# EDGAR Filing Document

**Accession Number:** 0001892704
**File Stem:** 0001493152-26-025360
**Filing Date:** 2026-5
**Character Count:** 1866755
**Document Hash:** 0e5b1df4a1ed43990b1e8e7049de6062
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-025360.hdr.sgml**: 20260527

**ACCESSION NUMBER**: 0001493152-26-025360

**CONFORMED SUBMISSION TYPE**: S-1/A

**PUBLIC DOCUMENT COUNT**: 122

**FILED AS OF DATE**: 20260527

**DATE AS OF CHANGE**: 20260527

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** First Breach, Inc.
- **CENTRAL INDEX KEY:** 0001892704
- **STANDARD INDUSTRIAL CLASSIFICATION:** ORDNANCE & ACCESSORIES, (NO VEHICLES/GUIDED MISSILES) [3480]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 825147193
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** S-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-295442
- **FILM NUMBER:** 261025037

**BUSINESS ADDRESS:**
- **STREET 1:** 8402 TOPPING RD.
- **CITY:** BALTIMORE
- **STATE:** MD
- **ZIP:** 21208
- **BUSINESS PHONE:** (410) 303-1600

**MAIL ADDRESS:**
- **STREET 1:** 8402 TOPPING RD.
- **CITY:** BALTIMORE
- **STATE:** MD
- **ZIP:** 21208

**As filed with the U.S. Securities and Exchange Commission on May 27, 2026.**

**Registration No. 333-295442** 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**AMENDMENT NO. 1 TO**

**FORM S-1**

**REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933**

**First Breach Inc.**

(Exact Name of Registrant as Specified in its Charter)

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| | | |
|:---|:---|:---|
| **Delaware** | **3480** | **82-5147193** |
| (State or Other Jurisdiction of<br> Incorporation or Organization) | (Primary Standard Industrial<br> Classification Code Number) | (I.R.S. Employer<br> Identification Number*)* |

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**18450 Showalter Rd**

**Hagerstown, MD 21742**

**(443) 900-9890**

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)

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**Jeffrey Low**

**Chief Executive Officer**

**First Breach Inc.**

**18450 Showalter Rd**

**Hagerstown, MD 21742**

**(443) 900-9890**

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

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***Copies to:***

**Joseph M. Lucosky, Esq.**

**Lucosky Brookman LLP**

**101 Wood Avenue South, 5th Floor**

**Woodbridge, NJ 08830**

**Tel. No.: (732) 395-4400**

**Fax No.: (732) 395-4401**

**Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.**

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ☐

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

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐

**The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.**

**The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.**

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| | |
|:---|:---|
| **PRELIMINARY PROSPECTUS** | **SUBJECT TO COMPLETION, DATED MAY 27, 2026** |

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**First Breach Inc.**

**70,728,866** **Shares**

**Common Stock**

This prospectus relates to the registration of the resale of up to 70,728,866 shares of common stock, par value $0.0001 per share, of First Breach Inc. (the "Company"), a Delaware corporation, consisting of (i) up to 45,034,282 shares of common stock held by our stockholders identified in this prospectus, or their permitted transferees (the "Registered Stockholders"), (ii) up to 10,000,000 shares of common stock underlying outstanding restricted stock units; (iii) up to 14,733,046 shares of common stock issuable, upon exercise of outstanding stock options] and (iv) up to 961,538 shares of common stock issuable upon conversion of the May 2026 Notes (as defined herein) held by the May 2026 Note Investors (as defined herein), in connection with our direct listing (the "Direct Listing") on the Nasdaq Capital Market ("Nasdaq"). The shares being registered herein may be freely sold in market transactions following the listing and upon the effectiveness of this registration statement. The 45,034,282 shares of common stock referenced in clause (i) above represent one hundred percent (100%) of our currently issued and outstanding common stock as of May 27, 2026. The 961,538 shares of common stock referenced in clause (ii) above represent the maximum number of shares issuable upon conversion of the May 2026 Notes at a fixed conversion price of $8.00 per share. None of the Company's outstanding shares registered herein may be freely sold in reliance on an exemption from registration such as Rule 144 ("Rule 144") under the Securities Act of 1933, as amended (the "Securities Act"), at this time. Prior to the listing of our common stock on the Nasdaq Capital Market there has been no public market for our common stock. During the period from March 2023 through March 2026, we issued shares of common stock to investors at a low price of $1.00 per share and a high price of $8.00 per share. This information, however, may have little or no relation to broader market demand for our shares of common stock. As a result, you should not place undue reliance on these historical sales prices as they may differ materially from the public prices of our shares of common stock on Nasdaq.

Unlike an initial public offering, the resale by the Registered Stockholders is not being underwritten by any investment bank. The Registered Stockholders may, or may not, elect to sell their shares of Common Stock covered by this prospectus, as and to the extent they may determine. Such sales, if any, will be made through brokerage transactions on the Nasdaq Capital Market at prevailing market prices. We will not be involved in the price setting process. Additionally, the price of our shares in prior private transactions may have little or no relation to the opening price and subsequent public price of our stock on Nasdaq. For more information, see the section titled "Plan of Distribution." If the Registered Stockholders choose to sell their shares of common stock, we will not receive any proceeds from the sale of such shares.

No public market exists for our common stock. Further, the listing of our common stock on Nasdaq, without a firm-commitment underwritten offering, is a novel method for commencing public trading in shares of our common stock, and consequently, the trading volume and price of shares of our common stock may be more volatile than if shares of our common stock were initially listed in connection with an initial public offering underwritten on a firm-commitment basis.

On the day that our shares of common stock are initially listed on Nasdaq, Nasdaq will begin accepting, but not executing, pre-opening buy and sell orders and will begin to continuously generate the indicative Current Reference Price (as defined below) on the basis of such accepted orders. The Current Reference Price is calculated each second and, during a 10-minute "Display Only" period, is disseminated, along with other indicative imbalance information, to market participants by Nasdaq on its NOII and BookViewer tools. Following the "Display Only" period, a "Pre-Launch" period begins, during which RBW Capital Partners LLC (the "Advisor" or "RBW"), in its capacity as our financial advisor, must notify Nasdaq that our shares are "ready to trade." Once the Advisor has notified Nasdaq that our shares of common stock are ready to trade, Nasdaq will confirm the Current Reference Price for our shares of common stock, in accordance with the Nasdaq rules. If the Advisor then approves proceeding at the Current Reference Price, the applicable orders that have been entered will be executed at such price and the regular trading of our shares of common stock on Nasdaq will commence, subject to Nasdaq conducting validation checks in accordance with the Nasdaq rules. Under the Nasdaq rules, the "Current Reference Price" means: (i) the single price at which the maximum number of orders to buy or sell can be matched; (ii) if there is more than one price at which the maximum number of orders to buy or sell can be matched, then it is the price that minimizes the imbalance between orders to buy or sell (i.e. minimizes the number of shares that would remain unmatched at such price); (iii) if more than one price exists under (ii), then it is the entered price (i.e. the specified price entered in an order by a customer to buy or sell) at which our shares of common stock will remain unmatched (i.e. will not be bought or sold); and (iv) if more than one price exists under (iii), a price determined by Nasdaq in consultation with the Advisor in its capacity as our financial advisor. In the event that more than one price exists under (iii), the Advisor will exercise any consultation rights only to the extent that it can do so consistent with the anti-manipulation provisions of the federal securities laws, including Regulation M, or applicable relief granted thereunder. The Registered Stockholders will not be involved in Nasdaq's price-setting mechanism, including any decision to delay or proceed with trading, nor will they control or influence the Advisor in carrying out its role as a financial adviser. The Advisor will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on considerations of volume, timing and price. In particular, the Advisor will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. For more information, see "Plan of Distribution."

We have applied to list our common stock on the Nasdaq Capital Market under the symbol "FBDT".

If our Nasdaq application is not approved or we otherwise determine that we will not be able to secure the listing of our common stock on Nasdaq, we will not complete this Direct Listing. This listing is a condition to the offering. No assurance can be given that our Nasdaq application will be approved and that our common stock will ever be listed on Nasdaq. If our listing application is not approved by Nasdaq, we will not be able to consummate the offering and we will terminate this Direct Listing.

We are an emerging growth company under the Jumpstart Our Business Startups Act of 2012 and a "smaller reporting company" as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and, as such, may elect to comply with certain reduced public company reporting requirements for this prospectus and future filings. See "*Prospectus Summary — Implications of Being an Emerging Growth Company" and* "*Prospectus Summary — Implications of Being a Smaller Reporting Company*."

**Investing in our common stock is speculative and involves a high degree of risk. Before making any investment decision, you should carefully review and consider all the information in this prospectus**, **including the risks and uncertainties described under "Risk Factors" beginning on page 7.**

**Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.**

The date of this prospectus is __________, 2026.

**TABLE OF CONTENTS**

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| | |
|:---|:---|
|  | **PAGE** |
| [PROSPECTUS SUMMARY](#Rma_001) | 1 |
| [SUMMARY OF FINANCIAL INFORMATION](#Rma_007) | 6 |
| [RISK FACTORS](#Rma_002) | 7 |
| [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](#Rma_003) | 34 |
| [USE OF PROCEEDS](#Rma_004) | 35 |
| [DIVIDEND POLICY](#Rma_005) | 35 |
| [CAPITALIZATION](#Rma_006) | 36 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#gk_001) | 37 |
| [BUSINESS](#gk_002) | 47 |
| [MANAGEMENT](#gk_003) | 51 |
| [EXECUTIVE AND DIRECTOR COMPENSATION](#gk_004) | 59 |
| [CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#gk_005) | 63 |
| [PRINCIPAL AND REGISTERED STOCKHOLDERS](#gk_006) | 64 |
| [DESCRIPTION OF CAPITAL STOCK](#gk_007) | 66 |
| [PLAN OF DISTRIBUTION](#gk_008) | 69 |
| [SHARES ELIGIBLE FOR FUTURE SALE](#gk_009) | 71 |
| [SALE PRICE HISTORY OF COMMON STOCK](#gk_010) | 72 |
| [MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS](#gk_011) | 73 |
| [LEGAL MATTERS](#gk_012) | 77 |
| [EXPERTS](#gk_013) | 77 |
| [WHERE YOU CAN FIND ADDITIONAL INFORMATION](#gk_014) | 77 |
| [INDEX TO FINANCIAL STATEMENTS](#G_006) | F-1 |

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**You should only rely on the information contained in this prospectus and in any free writing prospectus prepared by or on behalf of us and delivered or made available to you. We have not authorized anyone to provide you with additional or different information. The Registered Stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus or a free writing prospectus is accurate only as of its date, regardless of its time of delivery or of any sale of shares of our common stock. Our business, financial condition, operating results, and prospects may have changed since that date.**

**For investors outside the United States**: We have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside of the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside of the United States.

i

**ABOUT THIS PROSPECTUS**

This prospectus is a part of a registration statement on Form S-1 that we filed with the SEC using a continuous offering process. Under this process, the Registered Stockholders may, from time to time, sell the common stock covered by this prospectus in the manner described in the section titled "Plan of Distribution." Additionally, we may provide a prospectus supplement to add information to, or update or change information contained in, this prospectus, including the section titled "Plan of Distribution." You may obtain this information without charge by following the instructions under the "Where You Can Find Additional Information" section appearing elsewhere in this prospectus. You should read this prospectus and any prospectus supplement before deciding to invest in our common stock.

**INDUSTRY AND MARKET DATA**

Unless otherwise indicated, information in this prospectus concerning economic conditions, our industry, our markets and our competitive position is based on a variety of sources, including information from third-party industry analysts and publications and our own estimates and research. Some of the industry and market data contained in this prospectus are based on third-party industry publications. This information involves a number of assumptions, estimates and limitations.

The industry publications, surveys and forecasts and other public information generally indicate or suggest that their information has been obtained from sources believed to be reliable. None of the third-party industry publications used in this prospectus were prepared on our behalf. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors" in this prospectus. These and other factors could cause results to differ materially from those expressed in these publications.

**TRADEMARKS**

We own or have rights to trademarks or trade names that we use in connection with the operation of our businesses, our corporate names, logos and website names. This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the® or <sup>™</sup> symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent possible under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies' trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by any other companies. All other trademarks are the property of their respective owners.

ii

**PROSPECTUS SUMMARY**

*This summary highlights certain information appearing elsewhere in this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in shares of our common stock and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. This summary contains forward-looking statements that involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions, or future events. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements. See "Cautionary Note Regarding Forward-Looking Statements." Before you decide to invest in our common stock, you should also read the entire prospectus carefully, including "Risk Factors" beginning on page 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page 37, and the financial statements and related notes included in this prospectus.*

*Unless the context indicates otherwise, as used in this prospectus, the terms "we," "us," "our," "our company," "First Breach," and "our business" refer to First Breach Inc.* 

**Executive Summary**

We are an integrated manufacturer of high-quality ammunition and ammunition components, serving commercial, law enforcement, and military markets. With in-house production capabilities, we are able to maintain tight control over our supply chain and quality assurance from raw material processing to final product assembly. We operate in a state-of-the-art facility that includes an on-site lead smelting operation, allowing us to ensure the consistency, purity, and availability of one of the most critical raw materials in ammunition manufacturing, and brass cup and casing manufacturing from raw materials. We maintain relationships with multiple raw materials suppliers worldwide, including but not limited to ABCO Metals, Gemciler Guven Metal, and Mittal Metals, to ensure a consistent inflow in the materials needed to manufacture product and avoid potential global supply issues. Our in-house wearable tooling department further enhances production efficiency and quality by designing and fabricating precision tools tailored to our manufacturing processes. Through stringent quality control, high-tech machinery, and deep industry expertise, we have established a strong reputation among shooting sports enthusiasts, tactical professionals, and OEM clients. We distribute our products primarily through distributor channels, but we also sell smaller quantities of product directly to consumers and small businesses. We take pride in our customer relationships and do not limit ourselves to only a few customers, but we strive to distribute as many of our products as practical to as many customers as possible. In doing so, we have developed a strong customer base with over 140 potential sales channels.

Our vision is to establish ourselves as a leading participant in the United States and international ammunition markets. Through the production of high-quality, competitively priced products, we seek to achieve significant expansion of our market share and operational scale. As one of the few fully vertically integrated manufacturers capable of producing both components and finished cartridges, we maintain and continuously seek to strengthen a distinct competitive advantage supported by ongoing capital investments, strategic acquisitions, and partnerships. The global ammunition industry continues to experience robust demand driven by sustained civilian consumption for personal safety and recreational use, as well as increased defense and law enforcement expenditures amid geopolitical uncertainty. We are well-positioned to capture this growth through continuous process improvements, product line diversification, and the expansion of our distribution network. Concurrently, we intend to enhance our direct-to-consumer channels and brand visibility through targeted marketing, industry events, and strategic media collaborations.

In addition to our core operations, on September 23, 2025, we entered into a strategic joint venture with ideaForge Technology Inc., the world's #3 ranked dual-category drone manufacturer and a recognized innovator in unmanned aerial systems ("UAS"). The joint venture—First Forge Technologies Inc.—will be a U.S.-based enterprise focused on the localized production and sale of advanced drone platforms for defense, homeland security, and commercial applications. Leveraging ideaForge's proprietary avionics and autonomous technologies alongside our precision manufacturing infrastructure and domestic supply chain capabilities, the venture will deliver fully U.S.-compliant, "Made in the USA" aerial systems designed to meet federal and state procurement standards. We anticipate initial production and pilot deployments beginning in early 2026, with the goal of securing government and enterprise contracts simultaneously. This initiative aligns with U.S. policy directives aimed at strengthening domestic manufacturing, enhancing national security, and fostering technological independence, positioning us for meaningful long-term growth across both ammunition and aerospace sectors.

In furtherance of our drone and defense technology strategy, on May 1, 2026, we entered into a Master Services Agreement with Hellbender, Inc. for the design, engineering, prototyping and demonstration of volume manufacturing capability for two Class 1 attritable first-person-view drone platforms targeted for deployment consistent with U.S. National Defense Authorization Act requirements and the Department of Defense Drone Dominance Program parameters. See "*Recent Developments — Hellbender*" below for additional information.

**Implications of Being an Emerging Growth Company**

We are an "emerging growth company" as defined in Section 2(a) of the Securities Act, and we may remain an emerging growth company for up to five years following the listing of our common stock on Nasdaq. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. In particular, in this prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation-related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock.

In addition, the federal securities laws provide that an emerging growth company may take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected this exemption from new or revised accounting standards, and, therefore, we will not be subject to the same requirements to adopt new or revised accounting standards as other public companies that are not emerging growth companies.

We would cease to be an "emerging growth company" upon the earliest to occur of: (i) the last day of the fiscal year in which we have $1.235 billion or more in annual revenue, (ii) the date on which we first qualify as a large accelerated filer under the rules of the U.S. Securities and Exchange Commission, or the SEC, (iii) the date on which we have, in any three-year period, issued more than $1.0 billion in non-convertible debt securities, and (iv) the last day of the fiscal year ending after the fifth anniversary of the listing of our common stock on Nasdaq.

**Implications of Being a Smaller Reporting Company**

We are a "smaller reporting company" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) the market value of our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenues are less than $100 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and have reduced disclosure obligations regarding executive compensation and, if we are a smaller reporting company with less than $100 million in annual revenue, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

**Corporate Information**

We were originally formed as a limited liability company named First Breach, LLC under the laws of the State of Maryland on April 9, 2018 and subsequently converted to a corporation named First Breach Inc. incorporated under the laws of the State of Delaware on October 22, 2021. Our principal executive office is located at 18450 Showalter Rd., Hagerstown, MD 21742, and our telephone number is (443) 900-9890. Our website is https://firstbreach.com. Information contained on, or available through, our website does not constitute part of, and is not deemed incorporated by reference into, this prospectus, and investors should not rely on such information in deciding whether to purchase shares of our common stock.

**Summary of Significant Risks**

Investing in our common stock is speculative and involves a high degree of risk. These risks are discussed more fully in "Risk Factors" and elsewhere in this prospectus. We urge you to read "Risk Factors" beginning on page 7 and this prospectus in full. Our significant risks may be summarized as follows:

*Risks Related to Our Business and Industry*

● We have a limited operating history on which you can evaluate our company, and our decision to focus our efforts on establishing our manufacturing business may not be successful.

● We have incurred net losses and may continue to incur net losses as we seek to expand our business.

● Our manufacturing facility is critical to our success.

● Inability to make timely payments under our equipment lease agreement could lead to forfeiture of important manufacturing equipment, which may have a negative effect on our manufacturing process and in turn harm our results of operations.

● Shortages or a disruption in the availability, price or quality of raw materials may delay or reduce our sales and increase our costs, thereby harming our results of operations.

● Our performance is influenced by a variety of economic, social, and political factors.

● Our business depends on the sale of our ammunition products, and our success requires the introduction of new products that achieve market acceptance.

● War and other armed conflicts, such as the current Russia-Ukraine conflict and the current armed conflict involving Iran, the United States, Israel and other parties in the Middle East, or other natural or manmade disasters may affect the markets in which we operate, our customers, our delivery of products and customer service, and could have a material adverse impact on our business, results of operations, or financial condition.

● The international nature of our business exposes us to global economic, political and legal risks that could impact our profitability.

● The success of the Company depends, in part, on our ability to protect our intellectual property and our brand.

● We may be subject to intellectual property infringement claims, which could cause us to incur litigation costs and divert management attention from our business.

● We rely on third-party suppliers for most of our manufacturing equipment.

● We do not have long-term purchase commitments from our customers, and their ability to cancel, reduce, or delay orders could reduce our revenue and increase our costs.

● Revenue from sales of ammunition components will depend on sales to ammunition manufacturers, some of which will account for a significant portion of our sales.

● We face intense competition that could result in our losing or failing to gain market share and suffering reduced sales.

● We plan to manufacture and sell products that create exposure to potential product liability, warranty liability, or personal injury claims and litigation.

● The failure to manage our growth could adversely affect our operations.

● Our business is highly dependent upon our brand recognition and reputation, and the failure to maintain or enhance our brand recognition or reputation would likely have a material adverse effect on our business.

● Our operating results may experience significant fluctuations.

● The failure to attract and retain key personnel could have an adverse effect on our operating results.

● We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.

