jurisdiction, the same shall not invalidate or render illegal or unenforceable such provision (or its application) in any other jurisdiction or any other provision of this Agreement (or its application).

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>12

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| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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**39. NOTICES.** Except as otherwise provided in this Agreement, notice under this Agreement must be in writing. Notices will be deemed given when deposited in the U.S. mail, postage prepaid, first class mail; when delivered in person; or when sent by registered mail; by certified mail; or by nationally recognized overnight courier; or when sent by electronic mail. Notice to Borrower and/or any personal guarantor will be sent to Borrower's last known address or electronic mail address in Lender's records for this Loan. Notice to Lender may be sent to our Servicer: OnDeck, 4700 W. Daybreak Pkwy., Suite 200, South Jordan, UT, 84009, Attn: Director of Operations.

**40. RECORDKEEPING AND AUDIT REQUIREMENTS.** Lender shall have no obligation to maintain any electronic records or any documents, schedules, invoices or any other paper delivered to Lender by Borrower in connection with this Agreement or any other agreement other than as required by law. Borrower will at all times keep accurate and complete records of Borrower's accounts and Collateral. At Lender's request, Borrower shall deliver to Lender: (i) schedules of accounts and general intangibles; and (ii) such other information regarding the Collateral as Lender shall request. Lender, or any of its agents, shall have the right to call any telephone numbers that Borrower has provided or may provide in the future or otherwise in the Lender's possession (including any cellular or mobile telephone numbers) at intervals to be determined by Lender, and without hindrance or delay, to inspect, audit, check, and make extracts from any copies of the books, records, journals, orders, receipts, correspondence that relate to Borrower's accounts and Collateral or other transactions between the parties thereto and the general financial condition of Borrower and Lender may remove any of such records temporarily for the purpose of having copies made thereof. If Borrower was referred to Lender for this Loan by a third party (the "Referring Party"), then Borrower consents to Lender sharing certain reasonable information about Borrower with the Referring Party for purposes of the Referring Party verifying and/or auditing loans made through such Referring Party's referrals.

**41. GOVERNING LAW.** Subject to Section 33 above, our relationship including this Agreement and any claim, dispute or controversy (whether in contract, tort, or otherwise) at any time arising from or relating to this Agreement is governed by, and this Agreement will be construed in accordance with, applicable federal law and (to the extent not preempted by federal law) Utah law without regard to internal principles of conflict of laws. The legality, enforceability and interpretation of this Agreement and the amounts contracted for, charged and reserved under this Agreement will be governed by such laws. Borrower understands and agrees that (i) Lender is located in Utah, (ii) Lender makes all credit decisions from Lender's office in Utah, (iii) the Loan is made in Utah (that is, no binding contract will be formed until Lender receives and accepts Borrower's signed Agreement in Utah) and (iv) Borrower's payments are not accepted until received by Lender in Utah.

**42. WAIVER OF NOTICES AND OTHER TERMS.** Except for any notices provided for in this Agreement, Borrower and any person who has obligations pursuant to this Agreement (*e.g*., a Guarantor), to the extent not prohibited by applicable law hereby, waives demand, notice of nonpayment, notice of intention to accelerate, notice of acceleration, presentment, protest, notice of dishonor and notice of protest. To the extent permitted by applicable law, Borrower and any person who has obligations pursuant to this Agreement also agrees: Lender is not required to file suit, show diligence in collection against Borrower or any person who has obligations pursuant to this Agreement, or proceed against any Collateral; Lender may, but will not be obligated to, substitute, exchange or release any Collateral; Lender may release any Collateral, or fail to realize upon or perfect Lender's security interest in any Collateral; Lender may, but will not be obligated to, sue one or more persons without joining or suing others; and Lender may modify, renew, or extend this Agreement (repeatedly and for any length of time) without notice to or approval by any person who has obligations pursuant to this Agreement (other than the party with whom the modification, renewal or extension is made).

**43. Modifications of Payment Schedule.** Lender may unilaterally modify the Payment Schedule shown in the accompanying Business Loan and Security Agreement Supplement without prior approval by Borrower or Guarantor, including, but not limited to, extending the repayment term, increasing the total number of payments, or modifying the Payment Amount, so long as the modification does not increase the Total Repayment Amount or the amount of any individual payment above the Payment Amount shown on the Business Loan and Security Agreement Supplement. Any modification of the Payment Schedule will be effective upon notice by Lender to Borrower, which may be provided to Borrower by posting the notice in the online account, communicating the notice via regular mail at the last known address for Borrower, or via electronic mail at the e-mail address of Borrower in Lender's records. Lender may modify the Payment Schedule pursuant to this paragraph without any notice to Guarantor. Borrower and Guarantor agree that any modification to the Payment Schedule under this paragraph shall not affect Borrower's or Guarantor's obligations under this Business Loan and Security Agreement.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>13

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| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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**44. MONITORING, RECORDING AND ELECTRONIC COMMUNICATIONS.** In order to ensure a high quality of service for Lender's customers, Lender may monitor and/or record telephone calls between Borrower and Lender's employees or agents. Borrower acknowledges that Lender may do so and agrees in advance to any such monitoring or recording of telephone calls. Borrower also agrees that Lender may communicate with Borrower electronically by e-mail.

**45. CONFIDENTIALITY.** Borrower shall not make, publish or otherwise disseminate in any manner a copy of this Agreement or any public statement or description of the terms of this Agreement, except to its employees, advisors and similar persons who have a legitimate need to know its contents.

**46. ENTIRE AGREEMENT.** Any application Borrower signed or otherwise submitted in connection with the Loan, the accompanying Business Loan and Security Agreement Supplement and the Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits) and any other documents required by Lender now or in the future in connection with this Agreement and Borrower's Loan are hereby incorporated into and made a part of this Agreement. This Agreement is the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior written or verbal communications or instruments relating thereto.

**47. COUNTERPARTS; ELECTRONIC SIGNATURES**. This Agreement may be executed in one or more counterparts, each of which counterparts shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument. For purposes of the execution of this Agreement, signatures delivered by electronic or fax transmission shall be treated in all respects as original signatures.

**48. CUSTOMER SERVICE CONTACT INFORMATION**. If you have questions or comments about your Loan, you may contact our Servicer, OnDeck by (i) e-mail at customerservice@ondeck.com, (ii) telephone at (888) 556-3483 or (iii) mail at 4700 W. Daybreak Pkwy., Suite 200, South Jordan, UT 84009, Attn: Director of Operations.

**49. GRANT OF LICENSE TO USE THE ONDECK PLATFORM.** Subject to Borrower's compliance with this Agreement and the Terms of Use for the OnDeck Platform, Servicer grants Borrower a nonexclusive, revocable, non-transferable, non-sublicenseable, limited right and royalty-free license to use the OnDeck Platform, effective solely during the term of the Loan and so long as an Event of Default has not occurred. The license granted to Borrower is personal, and no rights hereunder may be transferred by Borrower without the express written approval of Servicer. Servicer may terminate the license granted hereunder without notice at any time after an Event of Default has occurred.

**50. PERSONAL GUARANTY.** Each Guarantor jointly and severally (if more than one), absolutely and unconditionally guarantee the prompt payment to Lender, including its successors and assignees, of any and all Obligations incurred by the Borrower pursuant to the Agreement (this "Personal Guaranty"). Each Guarantor further agrees to repay the Obligations on demand, without requiring Lender first to enforce payment against Borrower. This is a guarantee of payment and not of collection. This is an absolute, unconditional, primary, and continuing obligation and will remain in full force and effect until the first to occur of the following: (a) all of the Obligations have been indefeasibly paid in full, and Lender has terminated this Personal Guaranty, or (b) 30 days after the date on which written notice of revocation is actually received and accepted by Lender. No revocation will affect: (i) the then existing liabilities of the revoking Guarantor under this Personal Guaranty; (ii) Obligations created, contracted, assumed, acquired or incurred prior to the effective date of such revocation; (iii) Obligations created, contracted, assumed, acquired or incurred after the effective date of such revocation pursuant to any agreement entered into or commitment obtained prior to the effective date of such revocation; or (iv) any Obligations then or thereafter arising under the agreements or instruments then in effect and then evidencing the Obligations. Each Guarantor represents and warrants that (i) it is a legal resident of the United States of America and (ii) neither Borrower, nor itself individually as Guarantor, intends to file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within 6 months of the date hereof. Each Guarantor waives all notices to which the Guarantor might otherwise be entitled by law, and also waives all defenses, legal or equitable, otherwise available to the Guarantor. This Personal Guaranty shall be construed in accordance with the laws of the State of Utah, and shall inure to the benefit of Lender, its successors and assigns. To the extent not prohibited by applicable law, each of the undersigned Guarantors waives its right to a trial by jury of any claim or cause of action based upon, arising out of or related to this guaranty, the Agreement and all other documentation evidencing the Obligations, in any legal action or proceeding. Subject to Section 33 above, any such claim or cause of action shall be tried by court sitting without a jury.

**51. CERTIFICATION AND SIGNATURES.** By executing this Agreement or authorizing the person signing or affirming below to execute on its behalf, Borrower certifies that Borrower has received a copy of this Agreement and that Borrower has read, understood and agreed to be bound by its terms. Each person signing or affirming below certifies that each person is signing or affirming on behalf of the Borrower and/or in the capacity indicated below the signer's name (and if Borrower is a sole proprietorship, in the capacity of the owner of such sole proprietorship) and that such signer is authorized to execute this Agreement on behalf of or the in stated relation to Borrower.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>14

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| ![](ex10-4_001.jpg) | BUSINESS LOAN AND SECURITY<br> AGREEMENT SUPPLEMENT |

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<u>Use of Proceeds Certification</u>

As referred to in Section 4, by signing or affirming below, the Borrower certifies, acknowledges and understands that the proceeds from the requested Loan will be used solely for purchasing or acquiring specific products or services, for the following purposes only:

- specified merchandise

- insurance (but not self-insurance programs)

- services or equipment

- inventory or other specified goods

- loans to finance specified sales transactions

- public works projects or educational services (e.g., training)

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>15

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| ![](ex10-4_001.jpg) | SIGNATURE PAGE |

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**This Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits) is part of (and incorporated by reference into) the Business Loan and Security Agreement. Borrower should keep this important legal document for Borrower's records.**

**DISBURSEMENT OF LOAN PROCEEDS.** By executing this Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits), Borrower authorizes Lender to disburse the Loan proceeds less the amount of any applicable fees and in accordance with the Loan Proceeds Disbursement Authorization, if any, upon Loan approval by initiating an ACH credit, wire transfer or similar means to the checking account indicated herein (or a substitute checking account Borrower later identifies and is acceptable to Lender) (hereinafter referred to as the "Designated Checking Account") in the disbursal amount set forth in the accompanying Business Loan and Security Agreement Supplement less any amounts owed to Lender from a prior loan or used to pay off an amount owed to a third party lender. This authorization is to remain in full force and effect until Lender has received written notification from Borrower of its termination in such time and in such manner as to afford Lender and Borrower's depository bank a reasonable opportunity to act on it.

