# EDGAR Filing Document

**Accession Number:** 0001788756
**File Stem:** 0001096906-26-000662
**Filing Date:** 2026-5
**Character Count:** 468887
**Document Hash:** 61f4157643dc74e9eedb061326e6914c
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001096906-26-000662.hdr.sgml**: 20260501

**ACCESSION NUMBER**: 0001096906-26-000662

**CONFORMED SUBMISSION TYPE**: 1-K

**PUBLIC DOCUMENT COUNT**: 18

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260501

**DATE AS OF CHANGE**: 20260430

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Parallel Flight Technologies, Inc.
- **CENTRAL INDEX KEY:** 0001788756
- **STANDARD INDUSTRIAL CLASSIFICATION:** AIRCRAFT & PARTS [3720]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 832143900
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 1-K
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 24R-00334
- **FILM NUMBER:** 26928297

**BUSINESS ADDRESS:**
- **STREET 1:** 450 MCQUADE DRIVE
- **CITY:** LA SELVA BEACH
- **STATE:** CA
- **ZIP:** 95076
- **BUSINESS PHONE:** 831-252-4175

**MAIL ADDRESS:**
- **STREET 1:** 450 MCQUAIDE DRIVE
- **CITY:** LA SELVA BEACH
- **STATE:** CA
- **ZIP:** 95076

## Part

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 1-K**

**ANNUAL REPORT**

**ANNUAL REPORT PURSUANT TO REGULATION A OF THE**<br>**SECURITIES ACT OF 1933**

For the year ended December 31, 2025

**Parallel Flight Technologies, Inc.**

*(Exact name of registrant as specified in its charter)*

Commission File Number: 024-11247

---

| | |
|:---|:---|
| <br> Delaware | 83-2143900  |
| (State or other jurisdiction of<br>incorporation or organization)<br>| (IRS Employer Identification Number)<br>|
| 450 McQuaide Drive<br> La Selva Beach, CA. 95076  | <br> 831-278-2036  |
| (Address of principal executive offices) | (Registrant's telephone number, <br>including area code) |

---

**Class B Common Stock**

(Title of each class of securities issued pursuant to Regulation A)

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![image1.png](pft1k_1.jpg)

*PART II.*

*In this report, the term "Parallel Flight Technologies", "Parallel Flight", "PFT", "the company", or "us", "our", or "we", or similar terms refers to Parallel Flight Technologies, Inc., a Delaware corporation.*

**Forward-Looking Statements**

This Annual Report on Form 1-K may contain forward-looking statements relating to, among other things, the company, its business plan and strategy, and its industry. The words "believe," "estimate", "expect", "anticipate", "intend", "plan", "seek", "may", "will", "draft", "initial", "future", or the negative of these terms or other variations and similar expressions or statements regarding future periods are intended to identify forward-looking statements. Any such statements reflect management's current views with respect to future events based on information currently available and are subject to risks and uncertainties that could cause actual results to differ materially. Any forward-looking statements involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control.

These forward-looking statements involve known and unknown risks, uncertainties, and other important factors that could cause our actual results, performance, or achievements, or industry results, to differ materially from any predictions of future results, performance, or achievements that we express or imply in this Annual Report or in the information incorporated by reference into this Annual Report. Certain important risk factors that could cause actual results to differ materially from those in any forward-looking statements are described in the section titled "Risk Factors" within the Company's Offering Circular filed with the Securities and Exchange Commission ("SEC") on September 14, 2020, as modified by any Supplements and Amendments thereto (collectively, the "Offering Circular"). Any forward-looking statement made by us in this Annual Report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

**ITEM 1. BUSINESS**

*This discussion should be read in conjunction with (1) the other sections of this Annual Report, including, but not limited to, "Management's Discussion and Analysis of Financial Condition and Results of Operations"****,*** *and the attached Financial Statements and related exhibits, and (2) the Offering Circular for our Regulation A+ offering, including, but not limited to, the section titled "Risk Factors". The various sections of this discussion contain a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this Annual Report and the Offering Circular.*

 

**Introduction**

*Company Origins*. Parallel Flight Technologies, Inc. is a technology startup headquartered in La Selva Beach, California (near Santa Cruz, California) that manufactures and markets unmanned aerial vehicles ("UAS" or "drones") for commercial and military use. The Company's aircraft lift more payload and fly for a longer duration than other competitive technologies. The increased performance profiles offer expanded utility for applications across multiple global markets including wildfire, medical, and remote logistics, agriculture, utility, and critical U.S. Department of Defense ("DoD") missions.

PFT was founded in 2018 in response to terrible wildfires that devastated California in 2017 and 2018 and an interest in improving firefighter safety and effectiveness. PFT's founders are Joshua Resnick, David Adams (Director of Operations), and Robert Hulter (Director of Software + Controls).

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*Mission*. PFT's mission is to develop next generation UASs with industry leading flight times to save lives, property, and the environment.

**Product Description**

Our flagship product, Firefly, is a Group 3 (55 pounds to 1320 pounds) UAS quadcopter which incorporates a unique gasoline/electric hybrid powertrain at every propeller to increase the flight time and range up to 10x that of an all-electric drone. For example, Firefly has a design target to fly for 1.4 hours with a 100-pound payload and fly for 4.6 hours with a 10-pound payload.

![](pft1k_2.jpg)

Firefly

Our hybrid architecture is centered around our patented Parallel Hybrid Electric Multirotor ("PHEM") powertrain which uses both an internal combustion engine and an electric motor, in parallel, to power a propeller. Early analysis identified that the key ingredient to being able to fly further was related to energy storage. Lithium polymer batteries, commonly used in all-electric aircraft, are too big and too heavy to be practical for energy storage. Because gasoline has a 14x higher delivered specific energy than the lithium polymer batteries, the energy storage weight was greatly reduced. This enables our quadcopter to fly 10x longer than an all-electric version carrying the same payload.

The hybrid architecture is very adaptable and can be scaled up or down in order to accommodate different mission requirements and different payloads. Due to its modular design, it can also be used to hybridize compatible all-electric aircraft and exponentially increase their flight time and range. Furthermore, our propulsion architecture can be adapted to work with numerous fuel types and comes with inherent safety redundancies that conventional hybrid and electric architectures cannot replicate.

Due to the unique nature of this design, we have 5 patents granted and two international patent filings in process.

**Applications**

Firefly has the ability to be used in many different applications due to its heavy payload and long duration capability. The applications can be broken down in three categories based on how long the payload is being carried: (i) heavy payload dispersed over time, (ii) heavy payload for ½ of the flight, and (iii) heavy payload for the whole flight.

![](pft1k_3.jpg)

Heavy payload dispersed over time Heavy payload for ½ of the flight Heavy payload for the whole flight

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Heavy payload dispersed over time – Examples of this type of application are precision agriculture, invasive species eradication, land management, and controlled burns.

Heavy payload for ½ of the flight – Examples of this type of application are island to island logistics, ship to shore logistics, disaster relief, wildfire crew re-supply, and wildfire suppression.

Heavy payload for the whole flight – Examples of this type of application are powerline stringing, heavy sensor scanning, tethered emergency communications, cleaning buildings, and logistics.

We currently are targeting heavy sensor applications in order to get early market and user experience.

**Market**

The 2024 Teal World Civil Unmanned Aerial Systems Market Forecast projects that the market for a heavy payload aerial drone will grow from $2.3B in 2023 to $9.7B in 2030, or approximately 23% per year.

![](pft1k_4.jpg)

Heavy Payload Drone Market Forecast

Over this period the Delivery, Agriculture, and Wildfire segments are projected to grow faster than the average at 29%. New markets such as invasive species eradication, island delivery, large sensor scanning, contested logistics, and wildfire suppression are in addition to the above growth. Going forward, we also expect the defense sector to be larger than forecasted above due to the recent use of aerial drones in the war in Ukraine.

**Competitors**

We compete with more than 40 larger, more established companies that currently have UASs on the market and/or various product development programs, including, but not limited to, Yamaha, Griff Aviation, Watts Innovation, Harris Aerial, Forvola, Malloy, Schiebel, DJI, and Guardian. The systems available on the market are helicopters, multi-rotors, or Vertical Takeoff and Landing (VTOL) aircraft with all-electric, combustion, or serial hybrid powertrains. Even though some of these competitor aircraft can carry heavy payloads, they typically are much larger or heavier than Firefly. Firefly's smaller and lighter construction permits two-person portability, allowing us to fill an operational need that is not being met. Two-person portability is important for ease of use, transport, and maintainability.

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![](pft1k_5.jpg)

Competitor Positioning filtered for two-person portability

**Product Development**

Since inception, we have designed, built, and tested five aircraft and powertrain versions, introduced a new powertrain control technology, and proved the viability of our parallel hybrid architecture. Each iteration has improved both the performance and reliability of our technology. As shown below, we are currently at Technical Readiness Level (TRL) 8.<sup>1</sup> We expect to achieve TRL 9 and product release during 2026.

![](pft1k_6.jpg)

Aircraft versions by year and TRL level

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)TRL is a measurement that both the National Aeronautics and Space Administration (NASA) and the DoD use to evaluate the maturity of a particular technology and its readiness for deployment (scale 1-9). (Source: GAO presentation of DoD information. GAO-20-48G.)

TRL 8 – Actual system completed and qualified through test and demonstration

TRL 9 – Actual system proven through successful mission operations

During this past year, as part of our contract activity, we have continued testing the aircraft and our powertrains. We ended the year with 335 aircraft flight hours and 3,472 hours of powertrain testing.

**Accomplishments**

Parallel Flight has reached multiple milestones during this past year:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Signed strategic partnership with Mag Aerospace for expeditionary logistics

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Attended and displayed Firefly at Commercial UAV show in Las Vegas in September

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Presented a "PHEM-Powered Performance: Unlocking the Future of Dual-Use Heavy-Lift Drones" at the UAS summit in October

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Successfully completed an additional 4 of 7 milestones of tranche 2 of the DoD's National Security Innovation Capital ("NSIC") contract for $2M:

oProduction Aircraft Engineering

oAC1002 Flight Testing

oPHEM Testing

oAC1003 Build and Flight Testing

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Characterized flight time impact while supplying 2kw power to a payload

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Integrated custom mufflers to reduce noise by 20 dB

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Achieved record hover times for our pre-production aircraft on the way to production qualification

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Passed aircraft flight and PHEM test milestones of 300 and 3,000 hours respectively

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Filed for 49 U.S.C. 44807 exemption and a Part 137 UAS certificate (Agricultural operation) with the Federal Aviation Administration ("FAA")

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Received a $3.74M Small Business Innovation Research Grants ("SBIR") Phase II contract with the Office of Naval Research ("ONR") to convert Firefly into a maritime drone

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Finalized a $1M credit investment with Leonid Capital Partners

**Government Regulation**

The regulation of small UASs for commercial use in the United States is evolving and the regulations for drones weighing more than 55 pounds are not yet solidified.

On June 21, 2016, the FAA released its final rules regarding the routine use of certain small UASs (under 55 pounds) in the U.S. National Airspace System pursuant to the FAA Modernization and Reform Act of 2012. The rules, which became effective in August 2016, provide safety regulations for small UASs conducting non-recreational operations and contain various limitations and restrictions for such operations, including a requirement that operators keep UASs within visual-line-of-sight and prohibiting flights over unprotected people on the ground who are not directly participating in the operation of the UAS. The Small Unmanned Aircraft System Rule (14 CFR part 107) is only applicable to unmanned aircraft that weigh less than 55 pounds at takeoff. Consequently, pursuant to federal law, we will need FAA exemptions for certain commercial uses of our UAS. There are several different pathways to fly an unmanned aircraft that weighs 55 pounds or more, including type certificate, 49 U.S.C. 44807 grant of exemption, special airworthiness certificate operations, and public aircraft operations.

We filed for our 49 U.S.C. 44807 grant of exemption in September 2025.

Beginning December 22, 2025, the Federal Communications Commission ("FCC") issued a series of regulatory actions that prohibited the use of foreign components in UASs operating in the United States and required that any new drones contain more than65% US cost content. These rulings expand beyond prior restrictions focused on communications equipment from "covered" countries, introducing broader limitations on the integration of foreign sourced components into domestically produced UAS platforms. The guidelines published are only in effect to the end of the 2026 calendar year, at which time they might be changed or extended.

Even though we meet the US cost content, or "Made in America", requirements of the FCC directive, we still use communication related components that come from allied countries. To meet evolving FCC requirements, one viable path forward is pursuing a Blue UAS assessment. This process rigorously vets all electronic components from both a supply chain and cybersecurity standpoint. For example, a US manufactured drone that uses a radio sourced from an allied country can be still eligible for US government markets if approved through the Blue UAS program.

Achieving inclusion on the Blue UAS Cleared List would allow Firefly to operate and sell into US government markets while also aligning with FCC requirements. In effect, this provides a near-term pathway to commercial deployment as the broader regulatory landscape continues to evolve. We expect to initiate the Blue UAS assessment process early in 2026.

In parallel, we are actively evaluating and advancing plans to onshore select components within our supply chain. This will position us for long-term compliance while maintaining alignment with performance and cost requirements.

We will continue to monitor developments closely. Unfortunately, because of the changing regulatory landscape, we cannot make assurances that UAS regulation will not impede our ability to sell our drones.

**Intellectual Property**

Parallel Flight is developing an intellectual property strategy around its core patented PHEM technology, its hybrid power module, which patent was granted in 2022 (US 11,148,820). A favorable patent cooperation treaty ("PCT")

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opinion was issued for US 11,148,820 on May 12, 2022. Additionally, continuation patents to 11,148,820 were granted on January 2, 2024 as US 11,858,632 and December 24, 2024 as US 12,172,767. 11,858,632 is also being filed in India and the EU. A related Continuation-in-Part (CIP) drivetrain patent was granted on May 28, 2024 as US 11,993,375.

US patent 12,240,621 was granted on March 4, 2025 for the latest hybrid power module developments.

**Employees**

We currently have 7 full-time employees and 1 part-time employee. In addition to these employees, PFT uses the services of consultants and subject matter experts (SMEs) from time to time as needed.

**Property**

Parallel Flight's main facility is located at 450 McQuaide Drive, La Selva Beach, CA. PFT rents this space from Airspace Integration, which is a drone and aviation business hub. The facility includes shop space, office space, a large, outdoor drone test range, as well as a runway and access to class G airspace.

![](pft1k_7.jpg)

Shop space (left), and runway at Airspace Integration (right)

![](pft1k_8.jpg)

Outdoor drone test area

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 ![](pft1k_9.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inside of the Mega Cell &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mega Cell control center

*Mega Cell:* Parallel Flight Technologies has built a large test container that will allow the testing of eight power modules simultaneously. The architecture is set up to allow two separate quadcopters worth of modules to be tested at once. The Mega Cell is outfitted with the same hardware and systems as used in the drone in order to test all aspects of the product (*e.g.*, fuel lines, connectors, engines, etc), as well as dedicated monitoring systems, and monitoring software for each power module. Test progress is monitored from an external control center.

*Machine Shop:* In addition to the main shop and office location, Parallel Flight has access to additional lab space and a machine shop. The company has a 3 axis 4' x 4' Laguna Swift CNC router, two Prusa i3mk3s 3D printers, and other part fabrication equipment and an electronics test lab. In addition to these physical assets, PFT has access to several important software assets, including SolidWorks 2019 premium with FEA licenses, PDM for CAD version control, Matlab, Veronte Pipe for flight controller design, Xplane for HIL simulation, Altium schematic and PCB design software, and STM32 toolchain for embedded development.

Parallel Flight has obtained a Certificate of Authorization from the FAA via our partnership with Alaska Center for UAS Integration (ACUASI) to operate our over 55 pounds UAS in the airspace around our facility in La Selva Beach, CA.

**Legal Proceedings**

We are currently not a party to or involved in any litigation, and our management is not aware of any pending or threatened legal actions.

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**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

The following discussion of our financial condition and results of operations for years ended December 31, 2025 and 2024 should be read in conjunction with our audited financial statements and the related notes included in this Annual Report.

We were formed as a Delaware corporation on September 10, 2018. Our headquarters is located in La Selva Beach, California. We design, manufacture, and market heavy-lift, autonomous drones for commercial and government use, based on our proprietary and patented parallel hybrid propulsion technology.

In 2025, our primary revenue source was our ongoing NSIC government contract and a significant new SBIR Phase II contract from the ONR, awarded in August 2025. This $3.7 million contract represents a major step in PFT's commercialization trajectory and validates the maritime applicability of our Firefly platform.

**Results of Operations**

**Revenue**

For the year ended December 31, 2025, our grant/contract revenue was $1,601,687, compared to $1,567,108 for the year ended December 31, 2024. Revenue for both periods was derived entirely from government contracts. The increase in revenue in 2025 compared to 2024 reflects the commencement of the ONR SBIR Phase II program in late 2025, partially offset by the timing of milestone completions under the NSIC contract.

**Operating Expenses**

Throughout 2025, we spent most of our efforts advancing and developing our technologies. Our operating expenses consist of general and administrative, sales and marketing, and research and development. For the year ended December 31, 2025, our total operating expenses were $2,701,178, compared to $1,632,334 for 2024. The increase was primarily driven by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Research and development ("R&D") expenses of $1,756,479 (2024: $986,060) – reflecting accelerated development activities for the maritime SBIR contract and NSIC deliverables, as well as $166,804 in non-cash stock-based compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•General and administrative ("G&A") expenses of $672,234 (2024: $486,768) – including $204,065 of non-cash stock-based compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Sales and marketing expenses of $272,465 (2024: $159,506) – reflecting continued business development activities and trade show exhibition, as well as $81,066 in non-cash stock-based compensation.

**Operating Loss**

Our operating loss for 2025 was $1,099,491, compared to an operating loss of $65,226 for 2024. The increase in operating loss reflects the strategic acceleration of R&D and G&A spending described above, partially offset by higher grant revenue.

**Other Income/(Expense)**

Other income/(expense) included interest expense of $57,482 related to the notes payable obtained in 2025 (including amortization of debt discount of $12,408; other income of $163,692 from R&D tax credits; and a non-cash change in fair value of Simple Agreements for Future Equity ("SAFE") obligations of $37,672, reflecting an increase in the estimated fair value of outstanding SAFEs.

**Net Loss**

Our net loss for 2025 was $1,030,953, compared to a net loss of $762 in 2024. The significantly higher net loss in 2025 reflects our strategic acceleration of R&D spending to execute on the new SBIR Phase II maritime contract and NSIC deliverables, combined with higher G&A from non-cash stock compensation.

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**Significant Changes in Balance Sheet Accounts**

Total assets increased to $998,917 at December 31, 2025 from $473,891 at December 31, 2024, driven primarily by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Accounts receivable increased to $348,120 from $0, reflecting amounts due under government contracts at year-end.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Cash increased to $515,145 from $357,226, primarily due to $1,300,000 in loan proceeds, partially offset by operating cash usage of $815,895 and debt repayments of $326,186.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Contract assets increased to $117,064 from $68,308, reflecting revenue recognized in excess of amounts billed under government contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Property and equipment, net, decreased to $17,522 from $42,269 due to depreciation, as no significant capital expenditures were made during 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Total liabilities increased to $1,463,353 from $473,390, primarily due to $876,807 in notes payable (net of discount) obtained during 2025, an increase in accounts payable to $170,104 from $29,120, and an increase in SAFE liabilities to $113,018 from $75,346. Accrued liabilities decreased to $297,424 from $362,924.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·Total stockholders' equity decreased to a deficit of $464,436 from retained earnings of $501, reflecting the net loss of $1,030,953 partially offset by $566,026 in additional paid-in capital from stock-based compensation and warrant issuances.

**Liquidity and Capital Resources**

As of December 31, 2025, we had $515,145 in cash, compared to $357,226 as of December 31, 2024. Our operating activities used $815,895 in cash during 2025, compared to $225,403 in 2024. Financing activities provided $973,814 in cash during 2025, consisting primarily of $1,300,000 in proceeds from notes payable, partially offset by $326,186 in repayments. Financing activities provided $21,052 in cash during 2024.

During 2025, the Company obtained loans totaling $1,300,000, including a $1,000,000 facility from a third party with an annual interest rate of 22.75%, and $300,000 in private individual loans with interest rates of 10% per annum. As of December 31, 2025, $313,800 was classified as current notes payable and $563,007 as long-term, including debt discount of $97,007.

We will require significant additional capital to continue our operations and product development. As discussed in Note 3 to the financial statements, these conditions raise substantial doubt about the Company's ability to continue as a going concern. During the next 12 months, we intend to fund operations through the receipt of a portion of the $3,741,375 SBIR Phase II contract from the ONR, additional federal grant awards, and debt and/or equity financing as determined to be necessary. There are no assurances that management will be able to raise capital on terms acceptable to the Company. If we are unable to obtain sufficient capital, we may be required to reduce the scope of our planned operations.

**Debt**

As of December 31, 2024, the Company had no notes payable outstanding. During 2025, the Company entered into the debt arrangements described below. As of December 31, 2025, the Company had the following debt outstanding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Notes payable, current portion (net): $313,800 – representing the short-term portion of the private individual loans, net of debt discount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Notes payable, long-term (net): $563,007 – representing the third party facility, net of debt discount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•SAFEs: $113,018 – classified as long-term liabilities, increased from $75,346 at December 31, 2024 due to a non-cash increase in fair value of $37,672. Under the SAFEs, the funds contributed by investors convert to shares of preferred stock in a qualified priced preferred stock financing round at 80-85% of the preferred round price. As of December 31, 2025, there had not been any priced round of preferred stock financing that would trigger a conversion.

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**Market Outlook and Trends**

At the beginning of 2025, our business outlook changed as a result of tariffs being imposed on all imported material coming into the United States. Parallel Flight Technologies procures parts from not only U.S.-based companies but also from companies all over the world. As of the date of this Annual Report, parts are being impacted by tariffs ranging from 10% to 147%. We do not expect tariffs to decrease to pre-tariff levels. Therefore, we are actively moving our procurement of parts that are manufactured in higher tariff countries to either the United States or countries with lower tariffs. Unfortunately, some original equipment manufacturer (OEM) parts cannot be sourced from lower tariff locations due to the fact that the manufacturing capability does not exist elsewhere. The Company is evaluating the increase to product costs due to tariffs and whether such costs can be passed on to customers to minimize the impact to gross margin.

**ITEM 3. DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES**

The following table sets forth information about our executive officers and directors.

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Position** | **Age** | **Term of Office** |
| Craig Stevens | Chief Executive Officer and Director | 65 | September 2023 – Present |
| David Adams | Treasurer, Director, and Lead Hardware Engineer | 42 | September 2018 – Present |
| Robert Hulter | Secretary, Director, and Lead Software Engineer | 41 | September 2018 – Present |

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**There are no arrangements or understandings between our executive officers and directors and any other persons pursuant to which the executive officer or director was selected to act as such.**

***Craig Stevens***, has served as our Chief Executive Officer and a Director since September 2023, and oversees our operations. Mr. Stevens has spent most of his career in robotics and product development working for established companies in the semiconductor capital equipment market as well as for startups in the flat panel, 3D printing, and solar cell manufacturing areas. He has varied engineering and customer management experience, most notably as Vice President of Product Development for Novellus Systems, a former Fortune 500 company. Mr. Stevens received an MS in Mechanical Engineering from Stanford University and a BS in Mechanical Engineering from California Polytechnic State University, San Luis Obispo.

***David Adams***, has served as our Treasurer, a Director, and our lead hardware engineer since our inception in September 2018, and oversees hardware development. Between November 2017 and August 2019, he served as a Senior Systems Engineer at Verb Surgical, Inc., where he coordinated between multiple technical teams including robot software developers, hardware designers, and firmware engineers. Between May 2012 and November 2017, Mr. Adams served as a product engineer for LAM Research. Mr. Adams began his career as an engineer qualified Naval officer, aboard nuclear submarines. He also supported Naval research into drone swarms. After leaving the Navy, Mr. Adams focused his career on robotic systems integration and design. Mr. Adams received an MS in Electrical Engineering from San Jose State University and a BS in Electrical Engineering from California Polytechnic State University, San Luis Obispo.

***Robert Hulter***, has served as our Secretary, a Director, and lead software engineer since our inception in September 2018, where he oversees the development of our software. Between January 2010 and September 2020, he served as an Electrical Engineer for OLT Solar, where he was responsible for designing solar robotics cells. Mr. Hulter received a BSEE in Electrical Engineering from California Polytechnic State University, San Luis Obispo.

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**Compensation**

The table below reflects the annual compensation of each of the three highest paid persons who were executive officers or directors during the fiscal year ended December 31, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name(1)** | **Capacities in which**<br>**compensation received** | **Cash Compensation(2)(3)** | **Other**<br>**Compensation (4)** | **Total**<br> **Compensation** |
| Craig Stevens  | Chief Executive Officer and Director | $70578  | $351556  | $422134  |
| David Adams | Treasurer, Director, and Lead Hardware Engineer | $182430  | $56751  | $239181  |
| Robert Hulter | Secretary, Director, and Lead Software Engineer | $210000  | $0  | $210000  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The business address of each director and executive officer is 450 McQuaide Drive, La Selva Beach, California 95076.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Total cash compensation for the year is shown. Does not include any health or other benefits extended to all employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) End of year full time salaries are Craig Stevens $163,000, David Adams $210,000 and Robert Hulter $210,000

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Represents non-cash stock-based compensation of vested warrants

Our board of directors has three members. All of the members of our board of directors are also executive officers of the company. None of our executive officers received compensation with respect to their service as directors.

We do not have employment agreements with any of our executive officers or directors.

------

**ITEM 4. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS**

Set forth below is information regarding the beneficial ownership of the outstanding shares of our Class A Common Stock, our only voting securities, as of March 31, 2026, by (i) each person whom we know owned, beneficially, more than 10% of the outstanding shares of our Class A Common Stock, and (ii) all of the current officers and directors as a group. We believe that, except as noted below, each named beneficial owner has sole voting and investment power with respect to the shares listed. Unless otherwise indicated herein, beneficial ownership is determined in accordance with the rules of the SEC, and includes voting or investment power with respect to shares beneficially owned.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Title of class** | **Name and address of**<br>**beneficial owner** | **Amount and**<br>**nature of**<br>**beneficial**<br>**ownership** | **Amount and nature**<br>**of beneficial**<br>**ownership**<br>**acquirable** | **Percent of class** |
| Class A Common Stock  | Joshua Resnick (1)<br>| 1,000,000 shares | - | 19.93% |
| Class A Common Stock  | David Adams (1)<br>| 1,514,286 shares | - | 30.19% |
| Class A Common Stock  | Robert Hulter (1)<br>| 1,500,000 shares | - | 29.90% |
| Class A Common Stock | All directors and officers as a group (3 persons) | 3,014,286 shares | - | 60.09% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Business address is 450 McQuaide Drive, La Selva Beach, California 95076.

**ITEM 5. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS**

On April 11, 2025, Craig Stevens was issued a warrant to purchase 1,000,000 shares of Class A Common Stock at $0.49 per share, vesting over four years, as part of his original employment offer. On the same date, Craig Stevens and David Adams were issued warrants to purchase 332,539 shares and 153,538 shares, respectively, of Class A Common Stock, at $0.49 per share, as compensation for salary deferrals.

**ITEM 6. OTHER INFORMATION**

On August 7, 2025, the Company received a $3,741,375 SBIR Phase II contract from the ONR to develop a maritime version of its Firefly drone. The agreement extends into Q4 2027. This contract represents a significant development in PFT's expansion into the defense/maritime market.

------

**ITEM 7. FINANCIAL STATEMENTS**

**Parallel Flight Technologies, Inc.**

**Index to Financial Statements**

---

| | |
|:---|:---|
| [Independent Auditors' Report](#INDEPENDENTAUDITORSREPORT) | F-1 |
| [Balance Sheets](#bookmark=id.682jnvjip8sp) | F-3 |
| [Statements of Operations](#STATEMENTSOFOPERATIONS) | F-4 |
| [Statements of Stockholders' Equity (Deficit)](#STATEMENTSOFCHANGESINSTOCKHOLDERSEQUITY) | F-5 |
| [Statements of Cash Flows](#STATEMENTSOFCASHFLOWS) | F-6 |
| [Notes to the Financial Statements](#NOTESTOFINANCIALSTATEMENTS) | F-7 – F-14 |

---

------

**INDEPENDENT AUDITORS' REPORT**

To the Board of Directors and Stockholders

Parallel Flight Technologies, Inc.

**Opinion**

We have audited the accompanying financial statements of Parallel Flight Technologies, Inc., a Delaware corporation (the "Company"), which comprise the balance sheets as of December 31, 2025 and 2024, and the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

**Substantial Doubt About the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company incurred net losses and cash used in operations, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans regarding these matters are also described in Note 3. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

**Responsibilities of Management for the Financial Statements**

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

**Auditor's Responsibilities for the Audit of the Financial Statements**

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

------

In performing an audit in accordance with generally accepted auditing standards, we:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Exercise professional judgment and maintain professional skepticism throughout the audit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;●Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

/s/ dbb*mckennon*

San Diego, California

April 30, 2026

------

**PARALLEL FLIGHT TECHNOLOGIES, INC.**

**BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Assets  |  |  |
| Current Assets: |  |  |
| Cash and cash equivalents | $515145  | $357226  |
| Accounts receivable, net  | 348120  | -  |
| Contract asset  | 117064  | 68308  |
| Prepaid expenses | 1066  | 6088  |
| Total current assets | 981395  | 431622  |
| Property and equipment, net | 17522  | 42269  |
| Total assets | $998917  | $473891  |
| Liabilities and Stockholders' Equity (Deficit) |  |  |
| Current Liabilities |  |  |
| Accounts payable | $170104  | $29120  |
| Accrued liabilities | 297424  | 362924  |
| Deferred revenue  | 6000  | 6000  |
| Notes payable, current portion, net  | 313800  | -  |
| Total current liabilities | 787328  | 398044  |
| Simple agreements for future equity (SAFEs) - Note 5  | 113018  | 75346  |
| Notes payable, net of current portion  | 563007  | -  |
| Total liabilities | 1463353  | 473390  |
| Commitments and contingencies (Note 7) |  |  |
| Stockholders' Equity (Deficit): |  |  |
| Class A common stock, $0.00001 par value-13,000,000 and 8,000,000 authorized; 5,041,543 and 6,041,543 issued and outstanding at December 31, 2025 and 2024, respectively | 50  | 60  |
| Class B common stock, $0.00001 par value-3,000,000 authorized; 1,648,639 issued and outstanding at December 31, 2025 and 2024, respectively | 16  | 16  |
| Additional paid-in capital  | 9127995  | 8561969  |
| Accumulated deficit | (9592497)  | (8561544)  |
| Total stockholders' equity (deficit) | (464436)  | 501  |
| Total liabilities and stockholders' equity (deficit) | $998917  | $473891  |

---

*See accompanying notes to the financial statements*

------

**PARALLEL FLIGHT TECHNOLOGIES, INC.**

**STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Grant revenue | $1601687  | $1567108  |
| Operating expenses: |  |  |
| General and administrative | 672234  | 486768  |
| Sales and marketing | 272465  | 159506  |
| Research and development | 1756479  | 986060  |
| Total operating expenses | 2701178  | 1632334  |
| Operating loss | (1099491)  | (65226)  |
| Other income/(expense) |  |  |
| Interest expense | (57482)  | -  |
| Other income | 163692  | 16046  |
| Change in fair value of SAFE obligations | (37672)  | 48418  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income/(expense) | 68538  | 64464  |
| Net loss | $(1030953)  | $(762)  |
| Weighted average loss per share of  |  |  |
| Class A and B common stock - basic and diluted | $(0.15)  | $(0.00)  |
| Weighted average shares outstanding of |  |  |
| Class A and B common stock - basic and diluted | 6829908  | 7690182  |

---

*See accompanying notes to the financial statements*

------

**PARALLEL FLIGHT TECHNOLOGIES, INC.**

**STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Class A | Class A | Class B | Class B | Stock | Additional |  | Total |
|  | Common Stock | Common Stock | Common Stock | Common Stock | Subscription | Paid-In | Accumulated | Stockholders' |
|  | Shares | Amount | Shares | Amount | Receivable | Capital | Deficit | Equity (Deficit) |
| Balance at December 31, 2023 | 6041543  | $60  | 1648639  | $16  | $(21052)  | $8533290  | $(8560782)  | $(48468)  |
| Collection of stock subscription receivable | -  | -  | -  | -  | $21052  | -  | -  | 21052  |
| Stock-based compensation | -  | -  | -  | -  | -  | 28679  | -  | 28679  |
| Net loss | -  | -  | -  | -  | -  | -  | (762)  | (762)  |
| Balance at December 31, 2024 | 6041543  | 60  | 1648639  | 16  | -  | 8561969  | (8561544)  | 501  |
| Surrender of shares | (1000000) | (10)  | -  | -  | -  | 10  | -  | -  |
| Warrants issued in connection with notes | -  | -  | -  | -  | -  | 114081  | -  | 114081  |
| Stock-based compensation | -  | -  | -  | -  | -  | 451935  | -  | 451935  |
| Net loss | -  | -  | -  | -  | -  | -  | (1030953)  | (1030953)  |
| Balance at December 31, 2025 | 5041543  | $50  | 1648639  | $16  | $-  | $9127995  | $(9592497)  | $(464436)  |

---

*See accompanying notes to the financial statements*

------

**PARALLEL FLIGHT TECHNOLOGIES, INC.**

**STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities** |  |  |
| Net loss | $(1030953)  | $(762)  |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation expense | 24747  | 28469  |
| &nbsp;&nbsp;&nbsp;Change in fair value of SAFEs | 37672  | (48418)  |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount | 12408  | -  |
| &nbsp;&nbsp;&nbsp;Non-cash interest expense | 4666  | -  |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 451935  | 28679  |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (348120)  | -  |
| &nbsp;&nbsp;&nbsp;Contract asset | (48756)  | (68308)  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 5022  | (4343)  |
| &nbsp;&nbsp;&nbsp;Accounts payable  | 140984  | (57907)  |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | (65500)  | 38770  |
| &nbsp;&nbsp;&nbsp;Deferred revenue | -  | (141583)  |
| Net cash used in operating activities | (815895)  | (225403)  |
| **Cash flows from financing activities** |  |  |
| Proceeds from notes payable | 1300000  | -  |
| Repayments of notes payable | (326186)  | -  |
| Common stock issued for cash, net of offering costs | -  | 21052  |
| Net cash provided by financing activities  | 973814  | 21052  |
| Net change in cash | 157919  | (204351)  |
| Cash, beginning of the year | 357226  | 561577  |
| **Cash, end of the year** | $515145  | $357226  |
| **Supplemental disclosure of cash flow information:** |  |  |
| Income taxes paid | $-  | $-  |
| Interest paid | $13069  | $-  |
| **Supplemental disclosure of non-cash investing and financing information:** |  |  |
| Discount due to warrants issued with notes payable | $109415  | $-  |

---

*See accompanying notes to the financial statements*

------

**PARALLEL FLIGHT TECHNOLOGIES, INC.**

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 1 – Nature of Operations**

Parallel Flight Technologies, Inc. (the "Company") was founded on September 10, 2018 ("Inception") in the State of Delaware. The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The Company's headquarters is located in La Selva Beach, California.

The Company designs heavy-lift, autonomous aircraft based on the Company's proprietary and patented parallel hybrid propulsion technology. The Company's aircraft lift more payload and fly for a longer duration than other competitive technologies, offering expanded utility across multiple global markets including wildfire, medical and remote logistics, agriculture, utility, and critical U.S. Department of Defense missions.

**NOTE 2 – Summary of Significant Accounting Policies**

**Basis of Presentation**

The accounting and reporting policies of the Company conform to US GAAP.

**Use of Estimates**

The preparation of financial statements in conformity with US GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amount of expenses during the reporting periods. Actual results could materially differ from these estimates. It is reasonably possible that changes in estimates will occur in the near term.

**Fair Value of Financial Instruments**

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. The Company applies a three-level fair value hierarchy: Level 1 (quoted prices in active markets), Level 2 (directly or indirectly observable inputs), and Level 3 (unobservable inputs). The Company has Simple Agreements for Future Equity ("SAFEs") which are considered Level 3 liabilities. See Note 5.

**Risks and Uncertainties**

The Company has a limited operating history and has not generated significant revenue from intended operations. The Company's business and operations are sensitive to general business and economic conditions in the United States and worldwide, along with local, state, and federal government policy decisions. Adverse conditions may include changes in technology, competition from larger more well-funded competitors, and changes to industries the Company is targeting. These adverse conditions could affect the Company's financial condition and the results of its operations.

**Cash**

The Company considers all short-term, highly liquid, unrestricted investments with original maturities of three months or less, to be cash.

**Contract Asset**

The Company capitalizes costs incurred for services performed under contracts when the related performance milestones have not yet been achieved. These costs are recognized as expense in the period in which the milestone is met and the associated revenue is recognized. At December 31, 2024, the Company had a contract asset of $68,308, consisting of $64,539 of labor costs and $3,769 of materials costs, related to services performed under an existing contract. During 2025, the milestone was achieved, and the contract asset was recognized as revenue. At December 31, 2025, the Company had a contract asset of $117,064, representing unbilled receivables related to services performed under the Office of Naval Research contract.

------

**Property and Equipment**

Property and equipment is stated at cost. Depreciation and amortization are computed using the straight-line method based on estimated useful lives of the assets, which range from three to seven years. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations.