● Any acquisitions that we undertake will involve significant risks, and any acquisitions that we undertake in the future could disrupt our business, dilute stockholder value, and harm our operating results.

● A failure of our information technology systems, or an interruption in their operation due to internal or external factors including cyber-attacks, could have a material adverse effect on our business, financial condition or results of operations.

● We are subject to extensive regulation and could incur fines, penalties and other costs and liabilities under such requirements.

● Changes in government policies and firearms legislation could adversely affect our financial results.

● Failure to comply with the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption legislation, and export controls and trade sanctions, could result in fines or criminal penalties if we expand our business abroad.

● Our founders will have the ability to exert substantial influence over our company.

● Our charter documents and Delaware law could make it more difficult for a third party to acquire us and discourage a takeover.

● Compliance with the laws and regulations affecting public companies could adversely affect our business, results of operations, and financial condition.

● We are dependent on Hellbender, Inc., a third-party contractor, for the design, engineering and prototyping of our attritable drone platforms, and our drone development program may not be completed on time, within budget or at all. Our attritable drone development program is at an early stage, and we may not realize any revenue or other commercial benefit from our investment.

● If we are unable to satisfy our funding obligations on the dates required, we may be in breach of the JV Agreement, which could result in the dilution or forfeiture of our equity interests in the Joint Venture, disputes with IdeaForge, or the termination of the JV Agreement, any of which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, even if we are able to satisfy our capital contribution obligations, there is no guarantee that the Joint Venture will achieve its intended objectives or generate any return on our investment.

*Risks Related to this Direct Listing and Ownership of Our Common Stock*

● Our listing differs significantly from an initial public offering conducted on a firm-commitment basis.

● Our shares of common stock currently have no public market. An active trading market may not develop or continue to be liquid and the market price of our shares of common stock may be volatile.

● We may not be able to meet each of the quantitative requirements of the Nasdaq Capital Market's Market Value Standard for Direct Listings.

● We intend to list our common stock on the Nasdaq Capital Market in connection with the Direct Listing and must satisfy heightened initial listing requirements, and there can be no assurance that we will be able to do so.

● The market price of our Common Stock may be volatile, and you could lose all or part of your investment.

● If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline.

● Our status as an "emerging growth company" and a "smaller reporting company" allows us to take advantage of reduced disclosure requirements, which could make our Common Stock less attractive to investors.

● Exercise of warrants and options, and vesting of restricted stock units, may have a dilutive effect on our stock and negatively impact the price of our Common Stock.

● Tariffs and trade tensions could have an adverse effect on economic conditions and financial markets, which may adversely affect the value of our shares of Common Stock.

● Issuance of Preferred Stock could result in the dilution of the value of the current stockholders' Common Stock.

● The April 2026 Senior Notes (as defined herein) issued in the April 2026 Note Financing (as defined herein) are secured by a first-priority lien on substantially all of our assets, were issued at an original issue discount of 35.0%, and are convertible into shares of our common stock at a fixed conversion price of $8.00 per share. The conversion of the April 2026 Senior Notes and the exercise of the April 2026 Note Warrants (as defined herein) issued in connection with the April 2026 Note Financing may result in substantial dilution to our existing stockholders.

● The May 2026 Notes (as defined herein) issued in the May 2026 Note Financing (as defined herein) are secured by a subordinated security interest in substantially all of our assets, were issued at an original issue discount of 35.0%, and are convertible into shares of our common stock at the election of the holders at a conversion price of $8.00 per share. Funding of the May 2026 Notes is conditioned upon the Company's filing of a request for acceleration of effectiveness of this registration statement pursuant to Rule 461 under the Securities Act and the approval of our listing application by Nasdaq. The conversion of the May 2026 Notes may result in substantial dilution to our existing stockholders, and if the holders elect not to convert, we would be required to repay approximately $7,692,308 in cash at maturity.

● Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our ability to produce accurate financial statements and on our stock price.

● We do not expect to pay any dividends for the foreseeable future.

● Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock.

● An investment in our company may involve tax implications, and you are encouraged to consult your own advisors as neither we nor any related party is offering any tax assurances or guidance on our company or your investment.

**SUMMARY OF FINANCIAL INFORMATION**

The following tables set forth summary financial and other data for the periods ended and at the dates indicated below. Our summary balance sheet and statement of operations data as of and for the year ended December 31, 2025 have been derived from our audited financial statements included in this prospectus. Our summary balance sheet data as of March 31, 2026 and our summary statement of operations data for the three months ended March 31, 2026 and 2025 have been derived from our unaudited interim financial statements included elsewhere in this prospectus. The unaudited interim financial statements have been prepared on the same basis as the audited financial statements and, in the opinion of our management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial information set forth therein. Our results for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full year ending December 31, 2026 or for any other future period. The financial data set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and notes thereto included elsewhere in this prospectus.

***STATEMENTS OF OPERATIONS***

---

| | | | |
|:---|:---|:---|:---|
|  | Three months ended<br> March 31, 2026 (Unaudited)  | Three months ended<br> March 31, 2025(Unaudited)  | Year ended<br> December 31, 2025  |
| **Net revenues** | $266004 | $15685 | $384129 |
| Cost of revenues | 629850 | 327496 | 1761368 |
| Net loss associated with liquidation of raw materials | - | 386189 | 684960 |
| &nbsp;&nbsp;&nbsp;**Gross margin** | (363846) | (698000) | (2062199) |
| **Operating expenses:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general, and administrative expense | 14085908 | 472582 | 7926714 |
| **Total operating expenses** | 14085908 | 472582 | 7926714 |
| **Loss from operations** | (14449754) | (1170582) | (9988913) |
| **Total other expenses, net** | (197201) | (399593) | (3833208) |
| **Net loss before income taxes** | (14646955) | (1570175) | (13822121) |
| &nbsp;&nbsp;&nbsp;Income tax provision |  |  |  |
| **Net loss** | $(14646955) | $(1570175) | $(13822121) |
| **Net loss per share:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $(0.28) | $(0.04) | $(0.36) |
| Weighted average number of shares outstanding: |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic & diluted | 51407478 | 37784611 | 38276140 |

---

***BALANCE SHEET DATA***

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| Cash | $1414608 | $2477122 |
| Total current assets | $2352846 | $3493562 |
| Total assets | $11645296 | $13020782 |
| Total current liabilities | $4091059 | $4631271 |
| Total liabilities | $5543194 | $6616302 |
| Total stockholders' equity | $6102102 | $6404480 |
| Total liabilities and stockholders' equity | $11645296 | $13020782 |

---

**RISK FACTORS**

*An investment in our securities is speculative and involves a high degree of risk. You should carefully consider the risks described below, which we believe represent certain of the material risks to our business, together with the information contained elsewhere in this prospectus, before you make a decision to invest in our shares of common stock. Please note that the risks highlighted here are not the only ones that we may face. For example, additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could also impair our operations. If any of the following events occur or any additional risks presently unknown to us actually occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline and you could lose all or part of your investment.*

**Risks Related to Our Business and Industry**

***Our recurring losses and negative cash flow from operations, as well as current cash and liquidity projections, raise substantial doubt about our ability to continue as a going concern.***

Based on recurring losses from operations and current cash and liquidity projections, we have concluded that there is substantial doubt about our ability to continue as a going concern for the next twelve months. As of March 31, 2026, we had cash of $1,414,608 and negative working capital of $1,738,213. As of December 31, 2025, we had cash of $2,477,122 and negative working capital of $1,137,709. Further, we have incurred and expect to continue to incur significant costs in pursuit of our product development and growth plans. Our financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result if we do not continue as a going concern. You should not rely on our balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to holders of our common stock, in the event of liquidation.

***We have a limited operating history on which you can evaluate our company, and our decision to focus our efforts on establishing our manufacturing business may not be successful.***

 ****

We have a limited operating history on which you can evaluate our company. The company was founded in 2018 and until the first quarter of 2021 our operations consisted principally of securing the necessary licenses to conduct our business in the US and Israel. We are currently manufacturing ammunition and ammunition components in our manufacturing facility in the US. To date, production has been limited to optimizing our production lines and production of very high quality products for our customers.

Substantially all of our revenue to date has been from selling ammunition and components to end-users. We have decided to focus our efforts predominantly on our manufacturing, and we have significantly limited our wholesaling efforts as the manufacturing equipment began production. While we limited the wholesale business, our primary focus is on selling our own manufactured products as our manufacturing capabilities ramp up and are the central focus of our business. As a result, we anticipate that our wholesale revenue will be limited. There can be no assurance that our efforts to establish our manufacturing business will be successful. Accordingly, our business will be subject to many of the problems, expenses, delays, and risks inherent in the establishment of a new business enterprise.

 **

***We have incurred net losses and may continue to incur net losses as we seek to expand our business.***

 **

We have incurred losses since we established the company in 2018. We expect to continue to make significant expenditures and incur substantial expenses as we develop and expand our business; develop and introduce new products; build our manufacturing capabilities; expand our sales and distribution networks; implement internal systems and infrastructure; and hire additional personnel. As a result, we may continue to incur losses as we execute our plan to expand our business and may never achieve or maintain profitability. We may be unable to satisfy our current obligations solely from cash generated from operations or become profitable until we successfully expand our business. If we continue to incur substantial losses and are unable to secure additional sources of funding as needed to expand our business, we could be forced to curtail or discontinue our business operations; sell assets at unfavorable prices; or merge, consolidate, or combine with a company with greater financial resources in a transaction that may be unfavorable to us.

***Our manufacturing facility is critical to our success.***

 ****

Our manufacturing facility is critical to our success, as we currently produce all of our products at this facility. The facility also houses our principal research, development, engineering, and design functions.

Any event that causes a disruption of the operation of this facility for even a relatively short period of time would adversely affect our ability to produce and ship our products and to provide service to our customers. We make certain changes in our manufacturing operations from time to time to enhance the facility and associated equipment and systems and to introduce certain efficiencies in manufacturing and other processes to produce our products in a more efficient and cost-effective manner. We anticipate that we will continue to incur significant capital and other expenditures with respect to this facility, but we may not be successful in continuing to improve efficiencies.

***Inability to make timely payments under our equipment lease agreement could lead to forfeiture of important manufacturing equipment, which may have a negative effect on our manufacturing process and in turn harm our results of operations.***

We currently lease certain pieces of equipment that are important to our manufacturing operations. We have entered into a lease agreement for certain equipment which subjects us to monthly payments and requires us to provide a securities interest in the equipment. As such, any inability to make timely payments under our lease agreement could lead to the forfeiture of the equipment which may have a negative effect on our manufacturing process and in turn harm our results of operations.

***Shortages or a disruption in the availability, price or quality of raw materials may delay or reduce our sales and increase our costs, thereby harming our results of operations.***

We use a variety of raw materials in the production of our products including commodity materials such as brass, copper and lead. The price of raw materials and these commodities can be highly volatile and fluctuate based on the market for these commodities and their existing supply, which could result in instability in our profit margins. For example, copper has traditionally been used in electrical wiring, coining, industrial applications, and in alloys with a variety of other uses. Copper demand may increase because of new needs for the metal including increased telecommunication buildouts, improved batteries, and demand from the rapidly growing industry of electric cars. Similarly, supply chain disruptions may result in our inability to obtain necessary raw materials and commodities on a timely basis or from sources that provide consistent quality materials.

The inability to obtain sufficient quantities of raw materials necessary for the production of our products could result in reduced or delayed sales or lost orders. Any delay in or loss of sales or orders could adversely impact our operating results. Many of the materials used in the production of our products are available only from a limited number of suppliers. We could be subject to increased costs, supply interruptions, and difficulties in obtaining raw materials. Our reliance on third-party suppliers for various raw materials for our products exposes us to volatility in the availability, quality, and price of these raw materials. Our orders with certain of our suppliers may represent a very small portion of their total orders. As a result, they may not give priority to our business, leading to potential delays in or cancellation of our orders. A disruption in deliveries from our third-party suppliers, capacity constraints, production disruptions, price increases, or decreased availability of raw materials or commodities could have an adverse effect on our ability to meet our commitments to customers or increase our operating costs. Quality issues experienced by third party suppliers can also adversely affect the quality and effectiveness of our products and result in liability and reputational harm.

***Our performance is influenced by a variety of economic, social, and political factors.***

Our performance is influenced by a variety of economic, social, and political factors. General economic conditions and consumer spending patterns can negatively impact our operating results. Economic uncertainty, unfavorable employment levels, declines in consumer confidence, increases in consumer debt levels, increased commodity prices, and other economic factors may affect consumer spending on discretionary items and adversely affect the demand for our products. In times of economic uncertainty, consumers tend to defer expenditures for discretionary items, which affects demand for our products. Any substantial deterioration in general economic conditions that diminish consumer confidence or discretionary income could reduce our sales and adversely affect our operating results. Economic conditions also affect governmental political and budgetary policies. As a result, economic conditions also can have an adverse effect on the sale of our products to law enforcement, government, and military customers.

Political and other factors also can adversely affect our performance. Concerns about presidential, congressional, and state elections and legislature and policy shifts resulting from those elections can adversely affect the demand for our products. In addition, uncertainty surrounding control of firearms, firearm products, and ammunition at the federal, state, and local level and heightened fears of terrorism and crime can adversely affect consumer demand for our products. Often, such concerns result in an increase in near-term consumer demand and subsequent softening of demand when such concerns subside. Inventory levels in excess of customer demand may negatively impact operating results and cash flow.

Federal and state legislatures frequently consider legislation relating to the regulation of firearms, including amendment or repeal of existing legislation. Existing laws may also be affected by future judicial rulings and interpretations regarding firearm products and ammunition. If such restrictive changes to legislation develop, we could find it difficult, expensive, or even impossible to comply with them, impeding new product development and distribution of existing products.

 ****

***Our business depends on the sale of our ammunition products, and our success requires the introduction of new products that achieve market acceptance.***

The sale of ammunition and related components represents the core of our business, and our results of operations are directly tied to the level of consumer, commercial, and government demand for these products. Demand for ammunition is influenced by the sale and usage of firearms, which are themselves affected by economic conditions, recreational and sporting trends, law enforcement and security requirements, and legislative or regulatory developments. As a result, sales of ammunition can be volatile and difficult to predict, and any sustained reduction in demand would materially and adversely affect our business, financial condition, and results of operations.

In addition, our long-term success depends on our ability to develop and introduce new ammunition products that align with customer preferences. Product development is often costly and time-consuming, and new products may not achieve customer acceptance. If we fail to successfully develop and market new products, or if demand for our ammunition declines, our sales, margins, and overall market position could be materially harmed.

***War and other armed conflicts, such as the ongoing Russia-Ukraine conflict and the armed conflict involving Iran, the United States, Israel and other parties in the Middle East, or other natural or manmade disasters may affect the markets in which we operate, our customers, our delivery of products and customer service, and could have a material adverse impact on our business, results of operations, or financial condition.***

Geopolitical instability and armed conflict in regions in which we, our customers, or our suppliers operate may adversely affect our business. In February 2022, following Russia's invasion of Ukraine, the U.S. and other countries announced sanctions against Russia. These sanctions include restrictions on selling or importing goods, services or technology in or from affected regions, travel bans and asset freezes impacting connected individuals and political, military, business and financial organizations in Russia, severing certain Russian banks from the U.S. financial system, barring some Russian enterprises from raising money in the U.S. market and blocking the access of certain Russian banks to financial markets. More recently, in February 2026, the United States and Israel commenced military strikes against Iran, and Iran has undertaken retaliatory actions against Israel, U.S. military installations in the region, and targets in other countries. In connection with that conflict, Iran has at times restricted or disrupted vessel traffic through the Strait of Hormuz, a critical maritime chokepoint through which a substantial portion of the world's seaborne crude oil, refined petroleum products and liquefied natural gas transit, and a number of major shipping and logistics providers have suspended, rerouted or curtailed transits through the affected region. The U.S. and other countries have also imposed, and continue to impose, expanding sanctions and other restrictive measures targeting Iran, including measures directed at Iranian petroleum and petrochemical exports and associated financial and shipping networks.

These conflicts and related measures have contributed to increased freight rates, higher insurance premiums, longer transit times, port congestion, and elevated and volatile energy and commodity prices. The U.S. and other countries could impose wider sanctions or take other actions should either conflict further escalate, and Russia, Iran, or their respective allies could undertake further retaliatory measures, including additional disruption of regional shipping lanes, cyberattacks, or attacks on infrastructure. While it is difficult to anticipate the impact that these conflicts or the measures taken to date may have on our company, any escalation of hostilities, any further sanctions or restrictions imposed by the U.S. or other countries, and any retaliatory measures could increase our costs, reduce our sales and earnings, disrupt our operations and supply chain, delay our delivery of products and services, adversely affect the businesses of our customers and suppliers, or otherwise have a material adverse effect on our business, results of operations, or financial condition.

Similarly, our business and supply chain may be adversely affected by instability, disruption, or destruction in a geographic region in which we operate, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest, and natural or manmade disasters, including famine, flood, fire, earthquake, storm, pandemic events and spread of disease. Such events may cause customers to suspend their decisions on using our products and services, make it impossible to access some of our inventory, and give rise to sudden significant changes in regional and global economic conditions and cycles that could interfere with purchases of goods or services and commitments to develop new products and services. These events also pose significant risks to our personnel and to physical facilities, transportation and operations, which could have a material adverse impact on our business, results of operations, or financial condition.

 ****

***The international nature of our business exposes us to global economic, political and legal risks that could impact our profitability.***

We conduct a portion of our business outside the United States. There are inherent risks in our international operations, including:

● exchange controls and currency restrictions;

● currency fluctuations and devaluations;

● tariffs and trade barriers;

● export duties and quotas;

● changes in the availability and pricing of raw materials, energy and utilities;

● changes in local economic conditions;

● changes in laws and regulations, including the imposition of economic or trade sanctions affecting international commercial transactions;

● exposure to possible expropriation, nationalization or other government actions;

● unsettled political conditions, military action, civil unrest, acts of terrorism, force majeure, war or other armed conflict; and

● countries whose governments have been hostile to U.S.-based businesses.

Changes in U.S. or foreign government policy on international trade, including the imposition or continuation of tariffs, could materially and adversely affect our business. Also, because of uncertainties regarding the interpretation and application of laws and regulations and the enforceability of contract rights, we face risks in some countries that our contract rights would not be enforced by local governments. Other risks in international business also include difficulties in managing credit risk.

***The success of the Company depends, in part, on our ability to protect our intellectual property and our brand.***

We rely on and/or will rely on a combination of federal, provincial, state, common law trademark, patent, and trade secret laws, confidentiality procedures, and contractual provisions to protect our intellectual property. However, these measures afford only limited protection and might be challenged, invalidated, or circumvented by third parties. The measures we take to protect our intellectual property may not be sufficient or effective. Additionally, any competitors may independently develop similar intellectual property.

In addition, it is difficult to monitor compliance with, and enforce, our intellectual property on a worldwide basis in a cost-effective manner. In jurisdictions where foreign laws provide less intellectual property protection than afforded domestically and abroad, our technology or other intellectual property may be compromised, and our business would be materially adversely affected. We may find it necessary to take legal action in the future to enforce or protect our intellectual property rights, and such action may be expensive and time consuming. In addition, we may be unable to obtain a favorable outcome in any such intellectual property litigation.

***We may be subject to intellectual property infringement claims, which could cause us to incur litigation costs and divert management attention from our business.***

Any intellectual property infringement claims against us, with or without merit, could be costly and time-consuming to defend and divert our management's attention from our business. If our products were found to infringe a third party's proprietary rights, we could be required to enter into costly royalty or licensing agreements to be able to sell our products. Royalty and licensing agreements, if required, may not be available on terms acceptable to us or at all.

 ****

***Our efforts to avoid the patent, trademark, and copyright rights of others may not provide notice to us of potential infringements in time to avoid investing in product development and promotion that must later be abandoned if suitable license terms cannot be reached.***

There is no guarantee that our use of conventional technology searching and brand clearance searching will identify all potential rights holders. Rights holders may demand payment for past infringements and/or force us to accept costly license terms or discontinue use of protected technology and/or works of authorship that may include for example photos, videos, and software.