**AUTOMATIC PAYMENT PLAN.** Enrollment in Lender's Automatic Payment Plan is required for Loan approval. By executing this Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits), Borrower agrees to, and hereby, enrolls in the Automatic Payment Plan and authorizes Lender to collect payments required under the terms of Borrower's Business Loan and Security Agreement by initiating ACH debit entries to the Designated Checking Account in the amounts and on the dates provided in the payment schedule set forth in the accompanying Business Loan and Security Agreement Supplement. Borrower authorizes Lender to resubmit any returned or failed ACH Debt for any previously scheduled payment(s) that was not paid as provided in the Payment Schedule, as permitted by law and network rules. This authorization is to remain in full force and effect until Lender has received written notification from Borrower of its termination no less than three business days before a scheduled payment. Lender may suspend or terminate Borrower's enrollment in the Automatic Payment Plan immediately if Borrower fails to keep Borrower's designated checking account in good standing or if there are insufficient funds in Borrower's checking account to process any payment (or if Lender is otherwise unable to collect any amounts by ACH debit owed to Lender under the Loan or under any other loan or extension of credit by Lender to Borrower). **If Borrower revokes the authorization or Lender suspends or terminates Borrower's enrollment in the Automatic Payment Plan, Borrower still will be responsible for making timely payments pursuant to the alternative payment methods described in the Business Loan and Security Agreement.**

**Modification of Payment Schedule**. Borrower and Guarantor agree that Lender may unilaterally modify the agreed Payment Schedule pursuant to Paragraph 43 of the Business Loan and Security Agreement. Enrollment in Lender's Automatic Payment Plan authorizes Lender to debit the Designated Checking Account under Lender's Automatic Payment Plan pursuant to any modified Payment Schedule made in accordance with Paragraph 43 of the Business Loan and Security Agreement.

**Provisional Payment**. Credit given by us to you with respect to an automated clearing house ("ACH") credit entry is provisional until we receive final settlement for such entry through a Federal Reserve Bank. If we do not receive such final settlement, you are hereby notified and agree that we are entitled to a refund of the amount credited to you in connection with such entry, and the party making to you via such entry (i.e. the originator of the entry) shall not be deemed to have paid you in the amount of such entry.

**ACH Authorization for Material Misrepresentations**. In the event that we determine that you made any material misrepresentation in your application (including, but not limited to, misrepresenting your business revenue, altering bank statements, misrepresenting the purpose of the funds, etc.) you authorize Lender to debit the Designated Checking Account the full Disbursement Amount identified in the Business Loan and Security Agreement Supplement. In the event that Lender exercises this option and debits the Disbursement Amount from your Designated Checking Account, you agree that all other terms of the Business Loan and Security Agreement, including the Arbitration Agreement and Class Action Waiver, shall remain in full force and effect.

**Notice of Receipt of Entry**. Under the operating rules of the National Automated Clearing House Association, which are applicable to ACH transactions involving your account, we are not required to give next day notice to you of receipt of an ACH item and we will not do so. However, we will continue to notify you of the receipt of payments in the periodic statement we provide to you.

**Choice of Law.** We may accept on your behalf payments to your account which have been transmitted through one or more Automated Clearing Houses ("ACH") and which are not subject to the Electronic Fund Transfer Act and your rights and obligations with respect to such payments shall be construed in accordance with and governed by the laws of the state of Utah, unless it has otherwise specified in a separate agreement that the law of some other state shall govern.

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>16

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| ![](ex10-4_001.jpg) | SIGNATURE PAGE |

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**BUSINESS PURPOSE ACCOUNT.** By executing this Authorization Agreement for Direct Deposit (ACH Credit) and Direct Payments (ACH Debits), Borrower attests that the Designated Checking Account was established for business purposes and not primarily for personal, family or household purposes.

**ACCOUNT CHANGES.** Borrower agrees to promptly notify Lender in writing if there are any changes to the account and routing numbers of the Designated Checking Account.

**MISCELLANEOUS.** Lender is not responsible for any fees charged by Borrower's bank as the result of credits or debits initiated under this agreement. The origination of ACH transactions to Borrower's account must comply with the provisions of U.S. law. Borrower agrees to be bound by NACHA rules of the Electronic Payments Association

ODC App #: 8516648 Customer: HELIOSPACE CORPORATION V9 <br>17

## Exhibit 10.5

**Exhibit 10.5**

**RECEIVABLES SALE AGREEMENT**

**Note: These Purchase and Sale Terms ("Purchase and Sale Terms") form a part of and are incorporated into this Receivables Sale Agreement ("Agreement") which follows, and are subject to modification as provided in <u>Section 5</u>.** **Case ID:** <u>1816857</u>

**Purchaser:** Itria Ventures LLC, a Delaware limited liability company ("Purchaser").

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| **Merchant(s):** | HELIOSPACE CORPORATION, A Delaware Corporation |

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HELIO CORPORATION, A Florida Corporation

**Contract Date**: <u>June 09, 2025</u>.

**Purchase Price**: <u>One Hundred Fifty Thousand Dollars ($150,000.00)</u>.

The purchase price ("**Purchase Price**") is a gross amount before application of fees ("**Fees**"). The amount funded to you under this Agreement ("**Funded Amount**") will be net of the Fees specified below.

**Amount Sold**: <u>One Hundred Ninety Two Thousand Dollars</u> <u>($192,000.00</u>). This is the amount of your Receivables purchased by Purchaser under this Agreement ("**Amount Sold**") . Please refer to <u>Sections 2(a)</u> and <u>2(b)</u>.

**Purchased Percentage**: <u>Three Point Two Seven</u> percent (<u>3.27</u>%). This is the percentage of your Receivables that Purchaser will receive until the Merchant has delivered the Amount Sold ("**Purchased Percentage**"), on the periodic basis specified below.

**Periodic Amount**: <u>Three Thousand Six Hundred Ninety Two Dollars And Thirty One Cents</u> ($<u>3,692.31</u>). This is the periodic amount ("**Periodic Amount**") to be remitted to Purchaser every <u>every week</u>, subject to reconciliation against your actual Purchase Percentage of Receivables, as provided in <u>Section 5</u>.

**Fees**: Your Fees under this Agreement total <u>Two Thousand Dollars</u> Dollars ($<u>2,000.00</u>). This amount will be deducted from your Purchase Price specified above, per <u>Section 3(a)</u>. Additional fees may be payable after the Contract Date. Please refer to <u>Section 3(b)</u>.

**Funded Amount**: <u>One Hundred Forty Eight Thousand Dollars ($148,000.00)</u>. This amount is the Purchase Price *less* Fees, and is the net amount funded to you under this Agreement.

<u>**Guaranty of Performance**</u>

 

*(see page 12)*

**Guarantor(s):** <u>PAUL STUART TURIN, GREGORY TOWNSEND DELORY & JOSEPH THOMAS PITMAN</u> ("**Guarantor**").

**ALL PARTIES AND GUARANTOR AGREE TO CONDUCT THIS TRANSACTION BY ELECTRONIC MEANS AS FURTHER SPECIFIED IN THE AGREEMENT**

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| Merchant/Guarantor Initials: X | ![](ex10-5_002.jpg) |

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This **RECEIVABLES SALE AGREEMENT** ("**Agreement**"), dated as of the date specified on the prior page, is made by and between **Itria Ventures LLC**, a Delaware limited liability company ("**Purchaser**" or "**we**"), and the merchant(s) identified as "Merchant" in the Purchase and Sale Terms and on the signature page hereof (collectively, "**Merchant**" or "**you**").

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties now intend to be legally bound and agree as follows:

**1. Fundamental Terms, Conditions and Waivers.** This is a contract for the purchase and sale of Receivables (as defined). Purchaser is buying a stated amount of the Merchant's Receivables (the Amount Sold) for the Purchase Price set forth on the front page of this Agreement. Purchaser's right to receive remittances under this Agreement is contingent on your receipt of Receivables. To this end, you have the right to request a reconciliation of remittances of the Periodic Amount made in any prior periods against your actual Receivables for that period using the Purchased Percentage method, or a forward adjustment reconciliation of the Periodic Amount made in any prior periods against your actual Receivables, provided you comply with the requirements set out in <u>Section 5</u>. The term "**Receivables**" is defined in <u>Section2(c)</u>. **By signing this Agreement, you confirm to Purchaser that: (1) the representations, warranties and covenants set forth in <u>Section 6</u> are reasonable and necessary to effect the purposes of this Agreement and to afford Purchaser the benefit of its bargain pursuant to this Agreement; and (2) you will use the funded amount solely for working capital purposes in the operation of your business; and that you will continue to operate the Merchant business in good faith.**

By signing this Agreement, you confirm that the purchase and sale of Receivables contemplated by this Agreement does not constitute a loan transaction. Because the transactions under this Agreement are a purchase and sale and not a loan, there is no term, interest rate or any annual percentage rate (APR). In addition, because this transaction is not a loan, Purchaser has assumed the risk that Receivables may not be available for remittance to Merchant. Because of this, you understand and acknowledge that Merchant's representations, warranties and covenants in this Agreement are designed to give Purchaser a reasonable and fair opportunity to receive the benefit of its bargain.

You acknowledge that you have been advised by Purchaser to consult with legal counsel, and that you have been afforded a full opportunity to consult with legal counsel. You hereby affirm to Purchaser that you have either consulted with such counsel or voluntarily elected not to do so, including with respect to the waivers set below and in <u>Section 14</u>.