**Long-Lived Assets**

The Company reviews its long-lived assets in accordance with the Financial Accounting Standard Board's ("FASB") Accounting Standards Codification ("ASC") 360-10-35, *Impairment or Disposal of Long-Lived Assets*. Under that directive, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Such a group is tested for impairment whenever events or changes in circumstances indicate that its carrying value may not be recoverable. When such factors and circumstances exist, the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives are compared against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on the market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. There was no impairment during the years ended December 31, 2025 and 2024.

**Simple Agreements for Future Equity (SAFEs)**

The Company accounts for its SAFEs as derivative liabilities under FASB ASC Sections 815-10 and 815-40. Changes in the fair value of the SAFEs were $(37,672) and $48,418 during the years ended December 31, 2025 and 2024, respectively, representing non-cash losses and gains on revaluation. Key assumptions and quantitative information about significant unobservable inputs used in the Level 3 fair value measurement are disclosed in Note 5.

**Accounts Receivable and Allowance for Credit Losses**

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for credit losses based on its assessment of the collectability of accounts receivable. The Company evaluates the creditworthiness of its customers, historical collection experience, current economic conditions, and reasonable and supportable forecasts to estimate expected credit losses over the life of its receivables in accordance with ASC 326. Account balances are written off against the allowance when the Company determines that it is probable that the receivable will not be recovered. As of December 31, 2025 and 2024, the Company determined that no allowance for credit losses was necessary.

**Revenue Recognition**

In accordance with FASB ASC Topic 606, Revenue from Contracts with Customers, the Company records revenue when the customer takes physical possession of the product or can benefit from the services as provided. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services, using the five-step method required by ASC 606.

Revenue from grants is recognized in the period during which the conditions under the grant have been met and the Company has made payment for the related expenses or met the required milestones depending on the grant terms. Grant revenue was $1,601,687 and $1,567,108 for the years ended December 31, 2025 and 2024, respectively. At December 31, 2023, the Company had deferred revenue of $147,583. At both December 31, 2025 and 2024, the Company had deferred $6,000 of revenue related to product sales that were paid in advance of delivery.

**Research and Development**

Research and development costs consist primarily of developing heavy-lift technology across the aerospace, military, and public service industries. These costs are expensed as incurred. Research and development costs expensed were $1,756,479 and $986,060 for the years ended December 31, 2025 and 2024, respectively excluding stock based compensation

The Company received an R&D tax credit offset against employer-paid payroll taxes of $163,540 during the year ended December 31, 2025, which has been recorded as other income in the accompanying financial statements, as the receipt of such credit could not be determined to be probable at the time the underlying payroll taxes were incurred in 2022 and 2023.

------

**Income Taxes**

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates. A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. See Note 10.

**Stock-Based Compensation**

The Company accounts for stock awards issued under ASC 718, Compensation – Stock Compensation. Share-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and recognized over the employee's requisite vesting period. The fair value of each stock option or warrant award is estimated on the date of grant using the Black-Scholes option valuation model.

**Income/Loss per Common Share**

The Company computes net income per share of Class A Common Stock and Class B Common Stock using the two-class method. Basic net loss per share is computed using the weighted-average number of shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period. For periods in which the Company incurs a net loss, the effects of potentially dilutive securities would be antidilutive and are excluded from the earnings per share calculations. Dilutive securities consist of stock options under the Company's Equity Incentive Plan (Note 9). The number of shares for which SAFEs are convertible into is indeterminable.

**Concentration of Credit Risk**

The Company maintains its cash with a major financial institution located in the United States of America which it believes to be creditworthy. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At times, the Company may maintain balances in excess of the federal insured limits.

For the year ended December 31, 2025, one customer accounted for 93% of total revenue. For the year ended December 31, 2024, three customers accounted for 68%, 20%, and 12% of total revenue, respectively. As of December 31, 2025, two customers accounted for 100% of accounts receivable and contract assets.

**Segment Reporting**

The Company operates as a single reportable segment focused on the design, development, and manufacture of heavy-lift, autonomous unmanned aerial systems. The Company's Chief Executive Officer is the Chief Operating Decision Maker ("CODM") and reviews financial information on a monthly basis to evaluate performance and allocate resources. The CODM uses net loss as reported in the statements of operations as the measure of segment profit or loss. Significant segment expenses regularly provided to the CODM are research and development, general and administrative, and sales and marketing expenses, each of which is reported as a separate line item on the statements of operations. Segment assets are equal to the Company's total assets of $998,917 and $473,891 as of December 31, 2025 and 2024, respectively.

**Recent Accounting Pronouncements**

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosures about significant segment expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. The Company has a single reportable segment and the adoption of this ASU did not have a material impact on the financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about the effective tax rate reconciliation and income taxes paid. The standard is effective for annual periods beginning after December 15, 2025. The Company is currently evaluating the impact of ASU 2023-09 on its financial statement disclosures.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company's financial statements.

------

**NOTE 3 – Going Concern**

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses of $1,030,953 and $762 for the years ended December 31, 2025 and 2024, respectively, and has net cash used in operating activities of $815,895 and $225,403 for the years ended December 31, 2025 and 2024, respectively. The accumulated deficit as of December 31, 2025 was $9,592,497. These matters raise substantial doubt about the Company's ability to continue as a going concern.

During the next 12 months, the Company intends to fund operations through the receipt of a portion of the $3,741,375 SBIR Phase II contract from the Office of Naval Research, additional federal grant awards, and debt and/or equity financing as determined to be necessary. There are no assurances that management will be able to raise capital on terms acceptable to the Company. The accompanying financial statements do not include any adjustments that might result from these uncertainties.

**NOTE 4 – Property and Equipment**

The composition of property and equipment is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Automotive | $57554  | $57554  |
| Machinery and equipment | 92585  | 92584  |
|  | 150139  | 150138  |
| Less accumulated depreciation | (132617)  | (107869)  |
|  | $17522  | $42269  |

---

Depreciation expense was $24,747 and $28,469 for the years ended December 31, 2025 and 2024, respectively.

**NOTE 5 – Fair Value Measurements – Simple Agreements for Future Equity (SAFEs)**

The Company's SAFEs are measured at fair value on a recurring basis and are classified as Level 3 based on the observability of valuation inputs. The Company utilizes a probability-weighted average approach based on the estimated market value of the underlying securities and the potential settlement outcomes of the future equity obligations. As of December 31, 2025 and 2024, the Company had SAFEs totaling $113,018 and $75,346 outstanding, at fair value, respectively.

A roll forward of SAFE liabilities is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Balance at beginning of period | $75346  | $123764  |
| Revaluation  | 37672  | (48418)  |
| Balance at end of period | $113018  | $75346  |

---

Under the SAFEs, the funds contributed by the investors convert to shares of preferred stock in a qualified priced preferred stock financing round, at 80% – 85% of the preferred round price. As of December 31, 2025 and 2024, there had not been any priced round of preferred stock financing that would trigger a conversion of the SAFE funds to preferred stock.

As of December 31, 2025, the Company valued the SAFEs utilizing a fair value per share of the underlying equity of $0.49 per share and conversions discounts of 15% - 20% as per the SAFE agreements. Management assumed an equity financing outcome of 50%, liquidity event of 10%, cash settlement of 15% and a loss on investment of 25%.

------

Under the liquidity event and equity financing scenarios, the SAFEs are assumed to convert into shares at the contractual discount prices, resulting in a fair value of approximately $151,765 per scenario. Under the negotiated cash settlement scenario, the SAFE investors are assumed to receive face value of $122,000 plus a 20% premium, or approximately $146,400. Under the dissolution scenario, the SAFE holders are assumed to receive nothing.

The fair value measurement is sensitive to changes in the assigned scenario probabilities and in the estimated fair value per share of the underlying equity. An increase in the probability assigned to the equity financing or liquidity event scenarios, or an increase in the estimated share price, would result in a higher fair value of the SAFE liabilities, and vice versa.

**NOTE 6 – Debt**

*Private Individual Loans*

On January 23, 2025, the Board of Directors approved obtaining up to $350,000 in loans from private individuals. During the first quarter of 2025, the Company obtained loans totaling $300,000 from two private individuals, with an annual interest rate of 10% per annum. The proceeds were used to fund general operations. As consideration for the loans, the lenders received warrants to purchase 7,500 shares of Class B Common Stock per $100,000 loaned, at an exercise price of $1.55 per share, for a total issuance of 22,500 warrants, expiring on February 5, 2029. Under the relative fair value method, the fair value of these warrants of $6,878 was allocated as a debt discount and was being amortized to interest expense over the term of the loans using the effective interest method.

On December 17, 2025, the Company issued an additional 15,000 warrants to the lenders, with terms substantially identical to the original warrants, as consideration for the lenders' agreement not to declare a default on the notes. Because these warrants were issued without any new debt proceeds, the fair value of $4,666 was recognized directly as interest expense in the period of issuance.

All $300,000 of the private individual loans were repaid in full during 2025. Total interest paid in cash on these loans was $13,069.

*Third party Term Loan*

On November 13, 2025, the Company entered into a $1,000,000 secured term loan with a third party, with an annual interest rate of 22.75% per annum. The proceeds were used to fund general operations. The loan is repayable in 29 monthly installments of approximately $45,144 each, commencing December 21, 2025, with a final payment scheduled for April 21, 2028. The loan is secured by substantially all of the Company's assets. As consideration for the loan, the lender received warrants to purchase 244,898 shares of Class A Common Stock at an exercise price of $0.49 per share, expiring on November 12, 2035. Under the relative fair value method, $102,537 of the $1,000,000 in proceeds was allocated to the warrants and recorded as a debt discount, with a corresponding increase to additional paid-in capital. The debt discount is being amortized to interest expense over the term of the loan using the effective interest method.

*Warrant Valuation*

The fair value of warrants issued in connection with the Company's debt was estimated at issuance using the Black-Scholes option pricing model. See Note 9 for the assumptions used.

------

*Summary*

As of December 31, 2025, notes payable is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Notes payable, gross | $973814  | $-  |
| Less: unamortized debt discount | (97007)  | -  |
| Notes payable, net | 876807  | -  |
| Less: current portion, net | (313800)  | -  |
| Notes payable, long-term portion, net | $563007  | $-  |

---

The Company recorded total debt discount of $114,081 in connection with warrants issued with debt during 2025. Amortization of debt discount included in interest expense for the year ended December 31, 2025 was $12,408. As of December 31, 2025, unamortized debt discount was $97,007. Total interest expense for the year ended December 31, 2025 was $57,482, comprising $40,408 of interest on notes and credit card interest and $12,408 of debt discount amortization, and $4,666 related to the additional warrants discussed above.

*Future Minimum Principal Payments*

Future minimum principal payments on notes payable as of December 31, 2025 are as follows:

---

| | |
|:---|:---|
| Year Ending December 31, | Amount |
| 2026 | $355755  |
| 2027 | 445708  |
| 2028 | 172331  |
| Total gross principal | 973794  |
| Less: unamortized debt discount | (97007)  |
| Total notes payable, net | $876787  |

---

**NOTE 7 – Commitments and Contingencies**

The Company is not currently involved with, and does not know of any, pending or threatened litigation against the Company or any of its officers. The Company's lease is on a month-to-month basis.

During 2022, the Company entered into a consulting agreement under which the consultant was to receive $175,000 per year for services rendered plus equivalent benefits to the Company's executives. This contract was terminated on September 30, 2023. The Company has accrued $285,600 related to unpaid fees as of December 31, 2025 (same as December 31, 2024). Currently, there are ongoing discussions regarding the potential grant to the consultant of 697,064 warrants to purchase Class A Common Stock in settlement of unpaid amounts.

**NOTE 8 – Stockholders' Equity**

As of December 31, 2025, the Company is authorized to issue 16,000,000 shares of common stock, consisting of 13,000,000 shares of Class A Common Stock, with a par value of $0.00001 per share, and 3,000,000 shares of Class B Common Stock with a par value of $0.00001 per share. Class B Common Stock does not have voting rights while Class A Common Stock carries one-to-one voting rights.

On January 17, 2025, the Board of Directors approved increasing the number of authorized shares of Class A Common Stock from 8,000,000 to 13,000,000, which increase was subsequently approved by a majority of stockholders on January 20, 2025.

------

On February 20, 2025, Joshua Resnick surrendered 1,000,000 shares of Class A Common Stock to the Company for no consideration.

As of December 31, 2025, the Company had 5,041,543 shares of Class A Common Stock and 1,648,639 shares of Class B Common Stock issued and outstanding.

**NOTE 9 – Stock-Based Compensation**

**Equity Incentive Plan**

The Company adopted its 2020 Equity Incentive Plan (the "Plan") during 2020. The Plan enables the Board of Directors to grant various forms of equity awards, including stock options and restricted stock awards, to employees, directors, contractors, and consultants of the Company. A total of 700,000 shares of Class A Common Stock has been authorized for issuance under the Plan.

*Stock Options*

On April 11, 2025, the Company granted options to employees and contractors of the Company to purchase an aggregate of 232,682 shares of Class A Common Stock at exercise prices ranging from $0.49 to $10.00 per share (weighted average exercise price of $0.61 per share). The options vest over periods ranging from one to four years with a ten-year contractual term. No options were granted to non-employees, directors, or other third parties during 2025.

Stock option activity during the years ended December 31, 2025 and 2024 was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | Weighted-  |  |
|  |  | Weighted- | Average  | Weighted-  |
|  |  | Average | Remaining  | Average  |
|  | Number of | Exercise Price | Contractual  | Intrinsic  |
|  | Options | Per Share | Term (Years)  | Value  |
| Outstanding at December 31, 2023 | 277517  | $3.25  | 7.04  | -  |
| Granted | -  | -  | -  | -  |
| Forfeited | (152197)  | 1.92  | -  | -  |
| Outstanding at December 31, 2024 | 125320  | 4.86  | 6.53  | $-  |
| Granted | 232682  | 0.61  |  |  |
| Forfeited | -  | -  | -  |  |
| Outstanding at December 31, 2025 | 358002  | $2.09  | 7.79  | $-  |
| Exercisable at December 31, 2025 | 178849  | $3.43  | 6.66  | $-  |
| Vested or expected to vest at December 31, 2025 | 358002  | $2.09  | 7.79  | -  |

---

Stock-based compensation expense related to options recognized for the years ended December 31, 2025 and 2024 was $43,628 and $25,760, respectively. As of December 31, 2025, future stock-based compensation expense related to unvested options is expected to be approximately $81,011, which will be recognized over a weighted average remaining vesting period of three years.

The expected term of employee stock options is calculated using the simplified method which takes into consideration the contractual life and vesting terms of the options.

The Company determined the expected volatility assumption for options granted using the historical volatility of comparable public company's Common Stock. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility for future stock option grants, until such time that the Company's Common Stock has enough market history to use historical volatility.

The dividend yield assumption for options granted is based on the Company's history and expectation of dividend payouts. The Company has never declared or paid any cash dividends on its Common Stock, and the Company does not anticipate paying any cash dividends in the foreseeable future.

------

Management estimated the fair value of Common Stock based on recent sales to third parties. Forfeitures are recognized as incurred.

The fair value of stock options granted during 2025 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

---

| | |
|:---|:---|
|  | **December 31,**<br>**2025** |
| Average risk-free rate | 4.24% |
| Expected term (in years) | 6.25 |
| Expected volatility | 119.44% |
| Expected dividend yield | - |
| Stock price | $0.49  |

---

*Warrants*

On various dates during the first quarter of 2025, the Company issued warrants to purchase an aggregate of 22,500 shares of Class B Common Stock at an exercise price of $1.55 per share to two private individual lenders in connection with loans made to the Company (see Note 6). On December 17, 2025, the Company issued an additional 15,000 warrants to these same lenders, with terms substantially identical to the original warrants, as consideration for the lenders' agreement not to declare a default on the notes.

On April 11, 2025, a warrant to purchase 1,000,000 shares of Class A common stock was given to Craig Stevens as part of his original employment offer. The warrant purchase price is $0.49 per share and will vest over four years with a six-year contractual term.

On April 11, 2025, warrants to purchase 332,539 shares of Class A Common Stock were issued to Craig Stevens and warrants to purchase 153,538 shares of Class A Common Stock were issued to David Adams. The warrants purchase price was $0.49 per share and will vest over one year with a six-year contractual term. To assist with the Company's cash flow needs, neither Mr. Adams nor Mr. Stevens has taken his full salary during the past two years. The warrants were awarded as compensation for their reduction in salary.

On November 13, 2025, in connection with the third party term loan (see Note 6), the Company issued warrants to purchase 244,898 shares of Class A Common Stock at an exercise price of $0.49 per share, with a ten-year contractual term.

Warrant activity during the years ended December 31, 2025 and 2024 was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | Weighted-  |
|  |  | Weighted- | Average  |
|  |  | Average | Remaining  |
|  | Number of | Exercise Price | Contractual  |
|  | Warrants | Per Share | Term (Years)  |
| Outstanding at December 31, 2024 | -  | $-  | -  |
| Granted | 1768475  | 0.51  | 6.51  |
| Forfeited | -  | -  | -  |
| Outstanding at December 31, 2025 | 1768475  | $0.51  | 5.87  |

---

Stock-based compensation expense related to warrants recognized for the year ended December 31, 2025 was $408,307. Future stock-based compensation expense related to unvested warrants is expected to be approximately $163,315, which will be recognized over a weighted average remaining vesting period of 0.94 years.

------

The fair value of warrants granted during 2025 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

---

| | |
|:---|:---|
|  | **December 31,**<br>**2025** |
| Average risk-free rate | 3.62%-4.28% |
| Expected term (in years) | 4-10 |
| Expected volatility | 119.44% |
| Expected dividend yield | - |
| Stock price | $0.49  |

---

**Stock-Based Compensation Expense**

The table below shows the total stock-based compensation expense recorded for the year ended December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| General and administrative | $204065  | $28679  |
| Sales and marketing | 81066  | -  |
| Research and development | 166804  | -  |
| Total | $451935  | $28679  |

---

**NOTE 10 – INCOME TAXES**

The Company accounts for income taxes in accordance with ASC 740 (see Note 2 for the accounting policy summary). The Company has evaluated its tax positions under ASC 740-10 and has concluded that it does not have any uncertain tax positions that require recognition or disclosure as of December 31, 2025 and 2024.

The Company's net deferred tax asset at December 31, 2025 and 2024, was approximately $2,715,000 and $2,049,000, respectively. The net deferred tax asset primarily consists of net operating loss carryforwards and capitalized research and development costs under Section 174 of the Internal Revenue Code. As of December 31, 2025 and 2024, the Company provided a 100% valuation allowance against the net deferred tax assets, as management determined it was not more likely than not that the deferred tax assets would be realized. During the years ended December 31, 2025 and 2024, the Company recorded an increase to the valuation allowance of approximately $666,000 and $62,000, respectively.

Beginning with tax years after December 31, 2021, Section 174 of the Internal Revenue Code requires taxpayers to capitalize and amortize research and experimental expenditures over a five-year period for domestic research (fifteen years for foreign research) rather than deducting such costs as incurred. As of December 31, 2025 and 2024, the Company had unamortized capitalized research and development costs of approximately $3,605,000 and $3,153,000, respectively, resulting in a deferred tax asset of approximately $1,009,000 and $662,000, respectively, at the combined federal and state rate of approximately 28%.

At December 31, 2025 and 2024, the Company had federal net operating loss carryforwards of approximately $4,491,000 and $4,110,000, respectively, and state net operating loss carryforwards of approximately $8,489,000 and $8,109,000, respectively. Federal net operating losses generated after 2017 have no expiration but are limited to 80% of taxable income in any given year. California net operating losses carry forward for 20 years and expire on various dates through 2045.

At December 31, 2025 and 2024, the Company had federal research and development tax credit carryforwards of approximately $21,000. Federal R&D credits carry forward for 20 years.

------

At December 31, 2025 and 2024, the applicable combined federal and state rate used in calculating the deferred tax provision was approximately 28% for each year. The difference between the effective tax rate and the statutory rate is primarily due to a full valuation allowance on the net deferred tax assets.

The Company is subject to taxation in the United States and files tax returns in the U.S. federal jurisdiction and the State of California. The Company is subject to U.S. federal, state, and local income tax examinations by tax authorities for all periods since inception. The Company is not currently under examination by any tax authority.

*Provision for Income Taxes*

The provision for income taxes for the years ended December 31, 2025 and 2024 consists of the following (in dollars):

---

| | | |
|:---|:---|:---|
|  | **Years Ended** | **Years Ended** |
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Current - Federal | $-  | $-  |
| Current - State | -  | -  |
| Deferred - Federal | (339402)  | (17709)  |
| Deferred - State | (326549)  | (44225)  |
| Change in valuation allowance | 665951  | 61934  |
| Total provision | $-  | $-  |

---

*Effective Tax Rate Reconciliation*

A reconciliation of the statutory federal income tax rate to the effective tax rate is as follows:

---

| | | |
|:---|:---|:---|
|  | **Years Ended** | **Years Ended** |
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Statutory federal rate | 21.0% | 21.0% |
| State taxes, net of federal | 7.0% | 7.0% |
| Permanent differences | (13.3%) | 9,857.9% |
| Other | 0.1% | (2,105.3%) |
| Change in valuation allowance | (14.7%) | (7,780.6%) |
| Effective tax rate | 0.0% | 0.0% |

---

*Deferred Tax Assets and Liabilities*

Significant components of the Company's deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows (in dollars):

---

| | | |
|:---|:---|:---|
|  | **Years Ended** | **Years Ended** |
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capitalized R&D (Sec 174) | $1008696  | $662108  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net operating loss carryforwards | 1535923  | 1429454  |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 154032  | 27564  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other (state taxes, credits, charitable) | 21333  | 21334  |
| Total deferred tax assets | 2719984  | 2140460  |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | (4903)  | (12845)  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrual-to-cash adjustment | (358)  | (78843)  |
| Net deferred tax asset before valuation allowance | 2714723  | 2048772  |
| &nbsp;&nbsp;&nbsp;&nbsp;Valuation allowance | (2714723)  | (2048772)  |
| Net deferred tax asset | $-  | $-  |

---

------

*Valuation Allowance Roll forward*

The following is a roll forward of the Company's valuation allowance for the years ended December 31, 2025 and 2024 (in dollars):

---

| | | |
|:---|:---|:---|
|  | **Years Ended** | **Years Ended** |
|  | **December** | **December** |
|  | **2025** | **2024** |
| Balance, beginning of year | $2048772  | $1986838  |
| Increase during year | 665951  | 61934  |
| Balance, end of year | $2714723  | $2048772  |

---

**NOTE 11 – Subsequent Events**

Management has evaluated subsequent events through April 30, 2026, the date the financial statements were available to be issued. Events are in the order of occurrence.

On April 21, 2026, warrants to purchase 284,535 shares of Class A Common Stock were issued to Craig Stevens and warrants to purchase 39,116 shares of Class A Common Stock were issued to David Adams. The warrants purchase price was $0.49 per share and will vest over one year with a six-year contractual term. To assist with the Company's cash flow needs, neither Mr. Adams nor Mr. Stevens has taken his full salary during the past two years. The warrants were awarded as compensation for their reduction in salary.

On April 21, 2026, as part of employee incentives, the Company granted options to purchase an aggregate of 57,941 shares of Class A Common Stock, with a weighted average exercise price of $0.49 per share. The options will vest over four years with a 10-year contractual term.

Except as noted above, there have been no additional events or transactions during this time which would have a material effect on these financial statements.

------

**ITEM 8. EXHIBITS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 Second Amended and Restated Certificate of Incorporation of Parallel Flight Technologies, Inc. (incorporated by reference to Exhibit 2.1 to the Amendment to Offering Statement on Form 1-A filed on August 14, 2020 – File No. 024-11247)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Bylaws of Parallel Flight Technologies, Inc. (incorporated by reference to Exhibit 2.2 to the Amendment to Offering Statement on Form 1-A filed on August 14, 2020 – File No. 024-11247)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 [Form of Parallel Flight Technologies, Inc. Stock Option Award Agreement](pft_ex3z1.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 [Form of Parallel Flight Technologies, Inc. Warrant](pft_ex3z2.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 [Third Party Secured Term Loan Agreement](pft_ex3z3.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 Form of Subscription Agreement (incorporated by reference to Exhibit 4.1 to the Amendment to Offering Statement on Form 1-A filed on August 14, 2020 – File No. 024-11247)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 Transfer Agent Agreement with StartEngine Secure (incorporated by reference to Exhibit 6.1 to the Amendment to Offering Statement on Form 1-A filed on August 14, 2020 – File No. 024-11247)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 Quotation Agreement with StartEngine Primary, LLC (incorporated by reference to Exhibit 6.4 included within the Offering Statement Supplement on Form 253(g)(2) filed on November 12, 2020 – File No. 024-11247)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 [SBIR Phase II Contract with the Office of Naval Research](pft_ex6z3.htm)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 Escrow Services Agreement (incorporated by reference to Exhibit 8.1 to the Amendment to Offering Statement on Form 1-A filed on August 14, 2020 – File No. 024-11247)

------

**SIGNATURES**

Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| PARALLEL FLIGHT TECHNOLOGIES, INC. | PARALLEL FLIGHT TECHNOLOGIES, INC. |
| By: | /s/ Craig Stevens |
| Name: | Craig Stevens |
| Title: | Chief Executive Officer and  |
|  | Chief Financial Officer |
| Date: | April 30, 2026 |

---

Pursuant to the requirements of Regulation A, this report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated.

---

| |
|:---|
| /s/ Craig Stevens |
| Craig Stevens |
| Chief Executive Officer and Chief  |
| Financial Officer *(Principal Executive Officer,* <br>*Principal Financial Officer, and Principal* <br>*Accounting Officer)*, and Director |
| Date: April 30, 2026 |
| /s/ Robert Hulter |
| Robert Hulter |
| Director |
| Date: April 30, 2026 |
| /s/ David Adams |
| David Adams |
| Director |
| Date: April 30, 2026 |

---

------

## Ex1K-3

**PARALLEL FLIGHT TECHNOLOGIES, INC.**

**STOCK OPTION GRANT NOTICE**<br>**(2020 EQUITY INCENTIVE PLAN)**

**PARALLEL FLIGHT TECHNOLOGIES, INC.** (the "***Company***"), pursuant to its 2020 Equity Incentive Plan (the "***Plan***"), hereby grants to Optionholder an option to purchase the number of shares of the Company's Class A Common Stock set forth below. This option is subject to all of the terms and conditions as set forth in this notice, in the Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein (including in Section 18 below) but defined in the Plan or the Option Agreement will have the same definitions as in the Plan or the Option Agreement. If there is any conflict between the terms in this notice and the Plan, the terms of the Plan will control.

---

| |
|:---|
| Optionholder: |
| Date of Grant: |
| Vesting Commencement Date: |
| Number of Shares Subject to Option: |
| Exercise Price (Per Share): |
| Total Exercise Price: |
| Expiration Date: |

---

**Type of Grant:**⌧ Incentive Stock Option<sup>[<sup>1</sup>](#_ftnf1)</sup> ◻ Nonstatutory Stock Option

**Exercise Schedule**:⌧ Same as Vesting Schedule ◻ Early Exercise Permitted

**Vesting Schedule**: Subject to Section 8 of the Plan, one-fourth **(**1/4<sup>th</sup>) of the shares vest one year after the Vesting Commencement Date; the balance of the shares vest in a series of 36 successive equal monthly installments measured from the first anniversary of the Vesting Commencement Date, on the same day of the month as the Vesting Commencement Date (or the last day of the month, if a particular month does not have a corresponding day in such month), in each case subject to Optionholder's Continuous Service as of each such date.

**Payment:** By one or a combination of the following items (described in the Option Agreement):

⌧ By cash, check, bank draft or money order payable to the Company

◻Pursuant to a Regulation T Program if the shares are publicly traded

◻By delivery of already-owned shares if the shares are publicly traded

◻If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company's consent at the time of exercise, by a "net exercise" arrangement

------

<sup>[<sup>1</sup>](#_ftnb1)</sup> If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first *exercisable* for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option.

------

**Additional Terms/Acknowledgements:** Option holder acknowledges receipt of, and understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan. Optionholder acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement may not be modified, amended or revised except as provided in the Plan. Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan set forth the entire understanding between Optionholder and the Company regarding this option award and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception of (i) options previously granted and delivered to Optionholder, and (ii) the following agreements only. This Stock Option Grant Notice and any notices, agreements or other documents related thereto may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

**OTHER AGREEMENTS:**<br>

By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

---

| | |
|:---|:---|
| **PARALLEL FLIGHT TECHNOLOGIES, INC.**<br> By: <br> Signature<br> Title: CEO <br> Email: <br> Date:  | **OPTIONHOLDER:**<br>Signature<br> Email: <br> Date:  |

---

**ATTACHMENTS**: Option Agreement, 2020 Equity Incentive Plan and Notice of Exercise.

------

**ATTACHMENT I**

**OPTION AGREEMENT**

------

 **PARALLEL FLIGHT TECHNOLOGIES, INC.**

**2020 EQUITY INCENTIVE PLAN**<br>**OPTION AGREEMENT**

**(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)**

Pursuant to your Stock Option Grant Notice ("***Grant Notice***") and this Option Agreement, **PARALLEL FLIGHT TECHNOLOGIES, INC.** (the "***Company***") has granted you an option under its 2020 Equity Incentive Plan (the "***Plan***") to purchase the number of shares of the Company's Class A Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. The option is granted to you effective as of the date of grant set forth in the Grant Notice (the "***Date of Grant***"). If there is any conflict between the terms in this Option Agreement and the Plan, the terms of the Plan will control. Capitalized terms not explicitly defined in this Option Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan.

The details of your option, in addition to those set forth in the Grant Notice and the Plan, are as follows:

1.**VESTING**. Your option will vest as provided in your Grant Notice. Vesting will cease upon the termination of your Continuous Service. In the event your regular level of time commitment in the performance of your services for the Company and any Affiliates is reduced (for example, and without limitation, if you are an Employee or Consultant of the Company and you have a change in status from a full-time status to part-time status, or absent a change in status, routinely perform services at less than the status you enjoy on the date of grant of any Award made to you, or you take an extended leave of absence) after the date of grant of any Award to you, the Board has the right in its sole discretion to (x) make a corresponding reduction in the number of shares subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (y) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, by accepting the Award you are agreeing that you will have no right with respect to any portion of the Award that is so reduced or extended.

2.**NUMBER OF SHARES AND EXERCISE PRICE**. The number of shares of Class A Common Stock subject to your option and your exercise price per share in your Grant Notice will be adjusted for Capitalization Adjustments.

3.**EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES**. If you are an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended (that is, a "***Non-Exempt Employee***"), and except as otherwise provided in the Plan, you may not exercise your option until you have completed at least six months of Continuous Service measured from the Date of Grant, even if you have already been an employee for more than six months. Consistent with the provisions of the Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six month anniversary in the case of (i) your death or disability, (ii) a Corporate Transaction in which your option is not assumed, continued or substituted, (iii) a Change in Control or (iv) your termination of Continuous Service on your "retirement" (as defined in the Company's benefit plans).

------

4.**EXERCISE PRIOR TO VESTING ("EARLY EXERCISE")**. If permitted in your Grant Notice (*i.e.*, the "Exercise Schedule" indicates "Early Exercise Permitted") and subject to the provisions of your option, you may elect at any time that is both (i) during the period of your Continuous Service and (ii) during the term of your option, to exercise all or part of your option, including the unvested portion of your option; *provided, however,* that:

(a)a partial exercise of your option will be deemed to cover first vested shares of Class A Common Stock and then the earliest vesting installment of unvested shares of Class A Common Stock;

(b)any shares of Class A Common Stock so purchased from installments that have not vested as of the date of exercise will be subject to the purchase option in favor of the Company as described in the Company's form of Early Exercise Stock Purchase Agreement;

(c)you will enter into the Company's form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in the same vesting as if no early exercise had occurred; and

(d)if your option is an Incentive Stock Option, then, to the extent that the aggregate Fair Market Value (determined at the Date of Grant) of the shares of Common Stock with respect to which your option plus all other Incentive Stock Options you hold are exercisable for the first time by you during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, your option(s) or portions thereof that exceed such limit (according to the order in which they were granted) will be treated as Nonstatutory Stock Options.

5.**METHOD OF PAYMENT**. You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner ***permitted by your Grant Notice,*** which may include one or more of the following:

(a)Provided that at the time of exercise the Class A Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Class A Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. This manner of payment is also known as a "broker-assisted exercise", "same day sale", or "sell to cover".

(b)Provided that at the time of exercise the Class A Common Stock is publicly traded, by delivery to the Company (either by actual delivery or attestation) of already-owned shares of Class A Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise. "Delivery" for these purposes, in the sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such shares of Class A Common Stock in a form approved by the Company. You may not exercise your option by delivery to the Company of Class A Common Stock if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company's stock.

(c)If this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a "net exercise" arrangement pursuant to which the Company will reduce the number of shares of Class A Common Stock issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price. You

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must pay any remaining balance of the aggregate exercise price not satisfied by the "net exercise" in cash or other permitted form of payment. Shares of Class A Common Stock will no longer be outstanding under your option and will not be exercisable thereafter if those shares (i) are used to pay the exercise price pursuant to the "net exercise," (ii) are delivered to you as a result of such exercise, and (iii) are withheld to satisfy your tax withholding obligations.

6.**WHOLE SHARES**. You may exercise your option only for whole shares of Class A Common Stock.

7.**SECURITIES LAW COMPLIANCE**. In no event may you exercise your option unless the shares of Class A Common Stock issuable upon exercise are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the issuance of the shares would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations. In the event the shares subject to this option have not been registered under the Securities Act at the time this option is exercised, you shall, if required by the Company, concurrently with the exercise of all or any portion of this option, deliver to the Company your Investment Representation Statement in the form attached hereto as Attachment IV.

8.**TERM**. You may not exercise your option before the Date of Grant or after the expiration of the option's term. Except as set forth in your Grant Notice, the term of your option expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:

(a)immediately upon the termination of your Continuous Service for Cause;

(b)six (6) months after the termination of your Continuous Service for any reason other than Cause, your Disability or your death (except as otherwise provided in Section 8(d) below); *provided, however,* that if during any part of such six (6) month period your option is not exercisable solely because of the condition set forth in the section above relating to "Securities Law Compliance," your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of six months after the termination of your Continuous Service; *provided further,* that if (i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates within six months after the Date of Grant, and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your option will not expire until the earlier of (x) the later of (A) the date that is seven months after the Date of Grant, and (B) the date that is six months after the termination of your Continuous Service, and (y) the Expiration Date;

(c)12 months after the termination of your Continuous Service due to your Disability (except as otherwise provided in Section 8(d)) below;

(d)18 months after your death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates for any reason other than Cause;

(e)the Expiration Date indicated in your Grant Notice; or

(f)the day before the 10<sup>th</sup> anniversary of the Date of Grant.

If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the Date of Grant and ending on the day three months before the date of your option's exercise, you must be an

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employee of the Company or an Affiliate, except in the event of your death or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three months after the date your employment with the Company or an Affiliate terminates.

**9.** **EXERCISE**.

(a)You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require **(including, without limitation, any voting agreement or other agreement between the Company and certain of its stockholders)**.

(b)By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising in connection with this option, including without limitation by reason of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Class A Common Stock are subject at the time of exercise, or (iii) the disposition of shares of Class A Common Stock acquired upon such exercise.

(c)If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within 15 days after the date of any disposition of any of the shares of the Class A Common Stock issued upon exercise of your option that occurs within two years after the Date of Grant or within one year after such shares of Class A Common Stock are transferred upon exercise of your option.

(d)By exercising your option you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Class A Common Stock or other securities of the Company held by you, for a period of 180 days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rule or regulation (the "***Lock-Up Period***"); *provided, however*, that nothing contained in this section will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Class A Common Stock until the end of such period. You also agree that any transferee of any shares of Class A Common Stock (or other securities) of the Company held by you will be bound by this Section 9(d). The underwriters of the Company's stock are intended third party beneficiaries of this Section 9(d) and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

10.**TRANSFERABILITY**. Except as otherwise provided in this Section 10, your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you. Until the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, or after the Board determines that it is, will, or may no longer be relying upon the exemption from registration of options under the Exchange Act as set forth in Rule 12h-1(f) promulgated

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under the Exchange Act (the "***Reliance End Date***"), you will not transfer this option or, prior to exercise, the shares subject to this option, in any manner other than (i) to persons who are "family members" (as defined in Rule 701I(3) of the Securities Act) through gifts or domestic relations orders, or (ii) your executor or guardian upon your death or disability. Until the Reliance End Date, this option and, prior to exercise, the shares subject to this option, may not be pledged, hypothecated or otherwise transferred or disposed of, including by entering into any short position, any "put equivalent position" or any "call equivalent position" (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively), other than as permitted in clauses (i) and (ii) of this paragraph.

(a)**Certain Trusts**. Upon receiving written permission from the Board or its duly authorized designee, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the option is held in the trust. You and the trustee must enter into transfer and other agreements required by the Company.

(b)**Domestic Relations Orders.** Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this option with the Company prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital settlement agreement. If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(c)**Beneficiary Designation**. Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a third party who, on your death, will thereafter be entitled to exercise this option and receive the Class A Common Stock or other consideration resulting from such exercise. In the absence of such a designation, your executor or administrator of your estate will be entitled to exercise this option and receive, on behalf of your estate, the Class A Common Stock or other consideration resulting from such exercise.