***To the extent demand for our products increase, our future success will depend upon our ability to enhance manufacturing production capacity.***

To the extent we are able to establish production of our ammunition component and ammunition products and demand for our products increase significantly in future periods, one of our key challenges will be to enhance production capacity to meet sales demand, while maintaining product quality. Our inability to meet any future increase in sales demand or access capital for inventory may hinder growth or increase dilution in connection with financing activities conducted to meet any such increase in sales demand.

***We rely on third-party suppliers for most of our manufacturing equipment.***

We rely on third-party suppliers for most of the manufacturing equipment necessary for the production our products. The failure of suppliers to supply manufacturing equipment in a timely manner or on commercially reasonable terms could delay our plans to expand our business and otherwise disrupt our production schedules and increase our manufacturing costs. Our orders may represent a very small portion of certain suppliers' total orders. As a result, they may not give priority to our business, leading to potential delays in or cancellation of our orders. If any single-source supplier were to fail to supply our needs on a timely basis or cease providing us manufacturing equipment or components, we would be required to locate and contract with substitute suppliers. We may have difficulty identifying a substitute supplier in a timely manner and on commercially reasonable terms. If this were to occur, our business would be harmed.

***We do not have long-term purchase commitments from our customers, and their ability to cancel, reduce, or delay orders could reduce our revenue and increase our costs.***

Our customers do not provide us with firm, long-term volume purchase commitments, but issue purchase orders for our products. As a result, customers can cancel purchase orders or reduce or delay orders at any time. The cancellation, delay, or reduction of customer purchase orders could result in reduced sales, excess inventory, unabsorbed overhead, and reduced income from operations.

As we continue with manufacturing operations, we schedule internal production levels and place orders for raw materials with third party suppliers before receiving firm orders from our customers. Therefore, if we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products to deliver to our customers. Factors that could affect our ability to accurately forecast demand for our products include the following:

● an increase or decrease in consumer demand for our products or for the products of our competitors;

● our failure to accurately forecast customer acceptance of new products;

● new product introductions by us or our competitors;

● changes in our relationships with customers;

● changes in general market conditions or other factors, which may result in cancellations of orders or a reduction or increase in the rate of reorders placed by retailers;

● changes in laws and regulations governing the activities for which we sell products;

● weak economic conditions or consumer confidence, which could reduce demand for discretionary items, such as our products; and

● the domestic and international political environment, including debate over the regulation of firearms, ammunition, and related products and trade restrictions and embargos of our products.

Inventory levels in excess of consumer demand may result in inventory write-downs and the sale of excess inventory at discounted prices, which could have an adverse effect on our business, operating results, and financial condition. If we underestimate demand for our products, our manufacturing facility or third-party suppliers may not be able to react quickly enough to meet consumer demand, resulting in delays in the shipment of products and lost revenue, and damage to our reputation and customer and consumer relationships. We may not be able to manage inventory levels successfully to meet future order and reorder requirements.

***Revenue from sales of ammunition components will depend on sales to ammunition manufacturers, some of which will account for a significant portion of our sales.***

Our revenue from sales of ammunition components will depend on sales to ammunition manufacturers. The global market for ammunition manufacturing is highly concentrated and there are only a few licensed manufacturers in the US. Our sales of ammunition components could become increasingly dependent on purchases by a limited number of manufacturing customers. Consolidation in the industry could also adversely affect our business. If our sales were to become increasingly dependent on business with a limited number of manufacturers, we could be adversely affected by the loss or a significant decline in sales to one or more of these customers. In addition, our dependence on a smaller group of customers could result in their increased bargaining position putting pressure on the prices we charge.

The loss of any one or more of our customers or significant or numerous cancellations, reductions, delays in purchases or changes in business practices by our customers could have an adverse effect on our business, operating results, and financial condition.

These sales channels involve a number of special risks, including the following:

● we
 may be unable to secure and maintain favorable relationships with customers;

● we
 may be unable to control the timing of delivery of our products to end-user consumers;

● our
 customers are not subject to minimum sales requirements or any obligation to market our products to their end-user customers;

● our
 customers may terminate their relationships with us at any time; and

● our
 customers market and distribute competing products.

Although we intend to expand our customer base, our operating results would likely decline if we lost any major customers or if one of these sizable customers were to significantly reduce its orders for any reason. Because our sales are made by means of standard purchase orders rather than long-term contracts, we cannot assure you that our customers will continue to purchase our products at current levels, or at all.

In addition, periods of sluggish economies and consumer uncertainty regarding future economic prospects in our key markets can have an adverse effect on the financial health of our customers, which may in turn have a material adverse effect on our business, operating results, and financial condition.

We anticipate that we will extend credit to our customers for periods of varying duration based on an assessment of the customer's financial condition, generally without requiring collateral, which increases our exposure to the risk of uncollectable receivables. In addition, we face increased risk of order reduction or cancellation when dealing with financially ailing customer who may struggle with economic uncertainty. We may reduce our level of business with customers experiencing financial difficulties and may not be able to replace that business with other customers, which could have a material adverse effect on our business, operating results, and financial condition.

***Our gross margins depend upon our sales mix.***

Our gross margin is higher when our sales mix is skewed toward our higher-margin product lines. If our actual sales mix results in a lower overall percentage from our higher-margin product lines, our gross margins will be reduced, affecting our results of operations.

***We face intense competition that could result in our losing or failing to gain market share and suffering reduced sales.***

We operate in intensely competitive markets that are characterized by price erosion and competition from major domestic and international companies. Competition in the markets in which we operate is based on a number of factors, including price, quality, product innovation, performance, reliability, styling, product features, warranties, and sales and marketing programs. This intense competition could result in pricing pressures, lower sales, reduced margins, and lower market share.

Our competitors include Olin Corporation, Hornady Manufacturing Company, PMC Ammunition, and Federal Premium Ammunition.

Most of our competitors have greater market recognition, larger customer bases, long-term government contracts, and substantially greater financial, technical, marketing, distribution, and other resources than we possess, and that affords them competitive advantages. As a result, they may be able to devote greater resources to the promotion and sale of products, to invest more funds in intellectual property and product development, to negotiate lower prices for raw materials and components, to deliver competitive products at lower prices, and to introduce new products and respond to consumer requirements more quickly than we can.

Our competitors could introduce products with superior features at lower prices than our products and could also bundle existing or new products with other more established products to compete with us. Certain of our competitors may be willing to reduce prices and accept lower profit margins to compete with us. Our competitors could also gain market share by acquiring or forming strategic alliances with other competitors.

Finally, we may face additional sources of competition in the future because new distribution methods offered by the Internet and electronic commerce have removed many of the barriers to entry historically faced by start-up companies. Our customers may also demand that we reduce our prices on products, which could lead to lower margins. Any of the foregoing could cause our sales to decline, which would harm our financial position and results of operations.

Our ability to compete successfully depends on a number of factors, both within and outside our control. These factors include the following:

● our
 success in developing, producing, marketing, and successfully selling new products;

● our
 ability to address the needs of our customers;

● the
 pricing, quality, performance, and reliability of our products;

● the
 quality of our customer service;

● the
 efficiency of our production; and

● product
 or technology introductions by our competitors.

Because we believe technological and functional distinctions among competing products in our markets are perceived by many end-user consumers to be relatively modest, effectiveness in marketing and manufacturing are particularly important competitive factors in our business.

***We may have difficulty collecting amounts owed to us.***

Certain of our customers may experience business challenges and credit-related issues. We perform ongoing credit evaluations of customers, but these evaluations may not be completely effective. We do not grant payment terms to most customers, the very few customers that we grant payment terms to are given terms of a maximum of 30 days and do not generally require collateral. Should more customers than we anticipate experience liquidity issues, or if payments are not received on a timely basis, we may have difficulty collecting amounts owed to us by such customers, and our business, operating results, and financial condition could be adversely impacted. Retail consolidation could result in more concentrated credit-related risks.

***We plan to manufacture and sell products that create exposure to potential product liability, warranty liability, or personal injury claims and litigation.***

Our products are used in activities and situations that involve risk of personal injury and death. Our products expose us to potential product liability, warranty liability, and personal injury claims and litigation relating to the use or misuse of our products, including allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product or activities associated with the product, negligence, and strict liability. If successful, any such claims could have a material adverse effect on our business, operating results, and financial condition. Defects in our products may result in a loss of sales, recall expenses, delay in market acceptance, and damage to our reputation and increased warranty costs, which could have a material adverse effect on our business, operating results, and financial condition. Although we maintain product liability insurance in amounts that we believe are reasonable, we may not be able to maintain such insurance on acceptable terms, if at all, in the future and product liability claims may exceed the amount of insurance coverage. In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products.

 ****

***Product recall or field action could be costly and harm our reputation.***

Our products are used in activities that involve inherent risks of personal injury and property damage. Defects in design, materials, or manufacturing, such as misfires, squib loads, or over-pressure rounds, could require us to initiate a recall or other corrective action. Recalls can result in significant costs, lost sales, reputational harm, and potential product liability claims. If we fail to maintain robust quality-assurance and lot-traceability systems, the scope and cost of any recall could be magnified, with a material adverse effect on our results of operations.

***The failure to manage our growth could adversely affect our operations.***

The failure to manage our growth could adversely affect our operations. To continue to expand our business and enhance our competitive position, we must make significant investments in equipment, facilities, systems, and personnel. In addition, we must commit significant funds to enhance our sales, marketing, information technology, and research and development efforts. As a result of the increase in fixed costs and operating expenses, our failure to increase our sales sufficiently to offset these increased costs could adversely affect our business, operating results, and financial condition.

Managing our planned growth effectively will require us to take a number of steps, including the following:

● enhance
 our operational, financial, and management systems;

● enhance
 our facilities and purchase additional equipment; and

● successfully
 hire, train, and motivate additional employees, including additional personnel for our technological, sales, and marketing efforts.

The expansion of our products and customer base will result in increases in our overhead and selling expenses. We may be required to increase (1) staffing; (2) expenditures on capital equipment and leasehold improvements; and (3) other expenses to meet the demand for our products. Any increase in expenditures in anticipation of future sales that do not materialize would adversely affect our profitability.

***Our business is highly dependent upon our brand recognition and reputation, and the failure to maintain or enhance our brand recognition or reputation would likely have a material adverse effect on our business.***

Our brand recognition and reputation are critical aspects of our business. We believe that maintaining and further enhancing our brands and our reputation are critical to retaining existing customers and attracting new customers. We also believe that the importance of our brand recognition and reputation will continue to increase as competition in our markets continues to develop.

We anticipate that our advertising, marketing, and promotional efforts will increase in the foreseeable future as we continue to seek to enhance our brands and consumer demand for our products. Historically, we have relied on existing relationships of our management and customer referrals to increase consumer awareness of our brands to increase purchasing intent and conversation. We anticipate that we will increasingly rely on other forms of media advertising, including social media and e-marketing. Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our advertising, promotion, public relations, and marketing programs. These brand promotion activities may not yield increased revenue, and the efficacy of these activities will depend on a number of factors, including our ability to do the following:

● determine
 the appropriate creative message and media mix for advertising, marketing, and promotional expenditures;

● select
 the right markets, media, and specific media vehicles in which to advertise;

● identify
 the most effective and efficient level of spending in each market, media, and specific media vehicle; and

● effectively
 manage marketing costs, including creative and media expenses, in order to maintain acceptable customer acquisition costs.

In addition, certain of our products and brands may in the future benefit from endorsements and support from particular sportsmen, athletes, or other celebrities, and those products and brands may become personally associated with those individuals. As a result, sales of the endorsed products could be materially and adversely affected if any of those individuals' images, reputations, or popularity were to be negatively impacted.

Increases in the pricing of one or more of our marketing and advertising channels could increase our marketing and advertising expenses or cause us to choose less expensive but possibly less effective marketing and advertising channels. If we implement new marketing and advertising strategies, we may incur significantly higher costs than our current channels, which in turn could adversely affect our operating results. Implementing new marketing and advertising strategies also could increase the risk of devoting significant capital and other resources to endeavors that do not prove to be cost effective. We also may incur marketing and advertising expenses significantly in advance of the time we anticipate recognizing revenue associated with such expenses and our marketing and advertising expenditures may not generate sufficient levels of brand awareness and conversation or result in increased revenue. Even if our marketing and advertising expenses result in increased sales, the increase might not offset our related expenditures. If we are unable to maintain our marketing and advertising channels on cost-effective terms or replace or supplement existing marketing and advertising channels with similarly or more effective channels, our marketing and advertising expenses could increase substantially, our customer base could be adversely affected, and our business, operating results, financial condition, and reputation could suffer.

 ****

***Our operating results may experience significant fluctuations.***

Many factors contribute to significant periodic and seasonal quarterly fluctuations in our results of operations. These factors include the following:

● the
 cyclicality of the markets we serve;

● the
 timing and size of new orders;

● the
 cancellation of existing orders;

● the
 volume of orders relative to our capacity;

● product
 introductions and market acceptance of new products or new generations of products;

● timing
 of expenses in anticipation of future orders;

● changes
 in product mix;

● availability
 of production capacity;

● changes
 in cost and availability of labor and raw materials;

● timely
 delivery of products to customers;

● pricing
 and availability of competitive products;

● new
 product introduction costs;

● changes
 in the amount or timing of operating expenses;

● introduction
 of new technologies into the markets we serve;

● pressures
 on reducing selling prices;

● our
 success in serving new markets;

● adverse
 publicity regarding the safety, performance, and use of our products;

● the
 institution and outcome of any litigation;

● political,
 economic, or regulatory developments; and

● changes
 in economic conditions.

As a result of these and other factors, we believe that period-to-period comparisons of our results of operations may not be meaningful in the short term, and our performance in a particular period may not be indicative of our performance in any future period.

***The failure to attract and retain key personnel could have an adverse effect on our operating results.***

Our success depends substantially on the efforts and abilities of our senior management and key personnel. The competition for qualified management and key personnel is intense. We maintain noncompetition and nondisclosure covenants with many of our key personnel, and we do have employment agreements with some of them. The loss of services of one or more of our key employees or the inability to hire, train, and retain additional key personnel could delay the development and sale of our products, disrupt our business, and interfere with our ability to execute our business plan.

In addition, our ability to maintain our competitive position is dependent to a large degree on the efforts and skills of our senior management team, including our two founders Jeffrey Low and Jordan Low. The loss of the services of one or more of our key personnel could materially and adversely affect our operations.

 ****

***We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.***

In the future, we may require additional capital to fund the planned expansion of our business and to respond to business opportunities, challenges, potential acquisitions, or unforeseen circumstances. We could encounter unforeseen difficulties that may deplete our capital resources rapidly, which could require us to seek additional financing in the near future. The timing and amount of any additional financing that is required to continue the expansion of our business and the marketing of our products will depend on our ability to improve our operating results and other factors. We may not be able to secure additional debt or equity financing in a timely basis or on favorable terms, or at all. Such financing could result in substantial dilution of the equity interests of existing stockholders. We have no commitments for any additional financing should the need arise. If we are unable to secure any necessary additional financing, we may need to delay expansion plans, conserve cash, and reduce operating expenses. There is no assurance that any additional financing will be sufficient, that the financing will be available on terms favorable to us or to existing stockholders and at such times as required, or that we will be able to obtain the additional financing required for the continued operation and growth of our business. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. If we raise additional funds through further issuances of equity, convertible debt securities, or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences, and privileges senior to those of holders of our Common Stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to grow or support our business and to respond to business challenges could be significantly limited.

***Potential strategic alliances may not achieve their objectives, which could impede our growth.***

We anticipate that we will enter into strategic alliances in the future. We continue to explore strategic alliances designed to expand our product offerings, enter new markets, and improve our distribution channels. Strategic alliances may not achieve their intended objectives, and parties to our strategic alliances may not perform as contemplated. The failure of these alliances may impede our ability to introduce new products and enter new markets.

***Any acquisitions that we undertake will involve significant risks, and any acquisitions that we undertake in the future could disrupt our business, dilute stockholder value, and harm our operating results.***

We have a strategy to expand our operations through strategic acquisitions to enhance existing products and offer new products, enter new markets and businesses, strengthen and avoid interruption from our supply chain, and enhance our position in current markets and businesses. Acquisitions involve significant risks and uncertainties. We cannot accurately predict the timing, size, and success of any future acquisitions. We may be unable to identify suitable acquisition candidates or complete the acquisitions of candidates that we identify. Increased competition for acquisition candidates or increased asking prices by acquisition candidates may increase purchase prices for acquisitions to levels beyond our financial capability or to levels that would not result in the returns required by our acquisition criteria. Unforeseen expenses, difficulties, and delays frequently encountered in connection with expansion through acquisitions could inhibit our growth and negatively impact our operating results.

Our ability to complete acquisitions that we desire to make will depend upon various factors, including the following:

● the
 availability of suitable acquisition candidates at attractive purchase prices;

● the
 ability to compete effectively for available acquisition opportunities;

● the
 availability of cash resources, borrowing capacity, or stock at favorable price levels to provide required purchase prices in acquisitions;

● the
 ability of management to devote sufficient attention to acquisition efforts; and

● the
 ability to obtain any requisite governmental or other approvals.

We may have little or no experience with certain acquired businesses, which could involve significantly different supply chains, production techniques, customers, and competitive factors than our current business. This lack of experience would require us to rely to a great extent on the management teams of these acquired businesses. These acquisitions also could require us to make significant investments in systems, equipment, facilities, and personnel in anticipation of growth. These costs could be essential to implement our growth strategy in supporting our expanded activities and resulting corporate structure changes. We may be unable to achieve some or all of the benefits that we expect to achieve as we expand into these new markets within the time frames we expect, if at all. If we fail to achieve some or all of the benefits that we expect to achieve as we expand into these new markets, or do not achieve them within the time frames we expect, our business, financial condition, and results of operations could be adversely affected.

As a part of any potential acquisition, we may engage in discussions with various acquisition candidates. In connection with these discussions, we and each potential acquisition candidate may exchange confidential operational and financial information, conduct due diligence inquiries, and consider the structure, terms, and conditions of the potential acquisition. In certain cases, the prospective acquisition candidate agrees not to discuss a potential acquisition with any other party for a specific period of time and agrees to take other actions designed to enhance the possibility of the acquisition, such as preparing audited financial information. Potential acquisition discussions frequently take place over a long period of time and involve difficult business integration and other issues. As a result of these and other factors, a number of potential acquisitions that from time-to-time appear likely to occur do not result in binding legal agreements and are not consummated, but may result in significant legal, consulting, and other costs.

Unforeseen expenses, difficulties, and delays frequently encountered in connection with future acquisitions could inhibit our growth and negatively impact our profitability. Any future acquisitions may not meet our strategic objectives or perform as anticipated. In addition, the size, timing, and success of any future acquisitions may cause substantial fluctuations in our operating results from quarter to quarter.

If we finance any future acquisitions in whole or in part through the issuance of Common Stock or securities convertible into or exercisable for Common Stock, existing stockholders will experience dilution in the voting power of their Common Stock and earnings per share could be negatively impacted. The extent to which we will be able or willing to use our Common Stock for acquisitions will depend on the value of our Common Stock from time-to-time and the willingness of potential acquisition candidates to accept our Common Stock as full or partial consideration for the sale of their businesses. Our inability to use our Common Stock as consideration, to generate cash from operations, or to obtain additional funding through debt or equity financings to pursue an acquisition could limit our growth.

 ****

***Any acquisitions or strategic alliances that we undertake could be difficult to integrate, disrupt our business, dilute stockholder value, and harm our operating results.***

We may be unable to effectively complete an integration of the management, operations, facilities, and accounting and information systems of acquired businesses with our own; to implement effective controls to mitigate legal and business risks with which we have no prior experience; to manage efficiently the combined operations of the acquired businesses with our operations; to achieve our operating, growth, and performance goals for acquired businesses; to achieve additional sales as a result of our expanded operations; or to achieve operating efficiencies or otherwise realize cost savings as a result of anticipated acquisition synergies. The integration of acquired businesses involves numerous risks and uncertainties, including the following:

● the
 potential disruption of our core businesses;

● risks
 associated with entering markets and businesses in which we have little or no prior experience;

● diversion
 of management's attention from our core businesses;

● adverse
 effects on existing business relationships with suppliers and customers;

● risks
 associated with increased regulatory or compliance matters;

● failure
 to retain key customers, suppliers, or personnel of acquired businesses;

● the
 potential strain on our financial and managerial controls and reporting systems and procedures;

● greater
 than anticipated costs and expenses related to the integration of the acquired business with our business;

● potential
 unknown liabilities associated with the acquired company;

● risks
 associated with weak internal controls over information technology systems and associated cyber security risks;

● meeting
 the challenges inherent in effectively managing an increased number of employees in diverse locations;

● failure
 of acquired businesses to achieve expected results;

● the
 risk of impairment charges related to potential write-downs of acquired assets in future acquisitions; and

● the
 challenge of creating uniform standards, controls, procedures, policies, and information systems.