**<u>CERTAIN WAIVERS</u>. BY SIGNING THIS AGREEMENT, YOU ALSO ACKNOWLEDGE ANDUNDERSTANDTHAT YOU HAVE EXPRESSLY AND PERMANENTLY WAIVED AND RELEASED THE RIGHTS: (1) TO START OR JOIN A CLASS ACTION IN ANY CAPACITY; (2) TO TRIAL BY JURY; (3) TO CLAIM THAT THE TRANSACTION IMPLEMENTED BY THIS AGREEMENT IS A LOAN AND NOT A "TRUE SALE" OF RECEIVABLES; AND (4) TO RAISE DEFENSES AND COUNTERCLAIMS, TO THE MAXIMUM EXTENT PERMITTED BY LAW.**

Purchaser will conduct a recorded call prior to funding (the "**Funding Call**"). On this call, Purchaser will go over the Agreement and certain key requirements, including that this Agreement must be duly executed by Merchant before a Notary Public (the "**Notary**"). In addition, each individual listed as a "Guarantor" on the front page of this Agreement (collectively, "**Guarantor**") must duly execute the Guaranty of Performance (the "**Guaranty**") where noted on the Guaranty signature page hereof. You hereby affirm that all information provided to Purchaser and the Notary is truthful and accurate. This Agreement will not become effective unless and until the Agreement is funded by Purchaser (such date, the "**Effective Date**"). Purchaser's obligation to fund this Agreement is subject to due diligence review of Merchant or its business, at Purchaser's sole discretion.

By signing this Agreement, you further acknowledge that the execution and performance of this Agreement by Merchant will not conflict with or breach any other agreement or obligation of Merchant including without limitation the breach of any loan or other financing agreement previously entered into by Merchant.

**2. Purchase and Sale of Receivables**. (a) *Title to Receivables*. In exchange for the Purchase Price, you hereby irrevocably, unconditionally and absolutely sell, assign and transfer to Purchaser all (100%) of Merchant's right, title and interest (whether legal, equitable or beneficial) in and to the Amount Sold of Merchant's Receivables, on the terms and conditions specified herein. The purchase and sale of Receivables under this Agreement shall take place in New York. As of the Effective Date, the purchased Receivables shall be absolutely and unconditionally transferred to, owned by, controlled by, and vested solely in Purchaser, subject to the terms and conditions hereof. This Agreement is a binding legal contract and shall become effective as of the Effective Date. You agree to remit (directly or indirectly) your Receivables, up to the Amount Sold, to Purchaser as described in this Agreem ent. **Until Purchaser has received the Amount Sold, you agree to abide by the requirements specified in <u>Section 6</u>, including without limitation that:**

● You will remit Receivables to Purchaser as specified in this Agreement.

● **You will not sell or transfer your Receivables, nor take any action that would interfere with** 

**Purchaser's right to receive Receivables.**

● **You will not enter into any loan, factoring, merchant cash advance or other financing agreement without Purchaser's prior written consent.** 

● **You will ensure that all information and documents provided to Purchaser are correct and accurate.** 

● **You will immediately update Purchaser on any material change in this information or your business' condition.** 

(b) *Purchase and Sale Terms*. The Purchase and Sale Terms, set out on the front page of the Agreement and initialed by Merchant and Guarantor, form a part of this Agreement and are further described below. The "**Purchase Price**" is the gross dollar amount Purchaser is paying for Merchant's Receivables (defined in <u>subparagraph(c)</u> below). The "**Amount Sold**" is the dollar value of the Receivables sold to Purchaser and the dollar amount to be remitted to Purchaser out of your Receivables, as provided herein. The "**Purchased Percentage**" is the percentage of Receivables that Purchaser will receive on the periodic basis specified on the front page of the Agreement, until the Amount Sold (plus any additional fees and charges incurred under this Agreement) has been delivered to Purchaser. The "**Periodic Amount**" is the amount the parties have (i) estimated as the average periodic Purchased Percentage amount and (ii) agreed that, for administrative convenience, other than for credit card split deals (as evidenced by a separate writing (including email) between Merchant and Purchaser), you will remit to Purchaser on the periodic basis specified on the front page of the Agreement, subject to your right to request a reconciliation against your actual Receivables, as set forth in <u>Section 5</u>. The "**Funded Amount**" is the amount you will receive upon funding of this Agreement, and is equal to the Purchase Price, *less* total Fees (which fees are set forth on the front page of this <u>Agreement</u> and specified in Section 3(a)).

(c) *Receivables*. "**Receivables**" means any and all: (i) funds that Merchant receives from its customers using credit cards, charge cards, debit cards, prepaid cards, benefit cards, or similar cards to purchase Merchant's products and/or services (including without limitation any such funds that are processed by Merchant's card processor(s)); (ii) funds that Merchant receives from its customers in any manner of payment to purchase Merchant's products and/or services; (iii) accounts, future accounts, contract rights, choses in action and any other rights to payment; and (iv) insurance proceeds received by Merchant (up to the Amount Sold, *less* total remittances under this Agreement). "Receivables" also includes the Receivables of Merchant's subsidiaries and affiliated companies and, upon a Material Breach, of any (x) new or existing company owned or controlled by Merchant or any Guarantor (collectively, an "**Other Business**"), (y) any new or existing company, whether owned or controlled by Merchant or Guarantor or any third party, to which all or a material portion of the business or assets of Merchant are sold or otherwise transferred (collectively, a "**Successor Company**") or (z) any affiliate of any of the foregoing, in each case without the express prior written consent of Purchaser.

(d) *Approved Accounts*. Please specify all of Merchant's business bank accounts below, and also designate the account Purchaser should use to fund the Agreement. If no account is so designated, Purchaser will fund into the first account listed below.

---

| | | |
|:---|:---|:---|
| **Account #1** | **Account #2** | **Account #3** |
| **Deposit Funds / Withdrawals** | **Deposit Funds / Withdrawals** | **Deposit Funds / Withdrawals** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| Bank Name: | CHASE BANK | Bank Name: | CHASE BANK | Bank Name: |
| Routing #: | \*\*\*\*\*\*\*\*\*\*\*\* | Routing #: | \*\*\*\*\*\*\*\*\*\*\*\*\*\* | Routing #: |
| <sub>Account #:</sub> | \*\*\*\*\*\*\*\*\*\*\*\*\* | <sub>Account #:</sub> | \*\*\*\*\*\*\*\*\*\*\*\*\*\* | <sub>Account #:</sub> |

---

---

| | | |
|:---|:---|:---|
| **Account #4** | **Account #5** | **Account #6** |
| Deposit Funds / Withdrawals | Deposit Funds / Withdrawals | Deposit Funds / Withdrawals |

---

Bank Name:   Bank Name:   Bank Name:   <br> Routing #:   Routing #:   Routing #:   <br> <sub>Account #:</sub>   <sub>Account #:</sub>   <sub>Account #:</sub>  

---

| | | |
|:---|:---|:---|
| **Account #7** | **Account #8** | **Account #9** |
| Deposit Funds / Withdrawals | Deposit Funds / Withdrawals | Deposit Funds / Withdrawals |

---

Bank Name:   Bank Name:   Bank Name:   <br> Routing #:   Routing #:   Routing #:   <br> <sub>Account #:</sub>   <sub>Account #:</sub>   <sub>Account #:</sub>  

---

| | | |
|:---|:---|:---|
| **Account #10** | **Account #11** | **Account #12** |
| Deposit Funds / Withdrawals | Deposit Funds / Withdrawals | Deposit Funds / Withdrawals |

---

Bank Name:   Bank Name:   Bank Name:   <br> Routing #:   Routing #:   Routing #:   <br> <sub>Account #:</sub>   <sub>Account #:</sub>   <sub>Account #:</sub>  

---

| | | |
|:---|:---|:---|
| **Account #13** | **Account #14** | **Account #15** |
| Deposit Funds / Withdrawals | Deposit Funds / Withdrawals | Deposit Funds / Withdrawals |

---

Bank Name:   Bank Name:   Bank Name:   <br> Routing #:   Routing #:   Routing #:   <br> <sub>Account #:</sub>   <sub>Account #:</sub>   <sub>Account #:</sub>  

You hereby authorize Purchaser to debit or ACH your Approved Accounts (as defined) on the periodic basis and in the amounts specified herein, without further notice to or approval by you. As used herein, "**Approved Accounts**" means all (i) the Merchant accounts listed above; (ii) other Merchant business accounts; (iii) Merchant's authorized credit card processors; and (iv) upon the occurrence of a Material Breach, all other business accounts or credit card processing accounts of Merchant or any Other Business, Successor Company or Guarantor. **You understand and agree that Purchaser shall have full read-only access to all Approved Accounts while this Agreement is in effect.**

(e) Benefit to Merchant. The designation of Approved Account(s) for funding of the Purchase Price and for remittances of the Periodic Amount as provided in subparagraph (d) above is for administrative convenience only and does not change the distribution of benefits to all Merchants equally under this Agreement. Where more than one Merchant is identified in this Agreement, the funding of the Purchase Price shall serve to benefit all such Merchants equally irrespective of whether funding of the Purchase price is made to an Approved Account in the name of only one identified Merchant. In addition, remittances made under this Agreement shall be deemed to have been made by all Merchants equally irrespective of whether remittances are actually made through the Approved Account of only one identified Merchant.

**3. Fees Deducted at Funding; Additional Fees.** (a) *Fees Deducted from Purchase Price*. The Fees specified in this <u>Section 3(a)</u> will be deducted from Purchase Price in order to calculate the Funded Amount paid to you at closing. The Fees so deducted from the Purchaser Price are: (1) **a platform fee of** <u>1</u>**% of the Purchase Price**, which represents Purchaser's administrative and online platform costs; (2) **an underwriting fee of $** <u>500</u>**,** which represents Purchaser's underwriting and UCC filing costs; (3) if a lock box is required by Purchaser, a fee of $12.50 which represents Purchaser's cost to set up the lock box; and (4) any remaining undelivered Amount Sold by Merchant or any of Merchant's affiliates to Purchaser or any of Purchaser's affiliates under any Receivables Sale Agreement, and/or any other amount owed in connection with any other financing between Purchaser (or affiliate) and Merchant (or affiliate). **The aggregate Fees deducted from the Purchase Price are specified on the front page of this Agreement as the Funded Amount, namely the net amount paid to Merchant upon funding of this Agreement. Please note that these Fees are not Receivables payments and hence will not reduce the Amount Sold.**

(b) *Additional Fees*. Merchant authorizes Purchaser to charge Merchant the following fees, without notice: (1) *<u>Returned Item Fee</u>*: a returned item fee of **twenty-five dollars ($25.00)** (or lower amount if expressly required by law) **per return** will be assessed if a check, draft, wire transfer, ACH or similar instrument issued by Merchant or any Guarantor is not honored or cannot be processed, or an electronic debit is returned or cannot be processed (each, a "**Returned Item**"). Purchaser may assess this fee each time remittance of Receivables is returned or cannot be processed, even if it is later honored following resubmission. Any check, draft or similar instrument may be collected electronically if returned for insufficient or uncollected funds; (2) *<u>Costs of Collection</u>*, as specified in <u>Section 8</u>. (3) *<u>Lock Box Monthly Fee (if required by Purchaser)</u>*<u>:</u> a monthly fee of $30.00 to administer the lock box. **Please note that these fees are not Receivables payments and hence will not reduce the Amount Sold.**

**4. Remittance Methods**. Merchant shall remit Receivables to Purchaser as described in <u>Section 2(b)</u> in one of the following methods specified below. Merchant agrees to provide any and all authorizations, approvals, documents and assistance required to establish or change a remittance method if requested by Purchaser. You agree that Merchant will not change remittance methods or permit any event to occur that could cause a diversion of any of Merchant's Receivables from the specified remittance account to any other account or entity. **You will provide Purchaser and/or its authorized agents with all information, authorizations and passwords that are necessary for and/or Service Provider (as defined) to verify Merchant's receivables, receipts, and deposits.** All such Receivables shall be remitted on the first business day of the applicable periodic period specified in the Purchase and Sale Terms, subject to the reconciliation provisions in <u>Section 5</u> for transactions using the ACH remittance method, as per clause (1) below.