11.**RIGHT OF FIRST REFUSAL**. Shares of Class A Common Stock that you acquire upon exercise of your option are subject to any right of first refusal that may be described in the Plan and in the Company's bylaws in effect at such time the Company elects to exercise its right; *provided, however,* that if your option is an Incentive Stock Option and the right of first refusal described in the Plan or the Company's bylaws in effect at the time the Company elects to exercise its right is more beneficial to you than the right of first refusal described in the Plan or the Company's bylaws on the Date of Grant, then the right of first refusal described in the Plan or the Company's bylaws on the Date of Grant shall apply. Shares of Class A Common Stock (vested and unvested) that you acquire upon exercise of your option are also subject to any right of first refusal described in the Plan's Restricted Stock Purchase Agreement, if applicable. The Company's rights of first refusal shall expire on the first date upon which the shares of Class A Common Stock subject to the Award is listed (or approved for listing) upon notice of issuance on a national securities exchange or quotation system.

12.**RIGHT OF REPURCHASE**. To the extent provided in the Plan or the Company's bylaws in effect at such time the Company elects to exercise its right, the Company shall have the right to repurchase all or any part of the shares of Class A Common Stock you acquire pursuant to the exercise of your option.

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13.**OPTION NOT A SERVICE CONTRACT**. Your option is not an employment or service contract, and nothing in your option will be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option will obligate the Company or an Affiliate, their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

**14.** **WITHHOLDING OBLIGATIONS.**

(a)At the time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a "same day sale" pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.

(b)If this option is a Nonstatutory Stock Option, then upon your request and subject to approval by the Company, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Class A Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Class A Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of your option as a liability for financial accounting purposes). If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Class A Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option. Notwithstanding the filing of such election, shares of Class A Common Stock shall be withheld solely from fully vested shares of Class A Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility.

(c)You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation to issue a certificate for such shares of Class A Common Stock or release such shares of Class A Common Stock from any escrow provided for herein, if applicable, unless such obligations are satisfied.

15.**TAX CONSEQUENCES**. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular, you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the Grant Notice is at least equal to the "fair market value" per share of the Class A Common Stock on the Date of Grant and there is no other impermissible deferral of compensation associated with the option. Because the Class A Common Stock is not traded on an established securities market, the Fair Market Value is determined by the Board, perhaps in consultation with an independent valuation firm retained by the Company. You acknowledge that there is no guarantee that the Internal Revenue Service will agree with the valuation as determined by the Board, and you will not make any claim against the

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Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts that the valuation determined by the Board is less than the "fair market value" as subsequently determined by the Internal Revenue Service. You agree that if the Internal Revenue Service determines that the option was granted with a per share exercise price that was less than the fair market value of a share on the date of grant, you will be solely responsible for your costs related to such a determination.

16.**NOTICES**. Any notices provided for in your option or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

17.**GOVERNING PLAN DOCUMENT**. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. If there is any conflict between the provisions of your option and those of the Plan, the provisions of the Plan will control.

18.**CERTAIN DEFINITIONS**.

a."***Affiliate***" means, at the time of determination, any "parent" or "majority-owned subsidiary" of the Company, as such terms are defined in Rule 405 promulgated under the Securities Act. The Board will have the authority to determine the time or times at which "parent" or "majority-owned subsidiary" status is determined within the foregoing definition.

b."***Capitalization Adjustment***" means any change that is made in, or other events that occur with respect to, the Class A Common Stock subject to the Plan or subject to any Award without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure, or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

c."***Continuous Service***" means that your service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which you render service to the Company or an Affiliate as an Employee, Director or Consultant or a change in the entity for which you render such service, provided that there is no interruption or termination of your service with the Company or an Affiliate, will not terminate your Continuous Service; *provided, however*, that if the entity for which you are rendering services ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, your Continuous Service will be considered to have terminated on the date such entity ceases to qualify as an

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Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party's sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company's leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to you, or as otherwise required by law.

d."***Corporate Transaction***" means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i)a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its subsidiaries;

(ii)a sale or other disposition of more than 50% of the outstanding securities of the Company;

(iii)a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

(iv)a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

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**ATTACHMENT II**

**2020 EQUITY INCENTIVE PLAN**

***[ATTACHED AT END OF THIS DOCUMENT]***

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**ATTACHMENT III**

**NOTICE OF EXERCISE**

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**PARALLEL FLIGHT TECHNOLOGIES, INC.NOTICE OF EXERCISE**

Parallel Flight Technologies, Inc.

450 McQuaide Drive

La Selva Beach, CA 95076

Date of Exercise: _______________

This constitutes notice to **PARALLEL FLIGHT TECHNOLOGIES, INC.** (the "***Company***") under my stock option that I elect to purchase the below number of shares of Class A Common Stock of the Company (the "***Shares***") for the price set forth below. Capitalized terms not explicitly defined herein but defined in the Company's 2020 Equity Incentive Plan (the "***Plan***") or the option agreement governing this option will have the same definitions as in the Plan or option agreement, as applicable.

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| | | |
|:---|:---|:---|
| Type of option (check one): | Incentive ◻ | Nonstatutory ◻ |
| Stock option dated: | _______________ | _______________ |
| Number of Shares as<br>to which option is<br>exercised: | _______________ | _______________ |
| Certificates to be issued in name of: | _______________ | _______________ |
| Total exercise price: | $______________ | $______________ |
| Cash payment delivered<br>herewith: | $______________ | $______________ |
| Regulation T Program (cashless exercise) | $______________ | $______________ |
| Value of _________ Shares delivered herewith: | $______________ | $______________ |

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By this exercise, (i) I agree to provide such additional documents as you may require pursuant to the terms of the 2020 Equity Incentive Plan, (ii) I herewith provide you with either the personal information required for the Company to comply with the Corporate Transparency Act's beneficial ownership reporting requirements and authorize the Company to receive, store and file it with the appropriate U.S. government database, or I herewith provide my FinCEN personal identifier number and authorize the Company to receive, store and file it with the appropriate U.S. government database, (iii) I herewith provide for the payment by me to you (in the manner designated by you) of all applicable tax withholding obligations, if any, relating to the exercise of this option, and (iv) if this exercise relates to an incentive stock option, to notify you in writing within 15 days after the date of any disposition of any of the Shares issued upon exercise of this option that occurs within two years after the date of grant of this option or within one year after such Shares are issued upon exercise of this option. I further agree that this Notice of Exercise may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. I acknowledge that I have received, read and

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understood the Plan and option agreement governing the terms of my option and agree to abide by and be bound by their terms and conditions.

I hereby make the following certifications and representations with respect to the number of Shares listed above, which are being acquired by me for my own account upon exercise of the option as set forth above:

I acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the "***Securities Act***"), and are deemed to constitute "restricted securities" under Rule 701 and Rule 144 promulgated under the Securities Act. I warrant and represent to the Company that I have no present intention of distributing or selling said Shares, except as permitted under the Securities Act and any applicable state securities laws.

I further acknowledge and agree that, except for such information as required to be delivered to me by the Company pursuant to the option or the Plan (if any), I will have no right to receive any information from the Company by virtue of the grant of the option or the purchase of shares of Class A Common Stock through exercise of the option, ownership of such shares of Class A Common Stock, or as a result of my being a holder of record of stock of the Company. Without limiting the foregoing, to the fullest extent permitted by law, I hereby waive all inspection rights under Section 220 of the Delaware General Corporation Law and all such similar information and/or inspection rights that may be provided under the law of any jurisdiction, or any federal, state or foreign regulation, that are, or may become, applicable to the Company or the Company's capital stock (the "***Inspection Rights***"). I hereby covenant and agree never to directly or indirectly commence, voluntarily aid in any way, prosecute, assign, transfer, or cause to be commenced any claim, action, cause of action, or other proceeding to pursue or exercise the Inspection Rights.

I further acknowledge that I will not be able to resell the Shares for at least 90 days after the stock of the Company becomes publicly traded (*i.e.,* subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that more restrictive conditions apply to affiliates of the Company under Rule 144.

I further acknowledge that all certificates representing any of the Shares subject to the provisions of the option shall have endorsed thereon appropriate legends reflecting the foregoing limitations, as well as any legends reflecting restrictions pursuant to the Company's Certificate of Incorporation, Bylaws and/or applicable securities laws.

I further agree that, if required by the Company (or a representative of the underwriters) in connection with the first underwritten registration of the offering of any securities of the Company under the Securities Act, I will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Class A Common Stock or other securities of the Company for a period of 180 days following the effective date of a registration statement of the Company filed under the Securities Act (or such longer period as the underwriters or the Company shall request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rule or regulation) (the "***Lock-Up Period***"). I further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period.

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I understand that I may suffer adverse tax consequences as a result of my purchase or disposition of the shares. I represent that I have consulted with any tax consultants I deem advisable in connection with the purchase or disposition of the shares and that I am not relying on the Company for any tax advice.

I understand that the Company will not be required (i) to transfer on its books any shares that have been sold or otherwise transferred in violation of any of the provisions of this Notice of Exercise or (ii) to treat as owner of such shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred.

Very truly yours,

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| | |
|:---|:---|
|  | (Signature) |
|  | Name (Please Print) |
| Address of Record: |  |
| &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;&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;Email: |  |

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**ATTACHMENT IV**

**INVESTMENT REPRESENTATION STATEMENT**

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**INVESTMENT REPRESENTATION STATEMENT**

PARTICIPANT :_________________________

COMPANY:PARALLEL FLIGHT TECHNOLOGIES, INC.

SECURITY:CLASS A COMMON STOCK

AMOUNT:_________________________

DATE:_________________________

In connection with the purchase of the above-listed Securities, the undersigned Participant represents to the Company the following:

(a)Participant is aware of the Company's business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Participant is acquiring these Securities for investment for Participant's own account only and not with a view to, or for resale in connection with, any "distribution" thereof within the meaning of the Securities Act of 1933, as amended (the "Securities Act").

(b)Participant acknowledges and understands that the Securities constitute "restricted securities" under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Participant's investment intent as expressed herein. In this connection, Participant understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Participant's representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one (1) year or any other fixed period in the future. Participant further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Participant further acknowledges and understands that the Company is under no obligation to register the Securities. Participant understands that the certificate evidencing the Securities shall be imprinted with any legend required under applicable state securities laws.

(c)Participant is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of "restricted securities" acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to Participant, the exercise shall be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be resold, subject to the satisfaction of the applicable conditions specified by Rule 144, including in the case of affiliates (1) the availability of certain public information about the Company, (2) the amount of Securities being sold during any three (3) month period not exceeding specified limitations, (3) the resale being made in an unsolicited "broker's transaction", transactions directly with a "market maker" or "riskless principal transactions" (as those terms are defined under the Securities Exchange Act of 1934) and (4) the timely filing of a Form 144, if applicable.

In the event that the Company does not qualify under Rule 701 at the time of grant of the option, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which may require (i) the availability of current public information about the Company; (ii) the resale to occur more than a specified period after the purchase and full payment (within the meaning of

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Rule 144) for the Securities; and (iii) in the case of the sale of Securities by an affiliate, the satisfaction of the conditions set forth in sections (2), (3) and (4) of the paragraph immediately above.

(d)Participant further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption shall be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 shall have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Participant understands that no assurances can be given that any such other registration exemption shall be available in such event.

PARTICIPANT

<br> Signature

<br> Print Name

<br> Date

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**ATTACHMENT II**

**2020 EQUITY INCENTIVE PLAN**

***[attached below]***

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**PARALLEL FLIGHT TECHNOLOGIES, INC.**

***2020 EQUITY INCENTIVE PLAN***

1.***Purpose***.

The purpose of the Plan is to advance the interests of the Company's stockholders by enhancing the Company's ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing such persons with equity ownership opportunities and thereby better aligning the interests of such persons with those of the Company's stockholders. Capitalized terms used in the Plan are defined in Section 11 below.

*2.****Eligibility****.* 

Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein.

3.***Administration and Delegation***.

(a)*Administration.*&nbsp;&nbsp;&nbsp;&nbsp;The Plan will be administered by the Administrator. The Administrator shall have authority to determine which Service Providers will receive Awards, to grant Awards and to set all terms and conditions of Awards (including, but not limited to, vesting, exercise and forfeiture provisions). In addition, the Administrator shall have the authority to take all actions and make all determinations contemplated by the Plan and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Administrator may correct any defect or ambiguity, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem necessary or appropriate to carry the Plan and any Awards into effect, as determined by the Administrator. The Administrator shall make all determinations under the Plan in the Administrator's sole discretion and all such determinations shall be final and binding on all persons having or claiming any interest in the Plan or in any Award.

(b)*Appointment of Committees.*&nbsp;&nbsp;&nbsp;&nbsp;To the extent permitted by Applicable Laws, the Board may delegate any or all of its powers under the Plan to one or more Committees. The Board may abolish any Committee at any time and re-vest in itself any previously delegated authority.

4.***Stock Available for Awards***.

(a)*Number of Shares.* Subject to adjustment under Section 8 hereof, Awards may be made under the Plan covering up to 700,000 shares of Class A Common Stock. If any Award expires or lapses or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Class A Common Stock subject to such Award being repurchased by the Company at or below the original issuance price), in any case in a manner that results in any shares of Class A Common Stock covered by such Award not being issued or being so reacquired by the Company, the unused Class A Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. Further, shares of Class A Common Stock delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of Award and/or to satisfy any applicable tax withholding obligation (including shares retained by the Company from the Award being exercised or purchased and/or creating the tax obligation) shall be added to the number of shares of Class A Common Stock available for the grant of Awards under the Plan. However, in the case of Incentive Stock Options (as hereinafter defined), the foregoing provisions shall be subject to any limitations under the Code. Shares of Class A Common Stock issued under the

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Plan may consist in whole or in part of authorized but unissued shares, shares purchased on the open market or treasury shares.

(b)*Substitute Awards*. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Administrator may grant Awards in substitution for any options or other stock or stock-based awards granted prior to such merger or consolidation by such entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Administrator deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan. Substitute Awards shall not count against the overall share limit set forth in Section 4(a) hereof, except as may be required by reason of Section 422 of the Code.

5.***Stock Options***.

(a)*General.*&nbsp;&nbsp;&nbsp;&nbsp;The Administrator may grant Options to any Service Provider, subject to the limitations on Incentive Stock Options described below. The Administrator shall determine the number of shares of Class A Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to Applicable Laws, as it considers necessary or advisable.

(b)*Incentive Stock Options.*&nbsp;&nbsp;&nbsp;&nbsp;The Administrator may grant Options intended to qualify as Incentive Stock Options only to employees of the Company, any of the Company's present or future "parent corporations" or "subsidiary corporations" as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code. All Options intended to qualify as Incentive Stock Options shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. Neither the Company nor the Administrator shall have any liability to a Participant, or any other party, (i) if an Option (or any part thereof) which is intended to qualify as an Incentive Stock Option fails to qualify as an Incentive Stock Option or (ii) for any action or omission by the Administrator that causes an Option not to qualify as an Incentive Stock Option, including without limitation, the conversion of an Incentive Stock Option to a Non-Qualified Stock Option or the grant of an Option intended as an Incentive Stock Option that fails to satisfy the requirements under the Code applicable to an Incentive Stock Option. Any Option that is intended to qualify as an Incentive Stock Option, but fails to so qualify for any reason, including without limitation, the portion of any Option becoming exercisable in excess of the $100,000 limitation described in Treasury Regulation Section 1.422-4, shall be treated as a Non-Qualified Stock Option for all purposes.

(c)*Exercise Price.*&nbsp;&nbsp;&nbsp;&nbsp;The Administrator shall establish the exercise price of each Option and specify the exercise price in the applicable Award Agreement. The exercise price shall be not less than 100% of the Fair Market Value on the date the Option is granted. In the case of an Incentive Stock Option granted to an employee who, at the time of grant of the Option, owns (or is treated as owning under Section 424 of the Code) stock representing more than 10% of the voting power of all classes of stock of the Company (or a "parent corporation" or "subsidiary corporation" thereof within the meaning of Sections 424(e) or 424(f) of the Code, respectively), the per share exercise price shall be no less than 110% of the Fair Market Value on the date the Option is granted.

(d)*Duration of Options.*&nbsp;&nbsp;&nbsp;&nbsp;Each Option shall be exercisable at such times and subject to such terms and conditions as the Administrator may specify in the applicable Award Agreement, provided that the term of any Option shall not exceed ten years. In the case of an Incentive Stock Option granted to an employee who, at the time of grant of the Option, owns (or is treated as owning under Section 424 of the Code) stock representing more than 10% of the voting power of all classes of stock of the Company (or a "parent corporation" or "subsidiary corporation" thereof within the meaning of Sections 424(e) or 424(f) of the Code, respectively), the term of the Option shall not exceed five years.

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(e)*Exercise of Option; Notification of Disposition.*&nbsp;&nbsp;&nbsp;&nbsp;Options may be exercised by delivery to the Company of a written notice of exercise, in a form approved by the Administrator (which may be an electronic form), signed by the person authorized to exercise the Option, together with payment in full (i) as specified in Section 5(f) hereof for the number of shares for which the Option is exercised and (ii) as specified in Section 9(e) hereof for any applicable withholding taxes. Unless otherwise determined by the Administrator, an Option may not be exercised for a fraction of a share of Class A Common Stock. If an Option is designated as an Incentive Stock Option, the Participant shall give prompt notice to the Company of any disposition or other transfer of any shares of Class A Common Stock acquired from the Option if such disposition or transfer is made (i) within two years from the grant date with respect to such Option or (ii) within one year after the transfer of such shares to the Participant (other than any such disposition made in connection with a Change in Control). Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Participant in such disposition or other transfer.

(f)*Payment Upon Exercise.*&nbsp;&nbsp;&nbsp;&nbsp;Class A Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for in cash or by check, payable to the order of the Company, or, to the extent permitted by the Administrator, by:

(i)(A) delivery of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding, or (B) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;

(ii)delivery (either by actual delivery or attestation) of shares of Class A Common Stock owned by the Participant valued at their Fair Market Value, provided (A) such method of payment is then permitted under Applicable Laws, (B) such Class A Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Company at any time, and (C) such Class A Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;

(iii)surrendering shares of Class A Common Stock then issuable upon exercise of the Option valued at their Fair Market Value on the date of exercise;

(iv)delivery of a promissory note of the Participant to the Company on terms determined by the Administrator;

(v)delivery of property of any other kind which constitutes good and valuable consideration as determined by the Administrator; or

(vi)any combination of the above permitted forms of payment (including cash or check).

(g)*Early Exercise of Options*. The Administrator may provide in the terms of an Award Agreement that the Service Provider may exercise an Option in whole or in part prior to the full vesting of the Option in exchange for unvested shares of Restricted Stock with respect to any unvested portion of the Option so exercised. Shares of Restricted Stock acquired upon the exercise of any unvested portion of an Option shall be subject to such terms and conditions as the Administrator shall determine.

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*6.****Restricted Stock; Restricted Stock Units****.*

(a)*General*. The Administrator may grant Restricted Stock, or the right to purchase Restricted Stock, to any Service Provider, subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant (or to require forfeiture of such shares if issued at no cost) in the event that conditions specified by the Administrator in the applicable Award Agreement are not satisfied prior to the end of the applicable restriction period or periods established by the Administrator for such Award. In addition, the Administrator may grant to Service Providers Restricted Stock Units, which may be subject to vesting and forfeiture conditions during applicable restriction period or periods, as set forth in an applicable Award Agreement.

(b) *Terms and Conditions for All Restricted Stock and Restricted Stock Unit Awards*. The Administrator shall determine and set forth in the applicable Award Agreement the terms and conditions applicable to each Restricted Stock and Restricted Stock Unit Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, in each case, if any.

(c)*Additional Provisions Relating to Restricted Stock*.

(i)*Dividends*. Participants holding shares of Restricted Stock will be entitled to all ordinary cash dividends paid with respect to such shares, unless otherwise provided by the Administrator in the applicable Award Agreement. In addition, unless otherwise provided by the Administrator, if any dividends or distributions are paid in shares, or consist of a dividend or distribution to holders of Class A Common Stock of property other than an ordinary cash dividend, the shares or other property will be subject to the same restrictions on transferability and forfeitability as the shares of Restricted Stock with respect to which they were paid. Each dividend payment will be made as provided in the applicable Award Agreement, but in no event later than the end of the calendar year in which the dividends are paid to stockholders of that class of stock or, if later, the 15th day of the third month following the later of (A) the date the dividends are paid to stockholders of that class of stock, and (B) the date the dividends are no longer subject to forfeiture.

(ii)*Stock Certificates*. The Company may require that any stock certificates issued in respect of shares of Restricted Stock be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or its designee).

(d)*Additional Provisions Relating to Restricted Stock Units*.

(i)*Settlement*. Upon the vesting of a Restricted Stock Unit, the Participant shall be entitled to receive from the Company one share of Class A Common Stock or an amount of cash or other property equal to the Fair Market Value of one share of Class A Common Stock on the settlement date, as provided in the applicable Award Agreement. The Administrator may provide that settlement of Restricted Stock Units shall occur upon or as soon as reasonably practicable after the vesting of the Restricted Stock Units or shall instead be deferred, on a mandatory basis or at the election of the Participant, in a manner that complies with Section 409A.

(ii)*Voting Rights*. A Participant shall have no voting rights with respect to any Restricted Stock Units unless and until shares are delivered in settlement thereof.

(iii)*Dividend Equivalents*. To the extent provided by the Administrator, a grant of Restricted Stock Units may provide a Participant with the right to receive Dividend Equivalents. Dividend Equivalents may be paid currently or credited to an account for the

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Participant, may be settled in cash and/or shares of Class A Common Stock and may be subject to the same restrictions on transfer and forfeitability as the Restricted Stock Units with respect to which paid, as determined by the Administrator, subject, in each case, to such terms and conditions as the Administrator shall establish and set forth in the applicable Award Agreement.

*7.****Other Stock-Based Awards****.* 

Other Stock-Based Awards may be granted hereunder to Participants, including, without limitation, Awards entitling Participants to receive shares of Class A Common Stock to be delivered in the future. Such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan, as stand-alone payments and/or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may be paid in shares of Class A Common Stock, cash or other property, as the Administrator shall determine. Subject to the provisions of the Plan, the Administrator shall determine the terms and conditions of each Other Stock-Based Award, including any purchase price, transfer restrictions, vesting conditions and other terms and conditions applicable thereto, which shall be set forth in the applicable Award Agreement.

*8.****Adjustments for Changes in Class A Common Stock and Certain Other Events****.*

(a)In the event that the Administrator determines that any dividend or other distribution (whether in the form of cash, Class A Common Stock, other securities, or other property), reorganization, merger, consolidation, combination, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of Class A Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Class A Common Stock or other securities of the Company, or other similar corporate transaction or event, as determined by the Administrator, affects the Class A Common Stock such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award, then the Administrator may, in such manner as it may deem equitable, adjust any or all of:

(i)the number and kind of shares of Class A Common Stock (or other securities or property) with respect to which Awards may be granted or awarded (including, but not limited to, adjustments of the limitations in Section 3 hereof on the maximum number and kind of shares which may be issued);

(ii)the number and kind of shares of Class A Common Stock (or other securities or property) subject to outstanding Awards;

(iii)the grant or exercise price with respect to any Award; and

**(iv)**the terms and conditions of any Awards (including, without limitation, any applicable financial or other performance "targets" specified in an Award Agreement).

**(b)**In the event of any transaction or event described in Section 8(a) hereof (including without limitation any Change in Control) or any unusual or nonrecurring transaction or event affecting the Company or the financial statements of the Company, or any change in any Applicable Laws or accounting principles, the Administrator, on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Participant's request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to (i) prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made

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available under the Plan or with respect to any Award granted or issued under the Plan, (ii) to facilitate such transaction or event or (iii) give effect to such changes in Applicable Laws or accounting principles**:** 

(i)To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of such Award or realization of the Participant's rights had such Award been currently exercisable, payable and fully vested, as applicable; provided that, if the amount that could have been obtained upon the exercise or settlement of such Award or realization of the Participant's rights, in any case, is equal to or less than zero, then such Award may be terminated without payment;

(ii)To provide that such Award shall vest and, to the extent applicable, be exercisable as to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award;

(iii)To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and applicable exercise or purchase price, in all cases, as determined by the Administrator;

(iv)To make adjustments in the number and type of shares of Class A Common Stock (or other securities or property) subject to outstanding Awards, and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards which may be granted in the future;

**(v)**To replace such Award with other rights or property selected by the Administrator; and/or

**(vi)**To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable event.

(c)Notwithstanding the provisions of Section 8(b) above, if a Change in Control occurs and a Participant's Awards are not continued, converted, assumed, or replaced with a substantially similar award by (i) the Company, or (ii) a successor entity or its parent or subsidiary (an "***Assumption***"), and provided that the Participant has not had a Termination of Service, then immediately prior to the Change in Control such Awards shall become fully vested, exercisable and/or payable, as applicable, and all forfeiture, repurchase and other restrictions on such Awards shall lapse, in which case, such Awards shall be canceled upon the consummation of the Change in Control in exchange for the right to receive the Change in Control consideration payable to other holders of Class A Common Stock (A) which may be on such terms and conditions as apply generally to holders of Class A Common Stock under the Change in Control documents (including, without limitation, any escrow, earn-out or other deferred consideration provisions) or such other terms and conditions as the Administrator may provide, and (B) determined by reference to the number of shares subject to such Awards and net of any applicable exercise price; provided that to the extent that any Awards constitute "nonqualified deferred compensation" that may not be paid upon the Change in Control under Section 409A without the imposition of taxes thereon under Section 409A, the timing of such payments shall be governed by the applicable Award Agreement (subject to any deferred consideration provisions applicable under the Change in Control documents); and provided, further, that if the amount to which a Participant would be entitled upon the settlement or exercise of such Award at the time of the Change in Control is equal to or less than zero, then such Award may be terminated without payment. The Administrator shall determine whether an Assumption of an Award has occurred in connection with a Change in Control.

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(d)If a Change in Control occurs and a Participant's Awards have been Assumed pursuant to Section 8(c), and, within twelve months following such Change in Control (i) such Participant's employment or service with the Company or a successor entity or its parent or subsidiary is terminated other than for Cause, and other than as a result of Participant's death or Disability, or (ii) such Participant voluntarily terminates his or her employment or service with the Company or a successor entity or its parent or subsidiary with Good Reason, then (A) such Participant's remaining unvested Awards (including any substituted Awards) shall become fully vested, exercisable and/or payable, as applicable, and all forfeiture, repurchase and other restrictions on such Awards (including any substituted Awards) shall lapse, on the date of termination, and (B) with respect to Options then held by such Participant, the Participant shall have a period of six months following the date of his or her Termination of Service (or such longer period as may be set forth in the applicable Award Agreement(s) to exercise such Options, to the extent that he or she was otherwise entitled to exercise such Options on the date of such Termination of Service.

(e)In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in this Section 8, the Administrator will equitably adjust each outstanding Award, which adjustments may include adjustments to the number and type of securities subject to each outstanding Award and/or the exercise price or grant price thereof, if applicable, the grant of new Awards to Participants, and/or the making of a cash payment to Participants, as the Administrator deems appropriate to reflect such Equity Restructuring. The adjustments provided under this Section 8(e) shall be nondiscretionary and shall be final and binding on the affected Participant and the Company; provided that whether an adjustment is equitable shall be determined by the Administrator.

(f)In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Stock or the share price of the Stock, including any Equity Restructuring, for reasons of administrative convenience the Administrator may refuse to permit the exercise of any Award during a period of up to thirty days prior to the consummation of any such transaction.

(g)Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award. The existence of the Plan, any Award Agreements and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, (ii) any merger, consolidation dissolution or liquidation of the Company or sale of Company assets or (iii) any sale or issuance of securities, including without limitation, securities with rights superior to those of the Class A Common Stock or which are convertible into or exchangeable for Class A Common Stock. The Administrator may treat Participants and Awards (or portions thereof) differently under this Section 8.

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*9.****General Provisions Applicable to Awards****.* 

(a)*Transferability of Awards.*&nbsp;&nbsp;&nbsp;&nbsp;Except as the Administrator may otherwise determine or provide in an Award Agreement or otherwise, in any case in accordance with Applicable Laws, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the Participant, shall be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.

(b)*Documentation.*&nbsp;&nbsp;&nbsp;&nbsp;Each Award shall be evidenced in an Award Agreement, which may be in such form (written, electronic or otherwise) as the Administrator shall determine. Each Award may contain terms and conditions in addition to those set forth in the Plan.

(c)*Discretion.*&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award to a Participant need not be identical, and the Administrator need not treat Participants or Awards (or portions thereof) uniformly.

(d)*Termination of Status.*&nbsp;&nbsp;&nbsp;&nbsp;The Administrator shall determine the effect on an Award of the disability, death, retirement, authorized leave of absence or any other change or purported change in a Participant's Service Provider status and the extent to which, and the period during which, the Participant, the Participant's legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable.

(e)*Withholding.*&nbsp;&nbsp;&nbsp;&nbsp;Each Participant shall pay to the Company, or make provision satisfactory to the Administrator for payment of, any taxes required by law to be withheld in connection with Awards to such Participant no later than the date of the event creating the tax liability. Except as the Administrator may otherwise determine, all such payments shall be made in cash or by certified check. Notwithstanding the foregoing, to the extent permitted by the Administrator, Participants may satisfy such tax obligations in whole or in part by delivery of shares of Class A Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value. The Company may, to the extent permitted by Applicable Laws, deduct any such tax obligations from any payment of any kind otherwise due to a Participant.

(f)*Amendment of Award.*&nbsp;&nbsp;&nbsp;&nbsp;The Administrator may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or settlement, and converting an Incentive Stock Option to a Non-Qualified Stock Option. The Participant's consent to such action shall be required unless (i) the Administrator determines that the action, taking into account any related action, would not materially and adversely affect the Participant, or (ii) the change is permitted under Section 8 and 10(f) hereof.

(g)*Conditions on Delivery of Stock.*&nbsp;&nbsp;&nbsp;&nbsp;The Company will not be obligated to deliver any shares of Class A Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company's counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Administrator deems necessary or appropriate to satisfy the requirements of any Applicable Laws. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is determined by the Administrator to be necessary to the lawful issuance and sale of any

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securities hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained.

(h)*Acceleration.*&nbsp;&nbsp;&nbsp;&nbsp;The Administrator may at any time provide that any Award shall become immediately vested and/or exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.

*10.****Miscellaneous****.* 

(a)*No Right To Employment or Other Status.* No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided in an applicable Award Agreement.

(b)*No Rights As Stockholder; Certificates.* Subject to the provisions of the applicable Award Agreement, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Class A Common Stock to be distributed with respect to an Award until becoming the record holder of such shares. Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any Applicable Laws, the Company shall not be required to deliver to any Participant certificates evidencing shares of Class A Common Stock issued in connection with any Award and instead such shares of Class A Common Stock may be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator). The Company may place legends on stock certificates issued under the Plan deemed necessary or appropriate by the Administrator in order to comply with Applicable Laws.

(c)*Effective Date and Term of Plan.*&nbsp;&nbsp;&nbsp;&nbsp;The Plan shall become effective on the date on which it is adopted by the Board. No Awards shall be granted under the Plan after the completion of ten years from the earlier of (i) the date on which the Plan was adopted by the Board or (ii) the date the Plan was approved by the Company's stockholders, but Awards previously granted may extend beyond that date in accordance with the terms of the Plan.

(d)*Amendment of Plan.*&nbsp;&nbsp;&nbsp;&nbsp;The Administrator may amend, suspend or terminate the Plan or any portion thereof at any time; provided that no amendment of the Plan shall materially and adversely affect any Award outstanding at the time of such amendment without the consent of the affected Participant. Awards outstanding under the Plan at the time of any suspension or termination of the Plan shall continue to be governed in accordance with the terms of the Plan and the applicable Award Agreement, as in effect prior to such suspension or termination. The Board shall obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.

(e)*Provisions for Foreign Participants*. The Administrator may modify Awards granted to Participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan to address differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.

(f)*Section 409A*.

(i)*General*. The Company intends that all Awards be structured in compliance with, or to satisfy an exemption from, Section 409A, such that no adverse tax consequences, interest, or penalties under Section 409A apply in connection with any Awards. Notwithstanding anything herein or in any Award Agreement to the contrary, the Administrator

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may, without a Participant's prior consent, amend this Plan and/or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and actions with retroactive effect) as are necessary or appropriate to preserve the intended tax treatment of Awards under the Plan, including without limitation, any such actions intended to (A) exempt this Plan and/or any Award from the application of Section 409A, and/or (B) comply with the requirements of Section 409A, including without limitation any such regulations, guidance, compliance programs and other interpretative authority that may be issued after the date of grant of any Award. The Company makes no representations or warranties as to the tax treatment of any Award under Section 409A or otherwise. The Company shall have no obligation under this Section 10(f) or otherwise to take any action (whether or not described herein) to avoid the imposition of taxes, penalties or interest under Section 409A with respect to any Award and shall have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute non-compliant, "nonqualified deferred compensation" subject to the imposition of taxes, penalties and/or interest under Section 409A.

(ii)*Separation from Service*. With respect to any Award that constitutes "nonqualified deferred compensation" under Section 409A, any payment or settlement of such Award that is to be made upon a termination of a Participant's Service Provider relationship shall, to the extent necessary to avoid the imposition of taxes under Section 409A, be made only upon the Participant's "separation from service" (within the meaning of Section 409A), whether such "separation from service" occurs upon or subsequent to the termination of the Participant's Service Provider relationship. For purposes of any such provision of this Plan or any Award Agreement relating to any such payments or benefits, references to a "termination," "termination of employment" or like terms shall mean "separation from service."

(iii)*Payments to Specified Employees*. Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of "nonqualified deferred compensation" that are otherwise required to be made under an Award to a "specified employee" (as defined under Section 409A and determined by the Administrator) as a result of his or her "separation from service" shall, to the extent necessary to avoid the imposition of taxes under Code Section 409A(a)(2)(B)(i), be delayed until the expiration of the six-month period immediately following such "separation from service" (or, if earlier, until the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award agreement) on the day that immediately follows the end of such six-month period or as soon as administratively practicable thereafter (without interest). Any payments of "nonqualified deferred compensation" under such Award that are, by their terms, payable more than six months following the Participant's "separation from service" shall be paid at the time or times such payments are otherwise scheduled to be made.

(g)*Limitations on Liability*. Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, other employee or agent of the Company will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award, nor will such individual be personally liable with respect to the Plan because of any contract or other instrument he or she executes in his or her capacity as an Administrator, director, officer, other employee or agent of the Company. The Company will indemnify and hold harmless each director, officer, other employee and agent of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been or will be granted or delegated, against any cost or expense (including attorneys' fees) or liability (including any sum paid in settlement of a claim with the Administrator's approval) arising out of any act or omission to act concerning this Plan unless arising out of such person's own fraud or bad faith.

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**(h)***Lock-Up Period*. The Company may, at the request of any representative of the underwriters (the "***Managing Underwriter***") or otherwise, in connection with any registration of the offering of any securities of the Company under the Securities Act, prohibit Participants from, directly or indirectly, selling or otherwise transferring any shares of Class A Common Stock or other securities of the Company during a period of up to one hundred eighty days following the effective date of a registration statement of the Company filed under the Securities Act.

**(i)***Right of First Refusal*.

(i)Before any shares of Class A Common Stock held by a Participant or any permitted transferee (each, a "***Holder***") may be sold, pledged, assigned, hypothecated, transferred, or otherwise disposed of (each, a "***Transfer***"), the Company or its assignee(s) shall have a right of first refusal to purchase the shares of Class A Common Stock proposed to be Transferred on the terms and conditions set forth in this Section 10(i) (the "***Right of First Refusal***"). In the event that the Company's charter, bylaws and/or a stockholders' agreement applicable to the shares of Class A Common Stock contain a right of first refusal with respect to the shares of Class A Common Stock, such right of first refusal shall apply to the shares of Class A Common Stock to the extent such provisions are more restrictive than the Right of First Refusal set forth in this Section 10(i) and the Right of First Refusal set forth in this Section 10(i) shall not in any way restrict the operation of the Company's charter, bylaws or the operation of any applicable stockholders' agreement.

(ii)In the event any Holder desires to Transfer any shares of Class A Common Stock, the Holder shall deliver to the Company a written notice (the "***Notice***") stating: (A) the Holder's bona fide intention to sell or otherwise Transfer such shares of Class A Common Stock; (B) the name of each proposed purchaser or other transferee ("***Proposed Transferee***"); (C) the number of shares of Class A Common Stock to be Transferred to each Proposed Transferee; and (D) the price for which the Holder proposes to Transfer the shares of Class A Common Stock (the "***Offered Price***"), and the Holder shall offer such shares of Class A Common Stock at the Offered Price to the Company or its assignee(s).

(iii)Within twenty-five days after receipt of the Notice, the Company and/or its assignee(s) may elect in writing to purchase all, but not less than all, of the shares of Class A Common Stock proposed to be Transferred to any one or more of the Proposed Transferees by delivery of a written exercise notice to the Holder (a "***Company Notice***"). The purchase price ("***Purchase Price***") for the shares of Class A Common Stock repurchased under this Section 10(i) shall be the Offered Price.