***Breaches of our information systems could adversely affect our reputation, disrupt our operations, and result in increased costs and loss sales.***

There have been an increasing number of cyber security incidents affecting companies around the world, which have caused operational failures or compromised sensitive corporate data. Although we do not believe our systems are at a greater risk of cyber security incidents than other similar organizations, such cyber security incidents may result in the loss or compromise of customer, financial, or operational data; disruption of billing, collections, or normal operating activities; disruption of electronic monitoring and control of operational systems; and delays in financial reporting and other management functions. Possible impacts associated with a cyber security incident may include among others, remediation costs related to lost, stolen, or compromised data; repairs to data processing systems; increased cyber security protection costs; reputational damage; and adverse effects on our compliance with applicable privacy and other laws and regulations.

 ****

***A failure of our information technology systems, or an interruption in their operation due to internal or external factors including cyber-attacks, could have a material adverse effect on our business, financial condition or results of operations.***

Our operations depend on our ability to protect our information systems, computer equipment, and information databases from systems failures. We rely on our information technology systems generally to manage the day-to-day operations of our business, operate elements of our manufacturing facility, manage relationships with our customers, fulfill customer orders, and maintain our financial and accounting records. Failure of our information technology systems could be caused by internal or external events, such as incursions by intruders or hackers, computer viruses, cyber-attacks, failures in hardware or software, or power or telecommunication fluctuations or failures. The failure of our information technology systems to perform as anticipated for any reason or any significant breach of security could disrupt our business and result in numerous adverse consequences, including reduced effectiveness and efficiency of operations, increased costs, or loss of important information, any of which could have a material adverse effect on our business, operating results, and financial condition. Any technology and information security processes and disaster recovery plans we use to mitigate our risk to these vulnerabilities may not be adequate to ensure that our operations will not be disrupted should such an event occur.

***We are subject to extensive regulation and could incur fines, penalties and other costs and liabilities under such requirements.***

Like many other manufacturers and distributors of consumer products, we are required to comply with a wide variety of laws, rules, and regulations, including those relating to labor, employment, the environment, the export and import of our products, and taxation. These laws, rules, and regulations currently impose significant compliance requirements on our business, and more restrictive laws, rules and regulations may be adopted in the future.

Our operations are subject to a variety of laws and regulations relating to environmental protection, including those governing the discharge, treatment, storage, transportation, remediation, and disposal of certain materials and wastes, and restoration of damages to the environment, and health and safety matters. We could incur substantial costs, including remediation costs, resource restoration costs, fines, penalties, and third-party property damage or personal injury claims as a result of liabilities under or violations of such laws and regulations or the permits required thereunder. While environmental laws and regulations have not had a material adverse effect on our business, operating results, financial condition, the ultimate cost of environmental liabilities is difficult to accurately predict and we could incur material additional costs as a result of requirements or obligations imposed or liabilities identified in the future.

As a manufacturer and distributor of consumer products, we are subject to the Consumer Products Safety Act, which empowers the Consumer Products Safety Commission to exclude from the market products that are found to be unsafe or hazardous. Under certain circumstances, the Consumer Products Safety Commission could require us to repurchase or recall one or more of our products. In addition, laws regulating certain consumer products exist in some cities and states, and in other countries in which we sell our products, and more restrictive laws and regulations may be adopted in the future. Any repurchase or recall of our products could be costly to us and could damage our reputation. If we were required to remove, or we voluntarily removed, our products from the market, our reputation could be tarnished and we could have large quantities of finished products that we are unable to sell. We are also subject to the rules and regulations of the Bureau of Alcohol, Tobacco, Firearms and Explosives, or the ATF. If we fail to comply with ATF rules and regulations, the ATF may limit our growth or business activities, levy fines against or revoke our license to do business. Our business, and the business of all producers and marketers of ammunition and firearms, is also subject to numerous federal, state, local, and foreign laws, regulations, and protocols. Applicable laws have the following effects:

● require
 the licensing of all persons manufacturing, exporting, importing, or selling firearms and ammunition as a business;

● require
 background checks for purchasers of firearms;

● impose
 waiting periods between the purchase of a firearm and the delivery of a firearm;

● prohibit
 the sale of firearms to certain persons, such as those below a certain age and persons with criminal records;

● regulate
 the use and storage of gun powder or other energetic materials;

● regulate
 our employment of personnel with criminal convictions; and

● restrict
 access to firearm manufacturing facilities for individuals from other countries or with criminal convictions.

Also, the export of our products is controlled by International Traffic in Arms Regulations, or ITAR, and Export Administration Regulations, or EAR. The ITAR implements the provisions of the Arms Export Control Act and is enforced by the U.S. Department of State. The EAR implements the provisions of the Export Administration Act and is enforced by the U.S. Department of Commerce. Among their many provisions, the ITAR and the EAR require a license application for the export of many of our products. In addition, the ITAR requires congressional approval for any firearms export application with a total value of $1 million or higher. Further, because our manufacturing process includes certain toxic, flammable and explosive chemicals, we are subject to the Chemical Facility Anti-Terrorism Standards, as administered by the U.S. Department of Homeland Security, which require that we take additional reporting and security measures related to our manufacturing process.

Several states currently have laws in effect that are similar to, and, in certain cases, more restrictive than, these federal laws. Compliance with all of these regulations is costly and time-consuming. Inadvertent violation of any of these regulations could cause us to incur fines and penalties and may also lead to restrictions on our ability to manufacture and sell our products and services and to import or export the products we sell.

***Changes in government policies and firearms legislation could adversely affect our financial results.***

The sale, purchase, ownership, and use of firearms are subject to numerous and varied federal, state, and local governmental regulations. Federal laws governing firearms include the National Firearms Act, the Federal Firearms Act, the Arms Export Control Act, and the Gun Control Act of 1968. These laws generally govern the manufacture, import, export, sale, and possession of firearms and ammunition. We hold all necessary licenses to legally sell ammunition in the United States.

The federal and state legislatures may in the future consider additional legislation relating to the regulation of firearms and ammunition. Such legislation could effectively ban or severely limit the sale of affected firearms and ammunition. In addition, if such restrictions are enacted and are incongruent, we could find it difficult, expensive, or even practically impossible to comply with them, which could impede new product development and the distribution of existing products. We cannot assure you that the regulation of our business activities will not become more restrictive in the future and that any such restriction will not have a material adverse effect on our business.

 ****

***Failure to comply with the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption legislation, and export controls and trade sanctions, could result in fines or criminal penalties if we expand our business abroad.***

The expansion of our business internationally would expose us to trade sanctions and other restrictions imposed by the United States and other governments. The U.S. Departments of Justice, Commerce, Treasury and other agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against companies for violations of export controls, the Foreign Corrupt Practices Act, anti-boycott provisions and other federal statutes, sanctions and regulations and, increasingly, similar or more restrictive foreign laws, rules and regulations, which may also apply to us. By virtue of these laws and regulations, and under laws and regulations in other jurisdictions, we may be obliged to limit our business activities, we may incur costs for compliance programs and we may be subject to enforcement actions or penalties for noncompliance. In recent years, U.S. and foreign governments have increased their oversight and enforcement activities with respect to these laws, and we expect the relevant agencies to continue to increase these activities. A violation of these laws, sanctions or regulations could result in restrictions on our exports, civil and criminal fines or penalties and could adversely impact our business, operating results, and financial condition.

***Our founders will have the ability to exert substantial influence over our company.***

As of the date of this prospectus, our founders, Jeffrey Low and Jordan Low combined own 16,229,500 shares of our common stock representing 36.04% of our issued and outstanding shares of our common stock. As a result, our founders will be able to exert substantial influence over our company and over matters requiring approval by our stockholders, including electing all our directors, approving any amendments to our certificate of incorporation, increasing our authorized capital stock, effecting a merger or sale of our assets, and determining the number of shares available for issuance under our equity-based plans.

***Our charter documents and Delaware law could make it more difficult for a third party to acquire us and discourage a takeover.***

Our certificate of incorporation and bylaws contain, and Delaware law contains, certain provisions that may have the effect of deterring or discouraging, among other things, a non-negotiated tender or exchange offer for shares of Common Stock, a proxy contest for control of our company, the assumption of control of our company by a holder of a large block of Common Stock, and the removal of the management of our company. Such provisions also may have the effect of deterring or discouraging a transaction which might otherwise be beneficial to stockholders. Our amended and restated certificate of incorporation also authorizes our board of directors, without stockholder approval, to issue one or more series of preferred stock, which could have voting and conversion rights that adversely affect or dilute the voting power of the holders of Common Stock. Delaware law also imposes conditions on certain business combination transactions with "interested stockholders." Subject to certain exceptions, our bylaws authorizes our board of directors to fill vacancies or newly created directorships whereby a majority of the directors then in office may elect a successor to fill any vacancies or newly created directorships. Such provisions could limit the price that investors might be willing to pay in the future for shares of our Common Stock and impede the ability of the stockholders to replace management.

The elimination of monetary liability against our directors, officers, and employees under Delaware law and the existence of indemnification rights to our directors, officers, and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers, and employees. We also may enter into contractual indemnification obligations under employment agreements with our executive officers. The foregoing indemnification obligations could result in our incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and resultant costs may also discourage us from bringing a lawsuit against our directors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by our stockholders against our directors and officers even though such actions, if successful, might otherwise benefit our company and our stockholders.

***Our results of operations could be impacted by unanticipated changes in tax provisions or exposure to additional income tax liabilities.***

Our business operates in many locations under government jurisdictions that impose income taxes. Changes in domestic or foreign income tax laws and regulations, or their interpretation, could result in higher or lower income tax rates assessed or changes in the taxability of certain revenues or the deductibility of certain expenses, and higher excise taxes thereby affecting our income tax expense and profitability. In addition, audits by income tax authorities could result in unanticipated increases in our income tax expense.

***Compliance with the laws and regulations affecting public companies could adversely affect our business, results of operations, and financial condition.***

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Nasdaq listing standards, and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems, and resources. The complexity of complying with these rules may divert management's attention from other business matters, potentially harming our operations and financial results. Although we have hired additional employees to assist with compliance, we may need to hire more or engage consultants in the future, further increasing our operating expenses. As a public company subject to additional oversight, we may not have the same flexibility we had as a private company.

Additionally, changing laws, regulations, and governance standards, which are subject to varying interpretations, are creating uncertainty for public companies, which may result in increased general and administrative expenses and a diversion of management's time and attention from business operations to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us, and our business may be harmed. We also expect that being a public company will make it more expensive for us to obtain director and officer liability insurance, which may result in reduced coverage or higher premiums, and could make it more difficult to attract and retain qualified directors and officers.

Public disclosures required as a public company may increase our exposure to actual or threatened litigation from competitors and other third parties. Even if these claims do not result in litigation or are resolved in our favor, the time and resources spent on resolving them could harm our business.

***If we are unable to satisfy our funding obligations on the dates required, we may be in breach of the JV Agreement, which could result in the dilution or forfeiture of our equity interests in the Joint Venture, disputes with IdeaForge, or the termination of the JV Agreement, any of which could have a material adverse effect on our business, financial condition and results of operations.***

 

Pursuant to the JV Agreement (as defined below), we are obligated to invest $10,000,000 in the Joint Venture (as defined below) on or before December 31, 2026, with the remaining balance of the Capital Contribution (as defined below) of up to $25,000,000 to be funded on or before December 31, 2027. There can be no assurance that we will have sufficient capital or liquidity to meet these obligations when due. Our ability to fund these contributions will depend on a number of factors, including our operating cash flows, access to capital markets, and general economic and market conditions, many of which are outside of our control. If we are unable to satisfy our funding obligations on the dates required, we may be in breach of the JV Agreement, which could result in the dilution or forfeiture of our equity interests in the Joint Venture, disputes with IdeaForge (as defined below), or the termination of the JV Agreement, any of which could have a material adverse effect on our business, financial condition and results of operations.

Furthermore, even if we are able to satisfy our capital contribution obligations, there is no guarantee that the Joint Venture will achieve its intended objectives or generate any return on our investment. The Joint Venture is an early-stage enterprise subject to the risks inherent in the development and commercialization of drone technology, including regulatory, technological, competitive and market risks. The loss of all or a portion of our investment in the Joint Venture could have a material adverse effect on our business, financial condition and results of operations.

 ***We are dependent on Hellbender, Inc., a third-party contractor, for the design, engineering and prototyping of our attritable drone platforms, and our drone development program may not be completed on time, within budget or at all.***

We have engaged Hellbender, Inc. ("Hellbender") to design, engineer, prototype and demonstrate volume manufacturing capability for two Class 1 attritable first-person-view drone platforms pursuant to a master services agreement dated May 1, 2026 (the "Hellbender MSA") and an initial statement of work (the "Initial SOW"). The development program is subject to significant technical, manufacturing, schedule and cost risks. Hardware prototyping is inherently iterative and exploratory, and the actual timeline and total cost may vary materially from current estimates due to factors such as the complexity of risk reduction testing, supply chain lead times and component availability, unforeseen engineering challenges, and the timely performance of our own obligations under the agreement, including the provision of payload specifications and explosive materials. There can be no assurance that Hellbender will successfully complete the development program on time, within the estimated budget of approximately $3,000,000, or at all, or that the resulting drone systems will meet performance specifications, achieve manufacturing scalability targets, or be suitable for deployment in defense or commercial applications.

In addition, the Hellbender MSA may be terminated by either party upon five days' written notice. If Hellbender were to terminate the Hellbender MSA or become unable to perform, we may be unable to identify a suitable replacement contractor on acceptable terms or in a timely manner, which could materially delay or impair our drone development efforts. Furthermore, although all intellectual property in the deliverables produced under the agreement is owned by us, any dispute regarding intellectual property rights, open-source components incorporated into the deliverables, or the scope of Hellbender's exclusivity obligations could adversely affect our ability to commercialize the resulting products. The failure to successfully develop and deploy our attritable drone platforms could have a material adverse effect on our business, growth strategy, financial condition and results of operations.

 ***Our attritable drone development program is at an early stage, and we may not realize any revenue or other commercial benefit from our investment.***

Our attritable drone development program with Hellbender is at a pre-revenue, proof-of-concept stage and all deliverables under the Initial SOW are prototype and experimental in nature, provided "as is" without warranty. We will need to successfully transition from prototyping to a production-stage manufacturing agreement, which has not yet been negotiated, in order to realize any commercial benefit from the program. Even if we successfully develop production-intent prototypes, we will need to secure government or commercial procurement contracts, obtain any necessary regulatory approvals or certifications, establish manufacturing capacity for high-volume production, and compete effectively against established defense contractors and drone manufacturers with significantly greater resources, existing contract vehicles, and proven track records. There can be no assurance that the U.S. Department of Defense Drone Dominance Program or similar government procurement programs will proceed as anticipated, that our products will meet applicable requirements, or that we will be awarded any contracts. Accordingly, we may not realize any revenue, return on investment, or other commercial benefit from the approximately $3,000,000 investment in this development program, which could have a material adverse effect on our financial condition and results of operations.

**Risks Related to this Direct Listing and Ownership of Our Common Stock**

***Our listing differs significantly from an initial public offering conducted on a firm-commitment basis.***

This is not an initial public offering of common stock conducted on a firm-commitment underwritten basis. There have been few companies that have undertaken a direct listing to date and there are many uncertainties associated with such type of listing. The listing of our common stock on Nasdaq differs from a firm-commitment underwritten initial public offering in several significant ways, which include, but are not limited to, the following:

● There
 are no underwriters engaged on a firm-commitment basis. Consequently, prior to the opening of trading on Nasdaq, there will be no
 traditional book building process and no price at which underwriters initially sold shares to the public to help inform efficient
 and sufficient price discovery with respect to the opening trades on Nasdaq. Therefore, buy and sell orders submitted prior to and
 at the opening of trading of our common stock on Nasdaq will not have the benefit of being informed by a published price range or
 a price at which the underwriters initially sold shares to the public, as would be the case in an initial public offering underwritten
 on a firm-commitment basis. Moreover, there will be no underwriters engaged on a firm-commitment underwritten basis assuming risk
 in connection with the initial resale of shares of our common stock. In an initial public offering underwritten on a firm-commitment
 basis, the underwriters may engage in "covered" short sales in an amount of shares representing the underwriters'
 option to purchase additional shares. To close a covered short position, the underwriters purchase shares in the open market or exercise
 the underwriters' option to purchase additional shares. In determining the source of shares to close the covered short position,
 the underwriters typically consider, among other things, the price of shares available for purchase in the open market as compared
 to the price at which they may purchase shares through the underwriters' option to purchase additional shares. Purchases in
 the open market to cover short positions, as well as other purchases underwriters may undertake for their own accounts, may have
 the effect of preventing a decline in the market price of shares. Given that there will be no underwriters' option to purchase
 additional shares and no underwriters engaging in stabilizing transactions, there could be greater volatility in the public price
 of our common stock during the period immediately following the listing.

● There
 is not a fixed number of securities available for sale. Therefore, there can be no assurance that any Registered Stockholders will
 sell any or all of their common stock and there may initially be a lack of supply of, or demand for, our common stock on Nasdaq.
 Alternatively, we may have a large number of Registered Stockholders who choose to sell their common stock in the near term resulting
 in an oversupply of our common stock, which could adversely impact the public price of our common stock once listed on Nasdaq.

● Consistent
 with Regulation M and other federal securities laws applicable to the Direct Listing, we have not consulted with Registered Stockholders
 (other than our directors and officers who own our common stock) regarding their desire or plans to sell shares in the public market
 following the listing or discussed with potential investors their intentions to buy our common stock in the open market. In a firm-commitment
 underwritten initial public offering, it is customary for an issuer's officers, directors, and most of its other shareholders
 to enter into a 180-day contractual lock-up arrangement with the underwriters to help promote orderly trading immediately after listing.
 None of our Registered Stockholders have entered into contractual lock-up agreements or other contractual restrictions on transfer.
 Consequently, our Registered Stockholders may sell any or all of their common stock at any time (subject to any restrictions under
 applicable law), including immediately upon listing. The shares being registered herein may be freely sold in market transactions
 following the listing and upon the effectiveness of this registration statement. All shares of common stock subject to stock options
 outstanding and reserved for issuance under our equity incentive plan are expected to be registered on Form S-8 under the Securities
 Act and such shares are eligible for sale in the public markets, subject to the limitations applicable to affiliates under Rule 144.
 If such sales were to occur in a significant quantum, it may result in an oversupply of our common stock in the market, which could
 adversely impact the public price of our common stock. See "Our shares of common stock currently have no public market. An
 active trading market may not develop or continue to be liquid and the market price of our shares of common stock may be volatile."
 None of our stockholders are party to any contractual lock-up agreement or other contractual restrictions on transfer. Sales of substantial
 amounts of our common stock in the public markets by our founders, affiliates, or non-affiliates, or the perception that such sales
 might occur, could reduce the price that our common stock might otherwise attain. There can be no assurance that the Registered Stockholders
 will not sell all of their shares of our common stock, resulting in an oversupply of our common stock on The Nasdaq Capital Market.
 In the case of a lack of supply of our common stock, the trading price of our common stock may rise to an unsustainable level. Further,
 institutional investors may be discouraged from purchasing our common stock if they are unable to purchase a block of our common
 stock in the open market in a sufficient size for their investment objectives due to a potential unwillingness of our existing stockholders
 to sell a sufficient amount of our common stock at the price offered by such institutional investors and the greater influence individual
 investors have in setting the trading price. If institutional investors are unable to purchase our common stock in a sufficient amount
 for their investment objectives, the market for our common stock may be more volatile without the influence of long-term institutional
 investors holding significant amounts of our common stock. In the case of a lack of demand for our common stock, the trading price
 of our common stock could decline significantly and rapidly after the Direct Listing.