(1) *ACH/Direct Debit*. Unless otherwise agreed with Merchant, Purchaser will withdraw the Periodic Amount by initiating a debit via the Automatic Clearing House ("**ACH**") system to your Approved Account. You hereby authorize Purchaser to debit the designated amount from your Approved Account(s) on the periodic basis specified above, until the Amount Sold and any other fees and charges incurred under this Agreement have been received in full by Purchaser. You understand and acknowledge that, due to the timing of the receipt of data by Purchaser and the operations and rules of the ACH system as determined by the National Automated Clearing House Association ("**NACHA**"), Purchaser will not be able to confirm receipt of Receivables until after the actual debit. **You agree to promptly provide any assistance requested by Purchaser and/or your financial institution to confirm to that you have authorized Purchaser to initiate debit via ACH to your Approved Account.**

(2) *Direct Split*. For direct split deals, in which Receivables are remitted to Purchaser by your approved credit card processor in whole or in part, as separately agreed between you and Purchaser, the Purchased Percentage method shall Purchaser's exclusive method of remittance so long as a Material Breach has not occurred. You agree to use a credit card processor approved by Purchaser and to promptly enter into an agreement with the approved credit card processor, pursuant to which your credit card processor will remit the Purchased Percentage directly to Purchaser, rather than to you, until the Amount Sold (and any other fees and charges incurred under this Agreement) have been received by Purchaser in full. You understand and agree that Purchaser may require you to use a different credit card processor or change credit card processors, at the Purchaser's sole discretion. You agree to promptly enter into a new agreement with such credit card processor to effectuate this Agreement upon Purchaser's request. **You acknowledge and agree that each processor may provide Purchaser with Merchant's credit card, debit card and other payment card and instrument processing history, including without limitation Merchant's chargeback history and any communications about Merchant received by processor from a card processing system, as well as any other information Purchaser deems relevant.** You understand that Purchaser does not have any power or authority to control processor's actions with respect to the authorization, clearing, settlement and other processing of transactions, and that Purchaser is not responsible for any processor's actions. If applicable, you also agree to forward to Purchaser, on a daily, weekly, bi-weekly or monthly (as applicable) basis to by Purchaser (or any third party designated by Purchaser), all electronic payment transaction records from Merchant's point of sale system relevant to Receivables transactions (including, but not limited to, activity on Visa, MasterCard, American Express, Discover, Diners Club, JCB, or ATM Debit Cards and check truncation records).

(3) *Lockbox*. You hereby authorize Purchaser, upon written notice to you, to debit the Applicable Amount from a deposit account to be established by Merchant at Purchaser's written request that is approved by Purchaser using the Lockbox method (a "**Lockbox Account**"). Merchant acknowledges and agrees that any funds deposited into the Lockbox Account by Merchant's Processor will remain in the Lockbox Account until the Applicable Amount is periodically withdrawn by Purchaser.

(4) *Contacting Customers*. You understand and agree that Purchaser may, having taken title to the Receivables pursuant to the terms of this Agreement, and as the party at risk for the collection of the Receivables, contact your customers directly in order to:

(a) assess the credit of such customers; and (b) collect such Receivables directly from customers.

 **5. Merchant's Right of Reconciliation.** You have the right to request from the Company, as needed:

● a reconciliation of payments made in any period not to exceed a calendar quarter (90 days) prior to your request, in excess of (or below) your actual collected Receivables for that period (a "**Prior Adjustment** "); and

● a reconciliation of payments due under this Agreement going forward (a "**Forward Adjustment** "), if your actual collected Receivables have declined below the amount estimated by you and the Company as set out on page 1 of the Agreement (Purchase and Sale Terms).

Once you make a reconciliation request, you also need to produce, for the relevant period: (i) bank statements, (ii) accounts receivable (A/R) aging statements and/or (iii) if applicable, merchant processing (credit card) statements. You agree to use your reasonable best efforts to produce the requested documents as quickly as possible, so that we can timely assess your request.

We also agree that,

● upon receipt of a reconciliation request and supporting documentation, we will promptly calculate the excess and provide a credit or refund to your Merchant account, as you may specify; and

● if the reconciliation request is a Forward Adjustment, we will immediately implement any such request made in good faith for a reasonable period, subject to our receipt of requested documentation within ten (10) business days from the request.

You agree that, during each month a Forward Adjustment reconciliation is in effect, you are still required to provide additional documentation covering such period as we may reasonably request. We will then review such documentation in good faith in order to determine whether it is appropriate to continue the Forward Adjustment or return to the original Purchase and Sale Terms.

You further agree to promptly notify us in the event any Forward Adjustment reconciliation covering future periods is no longer required or if your Receivables increase to levels estimated in the Purchase and Sale Terms, whereupon the original Purchase and Sale Terms shall be reinstated, which we will then confirm by written notice to you.

**This <u>Section 5</u> supplements the Purchase and Sale Terms set out on the front page of this Agreement and in <u>Section 2(b)</u>, and provides important rights to Merchant**. **Merchant understands and agrees that all reconciliation requests must be made in good faith and must be supported by reasonable documentation, as provided above.** For example, Company may decline a reconciliation request where a documented Material Breach by Merchant, as specified in <u>Section 7</u>, is in effect.

**6. Representations, Warranties and Covenants.** Merchant, jointly and severally on behalf of itself and any entity whose accounts are included in Receivables (as defined in <u>Section 2(c)</u>), hereby represents, warrants and covenants that, as of the date of the Agreement and at all times thereafter until the Amount Sold, together with any fees, charges and Costs of Collection (as defined), as applicable, have been remitted to Purchaser in full:

**A.**  **<u>Validity of this Agreement</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;(i) **Use of Proceeds for Business Purposes.** Merchant agrees
that it will use all proceeds funded by Purchaser solely for business purposes, namely for working capital or other bona fide use in
the operation of its business, and not for any personal, consumer or household purposes.

&nbsp;&nbsp;&nbsp;&nbsp;(ii) **Not a Loan.** Merchant hereby reaffirms that this Agreement
constitutes a purchase and sale of Receivables at a discount, and is not a loan or any other form of transaction.

&nbsp;&nbsp;&nbsp;&nbsp;(iii) **Due Execution and Delivery.** This Agreement was duly executed,
initialed, notarized and delivered to Purchaser, and all such signatures by or obtained by Merchant are genuine.

&nbsp;&nbsp;&nbsp;&nbsp;(iv) **Authority to Enter Into This Agreement.** Merchant and
the person(s) signing this Agreement on behalf of Merchant, have full power and authority to sign this Agreement and legally bind Merchant
to perform the obligations specified herein.

&nbsp;&nbsp;&nbsp;&nbsp;(v) **No Violation of Prior Agreements.** Merchant's execution
and performance of this Agreement will not conflict with any other agreement, obligation, promise, court order, administrative order
or decree, law or regulation to which Merchant is subject, including any agreement that prohibits the sale or pledge of Merchant's
income or receipts.

&nbsp;&nbsp;&nbsp;&nbsp;(vi) **Merchant's Knowledge and Representation.** Merchant
represents and warrants that it is a sophisticated business entity familiar with the kind of transaction covered by the Agreement; and
that it was represented by counsel or had full opportunity to consult with counsel.

&nbsp;&nbsp;&nbsp;&nbsp;(vii) **No Pending or Contemplated Bankruptcy as of the Date of this Agreement.** As of the date of this Agreement, Merchant does not contemplate and has not filed any petition for bankruptcy protection
under Title 11 of the United States Code, and confirms that, to its knowledge, there has been no involuntary petition brought or pending
against Merchant. Merchant further represents and warrants to Purchaser that as of the date of this Agreement it does not anticipate
filing a bankruptcy petition, and that it does not anticipate that an involuntary petition will be filed against it.

&nbsp;&nbsp;&nbsp;&nbsp;(viii) **Reconciliation of Payments.** Merchant acknowledges that
Purchaser has provided Merchant with a reconciliation right under <u>Section 5</u>, which represent the exclusive manner of restructuring
payments, without retaining any debt restructuring company, under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;(ix) **Notice of Breach, Etc.** Merchant agrees to promptly notify
Purchaser in the event of (x) any actual or likely Material Breach of this Agreement by Merchant, (y) the filing of any material judgment
against Merchant or its assets or (z) the filing of bankruptcy proceedings by or against Merchant.

&nbsp;&nbsp;&nbsp;&nbsp;(x) **Benefits of Agreement.** Each Merchant and each Guarantor
acknowledge that they have received substantial benefit from the funding of proceeds by Purchaser under this Agreement.

**B.**  **<u>Conduct of Merchant's Business</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;(i) **Good Faith.** Merchant will at all times conduct its business
in good faith and consistent with past practice as disclosed to Purchaser, and agrees that it will not take any action designed to impair
or frustrate Purchaser's ability to collect Receivables.

&nbsp;&nbsp;&nbsp;&nbsp;(ii) **Remittance of Receivables.** Merchant will remit Receivables to Purchaser in good faith as provided herein, subject to the provisions
of this Agreement, including without limitation <u>Section 2(b)</u>, <u>Section 5</u> and <u>Section 7(B)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;(iii) **Diversion of Receipts.** Merchant will not permit any event to occur that could cause a diversion of any of Merchant's
Receivables to any unauthorized account, processor or third party.

&nbsp;&nbsp;&nbsp;&nbsp;(iv) **Change of Credit Card Processors**. Merchant agrees that (x) it will not change any credit card processor approved by Purchaser
without Purchaser's express prior written approval and (y) if it does so, Merchant shall be entitled as a secured party under the
UCC to place a "hold" on Merchant's processor account(s) as provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;(v) **Closing of Accounts**. Merchant shall not close any Approved Account provided to Purchaser without Purchaser's express
prior written approval.