(iv)Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check or wire transfer), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof, within five days after delivery of the Company Notice or in the manner and at the times mutually agreed to by the Company and the Holder. Should the Offered Price specified in the Notice be payable in property other than cash, the Company or its assignee shall have the right to pay the purchase price in the form of cash equal in amount to the value of such property, as determined by the Administrator.

(v)If all or a portion of the shares of Class A Common Stock proposed in the Notice to be Transferred are not purchased by the Company and/or its assignee(s) as provided in this Section 10(i), then the Holder may sell or otherwise Transfer such shares of Class A Common Stock to that Proposed Transferee at the Offered Price or at a higher price; provided that such sale or other Transfer is consummated within sixty days after the date of the Notice; and

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provided, further, that any such sale or other Transfer is effected in accordance with any Applicable Laws and the Proposed Transferee agrees in writing that the provisions of this Plan and the applicable Award Agreement and any other applicable agreements governing the shares of Class A Common Stock to be Transferred shall continue to apply to the shares of Class A Common Stock in the hands of such Proposed Transferee. If the shares of Class A Common Stock described in the Notice are not Transferred to the Proposed Transferee within such sixty-day period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal, as provided herein, before any shares of Class A Common Stock held by the Holder may be sold or otherwise Transferred.

(vi)Anything to the contrary contained in this Section 10(i) notwithstanding and to the extent permitted by the Administrator, the Transfer of any or all of the shares of Class A Common Stock during a Participant's lifetime or upon a Participant's death by will or intestacy to the Participant's Immediate Family or a trust for the benefit of the Participant's Immediate Family shall be exempt from the Right of First Refusal. As used herein, "***Immediate Family***" shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister or stepchild (whether or not adopted). In such case, the transferee or other recipient shall receive and hold the shares of Class A Common Stock so Transferred subject to the provisions of this Plan (including the Right of First Refusal), the applicable Award Agreement and any other applicable agreements governing the shares of Class A Common Stock to be Transferred, and there shall be no further Transfer of such shares of Class A Common Stock except in accordance with the terms of this Section 10(i) (or otherwise as expressly provided under the Plan).

(vii)The Right of First Refusal shall terminate as to all shares of Class A Common Stock if the Company becomes a Publicly Listed Company upon such occurrence.

(j)*Data Privacy*. As a condition of receipt of any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this paragraph by and among, as applicable, the Company and its subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing the Participant's participation in the Plan. The Company and its subsidiaries and affiliates may hold certain personal information about a Participant, including but not limited to, the Participant's name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), any shares of stock held in the Company or any of its subsidiaries and affiliates, details of all Awards, in each case, for the purpose of implementing, managing and administering the Plan and Awards (the "***Data***"). The Company and its subsidiaries and affiliates may transfer the Data amongst themselves as necessary for the purpose of implementation, administration and management of a Participant's participation in the Plan, and the Company and its subsidiaries and affiliates may each further transfer the Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the Participant's country, or elsewhere, and the Participant's country may have different data privacy laws and protections than the recipients' country. Through acceptance of an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant's participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or the Participant may elect to deposit any shares of Class A Common Stock. The Data related to a Participant will be held only as long as is necessary to implement, administer, and manage the Participant's participation in the Plan. A Participant may, at any time, view the Data held by the Company with respect to such Participant, request additional information about the storage and processing of the Data with respect to such Participant, recommend any necessary corrections to the Data with respect to the Participant or refuse or withdraw the consents herein in writing, in any case without

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cost, by contacting his or her local human resources representative. The Company may cancel Participant's ability to participate in the Plan and, in the Administrator's discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws his or her consents as described herein. For more information on the consequences of refusal to consent or withdrawal of consent, Participants may contact their local human resources representative.

**(k)***Severability*.

&nbsp;&nbsp;&nbsp;&nbsp;In the event any portion of the Plan or any action taken pursuant thereto shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provisions had not been included, and the illegal or invalid action shall be null and void.

**(l)***Governing Documents*.

&nbsp;&nbsp;&nbsp;&nbsp;In the event of any contradiction between the Plan and any Award Agreement or any other written agreement between a Participant and the Company or any Subsidiary of the Company that has been approved by the Administrator, the terms of the Plan shall govern, unless it is expressly specified in such Award Agreement or other written document that a specific provision of the Plan shall not apply.

(m)*Governing Law*. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of California, disregarding choice-of-law principles of the law of any state that would require the application of the laws of a jurisdiction other than such state.

(n)*Restrictions on Shares*. Shares of Class A Common Stock acquired in respect of Awards shall be subject to such terms and conditions as the Administrator shall determine, including, without limitation, restrictions on the transferability of shares of Class A Common Stock, the right of the Company to repurchase shares of Class A Common Stock, the right of the Company to require that shares of Class A Common Stock be transferred in the event of certain transactions, tag-along rights, bring-along rights, redemption and co-sale rights and voting requirements. Such terms and conditions may be additional to those contained in the Plan and may, as determined by the Administrator, be contained in the applicable Award Agreement or in an exercise notice, stockholders' agreement or in such other agreement as the Administrator shall determine, in each case in a form determined by the Administrator. The issuance of such shares of Class A Common Stock shall be conditioned on the Participant's consent to such terms and conditions and the Participant's entering into such agreement or agreements.

(o)*Titles and Headings*. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

(p)*Conformity to Securities Laws*. Participant acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan and all Awards granted hereunder shall be administered only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by Applicable Laws, the Plan and all Award Agreements shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

*11.****Definitions****.* As used in the Plan, the following words and phrases shall have the following meanings:

(a)"***Administrator***" means the Board or a Committee to the extent that the Board's powers or authority under the Plan have been delegated to such Committee.

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(b)"***Applicable Laws***" means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Class A Common Stock is listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where Awards are granted or issued under the Plan.

(c) *"****Award***" means, individually or collectively, a grant under the Plan of Options, Restricted Stock, Restricted Stock Units or Other Stock-Based Awards.

(d)*"****Award Agreement***" means a written agreement evidencing an Award, which agreements may be in electronic medium and shall contain such terms and conditions with respect to an Award as the Administrator shall determine, consistent with and subject to the terms and conditions of the Plan.

(e)*"****Board***" means the Board of Directors of the Company.

(f)"***Cause***," with respect to a Participant, means "Cause" (or any term of similar effect) as defined in such Participant's employment agreement with the Company if such an agreement exists and contains a definition of Cause (or term of similar effect), or, if no such agreement exists or such agreement does not contain a definition of Cause (or term of similar effect), then Cause shall include, but not be limited to: (i) the Participant's unauthorized use or disclosure of confidential information or trade secrets of the Company or any material breach of a written agreement between the Participant and the Company, including without limitation a material breach of any employment, confidentiality, non-compete, non-solicit or similar agreement; (ii) the Participant's commission of, indictment for or the entry of a plea of guilty or *nolo contendere* by the Participant to, a felony under the laws of the United States or any state thereof or any crime involving dishonesty or moral turpitude (or any similar crime in any jurisdiction outside the United States); (iii) the Participant's gross negligence or willful misconduct or the Participant's willful or repeated failure or refusal to substantially perform assigned duties; (iv) any act of fraud, embezzlement, material misappropriation or dishonesty committed by the Participant against the Company; or (v) any acts, omissions or statements by a Participant which the Company reasonably determines to be materially detrimental or damaging to the reputation, operations, prospects or business relations of the Company.

(g) "***Change in Control***" means (i) a merger or consolidation of the Company with or into any other corporation or other entity or person, (ii) a sale, lease, exchange or other transfer in one transaction or a series of related transactions of all or substantially all of the Company's assets, or (iii) any other transaction, including the sale by the Company of new shares of its capital stock or a transfer of existing shares of capital stock of the Company, the result of which is that a third party that is not an affiliate of the Company or its stockholders (or a group of third parties not affiliated with the Company or its stockholders) immediately prior to such transaction acquires or holds capital stock of the Company representing a majority of the Company's outstanding voting power immediately following such transaction; provided that the following events shall not constitute a "Change in Control": (A) a transaction (other than a sale of all or substantially all of the Company's assets) in which the holders of the voting securities of the Company immediately prior to the merger or consolidation hold, directly or indirectly, at least a majority of the voting securities in the successor corporation or its parent immediately after the merger or consolidation; (B) a sale, lease, exchange or other transaction in one transaction or a series of related transactions of all or substantially all of the Company's assets to an affiliate of the Company; (C) an initial public offering of any of the Company's securities; (D) a reincorporation of the Company solely to change its jurisdiction; or (E) a transaction undertaken for the primary purpose of creating a holding company that will be owned in substantially the same proportion by the persons who held the Company's securities immediately before such transaction. Notwithstanding the foregoing, if a Change in Control would give rise to a payment or settlement event with respect to any

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Award that constitutes "nonqualified deferred compensation," the transaction or event constituting the Change in Control must also constitute a "change in control event" (as defined in Treasury Regulation §1.409A-3(i)(5)) in order to give rise to the payment or settlement event for such Award, to the extent required by Section 409A.

(h)*"****Code***" means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.

(i)*"****Committee***" means one or more committees or subcommittees of the Board, which may be comprised of one or more directors and/or executive officers of the Company, in either case, to the extent permitted in accordance with Applicable Laws.

(j)*"****Class A Common Stock***" means the Class A Common Stock of the Company.

(k)*"****Company***" means Parallel Flight Technologies, Inc., a Delaware corporation, or any successor thereto. Except where the context otherwise requires, the term "Company" includes any of the Company's present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a significant interest, as determined by the Administrator.

*(l) "****Consultant****"* means any person, including any advisor, engaged by the Company or a parent or subsidiary of the Company to render services to such entity if: (i) the consultant or adviser renders *bona fide* services to the Company; (ii) the services rendered by the consultant or advisor are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company's securities; and (iii) the consultant or advisor is a natural person, or such other advisor or consultant as is approved by the Administrator.

*(m) "****Designated Beneficiary****"* means the beneficiary or beneficiaries designated, in a manner determined by the Administrator, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant's death or incapacity In the absence of an effective designation by a Participant, "Designated Beneficiary" shall mean the Participant's estate.

(n)*"****Director****"* means a member of the Board.

(o)"***Disability***" means a permanent and total disability within the meaning of Section 22(e)(3) of the Code, as it may be amended from time to time.

(p)*"****Dividend Equivalents***" means a right granted to a Participant pursuant to Section 6(d)(3) hereof to receive the equivalent value (in cash or shares of Class A Common Stock) of dividends paid on shares of Class A Common Stock.

(q)"***Employee***" means any person, including officers and Directors, employed by the Company (within the meaning of Section 3401(c) of the Code) or any parent or subsidiary of the Company.

(r)*"****Equity Restructuring***" means, as determined by the Administrator, a non-reciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Class A Common Stock (or other securities of the Company) or the share price of Class A Common Stock (or other securities of the Company) and causes a change in the per share value of the Class A Common Stock underlying outstanding Awards.

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(s)*"****Exchange Act****"* means the Securities Exchange Act of 1934, as amended.

(t)*"****Fair Market Value***" means, as of any date, the value of Stock determined as follows: (i) if the Class A Common Stock is listed on any established stock exchange, its Fair Market Value shall be the closing sales price for such Class A Common Stock as quoted on such exchange for such date, or if no sale occurred on such date, the first market trading day immediately prior to such date during which a sale occurred, as reported in *The Wall Street Journal* or such other source as the Administrator deems reliable; (ii) if the Class A Common Stock is not traded on a stock exchange but is quoted on a national market or other quotation system, the last sales price on such date, or if no sales occurred on such date, then on the date immediately prior to such date on which sales prices are reported, as reported in *The Wall Street Journal* or such other source as the Administrator deems reliable; or (iii) in the absence of an established market for the Class A Common Stock, the Fair Market Value thereof shall be determined by the Administrator.

(u)*"****Good Reason*,**" with respect to a Participant, means "Good Reason" (or any term of similar effect) as defined in such Participant's employment agreement with the Company or a successor entity or its parent or subsidiary if such an agreement exists and contains a definition of Good Reason (or term of similar effect), or, if no such agreement exists or such agreement does not contain a definition of Good Reason (or term of similar effect), then Good Reason shall mean:

(i) without the Participant's express written consent, the assignment to the Participant of any duties, or any limitation of the Participant's responsibilities, substantially inconsistent with the Participant's positions, duties, responsibilities and status with the Company immediately prior to the date of the Change in Control;

(ii) without the Participant's express written consent, the relocation of the principal place of the Participant's employment or service to a location that is more than fifty miles from the Participant's principal place of employment or service immediately prior to the date of the Change in Control, or the imposition of travel requirements substantially more demanding of the Participant than such travel requirements existing immediately prior to the date of the Change in Control;

(iii) any failure by the Company or a successor entity or its parent or subsidiary to pay, or any material reduction by the Company or a successor entity or its parent or subsidiary of, (A) the Participant's base compensation in effect immediately prior to the date of the Change in Control (unless reductions comparable in amount and duration are concurrently made for all other service providers of the Company or a successor entity or its parent or subsidiary with responsibilities, organizational level and title comparable to the Participant's), or (B) the Participant's bonus compensation, if any, in effect immediately prior to the date of the Change in Control (subject to applicable performance requirements with respect to the actual amount of bonus compensation earned by the Participant); or

(iv) any failure by the Company or a successor entity or its parent or subsidiary to (A) continue to provide the Participant with the opportunity to participate, on terms no less favorable than those in effect for the benefit of any employee or service provider group which customarily includes a person holding the employment or service provider position or a comparable position with the Company or a successor entity or its parent or subsidiary then held by the Participant, in any benefit or compensation plans and programs, including, but not limited to, the Company's life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which the Participant was participating immediately prior to the date of the Change in Control, or their equivalent, or (B) provide the Participant with all other fringe benefits (or their equivalent) from time to time in effect for the benefit of any employee or service provider group which customarily includes a person holding

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the employment or service provider position or a comparable position with the Company or a successor entity or its parent or subsidiary then held by the Participant.

(v)*"****Incentive Stock Option***" means an "incentive stock option" as defined in Section 422 of the Code.

(w)*"****Non-Qualified Stock Option****"* means an Option that is not intended to be or otherwise does not qualify as an Incentive Stock Option.

(x)*"****Option***" means an option to purchase Class A Common Stock.

(y)*"****Other Stock-Based Awards***" means other Awards of shares of Class A Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Class A Common Stock or other property.

(z)*"****Participant****"* means a Service Provider who has been granted an Award under the Plan.

(aa)*"****Plan***" means this 2020 Equity Incentive Plan.

(bb)"***Publicly Listed Company***" means that the Company or its successor (i) is required to file periodic reports pursuant to Section 12 of the Exchange Act and (ii) the Class A Common Stock is listed on one or more National Securities Exchanges (within the meaning of the Exchange Act) or is quoted on NASDAQ or a successor quotation system.

(cc)*"****Restricted Stock***" means Class A Common Stock awarded to a Participant pursuant to Section 6 hereof that is subject to certain vesting conditions and other restrictions.

(dd)*"****Restricted Stock Unit***" means an unfunded, unsecured right to receive, on the applicable settlement date, one share of Class A Common Stock or an amount in cash or other consideration determined by the Administrator equal to the value thereof as of such payment date, which right may be subject to certain vesting conditions and other restrictions.

(ee)*"****Section 409A***" means Section 409A of the Code and all regulations, guidance, compliance programs and other interpretative authority thereunder.

(ff)"***Securities Act***" means the Securities Act of 1933, as amended from time to time.

(gg)*"****Service Provider***" means an Employee, Consultant or Director.

(hh)*"****Termination of Service***" means the date the Participant ceases to be a Service Provider.

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**Parallel Flight Technologies, Inc.**

***2020 EQUITY INCENTIVE PLAN***

**CALIFORNIA SUPPLEMENT** 

The Administrator has adopted this supplement for purposes of satisfying the requirements of Section 25102(o) of the California Corporations Code and the regulations issued thereunder ("***Section 25102(o)***"). Notwithstanding anything to the contrary contained in the Plan and except as otherwise determined by the Administrator, the provisions set forth in this supplement shall apply to all Awards granted under the Plan to a Participant who is a resident of the State of California on the date of grant (a "***California Participant***") and which are intended to be exempt from registration in California pursuant to Section 25102(o). This supplement shall not apply to Awards granted to California Participants or after the date on which the Company becomes a Publicly Listed Company. Definitions in the Plan are applicable to this supplement.

*1.****Additional Limitations On Options****.* 

(a)*Maximum Duration of Options.* No Options granted to California Participants will be granted for a term in excess of 10 years.

(b)*Minimum Exercise Period Following Termination.* Unless a California Participant's Service Provider relationship is terminated for Cause, in the event of termination of such Participant's Service Provider relationship, to the extent required by Applicable Laws, he or she shall have the right to exercise an Option, to the extent that he or she was otherwise entitled to exercise such Option on the date employment terminated, as follows: (i) at least six months from the date of termination, if termination was caused by such Participant's death or Disability and (ii) at least 30 days from the date of termination, if termination was caused other than by such Participant's death or Disability.

2.***Additional Limitations For Restricted Stock Awards, Restricted Stock Units and Other Stock-Based Awards****.* The terms of all Restricted Stock Awards, Restricted Stock Units and Other Stock-Based Awards granted to California Participants shall comply, to the extent applicable, with Section 260.140.41 or Section 260.140.42 of the California Code of Regulations.

3.***Adjustments***. The Administrator will make such adjustments to an Award held by a California Participant as may be required by Section 260.140.41 or Section 260.140.42 of the California Code of Regulations.

4.***Additional Requirement To Provide Information To California Participants****.* To the extent required by Section 260.140.46 of the California Code of Regulations, the Company shall provide to each California Participant and to each California Participant who acquires Class A Common Stock pursuant to the Plan, not less frequently than annually, copies of annual financial statements (which need not be audited). The Company shall not be required to provide such statements to key persons whose duties in connection with the Company assure their access to equivalent information. In addition, this information requirement shall not apply to the Plan to the extent that it complies with all conditions of Rule 701 of the Securities Act ("***Rule 701***") as determined by the Administrator; provided that for purposes of determining such compliance, any registered domestic partner shall be considered a "family member" as that term is defined in Rule 701.

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5.***Stockholder Approval; Additional Limitations On Timing Of Awards****.* The Plan will be submitted for the approval of the Company's stockholders within twelve (12) months after the date of the Board's adoption of the Plan. Awards may be granted or awarded prior to such stockholder approval; provided that no Award granted to a California Participant shall become exercisable, vested or realizable, as applicable to such Award, unless the Plan has been approved by the Company's stockholders within twelve months before or after the date the Plan was adopted by the Administrator; and provided, further, that if such approval has not been obtained at the end of said twelve-month period, all Awards previously granted or awarded under the Plan to California Participants shall thereupon be canceled and become null and void.

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## Ex1K-3

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "***ACT***"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.

**WARRANT TO PURCHASE SHARES OF CLASS A COMMON STOCK**

**of**

**PARALLEL FLIGHT TECHNOLOGIES, INC.**

**Dated as of {date}**

**Void after the date specified in Section 8**

**No**. **[_xx_]** **Warrant to Purchase**

**xx Shares of Class A Common Stock (subject to adjustment)**

THIS CERTIFIES THAT, for value received, xxx, or his registered assigns (the "***Holder***"), is entitled, subject to the provisions and upon the terms and conditions set forth herein, to purchase from PARALLEL FLIGHT TECHNOLOGIES, INC., a Delaware corporation (the "***Company***"), shares of the Company's Class A Common Stock, $0.00001 par value per share (the "***Shares***"), in the amounts, at such times and at the price per share set forth in Section 1. The term "***Warrant***" as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein.

The following is a statement of the rights of the Holder and the conditions to which this Warrant is subject, and to which Holder, by acceptance of this Warrant, agrees:

1.**Number and Price of Shares; Exercise Period**.

(a)***Number of Shares***. Subject to any previous exercise of the Warrant, the Holder shall have the right to purchase up to xx Shares pursuant to the terms set forth below and as may be adjusted from time to time as set forth below.

&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;(b)***Exercise Price***. The exercise price per Share shall be equal to {price}, subject to

adjustment pursuant hereto (the "***Exercise Price***").

(c)***Exercise Period***. Subject to Section 1(d) below, this Warrant shall be exercisable, in whole or in part, as of the date hereof, and prior to (or in connection with) the expiration of this Warrant as set forth in Section 8.

(d)***Vesting and Acceleration Terms***. The purchase rights represented by this Warrant are subject to vesting and acceleration as provided in this Section 1(d). This Warrant shall vest (and become exercisable by the Holder) in a series of 48 successive equal monthly installments of xx Shares each,

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measured from September 1, 2023 (the "***Vesting Commencement Date***"), on the same day of the month as the Vesting Commencement Date, in each case subject to the Holder being an officer, director, employee, advisor or independent contractor of the Company or any parent or subsidiary thereof as of each such date, provided, however, that in the event of (and conditioned upon the consummation of) a Corporate Transaction (as defined below), and unless the Holder has notified the Company in advance that the Holder does not want to receive acceleration, this Warrant and the purchase rights represented hereby shall accelerate and be fully exercisable.

2.**Exercise of the Warrant**.

(a)***Exercise***. The purchase rights represented by this Warrant may be exercised at the election of the Holder, in whole or in part, in accordance with Section 1 (including Section 1(d)), by:

(i)the tender to the Company at its principal office (or such other office or agency as the Company may designate) of a notice of exercise in the form of Exhibit A (the "***Notice of Exercise***"), duly completed and executed by or on behalf of the Holder, together with the surrender of this Warrant; and

(ii)the payment to the Company of an amount equal to (x) the Exercise Price multiplied by (y) the number of Shares being purchased, by wire transfer or certified, cashier's or other check acceptable to the Company and payable to the order of the Company.

(b)***Net Issue Exercise***. In lieu of exercising this Warrant pursuant to Section 2(a)(ii), if the fair market value of one Share is greater than the Exercise Price (at the date of calculation as set forth below), the Holder may elect to receive a number of Shares equal to the value of this Warrant (or of any portion of this Warrant being canceled) by surrender of this Warrant at the principal office of the Company (or such other office or agency as the Company may designate) together with a properly completed and executed Notice of Exercise reflecting such election, in which event the Company shall issue to the Holder that number of Shares computed using the following formula:

X = Y (A – B)

A

Where:

X = The number of Shares to be issued to the Holder

Y = The number of Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation)

A = The fair market value of one Share (at the date of such calculation) B = The Exercise Price (as adjusted to the date of such calculation)

For purposes of the calculation above, the fair market value of one Share shall be determined by the Board of Directors of the Company, acting in good faith; *provided, however,* that:

(i)where a public market exists for the Company's common stock at the time of such exercise, the fair market value per Share shall be the product of (x) the average of the closing bid

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prices of the common stock or the closing price quoted on the national securities exchange on which the common stock is listed as published in the *Wall Street Journal*, as applicable, for the ten (10) trading day period ending five (5) trading days prior to the date of determination of fair market value and (y) the number of shares of common stock into which each Share is convertible at the time of such exercise, as applicable; and

(ii)if the Warrant is exercised in connection with the Company's initial public offering of common stock, the fair market value per Share shall be the product of (x) the per share offering price to the public of the Company's initial public offering and (y) the number of shares of common stock into which each Share is convertible at the time of such exercise, as applicable.

(c)***Treatment of Warrant in Cash/Public Acquisition***. In the event of a Corporate Transaction (as defined below) in which the consideration to be received by the holders of the outstanding shares of the Company (in their capacity as such) consists solely of cash, solely of Marketable Securities (as defined below) or a combination of cash and Marketable Securities (a "***Cash/Public Acquisition***"), and the fair market value of one Share as determined in accordance with Section 2 above would be greater than the Exercise Price (as adjusted to the date of such calculations) as of immediately prior to the closing of such Cash/Public Acquisition, and Holder has not previously exercised this Warrant in full, then, in lieu of Holder's exercise of the unexercised portion of this Warrant, this Warrant shall, as of immediately prior to such closing (but subject to the occurrence thereof) automatically cease to represent the right to purchase the Shares and shall, from and after such closing, represent solely the right to receive the aggregate consideration that would have been payable in such Corporate Transaction on and in respect of the total number of Shares for which this Warrant was exercisable as of immediately prior to the closing thereof (i.e., 1,000,000 Shares), net of the aggregate Exercise Price therefor, as if such total number of Shares had been issued and outstanding to Holder as of immediately prior to such closing, as and when such consideration is paid to the holders of the outstanding shares of the Company. In the event of a Cash/Public Acquisition in which the fair market value of one Share as determined in accordance with this Section 2 would be equal to or less than the Exercise Price in effect as of immediately prior to the closing of such Cash/Public Acquisition, then, unless the Holder elects otherwise in writing prior to the closing of such transaction, this Warrant will automatically and without further action of any party terminate as of immediately prior to such closing.

(d)***Treatment of Warrant in non-Cash/Public Acquisition.*** Upon the closing of any Corporate Transaction other than a Cash/Public Acquisition, unless the Holder has exercised this Warrant for all or a part of the Total Shares, and unless the Holder has notified the Company in writing that this Warrant shall be treated as if such Corporate Transaction was a Cash/Public Acquisition, the acquiring, surviving or successor entity shall assume this Warrant and the Corporation's obligations hereunder, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the total number of Shares issuable upon exercise of the unexercised portion of this Warrant as if such total number of Shares were outstanding on and as of the closing of such Corporate Transaction, at an aggregate Exercise Price equal to the aggregate Exercise Price in effect as of immediately prior to such closing, all subject to further adjustment from time to time thereafter in accordance with the provisions of this Warrant.

(e)***Certain Definitions***. For purposes of this Section 2, the following terms have the following meanings:

&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;(i)"***Corporate Transaction*"** means:

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(A)the closing of the sale, transfer or other disposition, in a single transaction or series of related transactions, of all or substantially all of the Company's assets or the exclusive license of all or substantially all of the Company's material intellectual property;

(B)the consummation of a merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold a majority of the outstanding voting securities of the capital stock of the Company or the surviving or acquiring entity immediately following the consummation of such transaction); or

(C)the closing of the transfer (whether by merger, consolidation or otherwise), in a single transaction or series of related transactions, to a "person" or "group" (within the meaning of Section 13(d) and Section 14(d) of the Exchange Act) of the Company's capital stock if, after such closing, such person or group would become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more than 50% of the outstanding voting securities of the Company (or the surviving or acquiring entity).

For the avoidance of doubt, a transaction will not constitute a "Corporate Transaction" if its sole purpose is to change the state of the Company's incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company's securities immediately prior to such transaction. Notwithstanding the foregoing, the sale of equity securities in a bona fide financing transaction for purposes of raising capital will not be deemed a "Corporate Transaction."

&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;(i) "***Marketable Securities***" means securities meeting all of the following requirements (determined as of immediately prior to the closing of the Corporate Transaction): (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "***Exchange Act***"), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in a Trading Market, and (iii) following the closing of such Corporate Transaction, Holder would not be restricted from publicly re-selling all of the issuer's shares and/or other securities that would be received by Holder in such Corporate Transaction were Holder to exercise this Warrant in full on or prior to the closing of such Corporate Transaction, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Corporate Transaction. Notwithstanding these foregoing provisions, securities held in escrow or subject to holdback to cover indemnification-related claims shall be deemed to be Marketable Securities if they would otherwise be Marketable Securities but for the fact that they are held in escrow or subject to holdback to cover indemnification-related claims.

(f)***Stock Certificates***. The rights under this Warrant shall be deemed to have been exercised and the Shares issuable upon such exercise shall be deemed to have been issued immediately prior to the close of business on the date this Warrant is exercised in accordance with its terms, and the person entitled to receive the Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such Shares as of the close of business on such date. As promptly as reasonably practicable on or after such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates (or a notice of issuance of uncertificated shares, if applicable) for that number of shares issuable upon such exercise. In the event that the rights under this Warrant are exercised in part and have not expired, the Company shall execute and deliver a new Warrant reflecting the number of Shares that remain subject to this Warrant.

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(g)***No Fractional Shares or Scrip***. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of the rights under this Warrant. In lieu of such fractional share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction.

(h)***Conditional Exercise***. The Holder may exercise this Warrant conditioned upon (and effective immediately prior to) consummation of any transaction that would cause the expiration of this Warrant pursuant to Section 8 by so indicating in the notice of exercise.

(i)***Automatic Exercise***. If the Holder of this Warrant has not elected to exercise this Warrant prior to expiration of this Warrant pursuant to Sections 8(b)-(d), then this Warrant shall automatically (without any act on the part of the Holder) be exercised pursuant to Section 2(b) effective immediately prior to the expiration of the Warrant to the extent such net issue exercise would result in the issuance of Shares, unless Holder shall earlier provide written notice to the Company that the Holder desires that this Warrant expire unexercised. For the avoidance of doubt, this Section 2(i) shall not cause this Warrant to be automatically exercised in connection with the expiration of this Warrant pursuant to Section 8(a). If this Warrant is automatically exercised, the Company shall notify the Holder of the automatic exercise as soon as reasonably practicable, and the Holder shall surrender the Warrant to the Company in accordance with the terms hereof.

(j)***Reservation of Stock***. The Company agrees during the term the rights under this Warrant are exercisable to reserve and keep available from its authorized and unissued shares of Common Stock for the purpose of effecting the exercise of this Warrant such number of shares as shall from time to time be sufficient to effect the exercise of the rights under this Warrant; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient for purposes of the exercise of this Warrant in accordance with its terms and the conversion of the Shares, without limitation of such other remedies as may be available to the Holder, the Company will use its best efforts to take such corporate action as may be necessary to increase its authorized and unissued shares of its Common Stock to a number of shares as shall be sufficient for such purposes. The Company represents and warrants that all shares that may be issued upon the exercise of this Warrant will, when issued in accordance with the terms hereof, shall be validly issued, fully paid and nonassessable.

3.**Replacement of the Warrant**. Subject to the receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at the expense of the Holder shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

**4.** **Transfer of the Warrant.**

(a)***Warrant Register***. The Company shall maintain a register (the "***Warrant Register***") containing the name and address of the Holder or Holders. Until this Warrant is transferred on the Warrant Register in accordance herewith, the Company may treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary. Any Holder of this Warrant (or of any portion of this Warrant) may change its address as shown on the Warrant Register by written notice to the Company requesting a change.

(b)***Warrant Agent***. The Company may appoint an agent for the purpose of maintaining the Warrant Register referred to in Section 4(a), issuing the Shares or other securities then

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issuable upon the exercise of the rights under this Warrant, exchanging this Warrant, replacing this Warrant or conducting related activities.

(c)***Transferability of the Warrant***. Subject to the provisions of this Warrant with respect to compliance with the Securities Act of 1933, as amended (the "***Securities Act***") and limitations on assignments and transfers, including without limitation compliance with the restrictions on transfer set forth in Section 5, title to this Warrant may be transferred by endorsement (by the transferor and the transferee executing the assignment form attached as Exhibit B (the "***Assignment Form***")) and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

(d)***Exchange of the Warrant upon a Transfer***. On surrender of this Warrant (and a properly endorsed Assignment Form) for exchange, subject to the provisions of this Warrant with respect to compliance with the Securities Act and limitations on assignments and transfers, the Company shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, for the number of shares issuable upon exercise hereof, and the Company shall register any such transfer upon the Warrant Register. This Warrant (and the securities issuable upon exercise of the rights under this Warrant) must be surrendered to the Company or its warrant or transfer agent, as applicable, as a condition precedent to the sale, pledge, hypothecation or other transfer of any interest in any of the securities represented hereby.

(e)***Taxes***. In no event shall the Company be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of any certificate, or a book entry, in a name other than that of the Holder, and the Company shall not be required to issue or deliver any such certificate, or make such book entry, unless and until the person or persons requesting the issue or entry thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or is not payable.

5.**Restrictions on Transfer of the Warrant and Shares; Compliance with Securities Laws**. By acceptance of this Warrant, the Holder agrees to comply with the following:

(a)***Restrictions on Transfers***. Subject to Section 5(b), this Warrant may not be transferred or assigned in whole or in part without the Company's prior written consent (which shall not be unreasonably withheld), and any attempt by Holder to transfer or assign any rights, duties or obligations that arise under this Warrant without such permission shall be void. Any transfer of this Warrant or the Shares (the "***Securities***") must be in compliance with all applicable federal and state securities laws. The Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the Securities, or any beneficial interest therein, unless and until the transferee thereof has agreed in writing for the benefit of the Company to take and hold such Securities subject to, and to be bound by, the terms and conditions set forth in this Warrant to the same extent as if the transferee were the original Holder hereunder, and

(i)there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement, or

(ii)(A) such Holder shall have given prior written notice to the Company of such Holder's intention to make such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, (B) the transferee shall have confirmed to the satisfaction of the Company in writing, substantially in the form of Exhibit A-1, that the Securities are being acquired (i) solely for the transferee's own account and not as a nominee for any other party, (ii) for investment and (iii) not with a view toward distribution or resale, and shall have confirmed

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such other matters related thereto as may be reasonably requested by the Company, and (C) if requested by the Company, such Holder shall have furnished the Company, at the Holder's expense, with (i) an opinion of counsel, reasonably satisfactory to the Company, to the effect that such disposition will not require registration of such Securities under the Securities Act or (ii) a "no action" letter from the Securities and Exchange Commission to the effect that the transfer of such Securities without registration will not result in a recommendation by the staff of the Securities and Exchange Commission that action be taken with respect thereto, whereupon such Holder shall be entitled to transfer such Securities in accordance with the terms of the notice delivered by the Holder to the Company. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144 except in unusual circumstances.

(b)***Permitted Transfers***. Permitted transfers with respect to Section 5(a) include (i) a transfer not involving a change in beneficial ownership, or (ii) transactions involving the distribution without consideration of Securities by any Holder during a Holder's lifetime or upon a Holder's death by will or intestacy to such Holder's Immediate Family or a trust for the benefit of such Holder's Immediate Family. As used herein, "***Immediate Family***" shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister or stepchild (whether or not adopted).

(c)***Investment Representation Statement***. Unless the rights under this Warrant are exercised pursuant to an effective registration statement under the Securities Act that includes the Shares with respect to which the Warrant was exercised, it shall be a condition to any exercise of the rights under this Warrant that the Holder shall have confirmed to the satisfaction of the Company in writing, substantially in the form of Exhibit A-1, that the Shares so purchased are being acquired solely for the Holder's own account and not as a nominee for any other party, for investment and not with a view toward distribution or resale and that the Holder shall have confirmed such other matters related thereto as may be reasonably requested by the Company.

(d)***Securities Law Legend***. Each certificate, instrument or book entry representing the Securities shall (unless otherwise permitted by the provisions of this Warrant) be notated with a legend substantially similar to the following (in addition to any legend required by state securities laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.

(e)***Market Stand-off Legend***. Each certificate, instrument or book entry representing the Shares and common stock issued upon exercise hereof or conversion thereof shall also be notated with a legend in substantially the following form:

THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC OFFERING, AS SET FORTH IN THE WARRANT PURSUANT TO WHICH THESE

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SHARES WERE ISSUED, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.

(f)***Instructions Regarding Transfer Restrictions***. The Holder consents to the Company making a notation on its records and giving instructions to any transfer agent in order to implement the restrictions on transfer established in this Section 5.

(g)***Removal of Legend***. The legend referring to federal and state securities laws identified in Section 5(d) notated on any certificate evidencing the Shares and the stock transfer instructions and record notations with respect to such securities shall be removed, and the Company shall issue a certificate without such legend to the holder of such securities (to the extent the securities are certificated), if (i) such securities are registered under the Securities Act, or (ii) such holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a sale or transfer of such securities may be made without registration, qualification or legend.

(h)***No Transfers to Bad Actors; Notice of Bad Actor Status***. The Holder agrees not to sell, assign, transfer, pledge or otherwise dispose of any securities of the Company, or any beneficial interest therein, to any person (other than the Company) unless and until the proposed transferee confirms to the reasonable satisfaction of the Company that neither the proposed transferee nor any of its directors, executive officers, other officers that may serve as a director or officer of any company in which it invests, general partners or managing members nor any person that would be deemed a beneficial owner of those securities (in accordance with Rule 506(d) of the Securities Act) is subject to any of the "bad actor" disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act, except as set forth in Rule 506(d)(2) or (d)(3) under the Securities Act and disclosed, reasonably in advance of the transfer, in writing in reasonable detail to the Company. The Holder will promptly notify the Company in writing if the Holder or, to the Holder's knowledge, any person specified in Rule 506(d)(1) under the Securities Act becomes subject to any of the "bad actor" disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act.

6.**Adjustments**. Subject to the expiration of this Warrant pursuant to Section 8, the number and kind of shares purchasable hereunder and the Exercise Price therefor are subject to adjustment from time to time, as follows:

(a)***Merger or Reorganization***. If at any time there shall be any reorganization, recapitalization, merger or consolidation (a "***Reorganization***") involving the Company (other than as otherwise provided for herein or as would cause the expiration of this Warrant under Section 8) in which shares of the Company's stock are converted into or exchanged for securities, cash or other property, then, as a part of such Reorganization, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, the kind and amount of securities, cash or other property of the successor corporation resulting from such Reorganization, equivalent in value to that which a holder of the Shares deliverable upon exercise of this Warrant would have been entitled in such Reorganization if the right to purchase the Shares hereunder had been exercised immediately prior to such Reorganization. In any such case, appropriate adjustment (as determined in good faith by the Board of Directors of the successor corporation) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after such Reorganization to the end that the provisions of this Warrant shall be applicable after the event, as near as reasonably may be, in relation to any shares or other securities deliverable after that event upon the exercise of this Warrant.