Such differences from a firm-commitment underwritten initial public offering could result in a volatile market price for our common stock and uncertain trading volume and may adversely affect your ability to sell your common stock.

***The direct listing process differs from an initial public offering underwritten on a firm-commitment basis and the impact of awareness of our brand and investor recognition of our Company on the demand for our common stock is unpredictable and our marketing and brand development efforts may not be successful.***

We will not conduct a traditional "roadshow" with underwriters prior to the opening of trading of our common stock on Nasdaq. Instead, we may engage in certain investor presentations and educational meetings to enhance our brand awareness and investor recognition of our Company. In advance of any investor presentation or educational meeting, we will announce the date for such presentation or meeting through financial news outlets in a manner consistent with typical corporate outreach to investors. We will prepare an electronic presentation for any investor presentation or educational meeting that we hold, and will make the presentation publicly available, without restriction, on a website.

There can be no assurance that any investor presentations or other educational meetings that we hold will have the same impact on awareness of our brand and investor recognition of our Company as a traditional "roadshow" conducted in connection with a firm-commitment underwritten initial public offering. As a result, there may not be efficient price discovery with respect to our common stock or sufficient demand among investors immediately following our listing, which could result in a more volatile public price of our common stock.

***Our shares of common stock currently have no public market. An active trading market may not develop or continue to be liquid and the market price of our shares of common stock may be volatile.***

We expect our shares of common stock to be listed and traded on Nasdaq. We will not be involved in the price setting process and the Registered Stockholders will not be involved in the price setting process. Additionally the price of our shares in prior private transactions may have little or no relation to the opening price and subsequent public price of our stock on Nasdaq. We have engaged a third party firm to conduct a valuation pursuant to Nasdaq's listing qualification rules and requirements. Prior to the listing on Nasdaq, there has not been a public market for our shares of common stock, and an active market for our shares of common stock may not develop or be sustained after the listing, which could depress the market price of our shares of common stock and could affect the ability of our stockholders to sell our shares of common stock. In the absence of an active public trading market, investors may not be able to liquidate their investments in our shares of common stock. An inactive market may also impair our ability to raise capital by selling our shares of common stock, our ability to motivate our employees through equity incentive awards and our ability to acquire other companies, products or technologies by using our shares of common stock as consideration.

In addition, we cannot predict the prices at which our shares of common stock may trade on Nasdaq following the listing of our shares of common stock, and the market price of our shares of common stock may fluctuate significantly in response to various factors, some of which are beyond our control. In particular, as this listing is taking place through a novel process that is not a firm-commitment underwritten initial public offering, there will be no traditional book building process and no price at which traditional underwriters initially sold shares to the public to help inform efficient price discovery with respect to the opening trades on Nasdaq. On the day that our shares of common stock are initially listed on Nasdaq, Nasdaq will begin accepting, but not executing, pre-opening buy and sell orders and will begin to continuously generate the indicative Current Reference Price (as defined below) on the basis of such accepted orders. The Current Reference Price is calculated each second and, during a 10-minute "Display Only" period, is disseminated, along with other indicative imbalance information, to market participants by Nasdaq on its NOII and BookViewer tools. Following the "Display Only" period, a "Pre-Launch" period begins, during which the Advisor, in its capacity as our financial advisor, must notify Nasdaq that our shares are "ready to trade." Once the Advisor has notified Nasdaq that our shares of common stock are ready to trade, Nasdaq will confirm the Current Reference Price for our shares of common stock, in accordance with the Nasdaq rules. If the Advisor then approves proceeding at the Current Reference Price, the applicable orders that have been entered will be executed at such price and regular trading of our shares of common stock on Nasdaq will commence, subject to Nasdaq conducting validation checks in accordance with Nasdaq rules. The Advisor will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on considerations of volume, timing and price. In particular, the Advisor will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. If the Advisor does not approve proceeding at the Current Reference Price (for example, due to the absence of adequate pre-opening buy and sell interest), the Advisor will request that Nasdaq delay the open until such a time that sufficient price discovery has been made to ensure a reasonable amount of volume crosses on the opening trade. For more information, see "Plan of Distribution."

Additionally, prior to the opening trade, there will not be a price at which underwriters initially sold shares of common stock to the public as there would be in a firm-commitment underwritten initial public offering. The absence of a predetermined initial public offering price could impact the range of buy and sell orders collected by Nasdaq from various broker-dealers. Consequently, upon listing on Nasdaq, the public price of our common stock may be more volatile than in a firm-commitment underwritten initial public offering and could decline significantly and rapidly.

Furthermore, because of our novel listing process on the Nasdaq Capital Market, Nasdaq's rules for ensuring compliance with its initial listing standards, such as those requiring a valuation or other compelling evidence of value, are untested. In the absence of a prior active public trading market for our common stock, if the price of our common stock or our market capitalization falls below those required by Nasdaq's eligibility standards, we may not be able to satisfy the ongoing listing criteria and may be required to delist.

In addition, because of our novel listing process, individual investors, retail or otherwise, may have greater influence in setting the opening public price and subsequent public prices of our common stock on Nasdaq and may participate more in our initial trading than is typical for a firm-commitment underwritten initial public offering. These factors could result in a public price of our common stock that is higher than other investors (such as institutional investors) are willing to pay, which could cause volatility in the trading price of our common stock and an unsustainable trading price if the price of our common stock significantly rises upon listing and institutional investors believe our common stock is worth less than retail investors, in which case the price of our common stock may decline over time. Further, if the public price of our common stock is above the level that investors determine is reasonable for our common stock, some investors may attempt to short our common stock after trading begins, which would create additional downward pressure on the public price of our common stock. To the extent that there is a lack of consumer awareness among retail investors, such a lack of consumer awareness could reduce the value of our common stock and cause volatility in the trading price of our common stock.

The public price of our common stock following the listing also could be subject to wide fluctuations in response to the risk factors described in this prospectus and others beyond our control, including:

● the
 number of shares of our common stock publicly owned and available for trading;

● overall
 performance of the equity markets and/or publicly-listed companies that offer competing services and products;

● actual
 or anticipated fluctuations in our revenue or other operating metrics;

● our
 actual or anticipated operating performance and the operating performance of our competitors;

● changes
 in the financial projections we provide to the public or our failure to meet these projections;

● failure
 of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow
 our company, or our failure to meet the estimates or the expectations of investors;

● any
 major change in our board of directors, management, or key personnel;

● the
 economy as a whole and market conditions in our industry;

● rumors
 and market speculation involving us or other companies in our industry;

● announcements
 by us or our competitors of significant innovations, new products, services, features, integrations or capabilities, acquisitions,
 strategic investments, partnerships, joint ventures, or capital commitments;

● new
 laws or regulations or new interpretations of existing laws or regulations applicable to our business, in the U.S. or globally;

● lawsuits
 threatened or filed against us;

● other
 events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and

● sales
 or expected sales of our common stock by us and our officers, directors and principal stockholders.

In addition, stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner often unrelated to the operating performance of those companies. These fluctuations may be even more pronounced in the trading market for our common stock shortly following the listing of our common stock on Nasdaq as a result of the supply and demand forces described above. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and harm our business, results of operations and financial condition.

**We may not be able to meet each of the quantitative requirements of the Nasdaq Capital Market's Market Value Standard for Direct Listings.**

We have applied to have shares of our common stock listed on the Nasdaq Capital Market. We expect that our common stock will be listed on the Nasdaq Capital Market on or promptly after the date of this prospectus. In order for the Nasdaq Capital Market to approve our listing application, we will need to meet the quantitative requirements of the Nasdaq Capital Market's Market Value of Listed Securities Standard, as provided in Nasdaq Listing Rules 5505(a) and 5505(b)(2), as well as the heightened initial listing requirements for direct listings set forth in Nasdaq Listing Rule IM-5505-1. We expect to meet all those requirements but in the event that we are unable to meet such requirements, we will not be approved to list our common stock on the Nasdaq Capital Market and our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

● a
 limited availability of market quotations for our securities;

● reduced
 liquidity for our securities;

● a
 determination that our common stock is "penny stock" which will require brokers trading in our common stock to adhere
 to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

● a
 limited amount of news and analyst coverage; and

● a
 decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as "covered securities." Because we expect that our common stock will be listed on the Nasdaq Capital Market, our common stock will qualify as covered securities under the statute. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. If we cannot be listed on the Nasdaq Capital Market or any other national securities exchange, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.

***We intend to list our common stock on the Nasdaq Capital Market in connection with the Direct Listing and must satisfy heightened initial listing requirements, and there can be no assurance that we will be able to do so.***

We have applied to list our common stock on the Nasdaq Capital Market in connection with the Direct Listing and intend to rely on the Market Value of Listed Securities Standard for purposes of satisfying the initial listing requirements. Companies listing in connection with a direct listing on the Nasdaq Capital Market must satisfy certain heightened quantitative and liquidity requirements under Nasdaq Listing Rules 5505(a) and 5505(b)(2), as well as the additional requirements for direct listings set forth in Nasdaq Listing Rule IM-5505-1, and Nasdaq will determine whether we meet these requirements based on the price of our common stock at the time of listing as determined by reference to a third-party valuation or, if applicable, sustained recent trading in a private placement market.

To qualify for initial listing under this standard as a direct listing, we must satisfy certain heightened quantitative requirements set forth in Nasdaq Listing Rules 5505(a) and 5505(b) and the direct listing requirements of IM-5505-1, including, among others:

● a valuation-based market value of listed securities of at least $100.0 million;

● a valuation-based
 market value of unrestricted publicly held shares of at least $30.0 million;

● at least 1,000,000 unrestricted
 publicly held shares;

● a minimum bid price of at
 least $8.00 per share;

● at least 300 round lot
 holders; and

● stockholders' equity
 of at least $5.0 million; and

In addition, companies listing in connection with a direct listing on the Nasdaq Capital Market must have at least three registered and active market makers willing to act as market makers for the Company's common stock.

Nasdaq will determine whether we satisfy the applicable initial listing requirements based on the price of our common stock at the time of listing and our satisfaction of the quantitative and liquidity requirements of the Nasdaq Capital Market.

Based on an assumed initial reference price of $19.13 per share, which was determined by reference to a third-party valuation conducted in connection with the Company's application to list on Nasdaq pursuant to the requirements of Nasdaq Listing Rule IM-5505-1, we expect to have a market value of listed securities in excess of $100.0 million, based on 45,034,282 shares of common stock outstanding as of the date of this prospectus, and a market value of unrestricted publicly held shares in excess of $30.0 million, based on 45,034,282 unrestricted publicly held shares. We further expect to have at least 1,000,000 unrestricted publicly held shares, at least 300 round lot holders, a minimum bid price of at least $8.00 per share (based on the assumed initial reference price of $19.13 per share, which exceeds the $8.00 minimum), stockholders' equity in excess of $5.0 million, based on our stockholders' equity of $6,102,102 as of March 31, 2026, and at least three registered and active market makers. Accordingly, we expect to satisfy the quantitative initial listing requirements of the Nasdaq Capital Market for direct listings in connection with the Direct Listing; however, there can be no assurance that our application will be approved or that we will continue to satisfy the applicable listing requirements.

The assumed initial reference price of $19.13 per share was derived from an independent third-party valuation conducted by a registered broker-dealer in connection with the Company's application to list on Nasdaq. The valuation employed a comparable public company analysis using enterprise value-to-revenue multiples applied on a sum-of-the-parts basis to the Company's two principal business segments. The independent appraiser identified two peer groups of publicly traded companies: drone and unmanned aerial systems companies and ammunition and defense products companies listed on U.S., European, and Canadian stock exchanges, and calculated the average forward enterprise value-to-revenue multiple for each peer group based on estimated fiscal year 2026 revenues. The drone peer group average multiple of approximately 9.5x was applied to the Company's projected fiscal year 2026 drone division revenue of approximately $77.2 million, and the ammunition peer group average multiple of approximately 3.2x was applied to the Company's projected fiscal year 2026 ammunition division revenue of approximately $35.6 million, yielding an aggregate implied equity value of approximately $851.5 million, or $19.13 per share based on 44,500,111 shares of common stock then outstanding. The independent appraiser did not conduct a discounted cash flow analysis due to the limited visibility of long-term cash flows in a rapidly evolving sector. No single factor was determinative, and the foregoing valuation reflected the independent appraiser's judgment as to the appropriate weighting of the foregoing factors. The assumed initial reference price does not reflect an arms'-length negotiation between a buyer and a seller or the price at which underwriters initially sold shares to the public, as would be the case in an initial public offering underwritten on a firm-commitment basis.

Investors should note that the assumed initial reference price of $19.13 per share represents a substantial premium over the per share prices paid by accredited investors in our prior private transactions, including as recently as January to March 2026, when we issued an aggregate of 325,836 shares of common stock at prices ranging from $3.00 to $8.00 per share, and earlier issuances at prices ranging from $1.00 to $2.00 per share. The disparity between the per share prices paid by accredited investors in prior private transactions and the assumed initial reference price may result in investors who purchase shares at or near the assumed initial reference price experiencing a decline in the value of their investment if the trading price of our common stock does not sustain such level. There can be no assurance that the trading price of our common stock will equal or exceed the assumed initial reference price following the listing.

***The market price of our Common Stock may be volatile, and you could lose all or part of your investment.***

The trading price of our Common Stock is likely to be volatile and may fluctuate substantially in response to a variety of factors, many of which are outside of our control. These factors include, among others, variations in our operating results; progress in establishing and scaling our manufacturing operations; announcements by us or our competitors; changes in laws or regulations affecting the ammunition and firearms industry; analyst coverage or lack thereof; litigation or regulatory actions; and changes in general market or economic conditions. As a result, purchasers of our Common Stock could incur substantial losses if the market price of our Common Stock declines.

 ****

***If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, our stock price and trading volume could decline.***

The trading market for our Common Stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our industry. We may never obtain research coverage by securities or industry analysts. If no analysts commence coverage of our company, the trading price and volume of our Common Stock would likely be negatively impacted. If we do obtain analyst coverage, and one or more analysts downgrade our Common Stock or publish inaccurate or unfavorable research about our business, the trading price of our Common Stock would likely decline. If one or more analysts cease coverage of our company or fail to regularly publish reports, demand for our Common Stock could decrease, which might cause our stock price and trading volume to decline.

***Our status as an "emerging growth company" and a "smaller reporting company" allows us to take advantage of reduced disclosure requirements, which could make our Common Stock less attractive to investors.***

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and a "smaller reporting company" under SEC rules. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including reduced disclosure obligations regarding executive compensation, exemption from the requirements of holding a nonbinding advisory vote on executive compensation, and, for so long as we qualify as an emerging growth company, exemption from the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act. We may also choose to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We cannot predict whether investors will find our Common Stock less attractive because we rely on these exemptions. If some investors find our Common Stock less attractive, there may be a less active trading market for our Common Stock, and our stock price may be more volatile.

***The Advisor, which will own a substantial number of shares of our common stock on the date of the Direct Listing, may have a conflict of interest.***

 ****

Given RBW's dual role as our financial advisor under Nasdaq direct listing rules and its status as a shareholder and placement agent may present a conflict of interest. A conflict of interest situation can arise when a person or an entity has interests that may make it difficult to perform their work objectively and effectively. Conflicts of interest may also arise if a person or entity receives personal benefits as a result of their position. Nasdaq will determine the Current Reference Price of our shares of common stock in the Direct listing in consultation with the Advisor in its capacity as our financial advisor. The Advisor will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on considerations of volume, timing and price. In particular, the Advisor will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price.

As compensation for successful listing, RBW will be granted 1.0% of our fully diluted common stock outstanding immediately prior to the Direct Listing, which we currently calculate at 887,472 shares ("Advisory Shares"). Such shares are not registered pursuant to this prospectus and the Advisor is not a Registered Shareholder. A resale registration statement covering such shares will be filed within 10 days of the date of the Direct Listing. In addition, upon a successful direct listing, we will pay RBW a one-time cash advisory fee of $250,000. As the Advisor will receive substantial personal benefit as a result of the Direct Listing, the existence of such financial and personal interests may result in a conflict of interest on the part of the Advisor between what it may believe is best for the Company and its shareholders and what it may believe is best for itself.

***Exercise of warrants and options, and vesting of restricted stock units, may have a dilutive effect on our stock and negatively impact the price of our Common Stock.***

 ****

As of the date of this prospectus, we had 16,731,496 warrants, 15,113,046 options, and 10,000,000 restricted stock units outstanding. Each warrant or option provides the holder the right to purchase up to one share of our Common Stock at a predetermined exercise price, and each restricted stock unit represents the right to receive one share of our Common Stock upon vesting. Our outstanding warrants consist of warrants to purchase an aggregate of 16,731,496 shares of Common Stock at an average exercise price of $1.27 per share over the next 1.1 years, and our outstanding options consist of options to purchase an aggregate of 15,113,046 shares of Common Stock at an average exercise price of $1.07 per share over the next 7.1 years. Our outstanding restricted stock units consist of 10,000,000 RSUs granted to our Chief Executive Officer and our President, which vest upon the satisfaction of time-based and market-based conditions through October 2026 and upon the achievement of certain specified market capitalization milestones.

To the extent that any of the outstanding warrants, options, and restricted stock units described above are exercised or vest, dilution to the interests of our stockholders will occur. For the life of such warrants and options, and during the vesting period of such restricted stock units, the holders will have the opportunity to profit from a rise in the price of the Common Stock with a resulting dilution in the interest of the other holders of Common Stock. The existence of such warrants, options, and restricted stock units may adversely affect the market price of our Common Stock and the terms on which we can obtain additional financing, and the holders of such warrants and options can be expected to exercise them at a time when we would, in all likelihood, be able to obtain additional capital by an offering of our unissued capital stock on terms more favorable to us than those provided by such warrants and options. The vesting of restricted stock units will result in additional shares becoming freely tradeable, which may create downward pressure on the market price of our Common Stock.

 ****

***Tariffs and trade tensions could have an adverse effect on economic conditions and financial markets, which may adversely affect the value of our shares of Common Stock.***

U.S. President Trump has announced a number of tariff-related policies that have resulted in increased tariffs and potentially will result additional tariffs on products imported into the United States. There is no certainty regarding if and how long the existing increased tariffs will remain in place or whether additional tariffs will be imposed and, if so, how long such tariffs will remain in place. These actions have resulted, and may result, in fluctuations in financial markets, including with respect to interest rates, and retaliatory tariffs or trade actions by other countries. If geopolitical tensions or uncertainty continue, they could result in a reduction of trade volume, investment and technological exchange and other economic activities among major international economies, which in turn could lead to a recession and further changes in interest rates. The application of increased tariffs or continuing uncertainty also may result in a material increase to our costs of operation or otherwise limit our commercial opportunities. Any of these events could adversely affect our business, results of operations and financial condition, which in turn may adversely affect the value of our shares of Common Stock.

***Issuance of Preferred Stock could result in the dilution of the value of the current stockholders' Common Stock.***

Our amended and restated certificate of incorporation allows us to issue Preferred Stock with voting, liquidation, and dividend rights senior to those of the Common Stock without the approval of our stockholders. The issuance of Preferred Stock could have the effect of making it more difficult for a third party to acquire a majority of the outstanding stock of our company and result in the dilution of the value of the then current stockholders' Common Stock.

 ****

***We have granted the April 2026 Note Investors a first-priority security interest in substantially all of our assets to secure our obligations under the April 2026 Senior Notes, and if we default on the April 2026 Senior Notes, we could lose substantially all of our assets.***

In connection with the April 2026 Note Financing, we entered into the April 2026 Security Agreement granting the April 2026 Note Investors a first-priority security interest in substantially all of our assets, including, without limitation, accounts receivable, inventory, equipment, intellectual property, general intangibles and the proceeds thereof (collectively, the "Collateral"). The April 2026 Security Agreement secures our obligations under the April 2026 Senior Notes and the other transaction documents related thereto. Upon an event of default under the April 2026 Senior Notes, including our failure to pay principal or interest when due, a breach of any representation, warranty or covenant in the related transaction documents, certain bankruptcy or insolvency events, or a material adverse change in our business or financial condition, the April 2026 Note Investors may exercise all remedies available under the Uniform Commercial Code and the April 2026 Security Agreement, including taking possession of and disposing of the Collateral. The April 2026 Security Agreement also imposes ongoing covenants on us, including obligations to maintain the Collateral, to refrain from granting additional liens without the April 2026 Note Investors' prior written consent, and to provide periodic financial information to the April 2026 Note Investors. If the April 2026 Note Investors were to exercise such remedies, we could lose some or all of our assets, which would materially impair our ability to continue operations and could result in a total loss of your investment in our Common Stock.