&nbsp;&nbsp;&nbsp;&nbsp;(vi) **Change of Name or Location or Sale or Closing of Business.** Merchant will not conduct Merchant's businesses under any
name other than as disclosed to Purchaser or change any of its places of business without prior written consent of Purchaser. Merchant
will not sell, dispose, transfer or otherwise convey all or substantially all of its business or any inventory or Collateral (as defined)
without (i) the express prior written consent of Purchaser (which shall include the written agreement of any purchaser or transferee assuming
all of Merchant's obligations under this Agreement in form and substance satisfactory to Purchaser. Except as disclosed to Purchaser
in writing, Merchant has no current plans to close its business, either temporarily, whether for renovations, repairs or any other purpose,
or permanently. Merchant will not voluntarily close its business on a temporary basis for renovations, repairs, or any other purposes,
other than to conduct renovations or repairs that are required by local ordinance or other legal order, or due to force majeure outside
of the control of Merchant. Prior to any such closure, Merchant will provide Purchaser ten (10) business days' prior written notice
to the extent practicable.

&nbsp;&nbsp;&nbsp;&nbsp;(vii) **Stacking Prohibited.** Merchant shall not enter into any merchant cash advance or loan agreement or incur any indebtedness (outside
trade payables in the ordinary course of business) that pledges or encumbers its Receivables or requires daily payments with any party
other than Purchaser for the duration of this Agreement. Merchant hereby authorizes Purchaser to share information regarding this Agreement
with any third party in order enable Purchaser to determine whether Merchant is in compliance with this provision.

&nbsp;&nbsp;&nbsp;&nbsp;(viii) **No Change of Control Transactions.** Merchant agrees that it will not transfer, pledge or encumber Merchant's ownership
interest (*e.g*., stock or membership interest), assets or business to any person or entity, (b) enter into any transaction that
results in any change in voting control, ownership control or effective control of the business or assets of Merchant, or (c) sell, assign,
transfer or cancel Merchant's commercial lease or any material license to any person or entity.

**C.**  **<u>Providing Information to Purchaser</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;(i) **Financial Condition and Financial Information.** Any bank
statements and financial statements of Merchant that have been furnished to Purchaser, and future statements that will be furnished to
Purchaser, fairly represent the financial condition of Merchant at such dates, as well as the ownership (or any change in ownership)
of Merchant. Purchaser may request bank and financial statements at any time this Agreement is in effect, and Merchant shall provide
them to Purchaser within five (5) business days. Further, Merchant represents that all documents, forms and recorded interviews provided
to or with Purchaser are true, accurate and complete in all respects, and accurately reflect Merchant's financial condition and
results of operations when provided. Merchant further agrees to authorize the release of any past or future tax returns to Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;(ii) **Accurate and Complete Information.** Merchant represents
and warrants that all information provided to Purchaser relating to Merchant's business, and all statements made to Purchaser relating
thereto have been truthful, accurate and complete. Merchant further agrees that Merchant will be truthful in all future statements to
Purchaser, and will provide Purchaser with accurate and complete information regarding Merchant's business as requested by Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;(iii) **Other Information.** Merchant will make reasonable efforts
to inform Purchaser if a debit by Purchaser is likely to result in a bounced or rejected debit, solely in order to improve efficient
administration of the Agreement and reduce return fees.

**D.**  **<u>Other Matters</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;(i) **Cooperation.** Merchant agrees that it will at all times
cooperate with Purchaser in order to fulfill the purposes of this Agreement and the collection of Receivables by Purchaser as provided
herein.

&nbsp;&nbsp;&nbsp;&nbsp;(ii) **Inspections.** Merchant will permit Purchaser or its agent
to conduct a site inspection of Merchant's business, including an inspection of Merchant's credit card terminals, without
prior notice to you.

&nbsp;&nbsp;&nbsp;&nbsp;(iii) **Governmental Approvals.** Merchant is in compliance and
shall comply with all laws and has valid permits, authorizations and licenses to own, operate and lease its properties and to conduct
the business in which it is presently engaged and/or will engage in hereafter.

&nbsp;&nbsp;&nbsp;&nbsp;(iv) **Merchant to Pay Taxes Promptly.** Merchant will promptly
pay all necessary taxes, including but not limited to employment and sales and use taxes.

&nbsp;&nbsp;&nbsp;&nbsp;(v) **Merchant to Maintain Insurance.** Merchant will use commercially
reasonable efforts to possess and maintain insurance in such amounts and against such risks as are necessary to protect its business
and will provide proof of such insurance to Purchaser upon request.

7. Material Breach.

**A.**  **<u>Material Breach</u>** <u>.</u> Any of the following actions
taken directly or indirectly by or on behalf of Merchant will constitute a "**Material Breach,**" without any prior notice
from Purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;(i) The breach of any representation, warranty, covenant or agreement of Merchant set forth in this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;(ii) Merchant interferes with Purchaser's right to collect the Amount Sold, including without limitation by any act prohibited under
this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;(iii) Except as expressly otherwise provided herein, Merchant becomes subject to any material judgment or garnishment after the Effective
Date that is not disclosed to Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;(iv) Merchant takes any affirmative steps (including, without limitation, executing a term sheet or definitive documentation) or threatens
to take any action prohibited by this Agreement that, if effected, would constitute a Material Breach.

**B.**  **<u>Limitations on Material Breach.</u>** Notwithstanding any other provision of this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;(i) If the aggregate Receivables remitted to Purchaser pursuant to this Agreement are less than the stated Amount Sold, despite Merchant's
best efforts to operate its business in compliance with this Agreement in good faith, and Merchant has not violated any other provision
of this Agreement, such diminution of Receivables shall not in itself be deemed a Material Breach.

&nbsp;&nbsp;&nbsp;&nbsp;(ii) The filing for bankruptcy or insolvency of Merchant is not in itself a Material Breach of this Agreement.

**8.** **Purchaser Remedies upon Material Breach.** Merchant agrees
that, upon the occurrence of a Material Breach, Purchaser may, and Merchant hereby authorizes Purchaser to, pursue any and all of the
following remedies, to the extent permitted by law, without prior notice to Merchant:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Purchaser shall be entitled to receive all Contract Damages
(as defined) from Merchant.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Purchaser will be entitled to recover from Merchant all Costs of Collection.

&nbsp;&nbsp;&nbsp;&nbsp;(c) Purchaser may withdraw funds from any of Merchant's bank accounts, including any Approved Account, by ACH, up to an amount equal
any Amount Sold, *plus* unpaid fees and charges under this Agreement, if any, and Purchaser's costs and expenses relating to
this Agreement (including without limitation, all Costs of Collection).

&nbsp;&nbsp;&nbsp;&nbsp;(d) Purchaser may exercise any and all remedies available, including but not limited to remedies under the Uniform Commercial Code (the
" **UCC**") of the applicable jurisdiction including without limitation: (1) notifying customers and other third parties
(including without limitation credit card processors) of Purchaser's rights to Receivables in Approved Accounts, (2) levying or
foreclosing on Approved Accounts, and (3) seizing Collateral in any Approved Account or at the business location of Merchant or any Other
Business, Successor Company or Guarantor, as applicable, including seizure by local sheriff and/or marshal.

&nbsp;&nbsp;&nbsp;&nbsp;(e) Purchaser shall also be entitled to all remedies available to it at law or in equity, including without limitation to initiate any
legal or equitable action, administrative proceeding, arbitration or mediation or other collection activities, as further specified below.

&nbsp;&nbsp;&nbsp;&nbsp;(f) Notwithstanding the foregoing, Purchaser agrees that it will not enforce any remedy under this Agreement while a reconciliation under <u>Section 5</u> is in process.

**You acknowledge that Purchaser has purchased from you any and all interests in the Amount Sold of Receivables, that Purchaser is the party at risk regarding the collection of those Receivables, and that Merchant has no legal or equitable interest in the Amount Sold of Receivables. The Amount Sold of Receivables, or any other fees and charges under this Agreement, shall not be subject to the application of or deduction for any claim, set-off, disability, defense (whether substantive or procedural) or counterclaim of Merchant. You agree that the funding transaction described in and implemented by this Agreement is a true purchase and sale of the Receivables (*i.e.*, a "true sale"), and not a loan, and acknowledge that Purchaser has entered into this Agreement in reliance upon this representation by you. In addition, you expressly waive and release your right to claim that the transaction carried out by this Agreement is a loan and not a true sale of Receivables. This Agreement and each of your obligations under this Agreement shall remain in effect until Purchaser's receipt in full of the Amount Sold of Receivables, together with any fees or charges as provided herein, including any Costs of Collection, as applicable.** Upon the occurrence of a Material Breach, Merchant hereby (1) acknowledges and agrees that Purchaser shall be entitled to receive the Contract Damages from Merchant; and (2) until the Amount Sold and any other fees and charges incurred under this Agreement have been received in full by Purchaser, irrevocably and unconditionally appoint Purchaser as Merchant's agent coupled with an interest and attorney-in-fact with full authority to (i) take any action or initiate any legal or equitable action (including an action to appoint a receiver for Merchant's business), administrative proceeding, arbitration or mediation or other collection activities or execute any instrument or document in the name of Merchant, solely for the purpose of securing the Contract Damages, or otherwise to enforce its rights with respect to any Collateral and (ii) pursue any remedy available at law (including those available under the provisions of the UCC) or in equity to enforce any agreements or satisfy any obligations to Purchaser, including without limitation placing a "hold" on Merchant's credit card processing accounts. As used herein, "**Contract Damages**" means an amount equal to the Amount Sold, less all prior receipts of Receivables by Purchaser plus any applicable fees and charges under this Agreement; and "**Costs of Collection**" means, as permitted by law, any and all costs, fees and expenses, including reasonable attorneys' fees and other professional fees, marshal fees, sheriff fees and disbursements incurred by Purchaser after any Material Breach, in connection with the defense, protection or enforcement of Purchaser 's rights under this Agreement and/or the Guaranty, including without limitation those arising from: (1) any legal or equitable action (including an action to appoint a receiver for Merchant's business), administrative proceeding, arbitration or mediation or other collection activities, taken against Merchant or any Other Business, Successor Company or Guarantor; (2) any levy or foreclosure upon Collateral; (3) any bankruptcy proceeding involving Merchant or any Guarantor, Other Business or Successor Company; and(4) all post-judgment enforcementproceedings. Without limiting the foregoing, Merchant acknowledges that Costs of Collection will include Purchaser's reasonable in-house collection costs of not less than $2,500 for any Material Breach. The parties hereby agree that, following arms' length negotiations and opportunity to consult with counsel, the Contract Damages amount is fair and reasonable and does not constitute a penalty. In the event of any collection efforts or action for the collection of the Amount Sold and other amounts to be received by Purchaser under this Agreement, Purchaser shall be entitled to recoup its reasonable legal fees, court costs and related expenses from Merchant and any Other Business, Successor Company and/or Guarantor.