(b)***Reclassification of Shares***. If the securities issuable upon exercise of this Warrant are changed into the same or a different number of securities of any other class or classes by reclassification, capital reorganization, conversion of all outstanding shares of the relevant class or series (other than as

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would cause the expiration of this Warrant pursuant to Section 8) or otherwise (other than as otherwise provided for herein) (a "***Reclassification***"), then, in any such event, in lieu of the number of Shares which the Holder would otherwise have been entitled to receive, the Holder shall have the right thereafter to exercise this Warrant for a number of shares of such other class or classes of stock that a holder of the number of securities deliverable upon exercise of this Warrant immediately before that change would have been entitled to receive in such Reclassification, all subject to further adjustment as provided herein with respect to such other shares.

(c)***Subdivisions and Combinations***. In the event that the outstanding shares of Common Stock are subdivided (by stock split, by payment of a stock dividend or otherwise) into a greater number of shares of such securities, the number of Shares issuable upon exercise of the rights under this Warrant immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately increased, and the Exercise Price shall be proportionately decreased, and in the event that the outstanding shares of Common Stock are combined (by reclassification or otherwise) into a lesser number of shares of such securities, the number of Shares issuable upon exercise of the rights under this Warrant immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately decreased, and the Exercise Price shall be proportionately increased.

(d)***Notice of Adjustments***. Upon any adjustment in accordance with Section 6(a), (b) or (c), the Company shall give notice thereof to the Holder, which notice shall state the event giving rise to the adjustment, the Exercise Price as adjusted and the number of securities or other property purchasable upon the exercise of the rights under this Warrant, setting forth in reasonable detail the method of calculation of each.

The Company shall, upon the written request of any Holder, furnish or cause to be furnished to such Holder a certificate setting forth (i) such adjustments, (ii) the Exercise Price at the time in effect and (iii) the number of securities and the amount, if any, of other property that at the time would be received upon exercise of this Warrant.

(e)***Dividends or Distributions***. In the event that the Company shall, at any time or from time to time after the date hereof, make or declare, a dividend or any other distribution payable to the holders of Class A Common Stock in securities of the Company, cash or other property, then, and in each such event, provision shall be made so that the Holder shall receive upon exercise of this Warrant, in addition to the number of Shares receivable thereupon, the kind and amount of securities of the Company, cash or other property which the Holder would have been entitled to receive had this Warrant been exercised in full into Shares on the date of such event and had the Holder thereafter, during the period from the date of such event to and including the expiration of this Warrant, retained such securities, cash or other property receivable by them as aforesaid during such period, giving application to all adjustments called for during such period under this Section 6 with respect to the rights of the Holder; provided, that no such provision shall be made if the Holder receives, simultaneously with the distribution to the holders of Class A Common Stock, a dividend or other distribution of such securities, cash or other property in an amount equal to the amount of such securities, cash or other property as the Holder would have received if this Warrant had been exercised in full into Shares on the date of such event.

7.**Notification of Certain Events**. Prior to the expiration of this Warrant pursuant to Section 8, in the event that the Company shall authorize:

(a)the issuance of any dividend or other distribution (including pursuant to Section 6(e) on the capital stock of the Company (other than as covered under Section 6(d) for which notice is otherwise provided pursuant to said Section 6(d));

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(b)any capital reorganization, including a Reorganization, of the Company or any reclassification, including a Reclassification, or recapitalization of the capital stock of the Company;

&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;(c)the voluntary liquidation, dissolution or winding up of the Company;

&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;(d)any transaction resulting in the expiration of this Warrant pursuant to Section 8(b)

or 8(c); or

&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;(e)any amendment to the Company's Certificate of Incorporation or Bylaws that

would adversely affect the rights granted to the Class A Common Stock;

the Company shall send to the Holder of this Warrant at least ten (10) business days prior written notice of the date on which a record shall be taken for any such dividend or distribution specified in clause (a) or at least ten (10) business days prior written notice of the expected effective date of any such other event specified in clause (b), (c) or (d), as applicable, and in the event such notice is being delivered with respect to clause (b) or (c), such notice must inform Holder that such event will automatically terminate this Warrant with no consideration paid to the Holder unless the Holder exercises this Warrant prior to such effective date.

8.**Expiration of the Warrant**. This Warrant shall expire and shall no longer be exercisable as of the earlier of:

(a)5:00 p.m. Pacific Time on the date which is six (6) years following the date of issuance of this Warrant;

&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;(b)any Corporate Transaction; or

(c)Immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to an effective registration statement filed under the Securities Act covering the offering and sale of the Company's common stock, including the Shares into which this Warrant is specifically exercisable.

In the event of the Holder's disability or death, the Company covenants that it will allow the representatives, heirs, beneficiaries, trustees, executors a meaningful period of time, not to exceed six (6) months to exercise this Warrant.

9.**No Rights as a Stockholder**. Nothing contained herein shall entitle the Holder to any rights as a stockholder of the Company or to be deemed the holder of any securities that may at any time be issuable on the exercise of the rights hereunder for any purpose nor shall anything contained herein be construed to confer upon the Holder, as such, any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to no par value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or any other rights of a stockholder of the Company

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until the rights under the Warrant shall have been exercised and the Shares purchasable upon exercise of the rights hereunder shall have become deliverable as provided herein.

10.**Market Stand-off**. The Holder of this Warrant hereby agrees to enter into and be bound by a customary market stand-off provision in such form as the Company may at any time or from time to time request.

11.**Representations and Warranties of the Holder**. By acceptance of this Warrant, the Holder represents and warrants to the Company as follows:

(a)***No Registration***. The Holder understands that the Securities have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the *bona fide* nature of the investment intent and the accuracy of the Holder's representations as expressed herein or otherwise made pursuant hereto.

(b)***Investment Intent***. The Holder is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof. The Holder has no present intention of selling, granting any participation in, or otherwise distributing the Securities, nor does it have any contract, undertaking, agreement or arrangement for the same.

(c)***Investment Experience***. The Holder has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, and has such knowledge and experience in financial or business matters so that it is capable of evaluating the merits and risks of its investment in the Company and protecting its own interests.

(d)***Speculative Nature of Investment***. The Holder understands and acknowledges that its investment in the Company is highly speculative and involves substantial risks. The Holder can bear the economic risk of its investment and is able, without impairing its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment.

(e)***Access to Data***. The Holder has had an opportunity to ask questions of officers of the Company, which questions were answered to its satisfaction. The Holder believes that it has received all the information that it considers necessary or appropriate for deciding whether to acquire the Securities. The Holder understands that any such discussions, as well as any information issued by the Company, were intended to describe certain aspects of the Company's business and prospects, but were not necessarily a thorough or exhaustive description. The Holder acknowledges that any business plans prepared by the Company have been, and continue to be, subject to change and that any projections included in such business plans or otherwise are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results.

(f)***Accredited Investor***. The Holder is an "accredited investor" within the meaning of Regulation D, Rule 501(a), promulgated by the Securities and Exchange Commission and agrees to submit to the Company such further assurances of such status as may be reasonably requested by the Company. The Holder has furnished or made available any and all information requested by the Company or otherwise necessary to satisfy any applicable verification requirements as to "accredited investor" status. Any such information is true, correct, timely and complete.

(g)***Residency***. The residency of the Holder (or, in the case of an entity, such entity's principal place of business) is correctly set forth on the signature page hereto.

------

(h)***Restrictions on Resales***. The Holder acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available. The Holder is aware of the provisions of Rule 144 promulgated under the Securities Act, which permit resale of shares purchased in a private placement subject to the satisfaction of certain conditions, which may include, among other things, the availability of certain current public information about the Company; the resale occurring not less than a specified period after a party has purchased and paid for the security to be sold; the number of shares being sold during any three-month period not exceeding specified limitations; the sale being effected through a "broker's transaction," a transaction directly with a "market maker" or a "riskless principal transaction" (as those terms are defined in the Securities Act or the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder); and the filing of a Form 144 notice, if applicable. The Holder acknowledges and understands that the Company may not be satisfying the current public information requirement of Rule 144 at the time the Holder wishes to sell the Securities and that, in such event, the Holder may be precluded from selling the Securities under Rule 144 even if the other applicable requirements of Rule 144 have been satisfied. The Holder acknowledges that, in the event the applicable requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will be required for any disposition of the Securities. The Holder understands that, although Rule 144 is not exclusive, the Securities and Exchange Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other than in a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk.

(i)***No Public Market***. The Holder understands and acknowledges that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company's securities.

(j)***Brokers and Finders***. The Holder has not engaged any brokers, finders or agents in connection with the Securities, and the Company has not incurred nor will incur, directly or indirectly, as a result of any action taken by the Holder, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with the Securities.

(k)***Legal Counsel***. The Holder has had the opportunity to review this Warrant, the exhibits and schedules attached hereto and the transactions contemplated by this Warrant with its own legal counsel. The Holder is not relying on any statements or representations of the Company or its agents, including Richter Law Offices, legal counsel to the Company, for legal advice with respect to this investment or the transactions contemplated by this Warrant.

(l)***Tax Advisors***. The Holder has reviewed with its own tax advisors the U.S. federal, state and local and non-U.S. tax consequences of this investment and the transactions contemplated by this Warrant. With respect to such matters, the Holder relies solely on any such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Holder understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment and the transactions contemplated by this Warrant.

(m)***No "Bad Actor" Disqualification***. Neither (i) the Holder, (ii) any of its directors, executive officers, other officers that may serve as a director or officer of any company in which it invests, general partners or managing members, nor (iii) any beneficial owner of any of the Company's voting equity securities (in accordance with Rule 506(d) of the Securities Act) held by the Holder is subject to any of the "bad actor" disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act, except as set forth in Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed, reasonably in advance of the acceptance of this Warrant, in writing in reasonable detail to the Company.

------

**12.** **Miscellaneous**.

(a)***Amendments***. Neither this Warrant nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Warrant and signed by the Company and the Holder.

(b)***Waivers***. No waiver of any single breach or default shall be deemed a waiver of any other breach or default theretofore or thereafter occurring.

(c)***Notices***. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail or otherwise delivered by hand, messenger or courier service addressed:

(i)if to the Holder, to the Holder at the Holder's address, facsimile number or electronic mail address as shown in the Company's records, as may be updated in accordance with the provisions hereof, or until any such Holder so furnishes an address, facsimile number or electronic mail address to the Company, then to and at the address, facsimile number or electronic mail address of the last holder of this Warrant for which the Company has contact information in its records; or

(ii)if to the Company, to the attention of the Chief Executive Officer (unless the Holder is such officer) or Secretary of the Company at the principal office of the Company.

Each such notice or other communication shall for all purposes of this Warrant be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, at the earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile, upon confirmation of facsimile transfer or, if sent via electronic mail, upon confirmation of delivery when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient's next business day. In the event of any conflict between the Company's books and records and this Warrant or any notice delivered hereunder, the Company's books and records will control absent fraud or error.

(d)***Governing Law***. This Warrant and all actions arising out of or in connection with this Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law provisions of the State of Delaware, or of any other state.

(e)***Jurisdiction and Venue***. Each of the Holder and the Company irrevocably consents to the exclusive jurisdiction and venue of the state courts of Delaware in New Castle County and to the jurisdiction of the United States District Court for the District of Delaware, in connection with any matter based upon or arising out of this Warrant or the matters contemplated herein, and agrees that process may be served upon them in any manner authorized by the laws of the State of Delaware for such persons.

(f)***Titles and Subtitles***. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant. All references in this Warrant to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

(g)***Severability***. If any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in

------

its entirety, to the extent necessary, shall be severed from this Warrant, and such illegal, unenforceable or void provision shall be replaced with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, unenforceable or void provision. The balance of this Warrant shall be enforceable in accordance with its terms.

(h)***Waiver of Jury Trial*. EACH OF THE HOLDER AND THE COMPANY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS WARRANT.**

(i)***California Corporate Securities Law***. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS WARRANT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

(j)***Rights and Obligations Survive Exercise of the Warrant***. Except as otherwise provided herein, the rights and obligations of the Company and the Holder under this Warrant shall survive exercise of this Warrant.

(k)***Entire Agreement***. Except as expressly set forth herein, this Warrant (including the exhibits attached hereto) constitutes the entire agreement and understanding of the Company and the Holder with respect to the subject matter hereof and supersede all prior agreements and understandings relating to the subject matter hereof.

(*signature page follows*)

------

The Company and the Holder sign this Warrant as of the date stated on the first page.

**PARALLEL FLIGHT TECHNOLOGIES, INC.**

By:

Name: Robert Hulter

Title: Secretary

**AGREED AND ACKNOWLEDGED, xx**

**&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;&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;** 

Address:

[*insert address*]

[Fax number: [*insert facsimile number, if appropriate*]]

**[**Email address: [*insert email address, if appropriate*]]

**(Signature Page to Warrant to Purchase Shares of Class A Common Stock of**

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**PARALLEL FLIGHT TECHNOLOGIES, INC.)**

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EXHIBIT A

**NOTICE OF EXERCISE**

**TO:** **PARALLEL FLIGHT TECHNOLOGIES, INC. (the "*Company*")**

**Attention:** **Chief Executive Officer**

(1)**Exercise**. The undersigned elects to purchase the following pursuant to the terms of the attached warrant:

Number of shares:&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;&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;&nbsp;&nbsp;&nbsp;&nbsp;

Type of security:Class A Common Stock

(2)**Method of Exercise**. The undersigned elects to exercise the attached warrant pursuant to:

☐A cash payment, and tenders herewith payment of the purchase price for such shares in full, together with all applicable transfer taxes, if any.

☐The net issue exercise provisions of Section 2(b), (c) or (d) of the attached warrant.

(3)**Conditional Exercise**. Ts this a conditional exercise pursuant to Section 2(e):

☐Yes☐No

If "Yes," indicate the applicable condition:

&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;&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;&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;&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;

(4)**Stock**. Please make a book entry and, if the shares are certificated, issue a certificate or certificates representing the shares in the name of:

☐The undersigned

☐Other — Name:&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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Address:&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;&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;&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;&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;&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;

(5)**Unexercised Portion of the Warrant**. Please issue a new warrant for the unexercised portion of the attached warrant in the name of:

☐The undersigned

☐Other — Name:&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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Address:&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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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☐Not applicable

(6)**Investment Intent**. The undersigned represents and warrants that the aforesaid shares are being acquired for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and that the undersigned has no present intention of selling, granting any participation in, or otherwise distributing the shares, nor does it have any contract, undertaking, agreement or arrangement for the same, and all representations and warranties of the undersigned set forth in Section 11 of the attached warrant are true and correct as of the date hereof.

(7)**Investment Representation Statement**. The undersigned has executed, and delivers herewith, an Investment Representation Statement in a form substantially similar to the form attached to the warrant as Exhibit A-1.

(8)**Consent to Receipt of Electronic Notice**. Subject to the limitations set forth in Delaware General Corporation Law §232(e), the undersigned consents to the delivery of any notice to stockholders given by the Company under the Delaware General Corporation Law or the Company's certificate of incorporation or bylaws by (i) facsimile telecommunication to the facsimile number provided below (or to any other facsimile number for the undersigned in the Company's records), (ii) electronic mail to the electronic mail address provided below (or to any other electronic mail address for the undersigned in the Company's records), (iii) posting on an electronic network together with separate notice to the undersigned of such specific posting or (iv) any other form of electronic transmission (as defined in the Delaware General Corporation Law) directed to the undersigned. This consent may be revoked by the undersigned by written notice to the Company and may be deemed revoked in the circumstances specified in Delaware General Corporation Law §232.

---

| |
|:---|
| &nbsp;&nbsp;(*Print name of the warrant holder*) |
| &nbsp;&nbsp;(*Signature*) |
| &nbsp;&nbsp;(*Name and title of signatory, if applicable*) |
| &nbsp;&nbsp;(*Date*) |
| &nbsp;&nbsp;(*Fax number*) |
| &nbsp;&nbsp;(*Email address*) |

---

**(*Signature page to the Notice of Exercise*)**

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**EXHIBIT A-1**

**INVESTMENT REPRESENTATION STATEMENT AND**

**MARKET STAND-OFF AGREEMENT**

HOLDER: &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;&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;&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;

COMPANY:PARALLEL FLIGHT TECHNOLOGIES, INC.

SECURITIES:THE WARRANT ISSUED ON [*INSERT DATE*] (THE "***WARRANT***") AND THE

SECURITIES ISSUED OR ISSUABLE UPON EXERCISE THEREOF

DATE:&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;&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;&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;

In connection with the purchase or acquisition of the above-listed Securities, the undersigned Holder represents and warrants to, and agrees with, the Company as follows:

1.**No Registration**. The Holder understands that the Securities have not been, and will not be, registered under the Securities Act of 1933, as amended (the "***Securities Act***"), by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the *bona fide* nature of the investment intent and the accuracy of the Holder's representations as expressed herein or otherwise made pursuant hereto.

2.**Investment Intent**. The Holder is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof. The Holder has no present intention of selling, granting any participation in, or otherwise distributing the Securities, nor does it have any contract, undertaking, agreement or arrangement for the same.

3.**Investment Experience**. The Holder has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, and has such knowledge and experience in financial or business matters so that it is capable of evaluating the merits and risks of its investment in the Company and protecting its own interests.

4.**Speculative Nature of Investment**. The Holder understands and acknowledges that its investment in the Company is highly speculative and involves substantial risks. The Holder can bear the economic risk of its investment and is able, without impairing its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment.

5.**Access to Data**. The Holder has had an opportunity to ask questions of officers of the Company, which questions were answered to its satisfaction. The Holder believes that it has received all the information that it considers necessary or appropriate for deciding whether to acquire the Securities. The Holder understands that any such discussions, as well as any information issued by the Company, were intended to describe certain aspects of the Company's business and prospects, but were not necessarily a thorough or exhaustive description. The Holder acknowledges that any business plans prepared by the Company have been, and continue to be, subject to change and that any projections included in such business plans or otherwise are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results.

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A-1-1

------

6.**Accredited Investor**. The Investor is an "accredited investor" within the meaning of Regulation D, Rule 501(a), promulgated by the Securities and Exchange Commission and agrees to submit to the Company such further assurances of such status as may be reasonably requested by the Company. The Holder has furnished or made available any and all information requested by the Company or otherwise necessary to satisfy any applicable verification requirements as to "accredited investor" status. Any such information is true, correct, timely and complete.

7.**Residency**. The residency of the Holder (or, in the case of an entity, such entity's principal place of business) is correctly set forth on the signature page hereto.

8.**Restrictions on Resales**. The Holder acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available. The Holder is aware of the provisions of Rule 144 promulgated under the Securities Act, which permit resale of shares purchased in a private placement subject to the satisfaction of certain conditions, which may include, among other things, the availability of certain current public information about the Company; the resale occurring not less than a specified period after a party has purchased and paid for the security to be sold; the number of shares being sold during any three-month period not exceeding specified limitations; the sale being effected through a "broker's transaction," a transaction directly with a "market maker" or a "riskless principal transaction" (as those terms are defined in the Securities Act or the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder); and the filing of a Form 144 notice, if applicable. The Holder acknowledges and understands that the Company may not be satisfying the current public information requirement of Rule 144 at the time the Holder wishes to sell the Securities and that, in such event, the Holder may be precluded from selling the Securities under Rule 144 even if the other applicable requirements of Rule 144 have been satisfied. The Holder understands and acknowledges that, in the event the applicable requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will be required for any disposition of the Securities. The Holder understands that, although Rule 144 is not exclusive, the Securities and Exchange Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other than in a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for those offers or sales and that those persons and the brokers who participate in the transactions do so at their own risk.

9.**No Public Market**. The Holder understands and acknowledges that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company's securities.

10.**Brokers and Finders**. The Holder has not engaged any brokers, finders or agents in connection with the Securities, and the Company has not incurred nor will incur, directly or indirectly, as a result of any action taken by the Holder, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with the Securities.

11.**Legal Counsel**. The Holder has had the opportunity to review the Warrant, the exhibits and schedules attached thereto and the transactions contemplated by the Warrant with its own legal counsel. The Holder is not relying on any statements or representations of the Company or its agents, including Richter Law Offices, legal counsel to the Company, for legal advice with respect to this investment or the transactions contemplated by the Warrant.

12.**Tax Advisors**. The Holder has reviewed with its own tax advisors the U.S. federal, state and local and non-U.S. tax consequences of this investment and the transactions contemplated by the Warrant. With respect to such matters, the Holder relies solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Holder understands that it (and

------

A-1-2

------

not the Company) shall be responsible for its own tax liability that may arise as a result of this investment or the transactions contemplated by the Warrant.

13.**No "Bad Actor" Disqualification**. Neither (i) the Holder, (ii) any of its directors, executive officers, other officers that may serve as a director or officer of any company in which it invests, general partners or managing members, nor (iii) any beneficial owner of any of the Company's voting equity securities (in accordance with Rule 506(d) of the Securities Act) held by the Holder is subject to any of the "bad actor" disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act, except as set forth in Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed, reasonably in advance of the purchase or acquisition of the Securities, in writing in reasonable detail to the Company.

(*signature page follows*)

------

A-1-3

------

The Holder is signing this Investment Representation Statement on the date first written above.

**HOLDER**

---

| |
|:---|
| &nbsp;&nbsp;CRAIG STEVENS |
| &nbsp;&nbsp;(*Signature*) |
| &nbsp;&nbsp;(*Name and title of signatory, if applicable*) |
| &nbsp;&nbsp;(*Street address*) |
| &nbsp;&nbsp;(*City, state and ZIP*) |
| &nbsp;&nbsp;(*Email address*) |

---

------

A-1-4

------

EXHIBIT B

**ASSIGNMENT FORM**

ASSIGNOR: &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;&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;&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;

COMPANY:PARALLEL FLIGHT TECHNOLOGIES, INC.

WARRANT:THE WARRANT TO PURCHASE SHARES OF CLASS A COMMON STOCK ISSUED ON [*INSERT DATE*] (THE "***WARRANT***")

DATE:&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;&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;&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;

(1)**Assignment**. The undersigned registered holder of the Warrant ("***Assignor***") assigns and transfers to the assignee named below ("***Assignee***") all of the rights of Assignor under the Warrant, with respect to the number of shares set forth below:

Number of shares: &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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Address of Assignee:&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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Number of Shares Assigned: &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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

and does irrevocably constitute and appoint &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; as attorney to make such transfer on the books of PARALLEL FLIGHT TECHNOLOGIES, INC., maintained for the purpose, with full power of substitution in the premises.

(2)**Obligations of Assignee**. Assignee agrees to take and hold the Warrant and any shares of stock to be issued upon exercise of the rights thereunder (the "***Securities***") subject to, and to be bound by, the terms and conditions set forth in the Warrant to the same extent as if Assignee were the original holder thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)**Investment Intent**. Assignee represents and warrants that the Securities are being acquired for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and that Assignee has no present intention of selling, granting any participation in, or otherwise distributing the shares, nor does it have any contract, undertaking, agreement or arrangement for the same, and all representations and warranties set forth in Section 11 of the Warrant are true and correct as to Assignee as of the date hereof.

(4)**Investment Representation Statement**. Assignee has executed, and delivers herewith, an Investment Representation Statement in a form substantially similar to the form attached to the Warrant as Exhibit A-1.

(5)**No "Bad Actor" Disqualification**. Neither (i) Assignee, (ii) any of its directors, executive officers, other officers that may serve as a director or officer of any company in which it invests, general partners or managing members, nor (iii) any beneficial owner of any of the Company's securities held or to be held by Assignee is subject to any of the "bad actor" disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act of 1933, as amended (the "***Securities Act***"), except as set forth in Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and

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disclosed, reasonably in advance of the transfer of the Securities, in writing in reasonable detail to the Company.

Assignor and Assignee are signing this Assignment Form on the date first set forth above.

**ASSIGNOR** **ASSIGNEE**

---

| | |
|:---|:---|
| &nbsp;&nbsp;(*Print name of Assignor*) | &nbsp;&nbsp;(*Print name of Assignee*) |
| &nbsp;&nbsp;(*Signature of Assignor*) | &nbsp;&nbsp;(*Signature of Assignee*) |
| &nbsp;&nbsp;(*Print name of signatory, if applicable*) | &nbsp;&nbsp;(*Print name of signatory, if applicable*) |
| &nbsp;&nbsp;(*Print title of signatory, if applicable*) | &nbsp;&nbsp;(*Print title of signatory, if applicable*) |
| &nbsp;&nbsp;Address: | &nbsp;&nbsp;Address: |

---

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## Ex1K-3

![Picture 917835158](pftex3z3_1.jpg)

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**SECURED PROMISSORY NOTE**

**$1,000,000 November 12<sup>th</sup>, 2025**

FOR VALUE RECEIVED, **PARALLEL FLIGHT TECHNOLOGIES, INC.**, a Delaware corporation (the "Borrower"), with its chief executive office located at 450 McQuaide Dr., La Selva Beach, CA 95076-1921, hereby unconditionally promises to pay to the order of **LEONID CAPITAL MANAGEMENT, LLC** (the "Lender"), without setoff, in lawful money of the United States of America and in immediately available funds, the principal amount of one million dollars ($1,000,000.00) (the "Principal Amount"), together with all accrued and unpaid interest as set forth herein in accordance with the terms and conditions set forth herein.

The Borrower hereby agrees, for the benefit of the Lender, as follows:

1. Definitions. Capitalized terms contained in this Secured Promissory Note ("Promissory Note"), unless otherwise indicated, shall have the meanings set forth in this Section 1. All other terms contained in this Promissory Note, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein

"Affiliate" is, with respect to any Person, (a) any other Person which, directly or indirectly, controls or is controlled by or is under common control with that Person, (b) any officer or director of that Person and (c) with respect to the Lender, any entity administered or managed by the Lender or an Affiliate or investment advisor thereof and which is engaged in making, purchasing, holding or otherwise investing in commercial loans. A Person will be deemed to be "controlled by" any other Person if that other Person possesses, directly or indirectly, power to vote 5% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management and policies of that Person whether by contract or otherwise.

"Assignment of Claims" means any assignment by Borrower of its payment rights to Lender with respect to any Underlying Account made and acknowledged in accordance with the Federal Assignment of Claims Act of 1940, as amended.

"Borrower" shall have the meaning set forth in the preamble.

"Business Day" means any day that is not a Saturday, Sunday or other day on which federally regulated banking institutions are authorized to close.

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"Closing Date" shall mean the date of this Promissory Note.

"Code" means the Uniform Commercial Code as in effect on the Closing Date, and as the same may, from time to time, be enacted and in effect in the State of California

"Collateral" shall have the meaning set forth on Exhibit A.

"Contract" shall have the meaning set forth on Exhibit A.

"Contracting Officer" is a person with authority to enter into, administer and/or terminate Government Contracts.

"Default" shall mean any event that, if it continues uncured, will, with the lapse of time or the giving of notice or both, constitute an Event of Default.

"Default Rate" shall have the meaning set forth in Section 10 hereof.

"Deposit Account" is any "deposit account" as defined in the Code with such additions to such term as may hereafter be made listed in Schedule 2.6.7.

"Event of Default" shall have the meaning set forth in Section 9 hereof.

"Insolvency" shall mean a situation if any of the Insolvency Events listed in Section 6(e) of this Promissory Note has occurred.

"Insolvency Event" shall have the meaning set forth in Section 9 hereof.

"Interest Rate" shall have the meaning set forth in Section 3 hereof.

"Lien" means with respect to any Person, any interest granted by that Person in any real or personal property, asset, or other right owned or being purchased or acquired by that Person that secures payment or performance of any obligation and includes any mortgage, lien, encumbrance, title retention lien, charge, or other security interest of any kind, whether arising by contract, as a matter of law, by judicial process, or otherwise.

"Liquidity" means, as of any date of determination, unencumbered cash or cash equivalents held by Borrowers at a depository institution as designated by Lender in their sole discretion.

"Loan Documents" are, collectively, this Agreement, Assignment of Claims, Deposit Account Control Agreement, any other control agreements, the Attestations, the Borrowing Resolutions, the Warrant, any subordination agreements, any note, or notes executed by Borrower, and any other present or future agreement between Borrower and/or for the benefit of Lender in connection with this Agreement, all as amended, restated, or otherwise modified.

"Maturity Date" means April 21<sup>st</sup>, 2028; provided that, upon request by Borrower, this date may be extended at the sole discretion of the Lender.

"Payment Date" shall have the meaning set forth in Section 3 hereof.

"Person" is any natural person, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency, or any other entity, whether acting in an individual, fiduciary or other capacity.

"Principal Amount" shall have the meaning set forth in the preamble.

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"Restricted Payment" means (A) any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other equity interest of Borrower or any Subsidiary, and (b) any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any capital stock or other equity interest or on account of any return of capital to Borrower's stockholders, partners or members (or the equivalent Person thereof).

"Term Loan" shall have the meaning set forth in Section 2 hereof.

"Underlying Account" means the Account, relating to and evidenced by the Contract.

"Warrant" means that certain Warrant Agreement, dated as of the Effective Date, by and between the Borrower and Lender, as amended, restated, modified or otherwise supplemented from time to time in accordance with and subject to the terms and conditions thereof.

2. Term Loan. Subject to the satisfaction of the conditions contained in Section 11, Lender agrees to make a term loan to Borrower (the "Term Loan") on the Closing Date in the Principal Amount. The commitment of the Lender to make the Term Loan shall terminate concurrently with the making of the Term Loan on the Closing Date. Amounts repaid or prepaid in respect of the Term Loan may not be reborrowed.

3. Interest Rate. All Principal Amounts will bear simple interest at a rate per annum equal to 22.75% (the "Interest Rate") from the date made until paid in full. Interest shall be calculated on the basis of actual days elapsed over year of 360 days. Interest on the outstanding balance of Principal Amounts shall be due and payable monthly, in arrears, on the on the 21st calendar day of each month, as set forth in Schedule 4.1.. If the 21st calendar day falls on a weekend or bank holiday (i.e., a non-Business Day), payment shall instead be due and payable on the next following business day, commencing December 21<sup>st</sup>, 2025 (each, a "Payment Date"). Any accrued interest which for any reason has not theretofore been paid shall be paid in full on the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Payments; Prepayments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Principal. The outstanding Principal Amount, together with all accrued and unpaid interest owing thereon and any other amounts outstanding hereunder, shall be due and payable in equal installments in an amount of $44,012.94 on each Payment Date and on the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.General. Subject to Section 4(c), Borrower shall have the option to prepay the Term Loan at any time or times in full or in part without penalty or premium. If this Promissory Note or any payment hereunder becomes due on a day which is not a Business Day, the due date of this Promissory Note or payment shall be extended to the next succeeding Business Day, and such extension of time shall he included in computing interest and fees in connection with such payment. All payments shall be deemed to be made upon Lender's initiation of electronic debit or credit entries through the ACH system to a Deposit Account of Borrower's on each Payment Date. In the event that the full amount owed by the Borrower under this Note is paid to Lender such that no indebtedness under this Promissory Note remains unpaid, then Lender shall return to the Borrower the original Promissory Note marked "paid in full" and shall promptly release the Lien and its security interest in, and return any, Collateral to the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Mandatory Prepayment. If the Term Loan is accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Lender an amount equal to the sum of (A) all outstanding principal, due in connection with the Term Loan, together with accrued and unpaid interest, and (B) all other sums, if any, that shall have become due and payable hereunder in connection with the Term Loan.

5. ACH Authorization. Borrower shall deliver to Lender (i) on or before the date hereof, an ACH Authorization with respect to all of Borrower's Deposit Accounts maintained by Borrower as of the date hereof as set forth on Schedule 2.6.7 and (ii) within two (2) Business Days of establishing a new Deposit Account after the date hereof, an ACH Authorization with respect to such new Deposit Account. Notwithstanding the provisions set forth herein, in order to satisfy any of the Obligations that are not paid or satisfied when due on each Payment Date in

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accordance with Exhibit B, Borrower authorizes Lender to initiate electronic debit or credit entries through the ACH system to any of Borrower's Deposit Accounts in order to satisfy any such amounts.

6. Representations and Warranties. In connection with its obligations hereunder, the Borrower represents and warrants to the Lender that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Borrower has full power, authority and legal right to execute, deliver and perform its obligations pursuant to this Promissory Note and the Promissory Note constitutes valid and binding obligations of the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Borrower is a Delaware corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.The execution, delivery and performance by the Borrower of this Promissory Note (i) constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with the terms of this Promissory Note, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law), (ii) has been duly authorized by all necessary action on the part of the Borrower, (iii) do not and will not require any approval of the Borrower's interest-holders that have not been obtained, and (iv) do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.The execution, delivery and performance by the Borrower of the Promissory Note will not (i) result in the breach of, or conflict with, or result in the acceleration of, any obligation under any guaranty, indenture, credit facility or other instrument to which Borrower or any of its assets may be subject, or under the organizational documents of the Borrower or (ii) violate any order, judgment or decree to which Borrower any of its assets is subject.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.No action, suit, proceeding or investigation, judicial, administrative or otherwise (including without limitation any reorganization, bankruptcy, insolvency or similar proceeding), currently is pending or, to the best of Borrower's knowledge, threatened in writing against Borrower or any Subsidiaries, which, either in any one instance or in the aggregate, may have a material, adverse effect on Borrower's or any such Subsidiary's ability to perform their obligations under this Promissory Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.The names and addresses of all financial institutions at which the Borrower maintain its Deposit Accounts, and the account numbers and account names of such Deposit Accounts as set forth on Schedule 2.6.7 are true and accurate as of the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.The pledge, assignment, and grant of the Collateral pursuant to this Promissory Note create a continuing first-priority lien and security interest in favor of Lender in and to all of Borrower's right, title, and interest in the Collateral, securing the payment and performance when due of all obligations under this Promissory Note. Such lien and security interest constitute a valid and, upon the filing by Lender of such UCC-1 financing statements as Lender reasonably deems necessary, a perfected first-priority security interest in the Collateral (copies of which filings shall be provided to Borrower for review prior to and upon filing). These representations and warranties shall survive until the indefeasible payment in full of the Principal Amount, interest and all other amounts due under this Promissory Note.

7. Security. As security for the payment and performance as and when due of all obligations under this Promissory Note, Borrower hereby pledges, assigns and grants to Lender, and hereby creates a continuing first priority lien and security interest in favor of Lender in and to all of its right, title and interest in and to the Collateral.

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8. Covenants.

&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;a.Affirmative Covenants. So long as any obligation under this Promissory Note remains outstanding, the Borrower, and cause any of its Subsidiaries to, unless it has received the prior written consent of the Lender:

&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;i.use all advances of the Principal Amount for general working capital purposes;

&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;ii.provide Lender with its monthly bank statements promptly upon receipt;

&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;iii.notify the Lender immediately upon the occurrence of any Default or Event of Default;

&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;iv.at Borrower's cost and expense, upon request of Lender, duly execute and deliver or cause to be duly executed and delivered, to Lender such further instruments, documents, certificates and financing and continuation statements, and do and cause to be done such further acts that may be reasonably necessary or advisable in the reasonable opinion of the Lender to carry out more effectively the provisions and purposes of this Promissory Note;

&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;v.(A) preserve and maintain its legal existence and good standing under the laws of the jurisdiction of its organization and its legal existence and good standing in each other state where it is registered as a foreign entity, (B) maintain all licenses necessary or convenient for its business, continually preserve its rights thereunder, (C) comply with all applicable laws; and (D) maintain all material property necessary or useful in its business in good working order and repair, including, without limitation, the Collateral;

&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;vi.permit the Lender or its agents to conduct inspections of the books and records and the Collateral and all records pertaining thereto upon reasonable prior notice from the Lender at reasonable intervals to be determined by the Lender and without hindrance or delay (except during a continuing Event of Default in which case no prior notice shall be required);

&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;vii.no later than twenty (20) Business Days after the Closing Date, deliver to Lender a fully executed control agreement in form and substance satisfactory to Lender with respect to each Deposit Account as set forth on Schedule 2.6.7

&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;viii.upon establishment of a Deposit Account, Borrower shall promptly (a) (in any event no later than two (2) Business Days after the establishment of such Deposit Account), notify Lender details of such Deposit Account, and (b) (in any event no later than twenty (20) Business Days after the establishment of such Deposit Account), deliver to Lender a fully executed control agreement in form and substance satisfactory to Lender with respect to such Deposit Account;

&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;ix.take all actions necessary to maintain, preserve and protect the rights and interests of the Lender with respect to all cash deposits of the Borrower and any Subsidiary and other proceeds of Collateral;

&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;x.assist in the prompt delivery of the Assignment of Claims to the Contracting Officer and assist in the completion of its related contract modification to change payee to lender, if necessary; and

&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;xi.upon Lender's request, provide a written report on the Underlying Account, where any payment on the Underlying Account does not occur by its due date and include the reasons for the delay and the expected payment date.