***The April 2026 Senior Notes are convertible into shares of our Common Stock at a fixed conversion price and the April 2026 Note Warrants issued in connection with the April 2026 Note Financing will result in significant dilution to our existing stockholders and may adversely affect the trading price of our Common Stock.***

The April 2026 Senior Notes issued in the April 2026 Note Financing are convertible into shares of our Common Stock at a fixed Conversion Price of $8.00 per share upon Direct Listing, subject to adjustment as set forth in the April 2026 Senior Notes. Based on $10,150,000 representing the maximum offering amount pursuant to the April 2026 Senior Notes (the "Maximum Offering Amount") and giving effect to the 35.0% original issue discount, the aggregate principal amount of the April 2026 Senior Notes was approximately $15,615,385, which, at a Conversion Price of $8.00 per share, will result in the issuance of approximately 1,951,923 shares of our Common Stock upon full conversion upon Direct Listing, representing approximately 4.3% of our currently outstanding shares of Common Stock (based on 45,034,282 shares outstanding as of the date of this prospectus). In addition, we issued April 2026 Note Warrants to purchase approximately 507,500 shares of our Common Stock in connection with the Maximum Offering Amount, each exercisable at $8.00 per share. In the aggregate, the shares of Common Stock issuable upon full conversion of the April 2026 Senior Notes and exercise of all April 2026 Note Warrants would total approximately 2,459,423 shares, representing approximately 5.3% of our currently outstanding shares of Common Stock (based on 45,034,282 shares outstanding as of the date of this prospectus). These figures are illustrative only and do not give effect to accrued interest or potential adjustments to the Conversion Price as set forth in the April 2026 Senior Notes, which could result in the issuance of a greater number of shares. The conversion of the April 2026 Senior Notes and the exercise of the April 2026 Note Warrants will increase the number of shares of our Common Stock outstanding, which will dilute the ownership percentage and voting power of our existing stockholders. Such dilution could be substantial. Furthermore, sales or the anticipated sale of a substantial number of shares of Common Stock issuable upon conversion of the April 2026 Senior Notes or exercise of the April 2026 Note Warrants in the public market could adversely affect the prevailing market price of our Common Stock. The April 2026 Note Investors are not subject to any lock-up or other contractual restriction on transfer and may sell the securities acquired in the April 2026 Note Financing, including shares of Common Stock issuable upon conversion or exercise thereof, immediately upon the listing of our Common Stock on a national securities exchange, which could create significant selling pressure in the period immediately following listing. The April 2026 Note Warrants contain a full-ratchet anti-dilution provision that adjusts the exercise price downward in the event we issue equity securities at a price per share below the then-current exercise price. This provision may amplify the dilutive effect in the event of future equity issuances at lower prices, as the exercise price of the April 2026 Note Warrants would be reduced, allowing the holders of April 2026 Note Warrants to acquire shares at a discount to the then-prevailing market price.

***The April 2026 Note Financing includes preemptive rights, board representation rights, most favored nations protections and other investor rights that may limit our operational and financial flexibility and adversely affect our ability to raise additional capital.***

The April 2026 Note Purchase Agreement and the related transaction documents in connection with the April 2026 Note Financing contain various covenants, restrictions and investor protections that may limit our operational and financial flexibility. Among other things, the April 2026 Note Investors have been granted: (i) preemptive rights to participate pro rata in future issuances of securities, and individual preemptive rights in favor of the Specified Holders (as defined in the April 2026 Senior Notes) to maintain their respective percentage ownership on a fully-diluted, as-converted basis, either of which may impede or delay our ability to raise additional capital on favorable terms, particularly if the April 2026 Note Investors or the Specified Holders elect to exercise such rights; (ii) a most favored nations provision that requires us to offer the April 2026 Note Investors terms at least as favorable as those offered to any subsequent investor, which may limit our flexibility to negotiate different or more favorable terms with future capital providers; (iii) the right of Elbert Basolis to serve as a member of our Board of Directors for a term of five (5) years, and the right of Bradford Johnson to attend all meetings of our Board of Directors in a non-voting observer capacity, each of which will afford the April 2026 Note Investors direct influence over our corporate governance and strategic direction; (iv) tag-along rights entitling the April 2026 Note Investors to participate in certain sales of Common Stock by stockholders holding at least five percent (5%) of our outstanding Common Stock, which may complicate or deter potential block trades or change-of-control transactions; and (v) drag-along rights permitting stockholders holding a majority of our outstanding Common Stock, together with the approval of our Board of Directors, to require the April 2026 Note Investors to participate in a bona fide change-of-control transaction. In addition, the April 2026 Note Investors are exempt from any lock-up provisions and may sell the securities acquired in the April 2026 Note Financing immediately upon the listing of our Common Stock on a national securities exchange, which could create additional selling pressure and adversely affect the trading price of our Common Stock. The May 2026 Note Purchase Agreement does not contain preemptive rights, board observer or director designation rights, tag-along or drag-along rights, or most-favored-nations provisions. Our obligation to comply with these provisions may constrain our ability to raise additional capital on favorable terms, enter into strategic transactions, pursue acquisitions, or otherwise manage our business in the manner that our management deems most advantageous, any of which could have a material adverse effect on our business, financial condition and results of operations.

***The April 2026 Senior Notes were issued with a substantial original issue discount of 35.0%, and we will be required to make periodic cash interest payments on the April 2026 Senior Notes, each of which may place significant strain on our financial resources and liquidity.***

The April 2026 Senior Notes were issued at an original issue discount of 35.0%, such that we will receive only $0.65 in cash proceeds for each $1.00 of principal indebtedness incurred. As a result, the aggregate principal amount of the April 2026 Senior Notes issued in connection with the Maximum Offering Amount was approximately $15,615,385, while the aggregate cash proceeds to us will be approximately $10,150,000. Our repayment obligations at maturity, or the number of shares of Common Stock issuable upon conversion of the April 2026 Senior Notes, will be based on the full principal amount of the April 2026 Senior Notes, not the cash proceeds received. In addition, the April 2026 Senior Notes bear interest at a rate of 6.0% per annum, payable in cash, which will require us to make periodic cash interest payments throughout the twelve-month term of the April 2026 Senior Notes. If we do not generate sufficient cash flow from operations to satisfy these interest payment obligations, we may need to use proceeds from other capital sources or seek additional financing, which may not be available on favorable terms or at all. Failure to make any required payment of principal or interest when due would constitute an event of default under the April 2026 Senior Notes, which could trigger the remedies described above, including enforcement of the April 2026 Security Agreement against substantially all of our assets. The combination of the substantial original issue discount and the cash interest obligation may place significant strain on our financial resources and liquidity position, and there can be no assurance that we will have adequate resources to satisfy our obligations under the April 2026 Senior Notes when due.

 ***The May 2026 Notes will be funded only upon the Company's filing of a request for acceleration of effectiveness of this registration statement pursuant to Rule 461 under the Securities Act and the approval of our listing application by Nasdaq, and there can be no assurance that such conditions will be satisfied, which could adversely affect our liquidity and operations.***

We have entered into the May 2026 Note Purchase Agreement, pursuant to which the May 2026 Note Investors have agreed to fund the May 2026 Notes in an aggregate principal amount of $7,692,308 (reflecting aggregate cash proceeds to us of $5,000,000 after giving effect to an original issue discount of 35.0%) upon the Company's filing of a request for acceleration of effectiveness of the registration statement of which this prospectus forms a part pursuant to Rule 461 under the Securities Act and the approval of our listing application by Nasdaq. If we do not file a request for acceleration, or if Nasdaq does not approve our listing application, the May 2026 Note Investors will not be obligated to fund the May 2026 Notes, and we will not receive the anticipated gross proceeds of approximately $5,000,000. We have planned our capital expenditures and operational activities based on the assumption that we will receive such proceeds upon or shortly after listing. If we do not receive such funding, or if funding is materially delayed, we may be required to curtail our planned operations, delay capital expenditures, or seek alternative sources of financing, which may not be available on favorable terms or at all. Any such delay or failure to obtain funding could have a material adverse effect on our business, financial condition and results of operations.

 ***The May 2026 Notes impose additional secured indebtedness and, upon conversion, will result in significant dilution to existing stockholders.***

The May 2026 Notes have an aggregate principal amount of approximately $7,692,308, and are convertible into approximately 961,538 shares of our Common Stock at a conversion price of $8.00 per share. The May 2026 Notes are convertible at the option of the holder at any time following the original issue date. Together with the approximately 1,951,923 shares issuable upon conversion of the April 2026 Senior Notes and the 507,500 shares issuable upon exercise of the April 2026 Note Warrants, the conversion of the May 2026 Notes would result in the issuance of an aggregate of approximately 3,420,961 shares of our Common Stock, representing approximately 7.6% of our currently outstanding shares. Such dilution could be substantial and may adversely affect the market price of our Common Stock. Furthermore, the May 2026 Notes are secured by a security interest in substantially all of our assets, subordinate only to the security interest of the April 2026 Note Investors, creating additional secured indebtedness that may limit our flexibility to obtain additional financing or encumber our assets in the future.

 ***We have entered into an equity line of credit that may result in substantial dilution to existing stockholders and may negatively affect the market price of our Common Stock.***

We have entered into the ELOC Agreement with the ELOC Investors, pursuant to which we have the right to sell up to $50,000,000 of newly issued shares of Common Stock over a 36-month period. The purchase price for shares sold under the ELOC will be at a 3% discount to the volume-weighted average price of our Common Stock during the applicable pricing period. The issuance and sale of shares to the ELOC Investors pursuant to the ELOC Agreement will result in dilution to our existing stockholders, and such dilution could be substantial depending on the number of shares we elect to sell and the prices at which such shares are sold. Furthermore, the sale of a substantial number of shares under the ELOC Agreement, or the perception that such sales could occur, could adversely affect the market price of our Common Stock and may make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate. The ELOC Investors may resell shares purchased under the ELOC immediately upon their acquisition, and such sales could create significant downward pressure on our stock price, particularly during periods of low trading volume.

 ***Our aggregate secured indebtedness following both the April 2026 Note Financing and the May 2026 Note Financing will substantially exceed our total assets, creating significant leverage risk.***

After giving effect to both the April 2026 Note Financing and the May 2026 Note Financing, we will have an aggregate principal amount of approximately $23,307,693 in secured convertible indebtedness (approximately $15,615,385 from the April 2026 Senior Notes and approximately $7,692,308 from the May 2026 Notes), against which we received only approximately $15,150,000 in aggregate cash proceeds ($10,150,000 from the April 2026 Senior Notes and $5,000,000 from the May 2026 Notes). The aggregate principal amount of our secured indebtedness substantially exceeds our total assets of $11,645,296 as of March 31, 2026. The April 2026 Senior Notes and the May 2026 Notes have different terms, including with respect to interest (6.0% per annum for the April 2026 Senior Notes versus no interest for the May 2026 Notes), priority (first lien for the April 2026 Senior Notes versus subordinated second lien for the May 2026 Notes), and conversion mechanics (mandatory conversion upon a Liquidity Event for the April 2026 Senior Notes versus voluntary conversion at the holder's option for the May 2026 Notes). These differing terms and priority positions create inter-creditor complexity that could complicate any future restructuring, refinancing or workout. If we are unable to satisfy our obligations under the notes when due, or if an event of default occurs under either set of notes, the noteholders could enforce their security interests against substantially all of our assets, which could result in a total loss of your investment.

  ****

 ***The May 2026 Note holders may elect not to convert the May 2026 Notes into Common Stock, which would require us to repay the full principal amount in cash at maturity.***

Unlike the April 2026 Senior Notes, which mandatorily convert into shares of Common Stock upon the occurrence of a Liquidity Event, the May 2026 Notes are convertible into Common Stock solely at the option of the holder at any time following the original issue date. There can be no assurance that the May 2026 Note holders will elect to convert the May 2026 Notes. If the May 2026 Note holders do not elect to convert, we would be required to repay the full aggregate principal amount of approximately $7,692,308 in cash at maturity, which substantially exceeds the $5,000,000 in cash proceeds we would receive upon funding. As of March 31, 2026, our cash on hand was $1,414,608. Even after giving effect to the proceeds from both note financings, we may not have sufficient cash resources to satisfy our repayment obligations under the May 2026 Notes if the holders do not convert, which could result in an event of default and the enforcement of the May 2026 Security Agreement against our assets.

  ****

 ***The ELOC Agreement contains conditions that may limit our ability to draw on the equity line of credit, and we may not be able to access the full commitment amount.***

Our ability to sell shares under the ELOC Agreement and the amounts we may raise thereunder are subject to a number of conditions and limitations, including: (i) a beneficial ownership limitation of 4.99%, which restricts the ELOC Investors from purchasing shares that would result in their beneficial ownership exceeding such threshold; (ii) an exchange cap of 19.99% of our outstanding shares as of the effective date, unless stockholder approval is obtained or the average price of shares sold meets certain thresholds; (iii) volume limitations that may reduce the number of shares purchased in any given pricing period; (iv) the requirement that an effective registration statement covering the resale of such shares be in effect at the time of each sale; and (v) a maximum purchase amount per notice that is tied to average daily trading volume. As a result of these limitations, we may not be able to draw down the full $50,000,000 commitment, and the actual amount of capital available to us under the ELOC may be substantially less than the full commitment amount. Our inability to access the full ELOC commitment when needed could adversely affect our liquidity and our ability to fund our operations and growth plans.

***Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our ability to produce accurate financial statements and on our stock price.***

We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish in our future annual reports a report by management on the effectiveness of our internal control over financial reporting. Our independent registered public accounting firm will also be required to attest to the effectiveness of our internal control over financial reporting once we cease to qualify as an emerging growth company. To comply with these requirements, we will need to document and test our internal control procedures, which will require significant expenditures of time and resources.

If we identify material weaknesses in our internal control over financial reporting, are unable to comply with the requirements of Section 404 in a timely manner, or cannot assert that our internal controls are effective, we could be subject to sanctions or investigations by regulatory authorities. Any such failure could result in material misstatements in our financial statements, a loss of investor confidence in the reliability of our reported financial information, and a decline in the market price of our Common Stock.

 ****

***Material weaknesses in our internal control over financial reporting may cause us to fail to timely and accurately report our financial results or result in a material misstatement of our financial statements.***

In connection with the audits of our 2025 and 2024 financial statements, we and our independent registered public accounting firm identified control deficiencies in the design and operation of our internal control over financial reporting that constituted a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. Our material weakness related to the following control deficiencies:

● The Company does not maintain effective controls over the preparation, review and timely completion of period-end financial statements, which is inclusive of (i) a lack of consistent and proper application of processes and procedures, (ii) sufficiency of resources with an appropriate level of technical accounting and reporting experience, (iii) a lack of review and supervision, (iv) a lack of clearly defined control processes, roles and segregation of duties within finance and accounting functions, and (v) a lack of sufficient inventory counting procedures.

The deficiencies described above, if not remediated, could result in a misstatement of one or more account balances or disclosures in our annual or interim financial statements that would not be prevented or detected, and, accordingly, we determined that these control deficiencies constitute a material weakness.

***We do not expect to pay any dividends for the foreseeable future.***

We do not anticipate paying any dividends to our stockholders for the foreseeable future. Accordingly, stockholders may have to sell some or all of their Common Stock to generate cash flow from their investment. Stockholders may not receive a gain on their investment when they sell our Common Stock and may lose some or all of the amount of their investment. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial conditions, contractual restrictions, restrictions imposed by applicable law, and other factors our board of directors deems relevant.

***Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock.***

We cannot assure you that our securities will continue to be listed on Nasdaq even if our securities are listed on Nasdaq. Following the listing of our common stock on Nasdaq, in order to maintain our listing, we will be required to comply with certain Nasdaq continuing listing rules, including those regarding minimum stockholders' equity, minimum share price, minimum market value of publicly held shares, corporate governance and various additional requirements. If we are unable to satisfy Nasdaq criteria for maintaining our listing, our securities could be subject to delisting. Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq's listing requirements.

***An investment in our company may involve tax implications, and you are encouraged to consult your own advisors as neither we nor any related party is offering any tax assurances or guidance on our company or your investment.***

An investment in our company generally involves complex federal, state and local income tax considerations. Neither the Internal Revenue Service nor any state or local taxing authority has reviewed the transactions described herein and may take different positions than the ones contemplated by management. You are strongly urged to consult your own tax and other advisors prior to investing, as neither we nor any of our officers, directors or related parties is offering you tax or similar advice, nor are any such persons making any representations and warrants regarding such matters.

***Securities law claims under Sections 11 and* 12 of the Securities Act *may be more difficult for investors to pursue in connection with this direct listing than in a traditional underwritten offering, which could limit remedies available to investors and affect the outcome of securities litigation.***

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Because this offering is being conducted through a direct listing, rather than a traditional underwritten initial public offering, investors may face additional challenges in bringing securities liability claims under Sections 11 and 12 of the Securities Act. In a traditional underwritten offering, plaintiffs generally can trace their purchases to the shares registered under the applicable registration statement. In a direct listing, however, both registered and unregistered shares may be available for trading immediately upon listing, which can make tracing significantly more difficult. Courts, including the U.S. Supreme Court in *Slack Technologies, LLC v. Pirani*, 598 U.S. 579 (2023), and the Ninth Circuit in *Pirani v. Slack Technologies, Inc*., 127 F.4<sup>th</sup> 1183 (9<sup>th</sup> Cir. 2025), have addressed whether plaintiffs must trace their purchases to shares registered under the registration statement to establish standing under Section 11 or Section 12 of the Securities Act. These decisions highlight uncertainty and potential limitations on investors' ability to pursue claims under the Securities Act in the context of a Direct Listing. As a result, investors in our common stock may have more limited remedies available in securities litigation compared to investors in companies that complete a traditional underwritten initial public offering. This uncertainty could affect the willingness of investors to purchase our shares and could increase the costs, risks, and outcomes of potential securities litigation

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

The information in this prospectus contains "forward-looking statements," which we intend to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements contained in this prospectus other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations, are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

You can identify some of these forward-looking statements by words or phrases such as "may," "will," "could," "would," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "project," "target," "continue" or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. The forward-looking statements in this prospectus are only predictions and are based largely on our current expectations and projections about future events and financial trends that we reasonably believe may affect our business, financial condition, and results of operations. Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.

These forward-looking statements present our estimates and assumptions only as of the date of this prospectus and are subject to several known and unknown risks, uncertainties, and assumptions. Accordingly, you are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether because of any new information, future events, changed circumstances or otherwise. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below:

● Our ability to develop and sell our proposed products.

● Our ability to source, retain, and expand our technical and business staff to meet the demands of our expanding and diversifying business.

● Our ability to raise the substantial amount of additional funds that will be necessary for our business to succeed, which funds may not be available on acceptable terms or available at all.

● Assumptions relating to the size of the market for our products.

● Unanticipated regulations of our products that add barriers to our business and have a negative effect on our operations.

● Our estimates of expenses, future revenue, capital requirements and our needs for, or ability to obtain, additional financing.

● Our status of an early-stage pre-net income company with a business model and marketing strategy still being developed and largely untested.

● Our ability to avoid a significant disruption in our information technology system, including security breaches, or our ability to implement new system and software successfully.

● Our ability to obtain and maintain intellectual property protection for our products.

● The other risks identified in this prospectus including, without limitation, those under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business" as such factors may be updated from time to time in our other filings with the SEC.

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with. Forward-looking statements necessarily involve risks and uncertainties, and our actual results could differ materially from those anticipated in the forward-looking statements due to a number of factors, including those set forth above under "*Risk Factors*" and elsewhere in this prospectus. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this prospectus. Prior to investing in our common stock, you should read this prospectus and the documents we have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we currently expect.

**USE OF PROCEEDS**

The Registered Stockholders may, or may not, elect to sell shares of our common stock covered by this prospectus. To the extent any Registered Stockholder chooses to sell shares of our common stock covered by this prospectus, we will not receive any proceeds from any such sales of our common stock.