**9. Sale of Receivables.** (a) *Security Interest*. To evidence the purchase and sale of Receivables hereunder and to secure Merchant's obligations to remit the Periodic Amount until the Amount Sold i s received by Purchaser out of Receivables, Merchant and Guarantor hereby grant to Purchaser, in the name of Purchaser or its duly authorized representative, a first priority, continuing security interest (unless a third-party lien has been consented to by Purchaser in writing prior to the Effective Date) in and to: (i) the Receivables of Merchant (or any person or entity whose accounts are included in Receivables) up to the Amount Sold; (ii) all equipment and inventory as those terms are defined in Article 9 of the UCC, as amended, whether now or hereafter owned or acquired by Merchant (and/or any subsidiary or other person or entity whose accounts are included in Receivables) and wherever located; (iii) all " proceeds" of such property described in <u>clause(i)</u> and/or <u>clause (ii)</u>, as that term is defined in Article 9 of the UCC; (iv) upon a Material Breach, the assets, business property and collateral of any Other Business, Successor Company or Guarantor; and (v) any additional collateral as may be mutually agreed between Merchant and/or any Guarantor , on the one hand, and Purchaser, on the other hand in writing (collectively, the "**Collateral**").

Merchant and Guarantor agree that any electronic signature provided for this Agreement shall be deemed fully "authenticated" under Article 9 of the UCC for purposes of creating and perfecting the foregoing security interest. Merchant hereby authorizes Purchaser to make any UCC filing and/or recording relating to this Agreement (including filing a UCC-1 financing statement) at any time with any governmental agency and/or office (including the office of the Secretary of State), including without limitation to perfect Purchaser's rights and interests in the Collateral as provided in this Agreement. In addition, upon a Material Breach, Purchaser may exercise any rights and remedies available under the UCC and applicable law against Merchant and/or Guarantor, including without limitation, placing a "hold" on Merchant's credit card processing accounts, the costs of which shall be borne by Merchant, as provided above. **Merchant and Guarantor hereby agree that Merchant will not pledge, grant, transfer or otherwise encumber any security interest in its Receivables to any other person or entity until Purchaser has received the Amount Sold, plus any assessed fees and Costs of Collection, other than in connection with a financing approved by Purchaser in writing beforehand.**

(b) *Further Assurances*. Merchant agrees to execute any documents or take any action on behalf of Merchant in connection with this Agreement as Purchaser deems necessary to perfect or maintain Purchaser's security interest in the Collateral as provided in this Agreement.

10. Merchant Authorizations .

(a) *Right to Contact Third Parties*. You authorize Purchaser, from time to time, to contact any credit reporting or database service, Merchant's current and prior credit card processors, and Merchant's current and prior banks (including without limitation the bank where any Approved Account will be maintained), in order to enable Purchaser to obtain whatever information Purchaser deems relevant, including without limitation Merchant's credit history, credit card, debit card and other payment card, processing and chargeback history.

(b) *Credit Reports and Information*. You authorize Purchaser to, from time to time, obtain credit and/or background reports on Merchant, its principals, and its customers. Any such report(s) that Purchaser obtains may include, without limitation, a hard or soft credit pull, the business' or individuals' credit history or similar characteristics, employment and education verifications, social security verification, criminal and civil history, Department of Motor Vehicle records, any other public records, and any other information bearing on credit standing, credit capacity or character. Such reports will be used by Purchaser to determine (i) if it will proceed with the purchase of the Receivables from Merchant and (ii) after funding, if needed to assist Purchaser in the collection of Receivables. Merchant shall also provide and/or execute such further and additional documents, instruments, and writings as Purchaser may require in order to access and review any tax information (including tax returns) related to Merchant's business (including without limitation by executing a 4506T form with the Internal Revenue Service).

(c) *Recorded Calls; Contact*. You authorize Purchaser to monitor and/or record its telephone calls with Merchant and its principals, owners, employees or agents to confirm the contents of conversations, for evaluation by supervisors, training, monitoring for compliance, and for collections. You further agree that: (i) you have established a business relationship with Purchaser, Purchasers employees and agents; (ii) you may be contacted from time-to-time regarding this Agreement or other business transactions; (iii) such communications and contacts are not unsolicited or inconvenient; and (iv) contact may be made during normal business hours by phone, email or otherwise, using contact information provided by you, your agents or employees.

(d) *Rights of Purchaser*. Without any prior notice to you , Purchaser may: (1) compromise or settle any claim, liability or obligation of Merchant under this Agreement or of any customer owing a Receivable purchased hereunder; (2) contact any credit card processor of Merchant in order to place a "hold" on all account funds upon the occurrence of a Material Breach; and (3) release, surrender, dispose of (including through foreclosure, and whether or not by judicial proceedings or arbitration, as applicable), exchange, modify, impair, fail to perfect, or extend the period of duration or time for the performance or discharge of any or all Receivables or Collateral, including without limitation the Receivables or Collateral of any Other Business or any Successor Company. **In addition, upon a Material Breach, Purchaser has the right to enforce any remedy set forth in this Agreement, separately or together at Purchaser's discretion.** The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

(e) *Acknowledgments and Waiver*. Your signature on the signature page hereof on behalf of Merchant, will confirm that you have read and understand all terms and conditions of this Agreement. Merchant hereby irrevocably and unconditionally waives and releases: (i) promptness, diligence, notice of acceptance, notice of presentment, demand, protest dishonor or default, and any other notice with respect to any obligations of Merchant with respect to the Collateral; (ii) any requirement that Purchaser exhaust any right, by statute or otherwise, or take any action against Merchant or any other person or entity or any Collateral; (iii) any defense relating to the marshalling of assets or similar doctrine; (iv) all defenses of any kind, both substantive and procedural, to enforcement it may have (now or in the future); (v) the right to assert any set-offs or counterclaims, whether legal, equitable or otherwise, and (vi) the right to claim that the transaction described in and implemented by this Agreement is a loan and not a true sale of the Receivables. **Further, Merchant hereby acknowledges Purchaser's right as a secured party under the UCC to implement a hold on funds in Merchant's card processor account as provided above.**

**11. Access to and Retrieval of Information**. (a) *Authorization*. From and after the Effective Date, until the Amount Sold has been remitted to Purchaser, you authorize Purchaser to: (i) access and collect any information relating Merchant's business (including information relating to Merchant's principals) maintained online by third-party financial institutions with which Merchant has relationships, maintains accounts or engages in financial transactions (including credit card processors), (ii) access third party sites designated by Merchant, on Merchant's behalf, to retrieve information requested by Merchant, and to register for accounts requested by Merchant and (iii) access third party internet sites, servers or documents, retrieve information, and use Merchant's information for the purposes described herein. Purchaser may work with one or more online financial service providers under contract to access this account information and review bank statements, as determined by Purchaser at its sole discretion without notice to you (collectively, "**Service Provider**"). **You will immediately provide Purchaser and/or Service Provider with relevant account information, passwords and/or codes in order to ensure that Purchaser has full read-only access to your Approved Accounts**. Purchaser's current Service Provider is Yodlee (<u>www.Yodlee.com</u>), but Purchaser has the right in its sole discretion to change the Service Provider at any time without prior notice. Merchant acknowledges that Service Provider is an independent contractor not affiliated with Purchaser, that Purchaser is not responsible for any actions of a Service Provider, and that you agree not to seek damages or other compensation from Purchaser based on any action or inaction by a Service Provider.

(b) *Disclaimer of Warranty*. YOU EXPRESSLY UNDERSTAND AND AGREE THAT MERCHANT'S USE OF THE SERVICE PROVIDER'S SERVICE (THE "**SERVICE**") AND ALL INFORMATION, PRODUCTS AND OTHER CONTENT (INCLUDING THAT OF THIRD PARTIES) INCLUDED IN OR ACCESSIBLE OR DOWNLOADED FROM THE SERVICE IS AT MERCHANT'S SOLE RISK. THE SERVICE IS PROVIDED ON AN "AS IS" AND "AS AVAILABLE" BASIS. PURCHASER AND S ERVICE PROVIDER EXPRESSLY DISCLAIM ALL WARRANTIES OF ANY KIND AS TO THE SERVICE AND ALL INFORMATION, PRODUCTS AND OTHER CONTENT (INCLUDING THAT OF THIRD PARTIES) INCLUDED IN OR ACCESSIBLE FROM THE SERVICE, WHETHER EXPRESS OR IMPLIED. MERCHANT AGREES THAT NEITHER PURCHASER OR SERVICE PROVIDER NOR ANY OF THEIR AFFILIATES WILL BE LIABLE FOR ANY HARM DAMAGES OF ANY KIND.

(c) *Service Content*. Merchant is permitted to use content delivered to Merchant through the Service only on the Service. Merchant may not copy, reproduce, distribute, or create derivative works from this content. Further, you agree not to reverse engineer or reverse compile any of the Service technology, including but not limited to, any Java applets associated with the Service. Merchant is licensing to Purchaser and its service providers, including Service Provider, any information, data, passwords, materials or other content (collectively, "**Content**") Merchant provides through or to the Service. Purchaser and Service Provider may use, modify, display, distribute and create new material using such Content to provide the Service to Merchant.

**12. Limitation of Liability.** YOU HEREBY AGREE THAT, REGARDLESS OF THE CLAIMS YOU MAY HAVE AGAINST PURCHASER TO THE EXTENT PERMITTED BY LAW, YOUR SOLE REMEDY WILL BE MONEY DAMAGES NOT TO EXCEED THE GREATER OF (i) THE AMOUNT OF FUNDS OVERPAID TO PURCHASER, IF ANY, AND (ii) **TEN THOUSAND DOLLARS ($10,000)**, AND THAT YOU WILL NOT BE ENTITLED TO, YOU HEREBY WAIVE, ANY AND ALL CLAIMS FOR, PUNITIVE, EXEMPLARY, CONSEQUENTIAL, LOST PROFITS, STATUTORY, OR SPECIAL DAMAGES OF ANY KIND, EVEN IF MERCHANT HAS BEEN ADVISED OF THE POSSIBLLITY OF SUCH DAMAGES. IF MERCHANT FILES ANY CLAIM OR ACTION AGAINST PURCHASER (X) IN DEROGATION OF THIS <u>SECTION 12</u> OR (Y) THE MATTER IS DISMISSED OR (Z) PURCHASER PREVAILS IN THE MATTER, YOU AGREE TO PAY ALL OF PURCHASER'S COSTS OF COLLECTION INCURRED IN THE MATTER.