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&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;b.Negative Covenants. So long as any obligation under this Promissory Note remains outstanding, the Borrower shall not and shall not permit any Subsidiary, unless it has received the prior explicit written consent of the Lender, to:

&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;i.sell, transfer, lease or otherwise dispose of any interest in its assets (including the Collateral) outside of the ordinary course of business;

&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;ii.create, incur, assume or become obligated (directly or indirectly), for any loans or other indebtedness for borrowed money or shall assume, guarantee or endorse, or otherwise become liable in connection with, the obligations of any person or entity;

&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;iii.create, incur, assume or permit to exist any Lien or security interest on or with respect to any of the Collateral (other than for various inchoate liens imposed by applicable law);

&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;iv.change (a) its name as it appears in official filings in the state of its organization (b) its or state of organization, or (c) the location of its chief executive office, in each case, without providing the Lender thirty (30) days prior written notice;

&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;v.establish or maintain any Deposit Accounts without at least twenty (20) days prior notice to the Lender;

&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;vi.(a) enter into any consolidation, amalgamation, demerger, merger, reconstruction, partnership or any analogous arrangement (except as contemplated under Section 9(d) for which not approval of Lender is required) or (b) wind up, liquidate or dissolve or take any action that would (or fail to take any action where such failure would) result in the liquidation or dissolution of Borrower or any Subsidiary; or

&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;vii.directly or indirectly, declare or make any Restricted Payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Financial Covenant; Liquidity. Maintain at all times Liquidity of not less than ($50,000.00), to be verified by Lender at any time either via its access to Borrower's bank accounts or its review of Borrower's monthly bank statements; provided, that, Borrower shall promptly provide any such additional information, statements or reports as requested by Lender to facilitate its determination of Borrower's compliance with the requirements set forth in this Section.

9. Events of Default. The occurrence of any of the following events set forth below shall constitute an event of default (an "Event of Default") hereunder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Failure to Pay. The Borrower fails to pay any amount of the Principal Amount, interest or other amounts due under this Promissory Note when due and such payment is not made within three (3) business days of when it is due; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Breach of Covenants. The Borrower fails to perform or observe any material term, covenant or agreement contained herein and such failure is not cured or waived within five (5) Business Days after the Borrower receives notice of such failure; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Representations and Warranties. Any representation or warranty made or furnished by or on behalf of Borrower or any Subsidiary in this Promissory Note or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement, or other document furnished pursuant to or in connection with this Promissory Note or any amendment or modification hereof or thereof or waiver hereunder or thereunder, proves to have been materially incorrect when made or furnished, except for matters which would not, in the aggregate, reasonably be expected to have a material, adverse effect on Borrower's or any such Subsidiary's ability to perform their obligations under this Promissory Note; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Change of Control. A Change of Control shall occur, provided that if the Borrower enters into definitive agreements that contemplate a Change of Control, such transaction(s) will not be deemed to be a Change of Control for purposes of this Section 9(d) or require Lender's prior written consent pursuant to Section 8(b) hereof if such definitive agreement(s) expressly provide as a closing condition that this Note will be repaid in full upon the consummation of such transaction(s); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.Insolvency Event. (a) The Borrower or any Subsidiary makes a general assignment for the benefit of creditors or admits in writing its inability to pay its debts generally as they become due; or an order, judgment or decree is entered adjudicating the Borrower or any Subsidiary bankrupt or insolvent; or any order for relief with respect to the Borrower or any Subsidiary is requested by the Borrower or any Subsidiary under the federal bankruptcy code; or the Borrower or any Subsidiary petitions or applies to any tribunal for the appointment of a custodian, trustee, receiver or liquidator of the Borrower or any Subsidiary, or of any substantial part of the assets of the Borrower or any Subsidiary, or commences any proceeding relating to the Borrower or any Subsidiary under any bankruptcy reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction; or (b) any such petition or application is filed, or any such proceeding is commenced (each, an "Insolvency Event"), against the Borrower or any Subsidiary and either (A) the Borrower or any Subsidiary by any act indicates its approval thereof, consent thereto or acquiescence therein or (B) such petition, application or proceeding is not dismissed within forty-five (45) days of filing thereof; or:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.Attachment of Collateral. An attachment, garnishment or writ is levied against any Collateral; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.Invalidity of Promissory Note. This Promissory Note shall for any reason fail to create a valid and perfected Lien and security interest in the Collateral because of any action or inaction on the part of Borrower, or shall fail to remain in full force or effect, or any action shall be taken to discontinue or to assert the invalidity or unenforceability thereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.Underlying Account. The Borrower, at any times, fails to observe each and every covenant, obligation and requirement of any contract(s) relating to or evidencing the Underlying Account (including the Contract), including the failure to meet any deadlines or deliverable requirements set forth therein or relating thereto.

10. Remedies; Costs and Expenses. Upon the occurrence of any Event of Default, the Lender (i) may declare all amounts outstanding under this Promissory Note immediately due and payable together with accrued interest and fees thereon, and (ii) shall be entitled to exercise any other rights and remedies which may be available under this Promissory Note or applicable law. Upon the occurrence of any Event of Default that is an Insolvency Event, the outstanding principal amount of this Promissory Note shall become immediately due and payable without any action on the part of the Lender, and the Borrower shall immediately pay to the Lender all amounts due and payable with respect to this Promissory Note. Further, upon the occurrence of any Event of Default (whether or not acceleration has occurred, and including on and after the existence of any Insolvency Event), interest on the Principal Amount shall accrue at a rate of five percent (5.0%) above the then applicable Interest Rate per annum (the "Default Rate"), or the maximum rate permitted by law, whichever is less, during the period of such default. Interest at the Default Rate shall accrue prior to and during any Insolvency Event until all accrued and unpaid interest as set forth herein are paid in full in cash. The Borrower agrees to pay all reasonable costs and expenses (including reasonable attorneys' fees) incurred by the Lender in documenting, protecting or enforcing its rights and remedies under this Promissory Note. Fees and expenses which are required to be paid by Borrower pursuant to this Promissory Note but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the obligations under this Promissory Note. Payment or acceptance of the increased interest rate provided in this Section 10 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of the Lender.

11. Conditions Precedent. The obligation of the Lender to make the Term Loan on the Closing Date is subject to the following conditions precedent, each of which shall be satisfactory in all respects to the Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Promissory Note. the duly executed Promissory Note in form and substance satisfactory to

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the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Assignment of Claims. the duly executed Assignment of Claims in form and substance satisfactory to the Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Security Interests. Borrower shall fully cooperate with the Lender in perfecting any security interests granted to the Lender hereunder, and shall deliver to the Lender any documents, information, materials, and consents as may be reasonably necessary to perfect or assist the Lender in perfecting any security interests granted to the Lender hereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Organizational Documents. (A) a true and correct copy of the Articles of Incorporation of the Borrower, as certified by the relevant governmental authority; and (B) a true and correct copy of the by-laws of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.Good Standing/Legal Existence. a certificate from the relevant governmental authority, dated not more than ten (10) days prior to the date hereof, certifying as to the legal existence and good standing of Borrower in its jurisdiction of organization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.Financial Information. (A) such financial information regarding the Borrower, each Subsidiary and the Collateral as may be reasonably requested by the Lender, prepared by Borrower in good faith and in accordance with assumptions for which Borrower has a reasonable basis in form satisfactory to the Lender, it being acknowledged by Lender that Borrower is not making any representation and warranties regarding the attainment of any projections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.Lien Searches. Lender shall have received the results of recent lien searches for the Borrower in each applicable jurisdiction, and such results shall be satisfactory to Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.ACH Authorization. The fully executed ACH Authorizations substantially in the form of Exhibit B attached hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.Approval. all governmental and third party approvals necessary or, in the discretion of Lender, advisable, in connection with the transactions contemplated hereby shall have been obtained and be in full force and effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j.Warrants. Borrower shall have issued the Warrant(s) to Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k.Additional Documents and Information. Lender shall have received such additional documents and information related to the transactions and the Persons contemplated hereby as the Lender may reasonably request; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l.Representations and Warranties. Lender shall have received such information as the Lender may reasonably request to confirm the truth and correctness of Borrower's representations and warranties set forth in Section 6 above.

12. Waiver of Presentment, etc. The Borrower and all others who may become liable for all or any part of this indebtedness hereunder do hereby severally waive presentment and demand for payment, notice of dishonor, protest, notice of protest, notice of nonpayment, notice of intent to accelerate the maturity hereof and of acceleration. No release of any person liable for payment of the indebtedness hereunder, no extension of time for payment of this Promissory Note or any installment hereof, and no alteration, amendment or waiver of any provision hereof made by agreement between or among the Lender and any other person or party shall release, modify, amend, waive, extend, change, discharge, terminate or affect the liability of the Borrower for the payment of all or any part of the indebtedness hereunder.

13. GOVERNING LAW. THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED, ENFORCED, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF

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CALIFORNIA, WITHOUT REFERENCE OR GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTS OF LAW PRINCIPLES THEREOF.

14. WAIVER OF JURY TRIAL. BORROWER AND LENDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS PROMISSORY NOTE AND ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS, THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS PROMISSORY NOTE. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

15. All notices consents, requests, approvals, demands, or other communication by any party to this Promissory Note must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (c) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Lender or Borrower may change its mailing address by giving notice to the other.

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| | | |
|:---|:---|:---|
| If to Borrower: | **PARALLEL FLIGHT TECHNOLOGIES, INC.** | **PARALLEL FLIGHT TECHNOLOGIES, INC.** |
|  | 450 McQuaide Dr. | 450 McQuaide Dr. |
|  | La Selva Beach, CA 95076-1921 | La Selva Beach, CA 95076-1921 |
|  | Attn: | Craig Stevens |
|  | Email: | craig@parallelflight.com |
| If to Lender: | **LEONID CAPITAL MANAGEMENT** | **LEONID CAPITAL MANAGEMENT** |
|  | 16400 Pacific Coast Highway, Ste 211 | 16400 Pacific Coast Highway, Ste 211 |
|  | Huntington Beach, CA 92649 | Huntington Beach, CA 92649 |
|  | Attn: | James Parker |
|  | Email: | james@leonidcp.com |

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16. Amendments and Waivers. This Promissory Note may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of the Borrower or the Lender, except by an agreement in writing signed by the Borrower and the Lender. The Lender shall not, by any act, delay, omission or otherwise, be deemed to have waived any of its respective rights or remedies hereunder. The waiver by the Lender of any right or remedy hereunder upon any one occasion shall not be construed as a bar to any right or remedy which they would otherwise have had on any future occasion.

17. Assignment. This Promissory Note shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective heirs, representatives, executors, successors and assigns. The Borrower agrees that it may not assign this Promissory Note and/or any obligations hereunder without the Lender's prior written consent, not to be unreasonably withheld, conditioned or delayed. Lender (and any permitted assignee of Lender) has the right, subject to compliance with any applicable laws and regulations, from time to time to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, its obligations, rights, and benefits under this Agreement and the other Loan Documents (including all or any part of the Promissory Note and all or any other Obligations) to one or more of its Affiliates who are not competitors of Borrower (including, without limitation, LCIF AGGREGATOR A, L.P. and LCIF PORTFOLIO HOLDINGS, LLC) with prompt notice to Borrower thereof, and to any other Person solely with the prior written consent of Borrower, not to be unreasonably withheld, conditioned or delayed.

18. Interest Rate Limitation; Invalidity. The Borrower and Lender intend at all times to comply with applicable state law or applicable United States federal law (to the extent that it permits a lender to contract for, charge, take, reserve or receive a greater amount of interest than under state law). If the applicable law (state or federal) is ever judicially interpreted so as to render usurious any amount called for under this Promissory Note, then it is the

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Borrower's and the Lender's express intent that all excess amounts theretofore collected by the Lender shall be credited against the unpaid principal balance of the Principal Amount based (or, if this Promissory Note has been or would thereby be paid in full, refunded to the Borrower), and the provisions hereof immediately be deemed reformed and the amounts thereafter collectible thereunder reduced, without the necessity of the execution of any new document, so as to comply with applicable law, but so as to permit the recovery of the fullest amount called for and legally permitted thereunder. In the event that any provision of this Promissory Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Promissory Note.

19. Reinstatement. This Promissory Note shall remain in full force and effect until the payment in full in cash of all amounts due hereunder, after which time this Promissory Note shall terminate without further action on the part of the parties hereto. To the extent any payment on amounts hereunder is declared to be fraudulent or preferential, set aside or required to be paid to any receiver, trustee in any Insolvency Event, liquidating trustee, agent, other similar person or any other Person under any Insolvency Event, receivership, fraudulent conveyance or similar law, or for any reason required to be returned or disgorged by any Lender to any Person, then, if such payment is recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent, other similar person, or any other Person, the amounts due hereunder or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding and this Promissory Note shall be reinstated and continue in full force and effect, in each case, as if such payment had not occurred.

[Signature page follows]

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IN WITNESS WHEREOF, the Borrower has caused this Promissory Note to be executed and delivered as of the day first above written.

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| | |
|:---|:---|
| **BORROWER:** | **BORROWER:** |
| **PARALLEL FLIGHT TECHNOLOGIES, INC.** | **PARALLEL FLIGHT TECHNOLOGIES, INC.** |
| By: |  |
| Name: | Craig Stevens |
| Title: | <br> Chief Executive Officer |
| **LENDER:** | **LENDER:** |
| **LEONID CAPITAL MANAGEMENT, LLC** | **LEONID CAPITAL MANAGEMENT, LLC** |
| By: |  |
| Name: | James Parker |
| Title: | Founding Partner |

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[Signature Page to Secured Promissory Note]

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Exhibit A

The Collateral consists of all of Borrower's right, title and interest in and to the following:

All goods, Accounts (including Underlying Accounts), Equipment, Inventory, contract rights or rights to payment of monies, leases, license agreements, franchise agreements, General Intangibles (except as provided below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, Intellectual Property, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired;

All monies due or to become due for the contract(s) identified as #N6833525C0254 (the "Contract") to the extent allowed under the Assignment of Claims Act of 1940, as amended, (31 U.S.C.3727, 41 U.S.C.6305); and

All Borrower's books and records pertaining to any of the foregoing, and any and all claims, rights and interests in any of the foregoing and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds (as defined in the Code) and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral shall not include: (a) any rights or interests of Borrower under any permit, license, contract, lease or other agreement to the extent the granting of a security interest therein (i) would be prohibited as by applicable law or (ii) is prohibited by or would constitute a breach or default under any agreement or document governing such property (but only to the extent (A) such prohibition is enforceable under applicable law (including, without limitation, the Code) and (B) such term would not be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the Code of any applicable jurisdiction); provided that (x) upon the termination, lapsing or other remedy (including by consent) of any such prohibition, such property shall automatically be part of the Collateral and the security interests hereunder shall automatically attach thereto and (y) to the extent severable, the security interests hereunder shall attach immediately to any portion of such permit, license, contract, lease or other agreement or any assets or property subject thereto that does not result in any of the consequences specified in this clause (ii); (b) more than sixty-five percent (65%) of the presently existing and hereafter arising issued and outstanding shares of voting capital stock owned by Borrower of any foreign Subsidiary which shares entitle the holder thereof to vote for directors or any other matter (it being understood that 100% of the non-voting capital stock of any foreign subsidiary shall constitute Collateral); or (c) until the occurrence of an Event of Default declared under Section 9(a) [Failure to Pay] (the "Intellectual Property Pledge Event", any Intellectual Property (but only for so long as such Event of Default is uncured or unwaived); provided, however, that the Collateral shall include all accounts and general intangibles that consist of rights to payment and proceeds from the sale, licensing or disposition of all or any part, or rights in, the foregoing (the "Rights to Payment"). Notwithstanding the foregoing, if an unappealable decision of a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property is necessary to have a security interest in the Rights to Payment, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property solely to the limited extent necessary to permit perfection of Lender's security interest in the Rights to Payment.

For the avoidance of doubt, upon the occurrence of the Intellectual Property Pledge Event, Intellectual Property of Borrower shall constitute Collateral hereunder.

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- Schedule 2.6.7 -

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Schedule 4.1

REPAYMENT SCHEDULE

![Picture 1](pftex3z3_2.jpg)

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- Schedule 4.1 -

## Ex1K-6

![Picture 1954812548](pftex6z3_1.jpg)

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Section A - Solicitation/Contract Form

SECTION A NOTES

Section A - SOLICITATION/CONTRACT FORM

CLAUSES INCORPORATED BY FULL TEXT

**Points of Contact**

**Contract Specialist**

Mr. Rhondi Bates

Phone: 732-323-4832

Email: rhondi.e.bates.civ@us.navy.mil

**Government Technical Point of Contact**

Daniel Eleuterio

Phone: 703-696-4303

Email: daniel.p.eleuterio.civ@us.navy.mil

**Alternate Government Technical Point of Contact**

Brian Holm-Hansen

Phone: 703-217-3994

Email: brian.holm-hansen.civ@us.navy.mil

**Contractor**

Mr. Shannon Knudsen

Phone: 571-723-0601

Email: smk@parallelflight.com

**THIS REQUIREMENT IS FOR A SMALL BUSINESS INNOVATION RESEARCH (SBIR) PHASE II CONTRACT IN SUPPORT OF THE OFFICE OF NAVAL RESEARCH (ONR) SBIR PROGRAM.**

Refer to the following website for information on clauses incorporated into this contract:

https://www.acquisition.gov/browse/index/far

Contract Administration Delegation:

In accordance with FAR 42.202, the Contracting Officer delegates all contract administration functions listed in FAR 42.302(a). The Contractor is advised to direct all inquiries concerning administration of this contract to the Administrative Contracting Officer (ACO) designated in Block 6 of the SF26 of this award document.

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Section B - Supplies or Services and Prices

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ITEM NO | SUPPLIES/SERVICES | QUANTITY | UNIT | UNIT PRICE | AMOUNT |
| 0001 |  | 1 | Lot |  | $3741375.00  |
|  | Research and Development | Research and Development | Research and Development | Research and Development |  |
|  | CPFF | CPFF | CPFF | CPFF |  |
|  | Services and materials necessary to conduct research and development under SBIR Topic (A1.04-2500) entitled "(Modifications to Firefly to make maritime compatible)" sufficient to demonstrate the conceptual feasibility of the Phase I effort and show development progress towards successful application of the efforts and deliver in accordance with the Statement of Work as set forth in the schedule. | Services and materials necessary to conduct research and development under SBIR Topic (A1.04-2500) entitled "(Modifications to Firefly to make maritime compatible)" sufficient to demonstrate the conceptual feasibility of the Phase I effort and show development progress towards successful application of the efforts and deliver in accordance with the Statement of Work as set forth in the schedule. | Services and materials necessary to conduct research and development under SBIR Topic (A1.04-2500) entitled "(Modifications to Firefly to make maritime compatible)" sufficient to demonstrate the conceptual feasibility of the Phase I effort and show development progress towards successful application of the efforts and deliver in accordance with the Statement of Work as set forth in the schedule. | Services and materials necessary to conduct research and development under SBIR Topic (A1.04-2500) entitled "(Modifications to Firefly to make maritime compatible)" sufficient to demonstrate the conceptual feasibility of the Phase I effort and show development progress towards successful application of the efforts and deliver in accordance with the Statement of Work as set forth in the schedule. |  |
|  | FOB: Destination | FOB: Destination | FOB: Destination | FOB: Destination |  |
|  | PSC CD: AC12 | PSC CD: AC12 | PSC CD: AC12 | PSC CD: AC12 |  |
|  | ESTIMATED COST | ESTIMATED COST | ESTIMATED COST | ESTIMATED COST | $3496612.00  |
|  | FIXED FEE | FIXED FEE | FIXED FEE | FIXED FEE | $244763.00  |
|  | TOTAL EST COST + FEE | TOTAL EST COST + FEE | TOTAL EST COST + FEE | TOTAL EST COST + FEE | $3741375.00  |
| ITEM NO | SUPPLIES/SERVICES | QUANTITY | UNIT | UNIT PRICE | AMOUNT |
| 0001 |  |  |  |  | $0.00  |
|  | Funding For CLIN 0001 |  |  |  |  |
|  | FFP |  |  |  |  |
|  | PURCHASE REQUEST NUMBER: 1301225449 |  |  |  |  |
|  |  |  |  | NET AMT | $0.00  |
|  |  |  |  |  | $1000000.00  |
|  | ACRN AA |  |  |  |  |
|  | CIN: 130122544900001 |  |  |  |  |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ITEM NO | SUPPLIES/SERVICES | QUANTITY | UNIT | UNIT PRICE | AMOUNT |
| 0002 |  | 1 | Lot |  | NSP |
|  | Data for CLIN 0001 | Data for CLIN 0001 | Data for CLIN 0001 | Data for CLIN 0001 |  |
|  | CPFF | CPFF | CPFF | CPFF |  |
|  | Data for CLIN 0001 to be produced in accordance with the DD1423 Contract | Data for CLIN 0001 to be produced in accordance with the DD1423 Contract | Data for CLIN 0001 to be produced in accordance with the DD1423 Contract | Data for CLIN 0001 to be produced in accordance with the DD1423 Contract |  |
|  | Data Requirements List, Exhibit A, A001-A004 (and DIDs referenced therein). | Data Requirements List, Exhibit A, A001-A004 (and DIDs referenced therein). | Data Requirements List, Exhibit A, A001-A004 (and DIDs referenced therein). | Data Requirements List, Exhibit A, A001-A004 (and DIDs referenced therein). |  |
|  | FOB: Destination | FOB: Destination | FOB: Destination | FOB: Destination |  |
|  | PSC CD: AC12 | PSC CD: AC12 | PSC CD: AC12 | PSC CD: AC12 |  |
|  | ESTIMATED COST | ESTIMATED COST | ESTIMATED COST | ESTIMATED COST | $0.00 |
|  | FIXED FEE | FIXED FEE | FIXED FEE | FIXED FEE | $0.00 |
|  | TOTAL EST COST + FEE | TOTAL EST COST + FEE | TOTAL EST COST + FEE | TOTAL EST COST + FEE | $0.00 |

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SECTION B NOTES

B.1This is a Phase II SBIR contract award. This is a Cost Plus Fixed Fee (Completion Form) contract. The contractor shall perform the work specified below and in Section C. The contractor shall be reimbursed in accordance with the provisions of the clauses entitled Allowable Cost and Payment, FAR 52.216-7, and Fixed Fee, FAR 52.216-8.

**Contractors are advised that a web site is available for viewing or printing out Data Item Descriptions (DIDs) as follows:** 

https://navysbir.com/links_forms.htm

B.2

B.3Contractors are requested to advise the Government of any potential interest in the sale or grant to the Government of technical data rights stemming from performance under this contract. If purchased or granted under any such agreement, the Government intends on using the technical data (as defined in DFARs 252.227-7018 (a)) on an unlimited and unrestricted basis (also defined at DFARs 252.227-7018 (a)). These unlimited rights are in addition to, and cannot be less than or restricted by, any existing data rights already conveyed to the Government under DFARs 252.227-7018 (b). If considering a sale or grant of unlimited rights under this paragraph, please identify the terms and conditions of such a transaction and any requested price for transferring ownership. If sold or granted, an express statement reflecting any such agreement will be inserted directly in the schedule. This paragraph is self-deleting if no agreement for sale or grant of rights is reached and no express statement of Government ownership is otherwise included in this contract. **Sale or grant of unlimited rights is not a requirement for engaging in this contract with the Government.**

B.4Payment of Fixed Fee - Completion

The Government shall make payments (provisional) to the contractor when requested as work progresses, but not more than twice per month. The fixed fee specified herein, subject to any adjustment required by other provisions of this contract, will be made in installments to be paid at the time of each provisional payment of the allowable cost. The amount of each such payment of fee shall be in the same ratio to the total fixed fee as the provisional payment of allowable cost is to the total estimated cost of the contract. The balance of the fixed fee will be paid in accordance with other clauses in this contract.

Withholding - Per FAR 52.216-8, Fixed Fee, payment of the fixed fee shall be made as specified in the Schedule; provided that the Contracting Officer withholds a reserve not to exceed 15 percent of the total fixed fee or $100,000, whichever is less, to protect the Government's interest.

In the event of discontinuance of the work, the fixed fee shall be redetermined by mutual agreement equitably to reflect any diminution of the work performed per FAR 52.232-22, Limitation of Funds. The fee will be adjusted to reflect the amount equal to the percentage of completed work contemplated by this contract.

------

Section C - Descriptions and Specifications

SECTION C NOTES

Section C - DESCRIPTIONS AND SPECIFICATIONS

C.1This contract constitutes acceptance of the offer submitted by **Parallel Flight Technologies, Inc.** under technical proposal **N2S-0185** tendered under Topic #A1.04-2500 for performance under a Phase II program as initially advertised in SBIR solicitation #**A1.04**, as negotiated (including any mutually agreed changes to the Statement of Work or other specific work requirements) under this bilateral agreement. This contract also sets forth all negotiated terms and conditions pertinent to award of this contract, including specific information required for contract performance and administration.

Items 0001 and 0002 are for performance of R&D work and the delivery of data and/or hardware deliverables and shall be performed in accordance with either the Statement of Work contained in this document or as referenced in the technical volume of the contractor's proposal. If this contract wholly incorporates the work contained in the contractor's technical proposal, the work shall be conducted in accordance with the detailed obligations to which the contractor committed itself through submission of the referenced proposal and no other Government Statement of Work is required for performance under this contract. **The research effort depicted in the technical volume of the contractor's proposal is hereby accepted.**

**C.2** **The Government reserves the right to establish task precedence any time there is a conflict between technical methodology, critical** path **or engineering strategy needed to accomplish the goal of the Navy program affected by, or under, this contract. Prioritization of conflicting tasking by the Contracting Officer, or his delegate, does not constitute a change to the contract under the Changes Clause per clause H.1 or FAR 52.243.**

C.3It is anticipated that a kickoff meeting may be held within 30 days of the date of award. If a kickoff meeting is not an express task in the Statement of Work, a kickoff meeting may not be required. Failure to hold a kickoff meeting should not be construed by the contractor as a reason for not beginning work immediately upon award of the contract.

C.4The contractor should ensure that the work effort incorporates, to the maximum extent practicable, those activities designated in their offer aimed at marketing the technology to either the Government or the private sector. Since a primary objective of the SBIR program is to encourage and potentially fund dual-use technology (within both the public and private sector), contractors shall devote some portion of their efforts towards actively marketing the Phase II technology.

C.5A Phase I proposal requires submission of a 1 page commercialization strategy and a schedule of specific data documenting estimated commercialization expectations from the proposed Phase I technology. Submission of a Phase I or II proposal also requires electronic registration to report the results of prior company Phase II commercialization efforts. The website address is:

https://www.dodsbirsttr.mil/submissions/login

Performance under this Phase II contract requires the company to report actual sales and investment data in its SBA Company Commercialization Report via "My Dashboard" on SBIR.gov. This shall be done at 12 and 24 months after the Phase II award (and annually thereafter if the contract continues beyond 24 months).

------

Section D - Packaging and Marking

SECTION D NOTES

Section D - PACKAGING AND MARKING

D.1All unclassified data shall be prepared for shipment in accordance with best commercial practice to assure safe arrival at the destination. Classified reports or other data, if any, shall be prepared for shipment in accordance with the National Industrial Security Program Operating Manual, DOD 5220.22-M.

D.2All reports shall prominently show the following information on the cover of the report/data or in the letter of transmittal (if a progress report):

&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;(1)Name and business address of the contractor

&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;(2)Contract number

&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;(3)Name, address and office location of the Government Technical Point of Contact

&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;(4)SBIR Research Topic Title

------

Section E - Inspection and Acceptance

SECTION E NOTES

INSPECTION AND ACCEPTANCE TERMS

E.1Inspection and acceptance of the R&D efforts and deliverables required under this contract shall be made at destination by the Government-designated technical liaison, or another duly authorized representative of the receiving activity. **All deliverables should therefore be submitted to his/her address as listed in Section G below for acceptance.** See the general reference section of this contract for the appropriate provisions which fully describe the rights and duties of the parties in inspection (FAR 52.246-9) and acceptance.

E.2Acceptance of the data submitted under the line items above shall generally constitute acceptance of the research and development work conducted under this contract unless the SOW or schedule otherwise specifies or requires delivery of hardware, software and/or other material product or intellectual property media. Acceptance of any other such product, model, prototype or data specifically called out in the SOW (Section C) or schedule (Section B).

E.3For the purposes of FAR 52.232-25(a)(5)(i), Prompt Payment, Government acceptance of data or any other work product shall be deemed to have occurred constructively on the 30th day after receipt at the receiving activity.

INSPECTION AND ACCEPTANCE TERMS

Supplies/services will be inspected/accepted at:

---

| | | | | |
|:---|:---|:---|:---|:---|
| CLIN | INSPECT AT | INSPECT BY | ACCEPT AT | ACCEPT BY |
| 0001 | Destination | Government | Destination | Government |
| 000101  | N/A | N/A | N/A | N/A |
| 0002 | Destination | Government | Destination | Government |

---

CLAUSES INCORPORATED BY REFERENCE

52.246-9 Inspection Of Research And Development (Short Form) APR 1984

------

Section F - Deliveries or Performance

SECTION F NOTES

Section F - DELIVERIES OR PERFORMANCE

F.2In the interests of encouraging pursuit of real-time state of the art R&D, requests for extensions of delivery dates or performance schedules under this effort are discouraged as a customary practice. They will continue to be evaluated on a case by case basis. Requests for extensions of the delivery schedule may be considered only if offers of monetary consideration or work-in-kind efforts are tendered in exchange for the delay. Extensions necessitated by causes due to no fault of the contractor do not require offers of consideration.

DELIVERY INFORMATION

---

| | | | | |
|:---|:---|:---|:---|:---|
| CLIN | DELIVERY DATE | QUANTITY | SHIP TO ADDRESS | DODAAC / CAGE |
| 0001 | 16-AUG-2027 | 1 | OFFICE OF NAVAL RESEARCH DANIEL ELEUTERIO<br> 875 N. RANDOLPH ST. SUITE 1067 CODE 322FNOC | N00014 |
|  |  |  | ARLINGTON VA 22203<br> 703-696-4303<br> FOB: Destination |  |
| 000101 | N/A | N/A | N/A | N/A |
| 0002 | 16-AUG-2027 | 1 | OFFICE OF NAVAL RESEARCH DANIEL ELEUTERIO<br> 875 N. RANDOLPH ST. SUITE 1067 | N00014 |
|  |  |  | CODE 322FNOC |  |
|  |  |  | ARLINGTON VA 22203<br> 703-696-4303<br> FOB: Destination |  |

---

CLAUSES INCORPORATED BY REFERENCE

52.242-15 Alt I Stop-Work Order (Aug 1989) - Alternate I APR 1984 <br> 52.247-34 F.O.B. Destination JAN 1991

------

Section G - Contract Administration Data

ACCOUNTING AND APPROPRIATION DATA

AA: 1741319 W6ED 255 00014 0 050120 2D 000000

COST CODE: A00008904230

AMOUNT: $1,000,000.00

---

| | | | |
|:---|:---|:---|:---|
| ACRN | CLIN/SLIN | CIN | AMOUNT |
| AA | 000101 | 130122544900001 | $1000000.00 |

---

CLAUSES INCORPORATED BY FULL TEXT

252.204-7022 EXPEDITING CONTRACT CLOSEOUT (MAY 2021)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)At the conclusion of all applicable closeout requirements of Federal Acquisition Regulation 4.804, the Government and Contractor shall mutually agree on the residual dollar amount remaining on the contract. Both the Government and Contractor agree to waive payment of any residual dollar amount of $1,000 or less to which either party may be entitled at the time of contract closeout.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)A residual dollar amount includes all money owed to either party at the end of the contract and as a result of the contract, excluding amounts connected in any way with taxation or a violation of law or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)For purposes of determining residual dollar amounts, offsets (e.g., across multiple contracts or orders) may be considered only to the extent permitted by law.

(End of clause)

252.232-7003ELECTRONIC SUBMISSION OF PAYMENT REQUESTS AND RECEIVING REPORTS (DEC 2018)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Definitions. As used in this clause--

Contract financing payment means an authorized Government disbursement of monies to a contractor prior to acceptance of supplies or services by the Government.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Contract financing payments include--

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Advance payments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Performance-based payments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Commercial advance and interim payments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Progress payments based on cost under the clause at Federal Acquisition Regulation (FAR) 52.232-16, Progress Payments;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)Progress payments based on a percentage or stage of completion (see FAR 32.102(e)), except those made under the clause at FAR 52.232-5, Payments Under Fixed-Price Construction Contracts, or the clause at FAR 52.232-10, Payments Under Fixed-Price Architect-Engineer Contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Interim payments under a cost reimbursement contract, except for a cost reimbursement contract for services when Alternate I of the clause at FAR 52.232-25, Prompt Payment, is used.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Contract financing payments do not include--

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Invoice payments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Payments for partial deliveries; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Lease and rental payments.

Electronic form means any automated system that transmits information electronically from the initiating system to affected systems.

Invoice payment means a Government disbursement of monies to a contractor under a contract or other authorization for supplies or services accepted by the Government.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Invoice payments include--

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Payments for partial deliveries that have been accepted by the Government;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Final cost or fee payments where amounts owed have been settled between the Government and the contractor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)For purposes of subpart 32.9 only, all payments made under the clause at 52.232-5, Payments Under Fixed- Price Construction Contracts, and the clause at 52.232-10, Payments Under Fixed-Price Architect-Engineer Contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Interim payments under a cost-reimbursement contract for services when Alternate I of the clause at 52.232-25, Prompt Payment, is used.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Invoice payments do not include contract financing payments.

Payment request means any request for contract financing payment or invoice payment submitted by the Contractor under this contract or task or delivery order.

Receiving report means the data prepared in the manner and to the extent required by Appendix F, Material Inspection and Receiving Report, of the Defense Federal Acquisition Regulation Supplement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Except as provided in paragraph (d) of this clause, the Contractor shall submit payment requests and receiving reports in electronic form using Wide Area WorkFlow (WAWF). The Contractor shall prepare and furnish to the Government a receiving report at the time of each delivery of supplies or services under this contract or task or delivery order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Submit payment requests and receiving reports to WAWF in one of the following electronic formats:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Electronic Data Interchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Secure File Transfer Protocol.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Direct input through the WAWF website.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Contractor may submit a payment request and receiving report using methods other than WAWF only when-

-

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Contractor has requested permission in writing to do so, and the Contracting Officer has provided instructions for a temporary alternative method of submission of payment requests and receiving reports in the contract administration data section of this contract or task or delivery order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)DoD makes payment for commercial transportation services provided under a Government rate tender or a contract for transportation services using a DoD-approved electronic third party payment system or other exempted vendor payment/invoicing system (e.g., PowerTrack, Transportation Financial Management System, and Cargo and Billing System);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)DoD makes payment on a contract or task or delivery order for rendered health care services using the TRICARE Encounter Data System; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)The Governmentwide commercial purchase card is used as the method of payment, in which case submission of only the receiving report in WAWF is required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Information regarding WAWF is available at https://wawf.eb.mil/.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)In addition to the requirements of this clause, the Contractor shall meet the requirements of the appropriate payment clauses in this contract when submitting payment requests.

(End of clause)

252.232-7006 WIDE AREA WORKFLOW PAYMENT INSTRUCTIONS (JAN 2023)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Definitions. As used in this clause—

"Department of Defense Activity Address Code (DoDAAC)" is a six position code that uniquely identifies a unit, activity, or organization.

"Document type" means the type of payment request or receiving report available for creation in Wide Area WorkFlow (WAWF).

"Local processing office (LPO)" is the office responsible for payment certification when payment certification is done external to the entitlement system.

"Payment request" and "receiving report" are defined in the clause at 252.232-7003, Electronic Submission of Payment Requests and Receiving Reports.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Electronic invoicing. The WAWF system provides the method to electronically process vendor payment requests and receiving reports, as authorized by Defense Federal Acquisition Regulation Supplement (DFARS) 252.232- 7003, Electronic Submission of Payment Requests and Receiving Reports.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)WAWF access. To access WAWF, the Contractor shall—

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Have a designated electronic business point of contact in the System for Award Management at https://www.sam.gov; and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Be registered to use WAWF at https://wawf.eb.mil/ following the step-by-step procedures for self-registration available at this web site.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)WAWF training. The Contractor should follow the training instructions of the WAWF Web-Based Training Course and use the Practice Training Site before submitting payment requests through WAWF. Both can be accessed by selecting the "Web Based Training" link on the WAWF home page at https://wawf.eb.mil/.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)WAWF methods of document submission. Document submissions may be via web entry, Electronic Data Interchange, or File Transfer Protocol.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)WAWF payment instructions. The Contractor shall use the following information when submitting payment requests and receiving reports in WAWF for this contract or task or delivery order:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Document type. The Contractor shall submit payment requests using the following document type(s):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(i)** **For cost-type line items, including labor-hour or time-and-materials, submit a cost voucher.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(ii)**For fixed price line items—

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)That require shipment of a deliverable, submit the invoice and receiving report specified by the Contracting Officer.

&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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(Contracting Officer: Insert applicable invoice and receiving report document type(s) for fixed price line items that require shipment of a deliverable.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)For services that do not require shipment of a deliverable, submit either the Invoice 2in1, which meets the requirements for the invoice and receiving report, or the applicable invoice and receiving report, as specified by the Contracting Officer.

&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;&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(Contracting Officer: Insert either "Invoice 2in1" or the applicable invoice and receiving report document type(s) for fixed price line items for services.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(iii)**For customary progress payments based on costs incurred, submit a progress payment request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(iv)**For performance based payments, submit a performance based payment request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(v)**For commercial financing, submit a commercial financing request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Fast Pay requests are only permitted when Federal Acquisition Regulation (FAR) 52.213-1 is included in the contract.