**DIVIDEND POLICY**

We have never declared or paid any cash dividends on our capital stock, and we do not anticipate paying any cash dividends in the foreseeable future.

The payment of dividends, if any, in the future is within the discretion of our board of directors and will depend on our earnings, capital requirements and financial condition and other relevant facts. We currently intend to retain all future earnings, if any, to finance the development and growth of our business.

**CAPITALIZATION**

The following table sets forth our cash and capitalization as of March 31, 2026 on an actual basis and on a pro forma basis to give effect to (i) the April 2026 Note Financing entered into on April 24, 2026, and (ii) the May 2026 Note Financing entered into on May 21, 2026, each as described under "Recent Developments" elsewhere in this prospectus. The pro forma adjustments giving effect to the May 2026 Note Financing assume that the registration statement of which this prospectus forms a part has been declared effective and that the May 2026 Note Investors have funded their Subscription Amounts. There can be no assurance that effectiveness will be achieved or that funding will occur. See "Risk Factors."

You should read this table together with "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and our audited financial statements and unaudited interim financial statements and related notes thereto included elsewhere in this prospectus.

The following table sets forth our cash and capitalization as of March 31, 2026:

● on an actual basis;

● on a pro forma basis to give effect to (i) the April 2026 Note Financing entered into on April 24, 2026, and (ii) the May 2026 Note Financing entered into on May 21, 2026, in each case as described under "Recent Developments," treating all notes as incurred debt; and

● on a pro forma as adjusted basis to reflect (1) the pro forma adjustments set forth above and (2) the mandatory conversion of the April 2026 Senior Notes into an aggregate of approximately 1,951,923 shares of common stock upon the closing of this Direct Listing, and the assumed full conversion of the May 2026 Notes into an aggregate of approximately 961,538 shares of common stock, for a combined total of approximately 2,913,461 additional shares of common stock.

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| | | | |
|:---|:---|:---|:---|
|  | **As of March 31, 2026** | **As of March 31, 2026** | **As of March 31, 2026** |
|  | Actual | Pro Forma | Pro Forma As Adjusted |
| Cash | $1414608 | $16564608 | $16564608 |
| Total long-term liabilities | 1452135 | 24759828 | 1452135 |
| Stockholders' Equity: |  |  |  |
| Preferred stock, $0.0001 par value, 1,000,000 authorized, no shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively |  |  |  |
| Common stock, $0.0001 par value, 500,000,000 and 100,000,000 authorized, 45,011,281 and 44,500,111 shares issued and outstanding as of March 31, 2026 and December 31, 2025 respectively | 4500 | 4500 | 4792 |
| Additional paid-in capital | 55987679 | 55987679 | 79384921 |
| Accumulated deficit | (49890077) | (49890077) | (49890077) |
| Total stockholders' equity | 6102102 | 6102102 | 29499636 |
| Total capitalization | $7554237 | $30861930 | $30951771 |

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The number of shares of our common stock outstanding as of March 31, 2026 excludes the following shares, which are not reflected in the table above:

● 16,223,996 shares of common stock issuable upon exercise of outstanding warrants (excluding the April 2026 Note Warrants) with a weighted average exercise price of $1.06 per share;

● 15,113,046 shares of common stock issuable upon exercise of outstanding options with a weighted average exercise price of $1.07 per share;

● 10,000,000 shares of common stock underlying unvested restricted stock units; and 507,500 shares of common stock issuable upon exercise of the April 2026 Note Warrants at an exercise price of $8.00 per share.

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION<br> AND RESULTS OF OPERATIONS**

*You should read the following discussion and analysis of our financial condition and results of operations together with the section titled "Summary of Financial Information" and our audited financial statements and related notes, each included elsewhere in this prospectus. Data as of and for the years ended December 31, 2025 and 2024 have been derived from our audited financial statements appearing at the end of this prospectus. Results for any interim period should not be construed as an inference of what our results would be for any full fiscal year or future period. This discussion and other parts of this prospectus contain forward-looking statements, such as those relating to our plans, objectives, expectations, intentions, and beliefs, which involve risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" included elsewhere in this prospectus.*

**Overview**

The Company was originally formed as a limited liability company named First Breach, LLC under the laws of the State of Maryland on April 9, 2018 and subsequently converted to a corporation named First Breach, Inc. incorporated under the laws of the State of Delaware on October 22, 2021.

The Company is a match-grade ammunition component manufacturer offering brass cups, brass casings, full-metal-jacket projectiles, lead projectile cores, and lead wire. Equipped with numerous quality control checks, the Company offers match-grade, SAAMI-specification products. Customers will have the ability to order custom head-stamped casings as well as a wide range of grain-size options for projectiles.

The Company is dedicated to building upon its industry experience while emphasizing placing integrity first along with competitive pricing, building customer relations, and utilizing quality raw materials.

**Factors and Trends Affecting Our Business and Results of Operations**

The Company's operating results, financial condition, and future growth prospects are influenced by a number of macroeconomic, industry-specific, and geopolitical factors. Management continuously monitors the following trends, each of which may positively or negatively impact the Company's performance:

*Inflation and Cost Pressures in Manufacturing, Talent, and Raw Materials*

The Company continues to experience elevated inflationary pressures affecting manufacturing inputs, labor, and raw materials. Wage inflation, competition for skilled personnel, and rising component and material costs have increased the overall cost structure. These pressures may require the Company to adjust pricing, modify sourcing strategies, or improve operational efficiencies to maintain gross margins.

*Global Supply-Chain Vulnerabilities for Raw Materials*

Worldwide supply-chain disruptions—including transportation delays, constrained logistics capacity, and limited availability of key raw materials—have created volatility in lead times and procurement costs. Unpredictable shortages, reliance on certain international suppliers, and fluctuations in global trade conditions may adversely affect production schedules and inventory management.

 ****

*Domestic Political and Geopolitical Risks Across Jurisdictions*

The Company operates in an environment influenced by evolving domestic regulatory policies, political uncertainty, and geopolitical tensions. Changes in trade restrictions, defense-related policies, foreign investment rules, sanctions, or interstate regulatory frameworks may affect market access, cost structures, or demand for the Company's products.

 ****

*Funding Constraints and Need for Additional Capital*

The Company's growth strategy and operational expansion require continued access to capital. Prevailing market conditions—such as higher interest rates, limited availability of venture or institutional financing, or volatility in the equity markets—may impact the Company's ability to raise funds on acceptable terms or within desired timelines. These constraints may affect investment in production, research and development, or strategic initiatives.

 ****

*Inflationary Cost Uncertainty Affecting Pricing and Margins*

Persistent cost volatility has created uncertainty in forecasting product margins. Rapid or unpredictable changes in input costs may limit the Company's ability to adjust pricing in a timely manner or could require price increases that may not be fully absorbed by customers. Such conditions may negatively affect gross margins, profitability, and operating cash flows.

 ****

*Demand Decline from Potential Political or Economic Factors*

The Company's revenue trajectory is influenced by broader economic conditions and political developments. Economic downturns, shifts in government spending priorities, changes in procurement processes, or reductions in customer budgets may soften demand. Additionally, political instability or regulatory changes in certain jurisdictions may slow customer adoption or delay purchasing cycles.

**Components of Results of Operations**

***Revenue***

The Company derives its revenue primarily from the production and sale of ammunition, which includes shipping income. Revenue is recognized when the Company satisfies its performance obligations to its customers, which generally occurs at a set delivery of the deliverables as specified in its customer contracts, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company reports any tax assessed by a governmental authority that the Company collects from its customers that is both imposed on and concurrent with its revenue-producing activities (such as sales, use, value-added and excise taxes) on a net basis (meaning the Company does not recognize these taxes in either its revenues or its costs and expenses).

***Operating Expenses***

 

*Cost of revenues* includes all finished material, supplies and materials, depreciation of equipment, equipment rental, and freight.

 ****

*Depreciation and amortization expenses* include depreciation of property and equipment and amortization of leasehold improvements. Depreciation and amortization is based on the estimated useful lives of the assets using the straight-line method.

 

*Selling, general and administrative expenses* primarily consist of costs associated with administrative staff salaries, facilities, utilities, insurance, marketing & advertising, stock-based compensation, legal fees and other office expenses related to the Company's business functions.

***Other Expenses, Net***

Other expenses, net consists primarily of interest income, interest expenses, loss on sale of equipment and a loss on the liquidation of raw materials outside the normal course of operations, and other miscellaneous expenses.

 

**Results of Operations**

 

 *<u>Comparison of the Three months Ended March 31, 2026 and 2025</u>*

The following table sets forth our summarized financial information for the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** <br> **March 31,**  | **Three Months Ended** <br> **March 31,**  | | |
|  | **2026** | **2025** |<br> **$ Change** |<br> **% Change** |
| Revenues | $266004 | $15685 | $250319 | 1595.90% |
| Cost of revenues | 629850 | 327496 | 302354 | 92.32% |
| Net loss associated with liquidation of raw materials | - | 386189 | 386189 | (100.00)% |
| Gross margin | (363846) | (698001) | 334155 | 47.87% |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Selling, general and administrative expense | 14085908 | 472582 | 13613326 | 2880.63% |
| Total operating expenses | 14085908 | 472582 | 13613326 | 2880.63% |
| Loss from operations | (14449754) | (1170583) | (13279171) | 11134.41% |
| Other expense, net: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest expense, net | (144356) | (406330) | 261973 | (64.47)% |
| &nbsp;&nbsp;&nbsp; Loss on sale of assets | (39457) |  | (39457) | 100.00% |
| &nbsp;&nbsp;&nbsp; Other income |  | 17000 | (17000) | (100.00)% |
| &nbsp;&nbsp;&nbsp; Other expense | (13388) | (10263) | (3125) | 30.45% |
| Total other expense, net | (197201) | (399592) | 202329 | 50.65% |
| Net loss | $(14646955) | $(1570175) | $(13076780) | 832.82% |

---

 *Revenue*

Revenue increased by $250,319 or 1,595.90% or the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in revenue was primarily attributable to a strategic shift in the Company's core product offerings and the implementation of new inspection equipment during the three months ended March 31, 2026.

 

 *Cost of Revenue*

Cost of revenue increased by $302,354 or 92.32% for the three months ended March 31, 2026, compared to three months ended March 31, 2025, partially attributable with the increase in revenue. In addition, higher fixed manufacturing costs and lower production volumes led to under-absorption of overhead, which negatively affected gross margin.

 *Net Loss associated with Liquidation of Raw Materials*

The net loss associated with liquidation of raw materials for the three months ended March 31, 2026 and 2025 was $0 and $386,189, respectively, attributable to the liquidation of certain raw material inventory outside the normal course of operations to support operating cash flow and working capital management, which resulted in proceeds below the inventory's carrying value. The Company does not anticipate further liquidation of raw materials.

 

 *Operating Expenses*

Selling, general and administrative expenses increased by $13,613,326 or 2,880.63%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The primary increase in selling, general and administrative expenses was primarily attributable to non-cash stock based compensation of $13,002,574, an increase in professional fees associated with the public listing of $317,075 and increase in salary and benefits of $238,084.

 

 *Total Other Expenses, Net*

Total other expenses, net decreased by $202,329 or 50.65%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease in other expenses, net was primarily attributable to decreased interest expense of $261,973.

 

 *Net Loss*

Net loss increased by $13,076,780 or 832.82%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, due to the fluctuations described above under "Revenue," "Operating Expenses," and "Other Expenses, Net."

*<u>Comparison of the Years Ended December 31, 2025 and 2024</u>*

The following table sets forth our summarized financial information for the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** | | |
|  | **2025** | **2024**<br> **(Restated)** |<br>**$ Change** |<br>**% Change** |
| Revenues | $384129 | $773870 | $(389741) | (50.36)% |
| Cost of revenues | 1761368 | 2235004 | (473636) | (21.19)% |
| Net loss associated with liquidation of raw materials | 684960 | 943278 | (258318) | (27.39)% |
| Gross margin | (2062199) | (2404412) | 342213 | 14.23% |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative expense | 7926714 | 2836942 | 5089772 | 179.41% |
| Total operating expenses | 7926714 | 2836942 | 5089772 | 179.41% |
| Loss from operations | (9988913) | (5241354) | (4747559) | 90.58% |
| Other expense, net: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (1866438) | (791730) | (1074708) | 135.74% |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | (2017314) |  | (2017314) | 100.00% |
| &nbsp;&nbsp;&nbsp;Loss on sale of assets | (1906) |  | (1906) | 100.00% |
| &nbsp;&nbsp;&nbsp;Other income | 93500 |  | 93500 | 100.00% |
| &nbsp;&nbsp;&nbsp;Other expense | (41050) | (41050) | - | 0.00% |
| Total other expense, net | (3833208) | (832780) | (3000428) | 360.29% |
| Net loss | $(13822121) | $(6074134) | $(7747987) | 127.56% |

---

*Revenue*

Revenue decreased by $389,741, or 50.36%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease in revenue was primarily attributable to a strategic shift in the Company's core product offerings and the implementation of new inspection equipment during 2025.

 

*Cost of Revenue*

Cost of revenue decreased by $473,636, or 21.19%, for the year ended December 31, 2025, compared to the prior year, partially attributable with the decline in revenue. In addition, higher fixed manufacturing costs and lower production volumes led to under-absorption of overhead, which negatively affected gross margin.

*Net Loss associated with Liquidation of Raw Materials*

The net loss associated with liquidation of raw materials for the year ended December 31, 2025 and 2024 was $684,960 and $943,278, respectively, attributable to the liquidation of certain raw material inventory outside the normal course of operations to support operating cash flow and working capital management, which resulted in proceeds below the inventory's carrying value. The Company does not anticipate further liquidation of raw materials.

*Operating Expenses*

Selling, general and administrative expenses increased by $5,089,772 or 179.41%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The primary increase in selling, general and administrative expenses was primarily attributable to non-cash stock based compensation of $4,581,625, an increase in professional fees associated with the public listing of $430,708 and increase in supplies and materials of $157,042, offset by a reduction in salary and benefits of $154,645.

 

*Total Other Expenses, Net*

Total other expenses, net increased by $3,000,428 or 360.29%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in other expenses, net was primarily attributable to increased interest expense of $1,078,360 and a loss on extinguishment of debt of $2,017,314.

 

*Net Loss*

Net loss increased by $7,747,987 or 127.56%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, due to the fluctuations described above under "Revenue," "Operating Expenses," and "Other Expenses, Net."

**Liquidity and Capital Resources**

*Three months ended March 31, 2026, and 2025:*

 ****

As of March 31, 2026 and 2025, our cash was $1,227,767 and $431,378, respectively. The following table shows a summary of our cash flows for the periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended,** <br> **March 31,**  | **Three Months Ended,** <br> **March 31,**  | | |
|  | **2026** | **2025** |<br> **$ Change** |<br> **% Change** |
| Net cash used in operating activities | $(2015407) | (518118) | $(1497289) | 288.99% |
| Net cash used in investing activities | (149577) | (14181) | (135396) | 954.79% |
| Net cash provided by financing activities | 1102470 | 329401 | 773069 | 234.68% |
| Net decrease in cash | (1062514) | (202898) | (859616) | 423.67% |
| &nbsp;&nbsp;&nbsp; Cash, beginning of period | 2477122 | 434613 | 2042509 | 469.96% |
| &nbsp;&nbsp;&nbsp; Cash, end of period | 1414608 | 231715 | 1182890 | 510.49% |

---

*Operating Activities*

Net cash used in operating activities increased by $1,497,289, or 288.99%, to $2,015,407 for the three months ended March 31, 2026 compared to the net cash used in operating activities of $531,506 for the three months ended March 31, 2025. Cash used in operating activities for the three months ended March 31, 2026 was primarily attributable to a net loss of $14,646,955, an addition of non-cash stock based compensation of $13,002,574 and depreciation adjustment of $335,238, debt discounts of $53,334, and non-cash PIK interest of $15,113. The remaining change was primarily attributed to net negative cash from changes in operating assets and liabilities of $734,299.

Cash used in operating activities for the three months ended March 31, 2025 was primarily attributable to a net loss of $1,570,175 and the addition of non-cash deprecation adjustment of $332,566 and debt discounts of $195,069, and non-cash PIK interest of $62,596. The remaining change was primarily attributed to net positive cash from changes in operating assets and liabilities of $459,738

*Investing Activities*

Net cash used in investing activities decreased by $135,396, or 954.79%, to $149,577 for the three months ended March 31, 2026 compared to $14,181 in net cash used in investing activities for the three months ended March 31, 2025. The net cash used in investing activities for the three months ended March 31, 2026 and 2025 consisted of capital expenditures of $149,577 and $14,181, respectively.

*Financing Activities*

Net cash provided by financing activities increased by $773,069, or 234.68%, to $1,102,470 for the three months ended March 31, 2026 compared to the net cash provided by financing activities of $329,401 for the three months ended March 31, 2025.

The net cash provided by financing activities for the three months ended March 31, 2026 consisted of proceeds from issuance of common stock of $1,342,003, offset by net payments on notes payable of $34,689 and principal payments on the financing leases of $204,844.

The net cash provided by financing activities for the three months ended March 31, 2025 consisted of proceeds from convertible notes of $500,000 offset principal payments on the financing leases of $170,599.

As of March 31, 2026, current assets totaled $2,352,846 and current liabilities totaled $4,091,059 as compared to current assets totaling $3,493,562 and current liabilities totaling $4,631,271 at December 31, 2025. As a result, we had negative working capital of $1,738,213 at March 31, 2026, compared to a negative working capital of $1,137,709 at December 31, 2025. The decrease in the working capital as of March 31, 2026 is primarily attributable to the loss from operations of $1,309,143, exclusive of non-cash stock based compensation of $13,002,574 and depreciation and amortization of $335,238, an increase in the current maturities of convertible notes payable of $220,090, a aggregate decrease in accounts payable, accrued liabilities and accrued expenses, related party of $418,282, partially offset by a reduction of inventory of $93,940 and proceeds form the issuance of stock of $1,342,003.

On April 24, 2026 (the "Original Issuance Date"), the Company entered into a securities purchase agreement with certain related parties, pursuant to which the Company issued senior secured convertible promissory notes in the principal amount of $10,500,000 (the "Notes") plus OID of $5,465,385 and matures twelve (12) months from the Original Issuance Date. The cash proceeds received by the Company were $10,500,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Notes bear interest at a rate of 6% per annum per annum on the original outstanding principal amount.

In connection with the issuance of the Notes, the accredited investors were also issued a total of 282,500 six month warrants to purchase shares of the Company's common stock at an exercise price of $8.00 per share (the "Warrant Shares"). If, while the Warrant Shares are outstanding, the Company issues common stock for consideration per share less than $8.00, the exercise price of the Warrant Shares will be reduced to the latest common stock issuance price.

On May 21, 2026 (the "Original Issuance Date"), the Company entered into a securities purchase agreement with certain related parties, pursuant to which the Company issued senior secured convertible promissory notes in the principal amount of $5,000,000 (the "Notes") plus OID of $2,692,308, and matures twelve (12) months from the Original Issuance Date. The cash proceeds to be received by the Company are $5,000,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Notes do not bear interest.

On May 21, 2026, the company entered into a Equity Line of Credit Agreement (the "ELOC Agreement") with certain accredited investors (the "ELOC Investors"), pursuant to which the Company can issue $50,000,000 in Common Stock. The term of the ELOC Agreement is thirty six (36) months from the date of the agreement. Under the ELOC Agreement, the Company may, at its sole discretion, deliver purchase notices to ELOC Investors directing them to purchase shares of the Company's Common Stock at a purchase price equal to 97% of the volume-weighted average price of the Common Stock during a specified pricing period. In connection with the ELOC Agreement, the Company has paid $25,000 in legal expenses. There are no commitment fees associated with the ELOC Agreement.

We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we anticipate that all available funds and any earnings generated in our business will be used to finance the growth of our business and will not be paid out as dividends to our shareholders. Any future determination related to our dividend policy will be made at the discretion of our Board of Directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our Board of Directors may deem relevant.