**13. Indemnity.** Merchant hereby agrees, jointly and severally if more than one Merchant, to indemnify, defend and hold Purchaser harmless from and against any and all direct and third party suits, costs, causes of action, judgments, complaints, orders, and claims (each a "**Claim**"), together with any and all liabilities, losses, obligations, damages and penalties of any kind incurred by Purchaser or its affiliates, including without limitation Contract Damages, reasonable attorneys' fees and disbursements and all Costs of Collection, arising from or relating to any Claim brought against Purchaser by a customer or other third party that Merchant has committed an act or omission which constitutes a breach of this Agreement or that any representation, warranty, covenant, disclosure or statement Merchant has made is not accurate in any respect or for any intentional or willful misconduct of Merchant, including in connection with the preservation, protection, or enforcement of any rights of Purchaser under this Agreement, and in any case commenced by or against Merchant or any Guarantor under the United States Bankruptcy Code (Title 11, United States Code) or any similar or successor statute. Purchaser will notify Merchant of any claim for indemnity hereunder, select counsel of Purchaser's choice and Merchant will promptly pay all legal fees, defense costs and other expenses incurred by Purchaser and promptly pay to Purchaser any judgment or other Claim amounts due and payable, including without limitation all Contract Damages and Costs of Collection.

**14. Merchant Waivers.** (a) *Commercial* Waivers. Merchant hereby unconditionally waives: (i) promptness, diligence, notice of acceptance, notice of presentment, demand, protest dishonor or default, and any other notice with respect to the Collateral; (ii) any claim that Purchaser exhaust any right, by statute or otherwise, or take any action against the Merchant or any other person or entity or the Collateral; (iii) any defense relating to the marshalling of assets or similar doctrine; (iv) all defenses of any kind, both substantive and procedural, to enforcement it may have, including any defenses relating to the proper service of any pleadings or other court documents; and (v) the right to assert any set-offs or counterclaims, whether legal, equitable or otherwise, against Purchaser or its affiliates. **BY SIGNING THIS AGREEMENT, MERCHANT EXPRESSLY AGREES THAT IT HAS PERMANENTLY WAIVED AND RELEASED THE RIGHTS (1) TO START OR JOIN A CLASS ACTION; (2) TO TRIAL BY JURY; (3) TO CLAIM, THAT THE TRANSACTION IMPLEMENTED BY THIS AGREMENT IS A LOAN AND NOT A TRUE SALE OF RECEIVABLES; AND (4) TO RAISE DEFENSES AND COUNTERCLAIMS, TO THE MAXIMUM EXTENT PERMITTED BY LAW. UPON A MATERIAL BREACH OF THIS AGREEMENT BY MERCHANT, AN ACTION MAY BE FILED AGAINST EACH MERCHANT WITHOUT PRIOR NOTICE FOR PURCHASER'S CONTRACT DAMAGES AND COSTS OF COLLECTION.**

**(b) *Waiver of Jury Trial and Class Action*. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT THAT THEY MAY HAVE TO (1) TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION, OR IN ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY); AND (2) ASSERT ANY CLAIMS AGAINST ANY OTHER PARTY AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION (INCLUDING CLASS ARBITRATION), EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY PUBLIC POLICY. TO THE EXTENT ANY PARTY IS PERMITTED BY LAW OR COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST ANY OTHER PARTY, THE PARTIES HEREBY AGREE THAT: (1) THE PREVAILING PARTY WILL NOT BE ENTITLED TO RECOVER ATTORNEYS' FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT); (2) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION; AND (3) THE FOREGOING WAIVERS ARE ESSENTIAL TERMS OF THIS AGREEMENT**. **YOU UNDERSTAND AND AGREE THAT, BY SIGNING THIS AGREEMENT, (1) YOU ARE PERMANENTLY WAIVING YOUR RIGHT TO A JURY TRIAL AND (2) YOU MUST BRING CLAIMS, INCLUDING IN COURT, ARBITRATION OR ANY OTHER LEGAL PROCEEDING, AGAINST PURCHASER ONLY IN YOUR INDIVIDUAL OR CORPORATE CAPACITY, AS APPLICABLE, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING.**

(c) *Waiver of Consumer Defenses*. Merchant and each Guarantor hereby waive any defense, regardless of the actual use of the Funded Amount by Merchant or Guarantor, claiming that the Funded Amount was made to Merchant or Guarantor for personal, consumer, family or household purposes. Merchant and each Guarantor understand and agree that, as set forth in <u>Section 1</u> above, the amount funded is solely for business purposes and for the operation of your business as set forth in this Agreement.

**15. Governing Law; Venue; Personal Jurisdiction; Consent to Service; Statute of Limitations; Arbitration**. (a) *Governing Law*. This Agreement and all transactions hereunder, including without limitation the purchase and sale of Receivables as specified herein, and all claims of whatsoever nature arising hereunder (including without limitation tort and statutory claims), will be governed by and enforced exclusively in accordance with the internal laws of the **State of New York**, without regard to conflict of laws principles. You expressly acknowledge that: (i) Purchaser maintains its principal office in the State of New York; (ii) the Funding Call and customer service will take place with Purchaser's representatives in the State of New York; (iii) all funding to and payments from Merchant under this Agreement will be processed through Purchaser's bank branches in New York; and (iv) the purchase and sale of Receivables pursuant to this Agreement shall take place in New York. **Accordingly, the parties agree that this Agreement and its subject matter bears a "significant, material and reasonable relationship" with the State of New York.**

(b) ***Venue and Personal Jurisdiction***. Subject to <u>Section 15(d),</u> the parties unconditionally and irrevocably consent to the exclusive jurisdiction and venue of state courts located in: (x) the State of New York; (y) the State of Merchant's incorporation or formation or where its operations, offices, assets or domicile are located, or (z) the State where any Guarantor resides. **In the event of a judicial action brought by Purchaser under this Agreement, Merchant and each Guarantor hereby unconditionally and irrevocably waive any and all claims and objections to jurisdiction and/or venue as per this provision.**

(c) ***Consent to Service***. Merchant and each Guarantor waive personal service of any and all process upon Merchant and Guarantor and consent that service of process may be made by certified or registered mail. **Merchant and each Guarantor hereby irrevocably and unconditionally waive any and all claims and objections to service of process as per this provision.**

(d) *Reduced Statute of Limitations.* Each party hereto agrees, after having been afforded the right to fully consult with counsel, that: (i) it will not bring any claim, action or legal or administrative proceeding of any kind or under any legal or equitable theory or request for relief of any kind to enforce or arising out of or relating to in any material respect this Agreement (collectively, "**Action or Proceeding**") after the date **one (1) year** from the sooner to occur of (x) the receipt of the Amount Sold in full by Merchant to Purchaser and (y) the effective date of termination for any reason of this Agreement (such period, the "**Limitations Period**"); (ii) all statutes of limitations under applicable law shall in all cases be limited to the Limitations Period; and (iii) the Limitations Period is a reasonable period of time in which to bring an Action or Proceeding under or relating to this Agreement

(e) *Arbitration*. Except as expressly otherwise provided herein, each party agrees to confidential arbitration of all disputes and claims arising out of or relating to this Agreement, including issues relating to the arbitrability of any dispute or claim (collectively, "**claims**"). If a party seeks to have a dispute settled by arbitration, that party must first send to the other party, by certified mail, a written Notice of Intent to Arbitrate (the "**Notice**"). If the parties do not reach an agreement to resolve the claim within thirty (30) days after the Notice is received, Purchaser and Merchant agree that the claim will be resolved by a final and binding arbitration proceeding with JAMS, Inc. ("**JAMS**") in New York County, State of New York, under the Optional Expedited Arbitration Procedures then in effect. The parties agree that, except as otherwise expressly required by JAMS rules, (i) the party filing arbitration shall pay all JAMS filing fees and reasonable administrative fees; (ii) thereafter, each party shall bear its own arbitration costs and fees, including witness fees and attorneys' fees; and (iii) each party shall bear an equal share of the arbitrator's fees; provided, if the arbitrator finds that either the substance of the claims of any party or the relief sought by any party is frivolous or brought for an improper purpose (as measured by the standards set forth in Federal Rule of Civil Procedure 11(b)), then the arbitrator shall award the other party all of its costs and fees of the arbitration, including witness and reasonable attorneys' fees. Purchaser and Merchant agree that, except as expressly otherwise provided herein, (i) arbitration is the required and exclusive forum for the resolution of all claims and (ii) to the fullest extent permitted by law, Purchaser and Merchant are each permanently giving up their right to a jury trial in any forum and the right to a judicial forum for the resolution of any and all claims. Further, the parties agree that the arbitrator may not consolidate proceedings for more than one person's claims, and may not otherwise preside over any form of a representative or class proceeding, and that if this specific provision is found unenforceable, then the entirety of this arbitration clause shall be null and void. Notwithstanding any provision hereof, upon a Material Breach by Merchant, Purchaser may commence a judicial action to collect Contract Damages, or to enforce any collection remedy sunder this Agreement or at law. And in any such judicial proceeding Purchaser shall have the right to respond to any defenses or claims asserted by any Merchant or Guarantor by contending, among other things, that Merchant's or Guarantor's claims or defenses must by arbitrated under this arbitration clause. Merchant agrees that the commencement of any such judicial action shall not constitute a waiver by Purchaser of its right to arbitrate any such claims arising under this Agreement.