[Note: The Contractor may use a WAWF "combo" document type to create some combinations of invoice and receiving report in one step.]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Document routing. The Contractor shall use the information in the Routing Data Table below only to fill in applicable fields in WAWF when creating payment requests and receiving reports in the system.

Routing Data Table\*

------

---

| | |
|:---|:---|
| *Field Name in WAWF* | *Data to be entered in WAWF* |
| Pay Official DoDAAC | HQ0339 |
| Issue By DoDAAC | N68335 |
| Admin DoDAAC\*\* | S0302A |
| Inspect By DoDAAC | N00014 |
| Ship To Code | N00014 |
| Ship From Code | 87G52 |
| Mark For Code | N/A |
| Service Approver (DoDAAC) | S0302A |
| Service Acceptor (DoDAAC) | N/A |
| Accept at Other DoDAAC | N/A |
| LPO DoDAAC | N/A |
| DCAA Auditor DoDAAC | HAA052 |
| Other DoDAAC(s) | N/A |

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(\*Contracting Officer: Insert applicable DoDAAC information. If multiple ship to/acceptance locations apply, insert "See Schedule" or "Not applicable.")

(\*\*Contracting Officer: If the contract provides for progress payments or performance-based payments, insert the DoDAAC for the contract administration office assigned the functions under FAR 42.302(a)(13).)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Payment request. The Contractor shall ensure a payment request includes documentation appropriate to the type of payment request in accordance with the payment clause, contract financing clause, or Federal Acquisition Regulation 52.216-7, Allowable Cost and Payment, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Receiving report. The Contractor shall ensure a receiving report meets the requirements of DFARS Appendix F.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)WAWF point of contact.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Contractor may obtain clarification regarding invoicing in WAWF from the following contracting activity's WAWF point of contact.

**Daniel Eleuterio-** _daniel.p.eleuterio.civ@us.navy.mil

(Contracting Officer: Insert applicable information or "Not applicable.")

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Contact the WAWF helpdesk at 866-618-5988, if assistance is needed.

(End of clause)

------

**GTXT.232-0001 PAYMENT INSTRUCTIONS (NAVAIR (MAY 2023)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use Only |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract/Order Payment Clause | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Type of Payment Request | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> Supply | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> Service | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> Construction | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment Office Allocation Method |
| &nbsp;&nbsp;52.212-4 (Alt I), | &nbsp;&nbsp;Cost Voucher | X | X | &nbsp;&nbsp;&nbsp;N/A | &nbsp;&nbsp;Line item specific proration. |
| &nbsp;&nbsp;Contract Terms and |  |  |  |  | &nbsp;&nbsp;If there is more than one ACRN |
| &nbsp;&nbsp;Conditions— |  |  |  |  | &nbsp;&nbsp;within a deliverable contract line |
| &nbsp;&nbsp;Commercial Products |  |  |  |  | &nbsp;&nbsp;item, the funds will be allocated in |
| &nbsp;&nbsp;and Commercial |  |  |  |  | &nbsp;&nbsp;the same proportion as the |
| &nbsp;&nbsp;Services; |  |  |  |  | &nbsp;&nbsp;amount of funding currently |
| &nbsp;&nbsp;52.216-7, Allowable |  |  |  |  | &nbsp;&nbsp;unliquidated for each ACRN on |
| &nbsp;&nbsp;Cost and Payment; |  |  |  |  | &nbsp;&nbsp;the line item billed. |
| &nbsp;&nbsp;52.232-7, Payments |  |  |  |  |  |
| &nbsp;&nbsp;Under Time-and- |  |  |  |  |  |
| &nbsp;&nbsp;Materials and Labor- |  |  |  |  |  |
| &nbsp;&nbsp;Hour Contracts |  |  |  |  |  |
| &nbsp;&nbsp;52.232-1, Payments,<br> 252.217-7007,<br> Payments<br> (vessel repair and alterations) | &nbsp;&nbsp;Navy Shipbuilding Invoice (Fixed Price) | X | X | &nbsp;&nbsp;&nbsp;N/A | &nbsp;&nbsp;Line item specific by fiscal year. If there is more than one ACRN within a deliverable line or<br> deliverable subline item, the funds will be allocated using the |
|  |  |  |  |  | &nbsp;&nbsp;oldest funds first. In the event of a deliverable line or deliverable subline item with two or more ACRNs with the same fiscal year, those amounts will be prorated to the available unliquidated funds<br> for that year. |
| &nbsp;&nbsp;52.232-1, Payments; | &nbsp;&nbsp;Invoice | X | X | &nbsp;&nbsp;&nbsp;N/A | &nbsp;&nbsp;Line item specific proration. |
| &nbsp;&nbsp;52.232-2, Payments |  |  |  |  | &nbsp;&nbsp;If there is more than one ACRN |
| &nbsp;&nbsp;Under Fixed-Price |  |  |  |  | &nbsp;&nbsp;within a deliverable line item or |
| &nbsp;&nbsp;Research and |  |  |  |  | &nbsp;&nbsp;deliverable subline item, the |
| &nbsp;&nbsp;Development |  |  |  |  | &nbsp;&nbsp;funds will be allocated in the |
| &nbsp;&nbsp;Contracts; |  |  |  |  | &nbsp;&nbsp;same proportion as the amount |
| &nbsp;&nbsp;52.232-3, Payments |  |  |  |  | &nbsp;&nbsp;of funding currently unliquidated |
| &nbsp;&nbsp;Under Personal |  |  |  |  | &nbsp;&nbsp;for each ACRN on the deliverable |
| &nbsp;&nbsp;Services Contracts; |  |  |  |  | &nbsp;&nbsp;line or deliverable subline item for |
| &nbsp;&nbsp;52.232-4, Payments |  |  |  |  | &nbsp;&nbsp;which payment is requested. |
| &nbsp;&nbsp;Under Transportation |  |  |  |  |  |
| &nbsp;&nbsp;Contracts and |  |  |  |  |  |
| &nbsp;&nbsp;Transportation-Related |  |  |  |  |  |
| &nbsp;&nbsp;Services Contracts; and |  |  |  |  |  |
| &nbsp;&nbsp;52.232-6, Payments |  |  |  |  |  |
| &nbsp;&nbsp;Under Communication |  |  |  |  |  |
| &nbsp;&nbsp;Service Contracts With |  |  |  |  |  |
| &nbsp;&nbsp;Common Carriers |  |  |  |  |  |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use Only |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract/Order Payment Clause | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Type of Payment Request | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> Supply | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> Service | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> Construction | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment Office Allocation Method |
| &nbsp;&nbsp;52.232-5, Payments Under Fixed-Price Construction Contracts | &nbsp;&nbsp;Construction Payment Invoice | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A | X | &nbsp;&nbsp;Line item specific by fiscal year. If there is more than one ACRN within a deliverable line or deliverable subline item, the funds will be allocated using the oldest funds first. In the event of a deliverable line or deliverable subline item with two or more<br> ACRNs with the same fiscal year, those amounts will be prorated to the available unliquidated funds for that year. |
| &nbsp;&nbsp;52.232-16, Progress | &nbsp;&nbsp;Progress | X | X | &nbsp;&nbsp;&nbsp;N/A | &nbsp;&nbsp;Contract-wide proration. |
| &nbsp;&nbsp;Payments | &nbsp;&nbsp;Payment\* |  |  |  | &nbsp;&nbsp;Funds shall be allocated in the |
| &nbsp;&nbsp;(excluding contracts |  |  |  |  | &nbsp;&nbsp;same proportion as the amount |
| &nbsp;&nbsp;with multiple lot |  |  |  |  | &nbsp;&nbsp;of funding currently unliquidated |
| &nbsp;&nbsp;progress payments) |  |  |  |  | &nbsp;&nbsp;for each ACRN. Progress |
|  |  |  |  |  | &nbsp;&nbsp;payments are considered |
|  |  |  |  |  | &nbsp;&nbsp;contract level financing, and the |
|  |  |  |  |  | &nbsp;&nbsp;"contract price" shall reflect the |
|  |  |  |  |  | &nbsp;&nbsp;fixed-price portion of the contract |
|  |  |  |  |  | &nbsp;&nbsp;per FAR 32.501-3. |
| &nbsp;&nbsp;52.232-16, Progress Payments;<br> 252.232-7018,<br> Progress Payments— Multiple Lots | &nbsp;&nbsp;Progress Payment\* | X | X | &nbsp;&nbsp;&nbsp;N/A | &nbsp;&nbsp;Lot-wide proration (applies to lots specifically identified in the contract). If there is more than one ACRN within a lot, the funds will be allocated in the same proportion as the amount of funding currently unliquidated for each ACRN on the lot for which payment is requested. |
|  |  |  |  |  | &nbsp;&nbsp; <br> See PGI 204.7108 paragraph (c) for multiple lot CLIN structure. |

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------

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For Government Use Only |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract/Order Payment Clause | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Type of Payment Request | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> Supply | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> Service | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> Construction | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment Office Allocation Method |
| &nbsp;&nbsp;52.232-29, Terms for Financing of Purchases of Commercial Products and Commercial Services; 52.232-30, Installment Payments for Commercial Products and Commercial Services | &nbsp;&nbsp;Commercial Product and Commercial Service Financing\* | X | &nbsp;&nbsp;&nbsp;&nbsp;X | &nbsp;&nbsp;&nbsp;N/A | &nbsp;&nbsp;Specified in approved payment. The contracting officer shall specify the amount to be paid and the account(s) to be charged for each payment approval in accordance with FAR 32.207(b)(2). |
| &nbsp;&nbsp;52.232-32,<br> Performance-Based Payments | &nbsp;&nbsp;Performance- Based Payments\* | X | &nbsp;&nbsp;&nbsp;&nbsp;X | &nbsp;&nbsp;&nbsp;N/A | &nbsp;&nbsp;Specified in approved payment. The contracting officer shall specify the amount to be paid and the account(s) to be charged for each payment approval in accordance with FAR 32.1007(b)(2). |
| &nbsp;&nbsp;252.232-7002,<br> Progress Payments for Foreign Military Sales Acquisitions | &nbsp;&nbsp;Progress Payment\* | X | &nbsp;&nbsp;&nbsp;&nbsp;X | &nbsp;&nbsp;&nbsp;N/A | &nbsp;&nbsp;Allocate costs among line items and countries in a manner acceptable to the administrative contracting officer. |
| &nbsp;&nbsp;\*Liquidation of Financing Payments. Liquidation will be applied by the payment office against those ACRNs which are identified by the payment instructions for the delivery payment and in keeping with the liquidation provision of the applicable contract financing clause (i.e., progress payment, performance-based payment, or commercial product and commercial service financing). | &nbsp;&nbsp;\*Liquidation of Financing Payments. Liquidation will be applied by the payment office against those ACRNs which are identified by the payment instructions for the delivery payment and in keeping with the liquidation provision of the applicable contract financing clause (i.e., progress payment, performance-based payment, or commercial product and commercial service financing). | &nbsp;&nbsp;\*Liquidation of Financing Payments. Liquidation will be applied by the payment office against those ACRNs which are identified by the payment instructions for the delivery payment and in keeping with the liquidation provision of the applicable contract financing clause (i.e., progress payment, performance-based payment, or commercial product and commercial service financing). | &nbsp;&nbsp;\*Liquidation of Financing Payments. Liquidation will be applied by the payment office against those ACRNs which are identified by the payment instructions for the delivery payment and in keeping with the liquidation provision of the applicable contract financing clause (i.e., progress payment, performance-based payment, or commercial product and commercial service financing). | &nbsp;&nbsp;\*Liquidation of Financing Payments. Liquidation will be applied by the payment office against those ACRNs which are identified by the payment instructions for the delivery payment and in keeping with the liquidation provision of the applicable contract financing clause (i.e., progress payment, performance-based payment, or commercial product and commercial service financing). | &nbsp;&nbsp;\*Liquidation of Financing Payments. Liquidation will be applied by the payment office against those ACRNs which are identified by the payment instructions for the delivery payment and in keeping with the liquidation provision of the applicable contract financing clause (i.e., progress payment, performance-based payment, or commercial product and commercial service financing). |

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SECTION G NOTES

Section G - CONTRACT ADMINISTRATION DATA

Administrative Fill-ins: For administration, inspection, payment, patent and customer service purposes, the following information is provided:

**Contract Administration Office**

DCMA Mountain Pacific-DoDAAC: S0302A West 6th Avenue And Kipling Street Lakewood CO 80225

EMAIL: dcma.gregg-adams.hq.list.S0302A-casd@mail.mil

The DCMA office has been assigned administration of this contract as set out in FAR Part 42. Not all of the activities to be performed by the administrative office during the life of this contract have been specifically identified or delegated. All correspondence between the contractor and Government concerning any admin activities should be directed to the Administrative Contracting Officer (ACO) at the address above. A copy of all such correspondence should also be directed to the Procurement Office Point of Contact.

------

**Payment Office**

DFAS- Columbus Center- DoDAAC: HQ0339

West Entitlement Operations

PO Box 182317

Columbus, OH 43218-2317

1-800-756-4571

Fax: 866-837-8036

The office above is designated as the disbursal office for payment under this contract. Invoices submitted for payment which do not contain CLIN or SLIN and the appropriate accounting classification reference number (ACRN) will be returned for correction. The disbursement of funds will be by CLIN/SLIN/ACRN designation or when multiple ACRNs are used DFAS should make payments from ACRN AA first and continue payments in accordance with subsequent ACRNs/SLINS when multiple ACRNs are used.

**Defense Contract Audit Agency Office**

Silicon Valley Branch Office-DoDAAC: HAA052

160 West Santa Clara Street, Suite 900

San Jose, CA 95113-1706 Phone: 510-448-2001

Email: dcaa.belvoir.hq.mbx.dcaa-fao4281@mail.mil

**Procurement Office Point of Contact (POC)**

Naval Air Warfare Center - Aircraft Division – DoDAAC: N68335

Highway 547 - Bldg 120 Room 207

Attn: Mr. Rhondi Bates Lakehurst NJ 08733-5083

Phone: (732) 323-4832

E-mail: rhondi.e.bates.civ@us.navy.mil

**Patent Office Address**

Office of Naval Research

Department of the Navy

Corporate Counsel (Code 00CC)

875 North Randolph Street

Arlington, VA 22203-1995

E-mailed to:

ONR.NCR.BDCC.list.invention.reports@navy.mil

The Contractor shall submit all invention disclosures and reports required by the Patent Rights clause of the contract to the Administrative Contracting Officer (ACO). The ACO will forward invention disclosures and reports directly to Corporate Counsel (Code 00CC). The invention disclosures can either be mailed or e-mailed. The Corporate Counsel will return the reports along with a recommendation to the ACO. The Corporate Counsel will represent the Contracting Officer with regard to invention reporting matters arising under this contract.

------

**Government Technical Point of Contact**

Daniel Eleuterio

Office of Naval Research

875 N Randolph Street

Arlington, VA 22203-1995

Phone: (703) 696-4303

Email : daniel.p.eleuterio.civ@us.navy.mil

The TPOC does not have express or implied authority to take any action, directly or indirectly, that would change any of the contract terms and conditions or to otherwise direct the accomplishment of effort which goes beyond the scope of the contractor's proposal. However, the TPOC may provide technical advice and/or discussion needed to clarify the direction of the effort and/or to monitor the progress and quality of performance. This is a completion type contract and the technical liaison is assigned for completion quality assurance only (except as otherwise allowable and required under FAR 52.246-9, Inspection of Research & Development). He/she is specifically not assigned the duties and responsibilities of a Contracting Officer Representative (COR/COTR). Section H of this contract sets forth the principles for changes under the contract.

Use the address of the TPOC as set forth above for distribution of reports and a copy of all data deliverables shall be uploaded to: https://www.navysbirprogram.com/navydeliverables/

**SBIR Program Manager (PM)**

ONR SBIR Program Office

ONR 351

875 North Randolph Street

Room 255, Code 03TSB

Arlington, VA 22203

Email: loreanne.ponirakis@navy.mil

Phone: 703-696-2175

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Section H - Special Contract Requirements

PUBLIC RELEASE

**Any controlled unclassified information pertaining to this contract shall not be released for public dissemination including publications, conference presentations, or posting to any social media sites, unless it has been approved for public release by appropriate Naval Systems Command (SYSCOM). The contractor shall coordinate with the contract TPOC to ensure compliance with all SYSCOM public release requirements prior to dissemination**

CLAUSES INCORPORATED BY FULL TEXT

**CTXT.211-9510 CONTRACTOR EMPLOYEES (NAVAIR) (MAY 2011)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)In all situations where contractor personnel status is not obvious, all contractor personnel are required to identify themselves to avoid creating an impression to the public, agency officials, or Congress that such contractor personnel are Government officials. This can occur during meeting attendance, through written (letter or email) correspondence or verbal discussions (in person or telephonic), when making presentations, or in other situations where their contractor status is not obvious to third parties. This list is not exhaustive. Therefore, the contractor employee(s) shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Not by word or deed give the impression or appearance of being a Government employee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Wear appropriate badges visible above the waist that identify them as contractor employees when in Government spaces, at a Government-sponsored event, or an event outside normal work spaces in support of the contract/order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Clearly identify themselves as contractor employees in telephone conversations and in all formal and informal written and electronic correspondence. Identification shall include the name of the company for whom they work;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Identify themselves by name, their company name, if they are a subcontractor the name of the prime contractor their company is supporting, as well as the Government office they are supporting when participating in meetings, conferences, and other interactions in which all parties are not in daily contact with the individual contractor employee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Be able to provide, when asked, the full number of the contract/order under which they are performing, and the name of the Contracting Officer's Representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If wearing a badge is a risk to safety and/or security, then an alternative means of identification maybe utilized if endorsed by the Contracting Officer's Representative and approved by the Contracting Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Contracting Officer will make final determination of compliance with regulations with regard to proper identification of contractor employees.

SECTION H NOTES

Section H - SPECIAL CONTRACT REQUIREMENTS

H.1The Contracting Officer is the only person authorized to approve changes in the requirements of this contract. The contractor shall not comply with any order, direction or request of Government personnel unless it is issued in writing and signed by the Contracting Officer. This clause specifically prohibits a contractor from implementing changes pursuant to direction from anyone other than the Contracting Officer and that to do so is considered at their own risk. No adjustment will be made in the contract price to cover any increase in charges incurred as a result of such unauthorized action.

The technical point of contact does not have the authority to take any action, either directly or indirectly, that would change any of the contract terms and conditions (i.e., pricing, delivery schedule, delivery destination) or to otherwise direct the accomplishment of effort which goes beyond the scope of this contract. This is a completion type contract and the technical liaison is assigned for completion quality assurance only (except as otherwise allowable and required under FAR 52.246-9, Inspection of Research & Development). He/she is not assigned the duties and responsibilities of a Contracting Officer Representative (COR/COTR). Section H of this contract sets forth the principles for changes under the contract.

------

Contractors should be advised that conversations, recommendations and/or suggestions made during the course of any required briefings, technical reviews or face-to-face meetings conducted to discuss performance or progress are not considered direction. The name and address of the Procuring Contracting Officer (PCO) is:

Naval Air Warfare Center - Aircraft Division

Attn: Domenick Davino

Hwy 547, Bldg. 120, Room 207

Lakehurst, NJ 08733

Phone: 240-577-8088

Email: domenick.a.davino.civ@us.navy.mil

H.2Research and Analytical Work. The contractor shall perform at least one-half of the research and/or analytical work under this contract unless approved in advance by the PCO.

H.3Principal Investigator (PI) Primary Employment. The primary employment of the Principal Investigator,

Craig Stevens must be with the small business firm at the time of the award and during conduct of this contract.

H.4Substitution of Personnel. The Contractor shall notify the Procuring Contracting Officer of any proposed change in the employment status of the Principal Investigator or any request to substitute for the principal investigator. Decisions regarding any changes will be based on whether the effort is substantially degraded by the removal/substitution of the Principal Investigator and will be evaluated on a case-by-case basis. The Contracting Officer will subsequently notify the contractor in writing of approval or disapproval. Government approval of any other personnel changes is not required.

H.5US Business Utilization. The research or R&D work contained in this contract must be performed by the small business concern in the United States, meaning the 50 states, and any territories and/or possessions of the US, plus the District of Columbia. In addition, all entities awarded a contract under the SBIR program shall purchase only American-made products and equipment, to the extent practicable in keeping with the purposes of the program and the needs of the project.

H.6(If Applicable) Rent -Free Use of Government Property. The contractor may use on a rent-free, non- interference basis the Government property accountable under Contract N/A. The contractor is responsible for scheduling the use of all property covered by the above contract and the Government is not responsible for conflicts, delays or disruptions to any work performed by the Contractor due to the use of any or all such property under this contract or any other contracts under which use of such property is authorized.

H.7(If Applicable) Government-Furnished Property/Equipment/Information. The Government will furnish the Government property listed in Attachment N/A to the Contractor for use in the performance of the contract subject to the provisions of the Government Property clause referenced in the general provisions of this contract.

H.8Government Property (Cost Reimbursement - General). Contractors are notified that all property purchased for performance under this contract passes to and vests in the Government and is subject to the terms of the Government Property clause set forth at FAR 52.245-1 and 52.245-9.

H.9Exercise of Option. The Government, at any time after the effective date of the contract, may require the contractor to perform work under Option Items 0003-0004 during the time and place and at the prices set forth herein. This option may be exercised by either a unilateral or bilateral modification to this contract signed by the Contracting Officer depending on whether the negotiations for the option SOW and the option price have been completed or the SOW, as written, fully describes the option effort. The unilateral right of the Government to invoke the option will expire within six months following the completion of the base effort. The right to invoke a unilateral option shall be maintained by the government up until the last day of the expiration period and no advance notice is required.

------

H.10Limitation of Liability - Incremental Funding (See FAR clause 52.232-22-Limitation of Funds for additional information)

This contract is incrementally funded and the amount currently available for payment thereunder is limited to

$1,000,000.00 which includes 7% of fixed fee. Subject to the provisions of the clause entitled Limitation of Funds, 52.232-22 of the general provisions of this contract, no legal liability on the part of the Government for payment in excess of $1,000,000.00 shall arise unless additional funds are made available and are incorporated as a modification to this contract. The amount available is estimated to cover the period of performance through approximately 24 months.

H.11Final Scientific /Technical Report. In addition to the requirement for submission of the final report to the TPOC and Navy Deliverables site, contractors are required to provide the following documentation:

In accordance with DFARS 252.235-7011-Final Scientific or Technical Report (DEC 2019), the contractor shall submit an electronic copy of the approved final scientific or technical report, not a summary, delivered under this contract to the Defense Technical Information Center (DTIC) through the web-based input system at

https://discover.dtic.mil/submit-documents/

Include a completed Standard Form (SF) 298, Report Documentation Page, in the document, or complete the web- based SF 298. This is the preferred method as submissions will receive a coding number immediately.

Alternatively, the contractor may submit a CD/DVD via regular mail to:

Defense Technical Information Center (DTIC)

Attn: Jack Rike

8725 John J. Kingman Rd

Ft. Belvoir, VA 22060-6218

H.12Invention Disclosures and Reports. Patent Counsel will represent the Contracting Officer with regard to invention reporting matters**. In accordance with the requirements of the Patent Rights clause of this contract, the contractor shall submit "Report of Inventions and Subcontracts" (DD Form 882) along with written disclosure of inventions to the designated TPOC within 3 months after completion of the contract.** The DD Form 882 is available at

https://www.acq.osd.mil/dpap/dars/dfars/html/previous/dd882.pdf

The TPOC will then confirm/validate, or, take exception to the information on the form and forward the completed report to the Patent Counsel listed in G.2 above. The contractor shall also submit a copy of the disclosure to the contracts point of contact (both at the Procurement office with a copy to the Administrative office also designated herein).

H.13Incorporation of Representations and Certifications. All representations and certifications and other written statements made by the contractor in response to Section K incident to award of this contract are hereby incorporated by reference.

H.14Proposal Pages with Proprietary Markings. The Government reserves the right to copy, use and/or disclose inside the Government, the technical portion of the SBIR proposal as needed to implement and administer the contract (See clause at 252.227-7016). This right is distinct from those rights established under 252.227-7018, Rights in Technical Data – SBIR Program concerning data produced under the contract.

------

Section I - Contract Clauses

CLAUSES INCORPORATED BY REFERENCE

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| | | |
|:---|:---|:---|
| 52.202-1 | &nbsp;&nbsp;&nbsp;Definitions | JUN 2020 |
| 52.203-3 | &nbsp;&nbsp;&nbsp;Gratuities | APR 1984 |
| 52.203-5 | &nbsp;&nbsp;&nbsp;Covenant Against Contingent Fees | MAY 2014 |
| 52.203-6 | &nbsp;&nbsp;&nbsp;Restrictions On Subcontractor Sales To The Government | JUN 2020 |
| 52.203-7 | &nbsp;&nbsp;&nbsp;Anti-Kickback Procedures | JUN 2020 |
| 52.203-8 | &nbsp;&nbsp;&nbsp;Cancellation, Rescission, and Recovery of Funds for Illegal or | MAY 2014 |
|  | &nbsp;&nbsp;&nbsp;Improper Activity |  |
| 52.203-10 | &nbsp;&nbsp;&nbsp;Price Or Fee Adjustment For Illegal Or Improper Activity | MAY 2014 |
| 52.203-12 | &nbsp;&nbsp;&nbsp;Limitation On Payments To Influence Certain Federal | JUN 2020 |
|  | &nbsp;&nbsp;&nbsp;Transactions |  |
| 52.203-19 | &nbsp;&nbsp;&nbsp;Prohibition on Requiring Certain Internal Confidentiality | JAN 2017 |
|  | &nbsp;&nbsp;&nbsp;Agreements or Statements |  |
| 52.204-2 | &nbsp;&nbsp;&nbsp;Security Requirements | MAR 2021 |
| 52.204-4 | &nbsp;&nbsp;&nbsp;Printed or Copied Double-Sided on Postconsumer Fiber | MAY 2011 |
|  | &nbsp;&nbsp;&nbsp;Content Paper |  |
| 52.204-10 | &nbsp;&nbsp;&nbsp;Reporting Executive Compensation and First-Tier | JUN 2020 |
|  | &nbsp;&nbsp;&nbsp;Subcontract Awards |  |
| 52.204-13 | &nbsp;&nbsp;&nbsp;System for Award Management Maintenance | OCT 2018 |
| 52.204-19 | &nbsp;&nbsp;&nbsp;Incorporation by Reference of Representations and | DEC 2014 |
|  | &nbsp;&nbsp;&nbsp;Certifications. |  |
| 52.204-21 | &nbsp;&nbsp;&nbsp;Basic Safeguarding of Covered Contractor Information | NOV 2021 |
|  | &nbsp;&nbsp;&nbsp;Systems |  |
| 52.204-23 | &nbsp;&nbsp;&nbsp;Prohibition on Contracting for Hardware, Software, and | DEC 2023 |
|  | &nbsp;&nbsp;&nbsp;Services Developed or Provided by Kaspersky Lab Covered |  |
|  | &nbsp;&nbsp;&nbsp;Entities |  |
| 52.204-25 | &nbsp;&nbsp;&nbsp;Prohibition on Contracting for Certain Telecommunications | NOV 2021 |
|  | &nbsp;&nbsp;&nbsp;and Video Surveillance Services or Equipment |  |
| 52.204-27 | &nbsp;&nbsp;&nbsp;Prohibition on a ByteDance Covered Application | JUN 2023 |
| 52.209-6 | &nbsp;&nbsp;&nbsp;Protecting the Government's Interest When Subcontracting | NOV 2021 |
|  | &nbsp;&nbsp;&nbsp;With Contractors Debarred, Suspended, or Proposed for |  |
|  | &nbsp;&nbsp;&nbsp;Debarment |  |
| 52.209-10 | &nbsp;&nbsp;&nbsp;Prohibition on Contracting With Inverted Domestic | NOV 2015 |
|  | &nbsp;&nbsp;&nbsp;Corporations |  |
| 52.211-5 | &nbsp;&nbsp;&nbsp;Material Requirements | AUG 2000 |
| 52.215-2 | &nbsp;&nbsp;&nbsp;Audit and Records--Negotiation | JUN 2020 |
| 52.215-8 | &nbsp;&nbsp;&nbsp;Order of Precedence--Uniform Contract Format | OCT 1997 |
| 52.215-10 | &nbsp;&nbsp;&nbsp;Price Reduction for Defective Certified Cost or Pricing Data | AUG 2011 |
| 52.215-11 | &nbsp;&nbsp;&nbsp;Price Reduction for Defective Certified Cost or Pricing Data-- | JUN 2020 |
|  | &nbsp;&nbsp;&nbsp;Modifications |  |
| 52.215-12 (Dev) | &nbsp;&nbsp;&nbsp;Subcontractor Certified Cost or Pricing Data (DEVIATION | OCT 2021 |
|  | &nbsp;&nbsp;&nbsp;2022-O0001) |  |
| 52.215-13 (Dev) | &nbsp;&nbsp;&nbsp;Subcontractor Certified Cost or Pricing Data - Modifications | OCT 2021 |
|  | &nbsp;&nbsp;&nbsp;(Deviation 2022-O0001) |  |
| 52.215-14 | &nbsp;&nbsp;&nbsp;Integrity of Unit Prices | NOV 2021 |
| 52.215-15 | &nbsp;&nbsp;&nbsp;Pension Adjustments and Asset Reversions | OCT 2010 |
| 52.215-17 | &nbsp;&nbsp;&nbsp;Waiver of Facilities Capital Cost of Money | OCT 1997 |
| 52.215-18 | &nbsp;&nbsp;&nbsp;Reversion or Adjustment of Plans for Postretirement Benefits | JUL 2005 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;(PRB) Other than Pensions |  |
| 52.215-19 | &nbsp;&nbsp;&nbsp;Notification of Ownership Changes | OCT 1997 |
| 52.215-23 | &nbsp;&nbsp;&nbsp;Limitations on Pass-Through Charges | JUN 2020 |

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---

| | | |
|:---|:---|:---|
| 52.216-8 | &nbsp;&nbsp;&nbsp;Fixed Fee | JUN 2011 |
| 52.219-6 (Dev) | &nbsp;&nbsp;&nbsp;Notice of Total Small Business Set-Aside (DEVIATION | OCT 2020 |
|  | &nbsp;&nbsp;&nbsp;2020-O0008). |  |
| 52.219-8 | &nbsp;&nbsp;&nbsp;Utilization of Small Business Concerns | FEB 2024 |
| 52.219-14 (Dev) | &nbsp;&nbsp;&nbsp;Limitations on Subcontracting (DEVIATION 2021-O0008) | FEB 2023 |
| 52.222-3 | &nbsp;&nbsp;&nbsp;Convict Labor | JUN 2003 |
| 52.222-37 | &nbsp;&nbsp;&nbsp;Employment Reports on Veterans | JUN 2020 |
| 52.222-40 | &nbsp;&nbsp;&nbsp;Notification of Employee Rights Under the National Labor | DEC 2010 |
|  | &nbsp;&nbsp;&nbsp;Relations Act |  |
| 52.222-50 | &nbsp;&nbsp;&nbsp;Combating Trafficking in Persons | NOV 2021 |
| 52.222-54 | &nbsp;&nbsp;&nbsp;Employment Eligibility Verification | MAY 2022 |
| 52.225-13 | &nbsp;&nbsp;&nbsp;Restrictions on Certain Foreign Purchases | FEB 2021 |
| 52.226-7 | &nbsp;&nbsp;&nbsp;Drug-Free Workplace | MAY 2024 |
| 52.226-8 | &nbsp;&nbsp;&nbsp;Encouraging Contractor Policies To Ban Text Messaging | MAY 2024 |
|  | &nbsp;&nbsp;&nbsp;While Driving |  |
| 52.227-1 Alt I | &nbsp;&nbsp;&nbsp;Authorization And Consent (JUN 2020) - Alternate I | APR 1984 |
| 52.227-2 | &nbsp;&nbsp;&nbsp;Notice And Assistance Regarding Patent And Copyright | JUN 2020 |
|  | &nbsp;&nbsp;&nbsp;Infringement |  |
| 52.227-10 | &nbsp;&nbsp;&nbsp;Filing Of Patent Applications--Classified Subject Matter | DEC 2007 |
| 52.227-11 | &nbsp;&nbsp;&nbsp;Patent Rights--Ownership By The Contractor | MAY 2014 |
| 52.228-7 | &nbsp;&nbsp;&nbsp;Insurance--Liability To Third Persons | MAR 1996 |
| 52.232-9 | &nbsp;&nbsp;&nbsp;Limitation On Withholding Of Payments | APR 1984 |
| 52.232-17 | &nbsp;&nbsp;&nbsp;Interest | MAY 2014 |
| 52.232-20 | &nbsp;&nbsp;&nbsp;Limitation Of Cost | APR 1984 |
| 52.232-23 | &nbsp;&nbsp;&nbsp;Assignment Of Claims | MAY 2014 |
| 52.232-25 | &nbsp;&nbsp;&nbsp;Prompt Payment | JAN 2017 |
| 52.232-33 | &nbsp;&nbsp;&nbsp;Payment by Electronic Funds Transfer--System for Award | OCT 2018 |
|  | &nbsp;&nbsp;&nbsp;Management |  |
| 52.232-39 | &nbsp;&nbsp;&nbsp;Unenforceability of Unauthorized Obligations | JUN 2013 |
| 52.232-40 | &nbsp;&nbsp;&nbsp;Providing Accelerated Payments to Small Business | MAR 2023 |
|  | &nbsp;&nbsp;&nbsp;Subcontractors |  |
| 52.233-1 | &nbsp;&nbsp;&nbsp;Disputes | MAY 2014 |
| 52.233-3 Alt I | &nbsp;&nbsp;&nbsp;Protest After Award (Aug 1996) - Alternate I | JUN 1985 |
| 52.233-4 | &nbsp;&nbsp;&nbsp;Applicable Law for Breach of Contract Claim | OCT 2004 |
| 52.239-1 | &nbsp;&nbsp;&nbsp;Privacy or Security Safeguards | AUG 1996 |
| 52.240-1 | &nbsp;&nbsp;&nbsp;Prohibition on Unmanned Aircraft Systems Manufactured or | NOV 2024 |
|  | &nbsp;&nbsp;&nbsp;Assembled by American Security Drone Act--Covered |  |
|  | &nbsp;&nbsp;&nbsp;Foreign Entities |  |
| 52.242-1 | &nbsp;&nbsp;&nbsp;Notice of Intent to Disallow Costs | APR 1984 |
| 52.242-3 | &nbsp;&nbsp;&nbsp;Penalties for Unallowable Costs | DEC 2022 |
| 52.242-4 | &nbsp;&nbsp;&nbsp;Certification of Final Indirect Costs | JAN 1997 |
| 52.242-13 | &nbsp;&nbsp;&nbsp;Bankruptcy | JUL 1995 |
| 52.243-2 Alt V | &nbsp;&nbsp;&nbsp;Changes--Cost-Reimbursement (Aug 1987) - Alternate V | APR 1984 |
| 52.244-5 | &nbsp;&nbsp;&nbsp;Competition In Subcontracting | AUG 2024 |
| 52.244-6 | &nbsp;&nbsp;&nbsp;Subcontracts for Commercial Products and Commercial | FEB 2024 |
|  | &nbsp;&nbsp;&nbsp;Services |  |
| 52.245-1 | &nbsp;&nbsp;&nbsp;Government Property | SEP 2021 |
| 52.245-9 | &nbsp;&nbsp;&nbsp;Use And Charges | APR 2012 |
| 52.246-23 | &nbsp;&nbsp;&nbsp;Limitation Of Liability | FEB 1997 |
| 52.246-25 | &nbsp;&nbsp;&nbsp;Limitation Of Liability--Services | FEB 1997 |
| 52.249-6 | &nbsp;&nbsp;&nbsp;Termination (Cost Reimbursement) | MAY 2004 |
| 52.249-14 | &nbsp;&nbsp;&nbsp;Excusable Delays | APR 1984 |
| 52.251-1 | &nbsp;&nbsp;&nbsp;Government Supply Sources | APR 2012 |
| 52.253-1 | &nbsp;&nbsp;&nbsp;Computer Generated Forms | JAN 1991 |

---

------

---

| | | |
|:---|:---|:---|
| 252.203-7000 | Requirements Relating to Compensation of Former DoD | SEP 2011 |
|  | Officials |  |
| 252.203-7001 | Prohibition On Persons Convicted of Fraud or Other Defense- | JAN 2023 |
|  | Contract-Related Felonies |  |
| 252.203-7002 | Requirement to Inform Employees of Whistleblower Rights | DEC 2022 |
| 252.204-7000 | Disclosure Of Information | OCT 2016 |
| 252.204-7003 | Control Of Government Personnel Work Product | APR 1992 |
| 252.204-7006 | Billing Instructions--Cost Vouchers | MAY 2023 |
| 252.204-7009 | Limitations on the Use or Disclosure of Third-Party | JAN 2023 |
|  | Contractor Reported Cyber Incident Information |  |
| 252.204-7012 | Safeguarding Covered Defense Information and Cyber | MAY 2024 |
|  | Incident Reporting |  |
| 252.204-7015 | Notice of Authorized Disclosure of Information for Litigation | JAN 2023 |
|  | Support |  |
| 252.204-7018 | Prohibition on the Acquisition of Covered Defense | JAN 2023 |
|  | Telecommunications Equipment or Services |  |
| 252.204-7020 | NIST SP 800-171 DoD Assessment Requirements | NOV 2023 |
| 252.205-7000 | Provision Of Information To Cooperative Agreement Holders | JUN 2023 |
| 252.209-7004 | Subcontracting With Firms That Are Owned or Controlled By | MAY 2019 |
|  | The Government of a Country that is a State Sponsor of |  |
|  | Terrorism |  |
| 252.215-7000 | Pricing Adjustments | DEC 2012 |
| 252.222-7006 | Restrictions on the Use of Mandatory Arbitration Agreements | JAN 2023 |
| 252.223-7006 | Prohibition On Storage, Treatment, and Disposal of Toxic or | SEP 2014 |
|  | Hazardous Materials |  |
| 252.225-7001 | Buy American and Balance of Payments Program | FEB 2024 |
| 252.225-7002 | Qualifying Country Sources As Subcontractors | MAR 2022 |
| 252.225-7012 | Preference For Certain Domestic Commodities | APR 2022 |
| 252.225-7048 | Export-Controlled Items | JUN 2013 |
| 252.225-7056 | Prohibition Regarding Business Operations with the Maduro | JAN 2023 |
|  | Regime |  |
| 252.225-7060 | Prohibition on Certain Procurements from the Xinjiang | JUN 2023 |
|  | Uyghur Autonomous Region |  |
| 252.225-7972 (Dev) | Prohibition on the Procurement of Foreign-Made Unmanned | AUG 2024 |
|  | Aircraft Systems (DEVIATION 2024-O0014) |  |
| 252.226-7001 | Utilization of Indian Organizations, Indian-Owned Economic | JAN 2023 |
|  | Enterprises, and Native Hawaiian Small Business Concerns |  |
| 252.226-7003 | Drug-Free Work Force | AUG 2024 |
| 252.227-7016 | Rights in Bid or Proposal Information | JAN 2023 |
| 252.227-7018 (Dev) | Rights in Other Than Commercial Technical Data and | NOV 2023 |
|  | Computer Software--Small Business Innovation Research (SBIR) Program (Deviation 2020-O0007) |  |
| 252.227-7019 | Validation of Asserted Restrictions--Computer Software | JAN 2023 |
| 252.227-7025 | Limitations on the Use or Disclosure of Government- | JAN 2023 |
|  | Furnished Information Marked with Restrictive Legends |  |
| 252.227-7030 | Technical Data--Withholding Of Payment | MAR 2000 |
| 252.227-7037 | Validation of Restrictive Markings on Technical Data | JAN 2023 |
| 252.227-7039 | Patents--Reporting Of Subject Inventions | APR 1990 |
| 252.231-7000 | Supplemental Cost Principles | DEC 1991 |
| 252.232-7010 | Levies on Contract Payments | DEC 2006 |
| 252.235-7010 | Acknowledgment of Support and Disclaimer | MAY 1995 |
| 252.235-7011 | Final Scientific or Technical Report | DEC 2019 |
| 252.242-7006 | Accounting System Administration | FEB 2012 |
| 252.243-7002 | Requests for Equitable Adjustment | DEC 2022 |

---

------

---

| | | |
|:---|:---|:---|
| 252.244-7000 | &nbsp;&nbsp;&nbsp;&nbsp;Subcontracts for Commercial Products or Commercial | &nbsp;&nbsp;&nbsp;&nbsp;NOV 2023 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;Services |  |
| 252.244-7001 | &nbsp;&nbsp;&nbsp;&nbsp;Contractor Purchasing System Administration | &nbsp;&nbsp;&nbsp;MAY 2014 |
| 252.245-7003 | &nbsp;&nbsp;&nbsp;&nbsp;Contractor Property Management System Administration | &nbsp;&nbsp;&nbsp;APR 2012 |
| 252.245-7005 | &nbsp;&nbsp;&nbsp;&nbsp;Management and Reporting of Government Property | &nbsp;&nbsp;&nbsp;JAN 2024 |
| 252.247-7023 | &nbsp;&nbsp;&nbsp;&nbsp;Transportation of Supplies by Sea | &nbsp;&nbsp;&nbsp;JAN 2023 |
| 252.251-7000 | &nbsp;&nbsp;&nbsp;&nbsp;Ordering From Government Supply Sources | &nbsp;&nbsp;&nbsp;AUG 2012 |

---

CLAUSES INCORPORATED BY FULL TEXT

**52.216-7** **ALLOWABLE COST AND PAYMENT (JUN 2013)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Invoicing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Government will make payments to the Contractor when requested as work progresses, but (except for small business concerns) not more often than once every 2 weeks, in amounts determined to be allowable by the Contracting Officer in accordance with Federal Acquisition Regulation (FAR) Subpart 31.2 in effect on the date of this contract and the terms of this contract. The Contractor may submit to an authorized representative of the Contracting Officer, in such form and reasonable detail as the representative may require, an invoice or voucher supported by a statement of the claimed allowable cost for performing this contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Contract financing payments are not subject to the interest penalty provisions of the Prompt Payment Act. Interim payments made prior to the final payment under the contract are contract financing payments, except interim payments if this contract contains Alternate I to the clause at 52.232-25.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)The designated payment office will make interim payments for contract financing on the 30th day after the designated billing office receives a proper payment request. In the event that the Government requires an audit or other review of a specific payment request to ensure compliance with the terms and conditions of the contract, the designated payment office is not compelled to make payment by the specified due date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Reimbursing costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)For the purpose of reimbursing allowable costs (except as provided in subparagraph (b)(2) of this section, with respect to pension, deferred profit sharing, and employee stock ownership plan contributions), the term "costs" includes only --

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Those recorded costs that, at the time of the request for reimbursement, the Contractor has paid by cash, check, or other form of actual payment for items or services purchased directly for the contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)When the Contractor is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid, for --

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Supplies and services purchased directly for the contract and associated financing payments to subcontractors, provided payments determined due will be made-

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)In accordance with the terms and conditions of a subcontract or invoice; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Ordinarily within 30 days of the submission of the Contractor's payment request to the Government;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Materials issued from the Contractor's inventory and placed in the production process for use on the contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)Direct labor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)Direct travel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)Other direct in-house costs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)Properly allocable and allowable indirect costs, as shown in the records maintained by the Contractor

for purposes of obtaining reimbursement under Government contracts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)The amount of financing payments that have been paid by cash, check or other form of payment to subcontractors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Accrued costs of Contractor contributions under employee pension plans shall be excluded until actually paid unless-

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)The Contractor's practice is to make contributions to the retirement fund quarterly or more frequently; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The contribution does not remain unpaid 30 days after the end of the applicable quarter or shorter payment period (any contribution remaining unpaid shall be excluded from the Contractor's indirect costs for payment purposes).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Notwithstanding the audit and adjustment of invoices or vouchers under paragraph (g) of this clause, allowable indirect costs under this contract shall be obtained by applying indirect cost rates established in accordance with paragraph (d) of this clause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Any statements in specifications or other documents incorporated in this contract by reference designating performance of services or furnishing of materials at the Contractor's expense or at no cost to the Government shall be disregarded for purposes of cost-reimbursement under this clause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Small business concerns. A small business concern may receive more frequent payments than every 2 weeks

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Final indirect cost rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Final annual indirect cost rates and the appropriate bases shall be established in accordance with Subpart 42.7 of the Federal Acquisition Regulation (FAR) in effect for the period covered by the indirect cost rate proposal.

(2)(i)The Contractor shall submit an adequate final indirect cost rate proposal to the Contracting Officer (or cognizant Federal agency official) and auditor within the 6-month period following the expiration of each of its fiscal years. Reasonable extensions, for exceptional circumstances only, may be requested in writing by the Contractor and granted in writing by the Contracting Officer. The Contractor shall support its proposal with adequate supporting data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)The proposed rates shall be based on the Contractor's actual cost experience for that period. The appropriate Government representative and the Contractor shall establish the final indirect cost rates as promptly as practical after receipt of the Contractor's proposal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)An adequate indirect cost rate proposal shall include the following data unless otherwise specified by the cognizant Federal agency official:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Summary of all claimed indirect expense rates, including pool, base, and calculated indirect rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)General and Administrative expenses (final indirect cost pool). Schedule of claimed expenses by element of cost as identified in accounting records (Chart of Accounts).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)Overhead expenses (final indirect cost pool). Schedule of claimed expenses by element of cost as identified in accounting records (Chart of Accounts) for each final indirect cost pool.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)Occupancy expenses (intermediate indirect cost pool). Schedule of claimed expenses by element of cost as identified in accounting records (Chart of Accounts) and expense reallocation to final indirect cost pools.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)Claimed allocation bases, by element of cost, used to distribute indirect costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)Facilities capital cost of money factors computation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G)Reconciliation of books of account (i.e., General Ledger) and claimed direct costs by major cost

element.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(H)Schedule of direct costs by contract and subcontract and indirect expense applied at claimed rates, as

well as a subsidiary schedule of Government participation percentages in each of the allocation base amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(I)Schedule of cumulative direct and indirect costs claimed and billed by contract and subcontract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(J)Subcontract information. Listing of subcontracts awarded to companies for which the contractor is the prime or upper-tier contractor (include prime and subcontract numbers; subcontract value and award type; amount claimed during the fiscal year; and the subcontractor name, address, and point of contact information).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(K)Summary of each time-and-materials and labor-hour contract information, including labor categories, labor rates, hours, and amounts; direct materials; other direct costs; and, indirect expense applied at claimed rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(L)Reconciliation of total payroll per IRS form 941 to total labor costs distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(M)Listing of decisions/agreements/approvals and description of accounting/organizational changes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(N)Certificate of final indirect costs (see 52.242-4, Certification of Final Indirect Costs).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(O)Contract closing information for contracts physically completed in this fiscal year (include contract number, period of performance, contract ceiling amounts, contract fee computations, level of effort, and indicate if the contract is ready to close).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)The following supplemental information is not required to determine if a proposal is adequate, but may be required during the audit process:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Comparative analysis of indirect expense pools detailed by account to prior fiscal year and budgetary

data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)General Organizational information and limitation on allowability of compensation for certain contractor personnel. See 31.205-6(p). Additional salary reference information is available at http://www.whitehouse.gov/omb/procurement_index_exec_comp/.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)Identification of prime contracts under which the contractor performs as a subcontractor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)Description of accounting system (excludes contractors required to submit a CAS Disclosure Statement or contractors where the description of the accounting system has not changed from the previous year's submission).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)Procedures for identifying and excluding unallowable costs from the costs claimed and billed (excludes contractors where the procedures have not changed from the previous year's submission).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)Certified financial statements and other financial data (e.g., trial balance, compilation, review, etc.).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G)Management letter from outside CPAs concerning any internal control weaknesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(H)Actions that have been and/or will be implemented to correct the weaknesses described in the management letter from subparagraph (G) of this section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(I)List of all internal audit reports issued since the last disclosure of internal audit reports to the Government.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(J)Annual internal audit plan of scheduled audits to be performed in the fiscal year when the final indirect cost rate submission is made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(K)Federal and State income tax returns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(L)Securities and Exchange Commission 10-K annual report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(M)Minutes from board of directors meetings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(N)Listing of delay claims and termination claims submitted which contain costs relating to the subject fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(O)Contract briefings, which generally include a synopsis of all pertinent contract provisions, such as: Contract type, contract amount, product or service(s) to be provided, contract performance period, rate ceilings, advance approval requirements, pre-contract cost allowability limitations, and billing limitations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)The Contractor shall update the billings on all contracts to reflect the final settled rates and update the schedule of cumulative direct and indirect costs claimed and billed, as required in paragraph (d)(2)(iii)(I) of this section, within 60 days after settlement of final indirect cost rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)The Contractor and the appropriate Government representative shall execute a written understanding setting forth the final indirect cost rates. The understanding shall specify

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the agreed-upon final annual indirect cost rates,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the bases to which the rates apply,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)the periods for which the rates apply,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)any specific indirect cost items treated as direct costs in the settlement, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)the affected contract and/or subcontract, identifying any with advance agreements or special terms and the applicable rates.

The understanding shall not change any monetary ceiling, contract obligation, or specific cost allowance or disallowance provided for in this contract. The understanding is incorporated into this contract upon execution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Failure by the parties to agree on a final annual indirect cost rate shall be a dispute within the meaning of the Disputes clause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Within 120 days (or longer period if approved in writing by the Contracting Officer) after settlement of the final annual indirect cost rates for all years of a physically complete contract, Contractor shall submit a completion invoice or voucher to reflect the settled amounts and rates. The completion invoice or voucher shall include settled subcontract amounts and rates. The prime contractor is responsible for settling subcontractor amounts and rates included in the completion invoice or voucher and providing status of subcontractor audits to the contracting officer upon request.

(6)(i) If the Contractor fails to submit a completion invoice or voucher within the time specified in paragraph (d)(5) of this clause, the Contracting Officer may--

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Determine the amounts due to the Contractor under the contract; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Record this determination in a unilateral modification to the contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) This determination constitutes the final decision of the Contracting Officer in accordance with the Disputes clause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Billing rates. Until final annual indirect cost rates are established for any period, the Government shall reimburse the Contractor at billing rates established by the Contracting Officer or by an authorized representative (the cognizant auditor), subject to adjustment when the final rates are established. These billing rates --

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Shall be the anticipated final rates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)May be prospectively or retroactively revised by mutual agreement, at either party's request, to prevent substantial overpayment or underpayment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Quick-closeout procedures. Quick-closeout procedures are applicable when the conditions in FAR 42.708(a) are satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)Audit. At any time or times before final payment, the Contracting Officer may have the Contractor's invoices or vouchers and statements of cost audited. Any payment may be --

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Reduced by amounts found by the Contracting Officer not to constitute allowable costs; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Adjusted for prior overpayments or underpayments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Final payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Upon approval of a completion invoice or voucher submitted by the Contractor in accordance with paragraph (d)(5) of this clause, and upon the Contractor's compliance with all terms of this contract, the Government shall promptly pay any balance of allowable costs and that part of the fee (if any) not previously paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The Contractor shall pay to the Government any refunds, rebates, credits, or other amounts (including interest, if any) accruing to or received by the Contractor or any assignee under this contract, to the extent that those amounts are properly allocable to costs for which the Contractor has been reimbursed by the Government. Reasonable expenses incurred by the Contractor for securing refunds, rebates, credits, or other amounts shall be allowable costs if approved by the Contracting Officer. Before final payment under this contract, the Contractor and each assignee whose assignment is in effect at the time of final payment shall execute and deliver --

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)An assignment to the Government, in form and substance satisfactory to the Contracting Officer, of refunds, rebates, credits, or other amounts (including interest, if any) properly allocable to costs for which the Contractor has been reimbursed by the Government under this contract; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)A release discharging the Government, its officers, agents, and employees from all liabilities, obligations, and claims arising out of or under this contract, except --

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)Specified claims stated in exact amounts, or in estimated amounts when the exact amounts are not known;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)Claims (including reasonable incidental expenses) based upon liabilities of the Contractor to third parties arising out of the performance of this contract; provided, that the claims are not known to the Contractor on the date of the execution of the release, and that the Contractor gives notice of the claims in writing to the Contracting Officer within 6 years following the release date or notice of final payment date, whichever is earlier; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)Claims for reimbursement of costs, including reasonable incidental expenses, incurred by the Contractor under the patent clauses of this contract, excluding, however, any expenses arising from the Contractor's indemnification of the Government against patent liability.

52.219-28 POST-AWARD SMALL BUSINESS PROGRAM REREPRESENTATION (FEB 2024)

(a) Definitions. As used in this clause--

Long-term contract means a contract of more than five years in duration, including options. However, the term does not include contracts that exceed five years in duration because the period of performance has been extended for a cumulative period not to exceed six months under the clause at 52.217-8, Option to Extend Services, or other appropriate authority.

Small business concern--

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Means a concern, including its affiliates, that is independently owned and operated, not dominant in its field of operation, and qualified as a small business under the criteria in 13 CFR part 121 and the size standard in paragraph (d) of this clause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Affiliates, as used in this definition, means business concerns, one of whom directly or indirectly controls or has the power to control the others, or a third party or parties control or have the power to control the others. In determining whether affiliation exists, consideration is given to all appropriate factors including common ownership, common management, and contractual relationships. SBA determines affiliation based on the factors set forth at 13 CFR 121.103.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If the Contractor represented that it was any of the small business concerns identified in 19.000(a)(3) prior to award of this contract, the Contractor shall rerepresent its size and socioeconomic status according to paragraph (f) of this clause or, if applicable, paragraph (h) of this clause, upon occurrence of any of the following:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Within 30 days after execution of a novation agreement or within 30 days after modification of the contract to include this clause, if the novation agreement was executed prior to inclusion of this clause in the contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Within 30 days after a merger or acquisition that does not require a novation or within 30 days after modification of the contract to include this clause, if the merger or acquisition occurred prior to inclusion of this clause in the contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)For long-term contracts--

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Within 60 to 120 days prior to the end of the fifth year of the contract; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Within 60 to 120 days prior to the date specified in the contract for exercising any option thereafter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)If the Contractor represented that it was any of the small business concerns identified in 19.000(a)(3) prior to award of this contract, the Contractor shall rerepresent its size and socioeconomic status according to paragraph (f) of this clause or, if applicable, paragraph (h) of this clause, when the Contracting Officer explicitly requires it for an order issued under a multiple-award contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Contractor shall rerepresent its size status in accordance with the size standard in effect at the time of this rerepresentation that corresponds to the North American Industry Classification System (NAICS) code(s) assigned to this contract. The small business size standard corresponding to this NAICS code(s) can be found at https://www.sba.gov/document/support--table-size-standards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)The small business size standard for a Contractor providing an end item that it does not manufacture, process, or produce itself, for a contract other than a construction or service contract, is 500 employees, or 150 employees for information technology value-added resellers under NAICS code 541519, if the acquisition--

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Was set aside for small business and has a value above the simplified acquisition threshold;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Used the HUBZone price evaluation preference regardless of dollar value, unless the Contractor waived the price evaluation preference; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Was an 8(a), HUBZone, service-disabled veteran-owned, economically disadvantaged women-owned, or women-owned small business set-aside or sole-source award regardless of dollar value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Except as provided in paragraph (h) of this clause, the Contractor shall make the representation(s) required by paragraph (b) and (c) of this clause by validating or updating all its representations in the Representations and Certifications section of the System for Award Management (SAM) and its other data in SAM, as necessary, to ensure that they reflect the Contractor's current status. The Contractor shall notify the contracting office in writing within the timeframes specified in paragraph (b) of this clause, or with its offer for an order (see paragraph (c) of this clause), that the data have been validated or updated, and provide the date of the validation or update.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)If the Contractor represented that it was other than a small business concern prior to award of this contract, the Contractor may, but is not required to, take the actions required by paragraphs (f) or (h) of this clause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)If the Contractor does not have representations and certifications in SAM, or does not have a representation in SAM for the NAICS code applicable to this contract, the Contractor is required to complete the following rerepresentation and submit it to the contracting office, along with the contract number and the date on which the rerepresentation was completed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Contractor represents that it [X] is, [&nbsp;&nbsp;&nbsp;&nbsp; ] is not a small business concern under NAICS Code 541715 assigned to contract number N68335-25-C-0254.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)[Complete only if the Contractor represented itself as a small business concern in paragraph (h)(1) of this clause.] The Contractor represents that it [&nbsp;&nbsp;&nbsp;&nbsp; ] is, [&nbsp;&nbsp;&nbsp;&nbsp; ] is not, a small disadvantaged business concern as defined in 13 CFR 124.1001.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)[Complete only if the Contractor represented itself as a small business concern in paragraph (h)(1) of this clause.] The Contractor represents that it [&nbsp;&nbsp;&nbsp;&nbsp; ] is, [&nbsp;&nbsp;&nbsp;&nbsp; ] is not a women-owned small business concern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Women-owned small business (WOSB) joint venture eligible under the WOSB Program. The Contractor represents that it [&nbsp;&nbsp;&nbsp;&nbsp; ] is, [&nbsp;&nbsp;&nbsp;&nbsp; ] is not a joint venture that complies with the requirements of 13 CFR 127.506(a) through (c). [The Contractor shall enter the name and unique entity identifier of each party to the joint venture: .]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Economically disadvantaged women-owned small business (EDWOSB) joint venture. The Contractor represents that it [&nbsp;&nbsp;&nbsp;&nbsp; ] is, [&nbsp;&nbsp;&nbsp;&nbsp; ] is not a joint venture that complies with the requirements of 13 CFR 127.506(a) through (c). [The Contractor shall enter the name and unique entity identifier of each party to the joint venture: .]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)[Complete only if the Contractor represented itself as a small business concern in paragraph (h)(1) of this clause.] The Contractor represents that it [&nbsp;&nbsp;&nbsp;&nbsp; ] is, [&nbsp;&nbsp;&nbsp;&nbsp; ] is not a veteran-owned small business concern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)[Complete only if the Contractor represented itself as a veteran-owned small business concern in paragraph (h)(6) of this clause.] The Contractor represents that it [&nbsp;&nbsp;&nbsp;&nbsp; ] is, [&nbsp;&nbsp;&nbsp;&nbsp; ] is not a service-disabled veteran-owned small business concern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)Service-disabled veteran-owned small business (SDVOSB) joint venture eligible under the SDVOSB Program. The Contractor represents that it [&nbsp;&nbsp;&nbsp;&nbsp; ] is, [&nbsp;&nbsp;&nbsp;&nbsp; ] is not an SDVOSB joint venture eligible under the SDVOSB Program that complies with the requirements of 13 CFR 128.402. [The Contractor shall enter the name and unique entity identifier of each party to the joint venture:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)[Complete only if the Contractor represented itself as a small business concern in paragraph (h)(1) of this clause.] The Contractor represents that--

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)It [&nbsp;&nbsp;&nbsp;&nbsp; ] is, [&nbsp;&nbsp;&nbsp;&nbsp; ] is not a HUBZone small business concern listed, on the date of this representation, on the List of Qualified HUBZone Small Business Concerns maintained by the Small Business Administration, and no material changes in ownership and control, principal office, or HUBZone employee percentage have occurred since it was certified in accordance with 13 CFR part 126; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)It [&nbsp;&nbsp;&nbsp;&nbsp; ] is, [&nbsp;&nbsp;&nbsp;&nbsp; ] is not a HUBZone joint venture that complies with the requirements of 13 CFR part 126, and the representation in paragraph (h)(8)(i) of this clause is accurate for each HUBZone small business concern participating in the HUBZone joint venture. [The Contractor shall enter the names of each of the HUBZone small business concerns participating in the HUBZone joint venture: .] Each HUBZone small business concern participating in the HUBZone joint venture shall submit a separate signed copy of the HUBZone representation.

[Contractor to sign and date and insert authorized signer's name and title.]

(End of clause)

**52.222-2** **PAYMENT FOR OVERTIME PREMIUMS (JUL 1990)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The use of overtime is authorized under this contract if the overtime premium cost does not exceed $0 or the overtime premium is paid for work --

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Necessary to cope with emergencies such as those resulting from accidents, natural disasters, breakdowns of production equipment, or occasional production bottlenecks of a sporadic nature;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)By indirect-labor employees such as those performing duties in connection with administration, protection, transportation, maintenance, standby plant protection, operation of utilities, or accounting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)To perform tests, industrial processes, laboratory procedures, loading or unloading of transportation conveyances, and operations in flight or afloat that are continuous in nature and cannot reasonably be interrupted or completed otherwise; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)That will result in lower overall costs to the Government.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any request for estimated overtime premiums that exceeds the amount specified above shall include all estimated overtime for contract completion and shall--

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Identify the work unit; e.g., department or section in which the requested overtime will be used, together with present workload, staffing, and other data of the affected unit sufficient to permit the Contracting Officer to evaluate the necessity for the overtime;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Demonstrate the effect that denial of the request will have on the contract delivery or performance schedule;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Identify the extent to which approval of overtime would affect the performance or payments in connection with other Government contracts, together with identification of each affected contract; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Provide reasons why the required work cannot be performed by using multishift operations or by employing additional personnel.

52.222-35 EQUAL OPPORTUNITY FOR VETERANS (JUN 2020)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Definitions. As used in this clause--

"Active duty wartime or campaign badge veteran," "Armed Forces service medal veteran," "disabled veteran," "protected veteran," "qualified disabled veteran," and "recently separated veteran" have the meanings given at Federal Acquisition Regulation (FAR) 22.1301.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Equal opportunity clause. The Contractor shall abide by the requirements of the equal opportunity clause at 41 CFR 60-300.5(a), as of March 24, 2014. This clause prohibits discrimination against qualified protected veterans, and requires affirmative action by the Contractor to employ and advance in employment qualified protected veterans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Subcontracts. The Contractor shall insert the terms of this clause in subcontracts valued at or above the threshold specified in FAR 22.1303(a) on the date of subcontract award, unless exempted by rules, regulations, or orders of the Secretary of Labor. The Contractor shall act as specified by the Director, Office of Federal Contract Compliance Programs, to enforce the terms, including action for noncompliance. Such necessary changes in language may be made as shall be appropriate to identify properly the parties and their undertakings.

(End of clause)

52.222-36 EQUAL OPPORTUNITY FOR WORKERS WITH DISABILITIES (JUN 2020)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Equal opportunity clause. The Contractor shall abide by the requirements of the equal opportunity clause at 41 CFR 60-741.5(a), as of March 24, 2014. This clause prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by the Contractor to employ and advance in employment qualified individuals with disabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Subcontracts. The Contractor shall include the terms of this clause in every subcontract or purchase order in excess of the threshold specified in Federal Acquisition Regulation (FAR) 22.1408(a) on the date of subcontract award, unless exempted by rules, regulations, or orders of the Secretary, so that such provisions will be binding upon each subcontractor or vendor. The Contractor shall act as specified by the Director, Office of Federal Contract Compliance Programs of the U.S. Department of Labor, to enforce the terms, including action for noncompliance. Such necessary changes in language may be made as shall be appropriate to identify properly the parties and their undertakings.

(End of clause)

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**52.232-22** **LIMITATION OF FUNDS (APR 1984)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The parties estimate that performance of this contract will not cost the Government more than (1) the estimated cost specified in the Schedule or, (2) if this is a cost-sharing contract, the Government's share of the estimated cost specified in the Schedule. The Contractor agrees to use its best efforts to perform the work specified in the Schedule and all obligations under this contract within the estimated cost, which, if this is a cost-sharing contract, includes both the Government's and the Contractor's share of the cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Schedule specifies the amount presently available for payment by the Government and allotted to this contract, the items covered, the Government's share of the cost if this is a cost-sharing contract, and the period of performance it is estimated the allotted amount will cover. The parties contemplate that the Government will allot additional funds incrementally to the contract up to the full estimated cost to the Government specified in the Schedule, exclusive of any fee. The Contractor agrees to perform, or have performed, work on the contract up to the point at which the total amount paid and payable by the Government under the contract approximates but does not exceed the total amount actually allotted by the Government to the contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Contractor shall notify the Contracting Officer in writing whenever it has reason to believe that the costs it expects to incur under this contract in the next 60 days, when added to all costs previously incurred, will exceed 75 percent of (1) the total amount so far allotted to the contract by the Government or, (2) if this is a cost-sharing contract, the amount then allotted to the contract by the Government plus the Contractor's corresponding share. The notice shall state the estimated amount of additional funds required to continue performance for the period specified in the Schedule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Sixty days before the end of the period specified in the Schedule, the Contractor shall notify the Contracting Officer in writing of the estimated amount of additional funds, if any, required to continue timely performance under the contract or for any further period specified in the Schedule or otherwise agreed upon, and when the funds will be required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)If, after notification, additional funds are not allotted by the end of the period specified in the schedule or another agreed-upon date, upon the Contractor's written request the Contracting Officer will terminate this contract on that date in accordance with the provisions of the Termination clause of this contract. If the Contractor estimates that the funds available will allow it to continue to discharge its obligations beyond that date, it may specify a later date in its request, and the Contracting Officer may terminate this contract on that later date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Except as required by other provisions of this contract, specifically citing and stated to be an exception to this clause --

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Government is not obligated to reimburse the Contractor for costs incurred in excess of the total amount allotted by the Government to this contract; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The Contractor is not obligated to continue performance under this contract (including actions under the Termination clause of this contract) or otherwise incur costs in excess of --

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)The amount then allotted to the contract by the Government or;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)If this is a cost-sharing contract, the amount then allotted by the Government to the contract plus the Contractor's corresponding share, until the Contracting Officer notifies the Contractor in writing that the amount allotted by the Government has been increased and specifies an increased amount, which shall then constitute the total amount allotted by the Government to this contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)The estimated cost shall be increased to the extent that (1) the amount allotted by the Government or, (2) if this is a cost-sharing contract, the amount then allotted by the Government to the contract plus the Contractor's corresponding share, exceeds the estimated cost specified in the Schedule. If this is a cost-sharing contract, the increase shall be allocated in accordance with the formula specified in the Schedule.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)No notice, communication, or representation in any form other than that specified in subparagraph (f)(2) above, or from any person other than the Contracting Officer, shall affect the amount allotted by the Government to this contract. In the absence of the specified notice, the Government is not obligated to reimburse the Contractor for any costs in excess of the total amount allotted by the Government to this contract, whether incurred during the course of the contract or as a result of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)When and to the extent that the amount allotted by the Government to the contract is increased, any costs the Contractor incurs before the increase that are in excess of --

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The amount previously allotted by the Government or;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)If this is a cost-sharing contract, the amount previously allotted by the Government to the contract plus the Contractor's corresponding share, shall be allowable to the same extent as if incurred afterward, unless the Contracting Officer issues a termination or other notice and directs that the increase is solely to cover termination or other specified expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)Change orders shall not be considered an authorization to exceed the amount allotted by the Government specified in the Schedule, unless they contain a statement increasing the amount allotted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)Nothing in this clause shall affect the right of the Government to terminate this contract. If this contract is terminated, the Government and the Contractor shall negotiate an equitable distribution of all property produced or purchased under the contract, based upon the share of costs incurred by each.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)If the Government does not allot sufficient funds to allow completion of the work, the Contractor is entitled to a percentage of the fee specified in the Schedule equaling the percentage of completion of the work contemplated by this contract.

52.244-2SUBCONTRACTS (JUN 2020)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Definitions. As used in this clause--

Approved purchasing system means a Contractor's purchasing system that has been reviewed and approved in accordance with Part 44 of the Federal Acquisition Regulation (FAR).

Consent to subcontract means the Contracting Officer's written consent for the Contractor to enter into a particular subcontract.

Subcontract means any contract, as defined in FAR Subpart 2.1, entered into by a subcontractor to furnish supplies or services for performance of the prime contract or a subcontract. It includes, but is not limited to, purchase orders, and changes and modifications to purchase orders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)When this clause is included in a fixed-price type contract, consent to subcontract is required only on unpriced contract actions (including unpriced modifications or unpriced delivery orders), and only if required in accordance with paragraph (c) or (d) of this clause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)If the Contractor does not have an approved purchasing system, consent to subcontract is required for any subcontract that—

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Is of the cost-reimbursement, time-and-materials, or labor-hour type; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Is fixed-price and exceeds—

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)For a contract awarded by the Department of Defense, the Coast Guard, or the National Aeronautics and Space Administration, the greater of the simplified acquisition threshold, as defined in FAR 2.101 on the date of subcontract award, or 5 percent of the total estimated cost of the contract; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)For a contract awarded by a civilian agency other than the Coast Guard and the National Aeronautics and Space Administration, either the simplified acquisition threshold, as defined in FAR 2.101 on the date of subcontract award, or 5 percent of the total estimated cost of the contract.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)If the Contractor has an approved purchasing system, the Contractor nevertheless shall obtain the Contracting Officer's written consent before placing the following subcontracts:

(e)(1) The Contractor shall notify the Contracting Officer reasonably in advance of placing any subcontract or modification thereof for which consent is required under paragraph (b), (c), or (d) of this clause, including the following information:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)A description of the supplies or services to be subcontracted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Identification of the type of subcontract to be used.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Identification of the proposed subcontractor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)The proposed subcontract price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)The subcontractor's current, complete, and accurate certified cost or pricing data and Certificate of Current Cost or Pricing Data, if required by other contract provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)The subcontractor's Disclosure Statement or Certificate relating to Cost Accounting Standards when such data are required by other provisions of this contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)A negotiation memorandum reflecting—

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)The principal elements of the subcontract price negotiations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)The most significant considerations controlling establishment of initial or revised prices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)The reason certified cost or pricing data were or were not required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)The extent, if any, to which the Contractor did not rely on the subcontractor's certified cost or pricing data in determining

the price objective and in negotiating the final price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)The extent to which it was recognized in the negotiation that the subcontractor's certified cost or pricing data were not accurate, complete, or current; the action taken by the Contractor and the subcontractor; and the effect of any such defective data on the total price negotiated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)The reasons for any significant difference between the Contractor's price objective and the price negotiated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G)A complete explanation of the incentive fee or profit plan when incentives are used. The explanation shall identify each critical performance element, management decisions used to quantify each incentive element, reasons for the incentives, and a summary of all trade-off possibilities considered.

(2) The Contractor is not required to notify the Contracting Officer in advance of entering into any subcontract for which consent is not required under paragraph (c), (d), or (e) of this clause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Unless the consent or approval specifically provides otherwise, neither consent by the Contracting Officer to any subcontract nor approval of the Contractor's purchasing system shall constitute a determination—

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Of the acceptability of any subcontract terms or conditions;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Of the allowability of any cost under this contract; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)To relieve the Contractor of any responsibility for performing this contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)No subcontract or modification thereof placed under this contract shall provide for payment on a cost-plus-a- percentage-of-cost basis, and any fee payable under cost-reimbursement type subcontracts shall not exceed the fee limitations in FAR 15.404-4(c)(4)(i).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)The Contractor shall give the Contracting Officer immediate written notice of any action or suit filed and prompt notice of any claim made against the Contractor by any subcontractor or vendor that, in the opinion of the Contractor, may result in litigation related in any way to this contract, with respect to which the Contractor may be entitled to reimbursement from the Government.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)The Government reserves the right to review the Contractor's purchasing system as set forth in FAR Subpart 44.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)Paragraphs (c) and (e) of this clause do not apply to the following subcontracts, which were evaluated during negotiations:

PJW Engineering

(End of clause)

52.252-2CLAUSES INCORPORATED BY REFERENCE (FEB 1998)

This contract incorporates one or more clauses by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available. Also, the full text of a clause may be accessed electronically at this address: https://www.acquisition.gov/browse/index/far

(End of clause)

**252.227-7028** **TECHNICAL DATA OR COMPUTER SOFTWARE PREVIOUSLY DELIVERED TO THE GOVERNMENT (JUN 1995)**

The Offeror shall attach to its offer an identification of all documents or other media incorporating technical data or computer software it intends to deliver under this contract with other than unlimited rights that are identical or substantially similar to documents or other media that the Offeror has produced for, delivered to, or is obligated to deliver to the Government under any contract or subcontract. The attachment shall identify--

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The contract number under which the data or software were produced;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The contract number under which, and the name and address of the organization to whom, the data or software were most recently delivered or will be delivered; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Any limitations on the Government's rights to use or disclose the data or software, including, when applicable, identification of the earliest date the limitations expire.

**252.235-7010** **ACKNOWLEDGMENT OF SUPPORT AND DISCLAIMER (MAY 1995)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Contractor shall include an acknowledgment of the Government's support in the publication of any material based on or developed under this contract, stated in the following terms: This material is based upon work supported by the Office of Naval Research under Contract No. N68335-25-C-0254.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)All material, except scientific articles or papers published in scientific journals, must, in addition to any notices or disclaimers by the Contractor, also contain the following disclaimer: Any opinions, findings and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the Office of Naval Research.

------

Section J - List of Documents, Exhibits and Other Attachments

Exhibit/Attachment **Table of Contents**

---

| | | | |
|:---|:---|:---|:---|
| DOCUMENT TYPE | DESCRIPTION | PAGES | DATE |
| Exhibit _ | CDRL A001 | 3 |  |
| Exhibit _ | CDRL A002 | 3 |  |
| Exhibit _ | CDRL A003 | 3 |  |
| Exhibit _ | CDRL A004 | 3 |  |
| Attachment 5 | CDRL distro | 1 |  |

---

## Form 1-K Filing Summary

### Filer Information

**Issuer CIK:** 0001788756

**Issuer CCC:** XXXXXXXX

**Is filer a shell company?:** No

**Is this filing by a successor company?:** No

### Submission Contact Information

**Is this a LIVE or TEST Filing?:** LIVE

**Period:** 12-31-2025

### Item 1: Issuer Information (Tab 1 Notification)

**Type of Report:** Annual Report

**Fiscal Year End:** 12-31-2025

**Exact Name of Issuer:** Parallel Flight Technologies, Inc.

**CIK:** 0001788756

**Jurisdiction of Incorporation:** DE

**IRS Number:** 83-2143900

**Address:** 450 MCQUADE DRIVE, LA SELVA BEACH, CA 95076

**Issuer Phone Number:** 831-278-2036

**Title of each class of securities issued pursuant to Regulation A:** Class B Common Stock

### Item 2: Ongoing Reporting Requirements

**Is the issuer relying on the relief provided by Rule 257(d) for this filing?** Yes