**MERCHANT MAY OPT OUT OF ARBITRATION. In order to opt out of this Arbitration Clause, Merchant shall send Purchaser a written notice executed by Merchant, stating that Merchant does not want the arbitration clause set forth in this <u>Section 15(e)</u> to apply to the Agreement. For any opt out to be effective, an opt out notice, duly executed by Merchant, must be sent to the following address by registered mail, within ten (10) business days after the Effective Date (*i.e.*, the date this Agreement is funded), time being of the essence, to: Itria Ventures LLC, One Penn Plaza, Suite no. 4915, New York, NY 10119, Attention: President and General Counsel.**

**16. Guaranty of Performance**. (a) *Guaranty of Performance*. Each Guarantor hereby guarantees (this "**Guaranty**") Merchant's complete and timely performance of the obligations specified in <u>Section 6</u> hereof upon the occurrence of a Material Breach. Upon such occurrence of a Material Breach, the obligations of Guarantors shall remain in effect and enforceable by Purchaser until the entire Amount Sold has been received by Purchaser, including (i) any assessed fees and Costs of Collection, whether or not litigation is commenced and (ii) the return of any amount of remittances set aside or returned by Purchaser for any reason. If there is more than one Guarantor, the liability of all Guarantors shall be joint and several. **Each Guarantor acknowledges that such guarantor has read and fully understands the provisions of this Agreement, including without limitation the obligations of Merchant set out in <u>Section 6</u> and the arbitration provisions directly above**.

(b) *Waivers*. Each Guarantor hereby unconditionally waives: (i) promptness, diligence, notice of acceptance, notice of presentment, demand, protest dishonor or default, and any other notice with respect to the Collateral; (ii) any claim that Purchaser exhaust any right, by statute or otherwise, or take any action against the Merchant or any other person or entity or the Collateral; (iii) any defense relating to the marshalling of assets or similar doctrine; (iv) any defense founded upon or relating to the impairment of the Receivables or Collateral; (v) all defenses of any kind, both substantive and procedural, to enforcement it may have, including any defenses relating to the proper service of any pleadings or other court documents; and (vi) the right to assert any set-offs or counterclaims, whether legal, equitable or otherwise, against Purchaser or its affiliates. **EACH GUARANTOR ACKNOWLEDGES AND HEREBY REAFFIRMS THE WAIVERS SPECIFIED IN <u>SECTION 1</u> AND <u>SECTION 14</u>, INCLUDING WITHOUT LIMITATION THE JURY WAIVER AND CLASS ACTION WAIVER.**

(c) *Rights of Purchaser*. Each Guarantor acknowledges that, upon a Material Breach of the Agreement by Merchant, Purchaser may, without prior notice to Guarantor: (i) enforce its rights t o c o l l ec t th e R ec e i v ab l e s or a ga i n st t he Collateral as provided herein; (ii) bring an action against each Guarantor and, in the event Purchaser recovers a judgment against Guarantor, thereafter domesticate such judgment in another jurisdiction at Purchaser's discretion, whether prior to, contemporaneously with or after any enforcement against Merchant or any customer; and/or (iii) initiate any legal or equitable action (including an action to appoint a receiver for Merchant's business), administrative proceeding, arbitration or mediation or other collection activities. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

(d) *Enforcement Expenses*. Upon a Material Breach by Merchant, each Guarantor agrees to pay or reimburse Purchaser for all costs, expenses and attorneys' fees and disbursements paid or incurred by Purchaser in endeavoring to collect and enforce the Agreement, the Receivables, and/or this Guaranty, including in connection with the preservation, protection, or enforcement of any rights of Purchaser in any case commenced by or against Guarantor under the United States Bankruptcy Code (Title 11, United States Code) or any similar or successor statute.

**17. Miscellaneous**. (a) *Entire Agreement*. This Agreement (including the above Guaranty) constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes all previous agreements and understandings, whether written or oral. This Agreement may only be modified by written amendment signed by the parties, and shall inure to the benefit of the parties and their respective successors and permitted assigns. Upon the termination of this Agreement for any reason, <u>Sections 6</u>, <u>7</u>, <u>8</u>, <u>9</u>, <u>10</u>, <u>11(d)</u>, <u>12</u>, <u>13</u>, <u>14(b)</u>, <u>15</u> and this <u>Section 16</u> shall remain in full force and effect.

(b) *Assignment and Delegation*. You may not assign this Agreement or any rights herein or delegate any duties, in whole or in part, without the prior written consent of Purchaser, and any purported assignment or delegation by Merchant without such consent shall be void *ab initio*. Purchaser may assign, sell and transfer this Agreement or any rights herein, to any party, without the consent of or notice to Merchant.

(c) *Notices*. All communications between the parties with respect of, or notices, requests, directions, consents or other information sent under, this Agreement shall be in writing and delivered by email (with proof of transmission) to an email address of the other party at which such party normally and customarily receives email communications as of the time the notice is sent or, at the request of any party, by Federal Express or other internationally recognized courier (with signature). All such communications and notices shall be effective upon receipt or sending with proof of transmission.

(d) *Service of Process*. Merchant agrees and hereby consents that service of process for any lawsuit or arbitration involving Merchant or any of its principals may be made by Purchaser at Merchant's primary business address.

(e) *No Waiver*. There will be effected no waiver by failure on the part of Purchaser to exercise, or delay in exercising, any right under this Agreement, nor will any single or partial exercise by Purchaser of any right under this Agreement preclude any other future exercise of any right. The remedies provided hereunder are cumulative and not exclusive of any remedies provided by law or equity.

(f) *Severability*. The illegality, invalidity or unenforceability of any provision of this Agreement under the law of any jurisdiction shall not affect its legality, validity or enforceability under the law of any other jurisdiction nor the legality, validity or enforceability of any other provision.

(g) *Further Assurances*. The parties agree to execute such further and additional documents, instruments, and writings as may be necessary, proper, required, desirable, or convenient for the purpose of fully effectuating the terms and provisions of this Agreement.

(h) *Counterparts; Telecopies*. This Agreement may be executed in multiple counterparts, all of which taken together shall be deemed to constitute one and the same original instrument. Transmission by email, telecopier, facsimile or other form of electronic transmission of an executed counterpart of this Agreement shall be deemed an executed original.

(i) *Consent to Electronic Transactions*. **You expressly consent to conducting this transaction by electronic means, including without limitation email communications, electronic signatures, the creation of a duly authenticated security interest by electronic signature, and the retention and storage of electronic records, to the maximum extent permitted by law.** Merchant agrees that Purchaser does not need to provide Merchant with a paper copy of any notice or document relating to this Agreement unless specifically requested by Merchant in writing.

***[signature page follows]***

IN WITNESS WHEREOF, (i) Merchant and Purchaser by their duly authorized officers have signed this **Receivables Sale Agreement** and (ii) each Guarantor has subscribed to the **Guaranty of Performance** (<u>Section16)</u>, in each case in accordance with the terms t hereof. By signing below, Merchant and each Guarantor hereby affirm to Purchaser that they have read and understand this Agreement, including without limitation the provisions referenced in <u>Section1</u> (Fundamental Terms, Conditions and Waivers), <u>Section 14</u> (Merchant Waivers) and <u>Section 15</u>(e) (Arbitration). By signing the Guaranty, each Guarantor further affirms to Purchaser that such Guarantor has read and fully understands the Guaranty of Performance (<u>Section 16</u>) and that, by signing below, such guarantor will be personally liable for the timely and complete performance of Merchant's obligations as set forth therein.

**MERCHANT:** HELIOSPACE CORPORATION, HELIO CORPORATION

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| **TAX ID #:** | 824652805 |

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| By: | /s/ PAUL STUART TURIN | By: |
| Name: | PAUL STUART TURIN | Name: |
| Title: | Managing Member | Title: |

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| By: | /s/ GREGORY TOWNSEND DELORY | By: |
| Name: | GREGORY TOWNSEND DELORY | Name: |
| Title: | CEO | Title: |

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| By: | /s/ JOSEPH THOMAS PITMAN | By: |
| Name: | JOSEPH THOMAS PITMAN | Name: |
| Title: | CTO | Title: |

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**GUARANTOR**

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| By: | /s/ PAUL STUART TURIN | By: | /s/ JOSEPH THOMAS PITMAN |
| Name: | PAUL STUART TURIN | Name: | JOSEPH THOMAS PITMAN |
| SS#: | XXX-XX-\*\*\*\* | wSS#: | XXX-XX-\*\*\*\* |

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| By: | /s/ GREGORY TOWNSEND DELORY | By: |
| Name: | GREGORY TOWNSEND DELORY | Name: |
| SS#: | XXX-XX-\*\*\*\* | SS#: |

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By:   By:   <br> Name: Name: <br> SS#: SS#:

**STATE OF ______________)** 

**COUNTY OF ____________)**

I, ___________________________________________. a Notary Public, do hereby certify that on this ___ day of _______, 20__, appeared before me PAUL STUART TURIN, GREGORY TOWNSEND DELORY & JOSEPH THOMAS PITMAN, the <u>Managing Member/CEO/CTO</u> of Merchant, and a Guarantor under the within Receivables Sale Agreement, each personally known to me or proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the foregoing agreement, and swore and acknowledged to me that he or she executed the same by and in the name of Merchant and/or as Guarantor, respectively, for the purpose and in the capacity therein expressed, and that the statements contained therein are true and correct.

Notary Signature:______________________

Name of Notary: ______________________

Notary Commission Expires:______________________

## Exhibit 31.1

**Exhibit 31.1**

**Certification of Principal Executive Officer<br> Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Gregory T. Delory, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Helio
Corporation;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

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| Date: June 23, 2025 | /s/ Gregory T. Delory | /s/ Gregory T. Delory |
|  | Name: | Gregory T. Delory |
|  | Title: | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

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## Exhibit 31.2

**Exhibit 31.2**

**Certification of Principal Financial Officer<br> Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Erick Frim, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Helio
Corporation;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

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| Date: June 23, 2025 | /s/ Erick Frim | /s/ Erick Frim |
|  | Name: | Erick Frim |
|  | Title: | Interim Chief Financial Officer |
|  |  | (Principal Financial Officer) |

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## Exhibit 32.1

**Exhibit 32.1**

**Certification of Principal Executive Officer<br> Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Gregory T. Delory, the Chief Executive Officer of Helio Corporation (the "Company"), hereby certify, that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Quarterly Report on Form 10-Q for the period ended April
30, 2025 (the "Report") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.

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| | | |
|:---|:---|:---|
| Date: June 23, 2025 | /s/ Gregory T. Delory | /s/ Gregory T. Delory |
|  | Name: | Gregory T. Delory |
|  | Title: | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

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## Exhibit 32.2

**Exhibit 32.2**

**Certification of Principal Financial Officer<br> Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Erick Frim, the Interim Chief Financial Officer of Helio Corporation (the "Company"), hereby certify, that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Quarterly Report on Form 10-Q for the period ended April
30, 2025 (the "Report") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.

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| | | |
|:---|:---|:---|
| Date: June 23, 2025 | /s/ Erick Frim | /s/ Erick Frim |
|  | Name: | Erick Frim |
|  | Title: | Interim Chief Financial Officer |
|  |  | (Principal Financial Officer) |

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