Management is exploring new product channel sales in distributors and continuing e-commerce sales of produce for consumers. The Company has increased its focus on sales and developing a sales pipeline for potential customers. This customer base expansion will enable us to provide financial stability for the foreseeable future, expand our current processes, and position us for long-term shareholder value creation. Additionally, the Company continues to evaluate strategic initiatives (e.g., acquisitions) and additional capital raises through debt or equity may be necessary to achieve these objectives. See the "Business" section appearing elsewhere in this prospectus for our joint venture with First Forge Technologies Inc.

The Company's management concluded that its recurring losses from operations and the fact that it has not generated significant revenue or positive cash flows from operations raise substantial doubt about its ability to continue as a going concern for the next 12 months from the date of filing.

The Company expects to continue to generate operating losses and negative cash flow from operations for the foreseeable future. Our ability to continue to operate as a going concern in the long term is dependent upon our ability to manage and grow our current products and to ultimately achieve profitable operations.

Management may consider various options to raise capital to fund potential acquisitions through equity or debt offerings. There can be no assurances, however, that management will be able to obtain sufficient additional funds, if needed, or that such funds, if available, will be obtained on terms satisfactory to us. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should we be unable to continue as a going concern.

Additionally, it is reasonably possible that estimates made in the financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including the recoverability of long-lived assets.

**Critical Accounting Policies and Estimates**

***Equity Classified Warrants***

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, *Distinguishing Liabilities from Equity* ("ASC 480") and ASC 815, *Derivatives and Hedging* ("ASC 815"). The Company's assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance.

**Indebtedness**

The Company did not have any bank debt or revolving credit facilities for any of the periods presented. However, of March 31, 2026, the Company has outstanding convertible promissory notes to investors in private placements and entered into financing lease arrangements.

As of March 31, 2026, the Company had outstanding convertible promissory notes with a gross principal balance of $612,900 and accrued payment-in-kind ("PIK") interest of $46,600, net of original issue discount ("OID") of $36,045 and unamortized debt discount of $83,036, resulting is a total stated balance of $540,420. The notes bear interest at rates of 10% per annum, which accrues as PIK interest, is not payable in cash, and is added to the outstanding principal balance of the notes. The notes have stated maturity dates ranging from November 2026 to June 2027.

The notes are unsecured and, subject to certain conditions, are convertible into shares of the Company's common stock upon the occurrence of a qualified financing or a Liquidity Event, defined as the Company's consummation of a direct listing of its shares on a public marketplace based on a Company valuation of not more than $60.0 million. Upon conversion, the aggregate principal amount, including accrued PIK interest, converts at a price equal to a 15% discount to the price paid by investors.

The notes contain customary events of default, including failure to pay principal or interest when due and certain insolvency events, which could result in acceleration of amounts due.

In addition, the Company has outstanding finance lease arrangements primarily related to equipment. As of March 31, 2026, the Company had outstanding finance lease obligations with an aggregate present value of approximately $1,470,076, with remaining lease term of 1.4 years and a weighted-average interest rate of 22.7%. The finance leases are secured by the underlying leased assets.

**Contractual Obligations and Commitments**

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. The Company is not a party to any litigation or proceeding, including any governmental proceeding, which our management believes could result in any judgments or fines against us that would have a material adverse effect on our financial position, liquidity or results of future operations.

**Off-Balance Sheet Transactions**

We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

**Critical Accounting Policies and Estimates**

Our financial statements and the related notes thereto included in this prospectus are prepared in accordance with United States generally accepted accounting principles. The preparation of financial statements also requires us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. These estimates are developed based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operation, and cash flows will be affected. We believe that the accounting policies described below involve a greater degree of judgment and complexity. Accordingly, these are the estimates we believe are most critical to aid in fully understanding and evaluating our financial condition, results of operations and future performance. We have described our significant accounting policies within Note 2 to our audited financial statements.

 ****

**Stock-Based Compensation**

The Company accounts for stock-based compensation in accordance with ASC 718, *Compensation—Stock Compensation.* The Company measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical information for its stock. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The assumptions used in calculating the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the application of management's judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expenses could be materially different for future awards.

**Emerging Growth Company Accounting Election**

Section 102(b)(1) of the Jumpstart Our Business Startups Act (the "JOBS Act") exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect not to take advantage of the extended transition period and to comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. Following the listing of our common stock on Nasdaq, we expect to be an emerging growth company and will have the benefit of the extended transition period. We intend to take advantage of the benefits of this extended transition period.

**Emerging Growth Company and Smaller Reporting Company Status**

As an "emerging growth company," under the JOBS Act, we are permitted to take advantage of an extended transition period for complying with new or revised accounting standards. We may elect to avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that we either irrevocably elect to opt out of such extended transition period or no longer qualify as an emerging growth company. We may choose to adopt any new or revised accounting standards early whenever such early adoption is permitted for private companies.

Subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company, we choose to rely on available exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), or (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. We will remain an emerging growth company until the earliest to occur of the following: (i) the last day of the fiscal year following the fifth anniversary of the date of its first sale of common equity securities pursuant to an effective registration statement; (ii) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a "large accelerated filer," as defined in Rule 12b-2 under the Exchange Act.

We are also a "smaller reporting company," as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be permitted to do so for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

***Changes in and Disagreements with Accountants on Accounting and Financial Disclosure***

None.

 ****

 **

**Accounting Pronouncements**

 

***Recently Issued and Adopted Pronouncements***

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. We are also a "smaller reporting company," as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be permitted to do so for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter. The amendments also require disclosure of all annual segment profit or loss and asset disclosures in interim periods and provide expanded disclosure requirements for entities with a single reportable segment.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. The Company adopted ASU 2023-07 for its year ended December 31, 2024, in accordance with the required effective date for non-accelerated filers. The adoption did not impact the Company's financial position, results of operations, or cash flows; however, it resulted in enhanced segment disclosures in the notes to the financial statements in accordance with ASC 280, *Segment Reporting*. These enhancements include the identification of significant segment expense categories, disclosure of the measures of segment profit or loss used by the Chief Operating Decision Maker ("CODM"), related reconciliations to the most comparable GAAP measure, and expanded disclosures for entities with a single reportable segment.

In December 2023, the FASB issued ASU 2023-09*, Income Taxes (Topic 740): Improvements to Income Tax Disclosures*. The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as reconciling items that meet a quantitative threshold. Further, the ASU requires additional disclosures on income tax expense and taxes paid, net of refunds received, by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024 on a prospective basis with the option to apply it retrospectively. Early adoption is permitted. The Company adopted ASC 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. For additional information, see Note 19 "Income Taxes" to the financial statements.

***Recently Issued but Not Yet Adopted Accounting Pronouncements***

In November 2024, the FASB issued ASU 2024-03, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures* (Subtopic 220-40): Disaggregation of Income Statement Expenses to expand the disclosure requirements for certain costs and expenses. In January 2025, FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03 as periods beginning after December 15, 2026 for annual reporting, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the potential impact that the adoption of these ASUs will have on its financial statements.

**BUSINESS**

**Executive Summary**

We are an integrated manufacturer of high-quality ammunition and ammunition components, serving commercial, law enforcement, and military markets. With in-house production capabilities, we are able to maintain tight control over our supply chain and quality assurance from raw material processing to final product assembly. We operate in a state-of-the-art facility that includes an on-site lead smelting operation, allowing us to ensure the consistency, purity, and availability of one of the most critical raw materials in ammunition manufacturing, and brass cup and casing manufacturing from raw materials. We maintain relationships with multiple raw materials suppliers worldwide, including but not limited to ABCO Metals, Gemciler Guven Metal, and Mittal Metals, to ensure a consistent inflow in the materials needed to manufacture product and avoid potential global supply issues. Our in-house wearable tooling department further enhances production efficiency and quality by designing and fabricating precision tools tailored to our manufacturing processes. Through stringent quality control, high-tech machinery, and deep industry expertise, we have established a strong reputation among shooting sports enthusiasts, tactical professionals, and OEM clients. We distribute our products primarily through distributor channels, but we also sell smaller quantities of product directly to consumers and small businesses. We take pride in our customer relationships and do not limit ourselves to only a few customers, but we strive to distribute as many of our products as practical to as many customers as possible. In doing so, we have developed a strong customer base with over 140 potential sales channels.

Our vision is to establish ourselves as a leading participant in the United States and international ammunition markets. Through the production of high-quality, competitively priced products, we seek to achieve significant expansion of our market share and operational scale. As one of the few fully vertically integrated manufacturers capable of producing both components and finished cartridges, we maintain and continuously seek to strengthen a distinct competitive advantage supported by ongoing capital investments, strategic acquisitions, and partnerships. The global ammunition industry continues to experience robust demand driven by sustained civilian consumption for personal safety and recreational use, as well as increased defense and law enforcement expenditures amid geopolitical uncertainty. We are well-positioned to capture this growth through continuous process improvements, product line diversification, and the expansion of our distribution network. Concurrently, we intend to enhance our direct-to-consumer channels and brand visibility through targeted marketing, industry events, and strategic media collaborations.

In addition to our core operations, on September 23, 2025, we entered into a strategic joint venture with ideaForge Technology Inc., the world's #3 ranked dual-category drone manufacturer and a recognized innovator in UAS. The joint venture—First Forge Technologies Inc.—will be a U.S.-based enterprise focused on the localized production and sale of advanced drone platforms for defense, homeland security, and commercial applications. Leveraging ideaForge's proprietary avionics and autonomous technologies alongside our precision manufacturing infrastructure and domestic supply chain capabilities, the venture will deliver fully U.S.-compliant, "Made in the USA" aerial systems designed to meet federal and state procurement standards. We anticipate initial production and pilot deployments beginning in early 2026, with the goal of securing government and enterprise contracts simultaneously. This initiative aligns with U.S. policy directives aimed at strengthening domestic manufacturing, enhancing national security, and fostering technological independence, positioning us for meaningful long-term growth across both ammunition and aerospace sectors.

In furtherance of our drone and defense technology strategy, on May 1, 2026, we entered intothe Hellbender MSA for the design, engineering, prototyping and demonstration of volume manufacturing capability for two Class 1 attritable first-person-view drone platforms targeted for deployment consistent with U.S. National Defense Authorization Act requirements and the Department of Defense Drone Dominance Program parameters. See "Recent Developments — Hellbender" below for additional information.

**Corporate Background**

We were originally formed as a limited liability company named First Breach, LLC under the laws of the State of Maryland on April 9, 2018 and subsequently converted to a corporation named First Breach Inc. incorporated under the laws of the State of Delaware on October 22, 2021. We did not begin any operations until 2020. The Company began as a wholesaler of ammunition and tactical equipment for both domestic and foreign consumption. After experiencing significant growth in the wholesale space, we decided to enter the manufacturing space. The Company, in a very short time, built a manufacturing facility where it currently produces components and cartridges of ammunition for both pistol and rifle.

**Vision, Industry, and Market Opportunity**

Our vision is to become a key player in domestic US and international ammunition industry. We plan to significantly expand market share with our high quality products and competitively priced products. We continuously improve production processes to increase output while maintaining quality in efforts to achieve economies of scale and enhance our competitiveness. We plan to continue expanding our product lines and offerings as one of only a few completely vertically integrated manufactures through capital equipment investment, growth through strategic acquisitions, and strategic industry partnerships. There are only a small number of companies in our industry that manufacture and sell both components and finished cartridges. There are very few competitors in our industry and increasing demand for our products. Due to consistent growth in civilian demand, including drivers for personal safety concerns and recreational sport, and military or law enforcement needs as a result of geopolitical tensions and growing expenditures, we are positioned well for continued growth and expansion. We strive to enhance our customers' experience and meeting their growing needs, while consistently building relationships with new distributors, manufacturers, major retailers, and our mass-market audience. We plan to expand our direct to consumer distribution lines and brand recognition through continued media attention, industry events, partnerships, and social media influencers and affiliates.

**Products & Manufacturing**

Our core product lines include centerfire cartridges, bullets, casings, and cups, for pistol and rifle, that provide reliability, accuracy, and performance to the consumer.

The Company is only one of a small number of manufacturers that manufacturers components from raw materials and finished products. We have been successfully operating in a complex and dynamic environment through enhancing existing product lines, improving ammunition performance, optimizing production processes and constantly improving manufacturing efficiency and quality assurance. We have continued to invest in advanced manufacturing techniques, as well as higher levels of automation and quality control in efforts to reduce costs and maintain competitiveness. In addition, we have maintained a diversified supply chain for raw materials and other consumables in order to ensure consistent manufacturing uptime. Our manufacturing emphasizes rigorous standards for safety, reliability, accuracy, and cleanliness. Every cartridge is purpose-built, engineered with careful attention to achieving the ideal balance of uniformity, velocity, consistency, and grouping accuracy. Each component and cartridge undergo a comprehensive, multi-step inspection process to ensure superior quality and performance. We continuously push to strengthen our efficiency and output while maintaining the world-class quality product that we produce.

**Competitive Strengths**

We manufacture high quality products at competitive pricing, giving our customer the best options when sourcing their components or cartridges. The Company holds its product to match-grade quality standards and strives to mitigate any product that doesn't meet specifications. We are focused on integrated production from raw materials which provides better quality assurance and management of productions lines and reduced component sourcing, while being only one of a few companies that produces brass cups from raw brass strip. Our success in part also comes from the extremely high quality customer service that we offer and the effectiveness of management. Manufacturing from raw materials and producing other wear parts for our machines in-house gives us the ability or offer custom labeled or package purchase options to our customers. Our lean and flexible manufacturing strategy allows us to pivot between civilian, military and law enforcement priorities based on market conditions.

**Competition**

There are only a small number of companies that comprise the majority of the ammunition and ammunition component manufacturing industry. Over the past few years, the industry has experienced significant consolidation. Most of these companies are divisions of larger companies or owned by foreign entities. Our focus is on manufacturing high quality and reliable ammunition and components at competitive prices. Our primary competitors include the Winchester Ammunition division of Olin Corporation, Hornady Manufacturing Company, PMC Ammunition, Federal Premium Ammunition, Skydio, BRINC Drones Inc., and Ondas Holdings Inc.

A significant portion of our competition consists of divisions of larger, well-capitalized enterprises that benefit from substantial economies of scale, established supplier relationships, diversified product portfolios, and broader distribution networks. These competitors may be able to achieve lower per-unit production costs, negotiate more favorable pricing for raw materials, and tolerate pricing pressure for extended periods, which can create competitive challenges for smaller manufacturers seeking to offer competitively priced products.

While we may not have the same scale advantages as certain larger competitors, we have structured our operations to compete effectively on price through a high degree of vertical integration, disciplined cost management, and focused capital investment. We manufacture a significant portion of our key components internally, which reduces dependence on third-party suppliers, limits exposure to supplier margin markups, and enhances cost predictability. In addition, we have invested in specialized production equipment, automation, and process optimization initiatives designed to increase throughput, improve yields, and reduce per-unit manufacturing costs as production volumes increase. We make ongoing efforts to secure reliable sources of critical raw materials through negotiated supply arrangements, inventory planning, and operational flexibility, which we believe mitigate input cost volatility and supply disruption risk. We further emphasize operational efficiency, overhead discipline, and continuous process improvement as core elements of our cost structure strategy. While larger competitors may benefit from scale-driven pricing advantages, we believe that our vertically integrated manufacturing model, capital-efficient operating structure, and ability to scale production within existing facilities position us to offer high-quality, reliable ammunition and components at competitive prices while maintaining acceptable margins.

**Challenges**

We face certain industry-related challenges that may influence our operations and financial performance. Scaling production in our industry is capital intensive and requires significant investment in manufacturing equipment, facilities, working capital, and skilled labor. Our ability to expand production capacity and achieve operating efficiencies depends in part on our ability to access additional capital on acceptable terms. The ammunition industry is influenced by the domestic political environment, regulatory developments, and geopolitical tensions relating to firearm policies, which may affect demand for our products either positively or negatively. Changes in laws, regulations, or public sentiment regarding firearms and related products could impact market conditions, customer demand, and our operating environment. In addition, current U.S. policies, including tariffs or trade restrictions, may affect certain imported raw materials and components used in our manufacturing processes, which could increase input costs or disrupt supply chains. Although we seek to mitigate these risks through supply arrangements, inventory planning, and operational flexibility, there can be no assurance that such measures will fully offset cost increases or supply disruptions. We also operate in a competitive environment where larger competitors may have greater financial resources, broader distribution capabilities, and stronger purchasing power, which may create pricing pressure or limit our market share. Our ability to successfully compete depends on maintaining operational efficiency, managing costs, continuing to invest in automation and process improvements, and effectively scaling production while maintaining product quality.

**Research and Development**

We are constantly developing our flexible manufacturing processes to best facilitate all of our customers. We conduct research and execute, when optimal, on enhancing current production lines as well as introducing technological advancements or new equipment to our manufacturing operation. Over some time we have been exploring options for innovative ammunition, such as developing ammunition made out of advanced materials, composites and hybrids. We intend to not only expand our conventional caliber offerings to the market, but to also introduce innovative ammunition options in the future that should be more environmentally-friendly or more optimal to shooters, military operators, and law enforcement.

**Government Regulation**

We adhere to government regulations regarding ammunition manufacturing. We are licensed with the state of Maryland as well as the Bureau of Alcohol, Tobacco, Firearms and Explosive to manufacture ammunition and possess explosive materials on premises. We are subject to International Traffic in Arms Regulations ("ITAR") regulations should we export product outside of the US and would only do so in accordance with ITAR compliance rules.

**Recent Developments**

***First Forge Technologies Inc. – Drone Joint Venture***

*Material Terms of the JV Agreement*

We entered into a joint venture agreement with IdeaForge Technology Inc., ("IdeaForge") on September 23, 2025 (the "IdeaForge JV Agreement"), as amended on March 11, 2026 (the "IdeaForge JV Amending Agreement", together with the IdeaForge JV Agreement, the "JV Agreement"), pursuant to which the parties agreed to form First Forge Technology Inc., a Delaware entity (the "Joint Venture"). The core objective of the Joint Venture is to co-develop and manufacture high-performance drones that are fully compliant with U.S. regulatory and defense standards, as well as the development of new intellectual property and drone technology, while being certified and labeled as "Made in the USA." Pursuant to the JV Agreement, we and IdeaForge are each entitled to 50% of the outstanding equity interests of the Joint Venture, with each party to be issued 5,000 shares for a purchase price of $1.00 upon issuance.

*Obligations of the Joint Venture*

Pursuant to the JV Agreement, we agreed, among other things, to (i) make a total capital contribution to the Joint Venture in such amount as may be required for its operations and as agreed between the parties, which shall include a capital contribution of up to $25,000,000 ("Capital Contribution"), of which a first tranche of $10,000,000 shall be invested on or before December 31, 2026 and applied toward the Capital Contribution, with the remaining balance to be invested on or before December 31, 2027, each of which amounts may be adjusted by mutual agreement of the parties, and which investment may be made through the purchase of Series A Preferred Stock which is non-voting, non-convertible, does not carry dividend or liquidation preference rights and does not otherwise participate in the governance or economic rights in the Joint Venture; (ii) facilitate the provision of a demarcated manufacturing facility for manufacturing services, including through lease assistance; (iii) provide the Joint Venture with such technical know-how, expertise and operational assistance as may be reasonably required in connection with obtaining applicable licenses, permits, approvals and regulatory clearances; and (iv) support the Joint Venture's commercial development efforts by sharing relevant customer contacts in the defense, law enforcement and related sectors globally.

In connection with the JV Agreement, IdeaForge agreed, among other things, to (i) contribute certain technical know-how, experience and expertise necessary for the design, engineering, manufacture, distribution and sale of unmanned aerial vehicles; (ii) transfer to the Joint Venture certain hardware, equipment, components, materials, documentation and other tangible assets necessary for the conduct of the Joint Venture's business; (iii) contribute certain software and related technology required for the Joint Venture's operations; (iv) grant the Joint Venture a non-exclusive, non-transferable and revocable right to access and use certain ground control station software, firmware, subsystems, components and related technology necessary for the operation of unmanned aerial vehicles manufactured by the Joint Venture; and (v) license to the Joint Venture certain intellectual property necessary for the conduct of the Joint Venture's business pursuant to a separate intellectual property licensing agreement.

The Joint Venture is governed by a board of directors (or managers) consisting of four (4) members, of which we have the right to designate two (2) members and IdeaForge has the right to designate two (2) members, with each director entitled to one vote. Except as otherwise provided in the JV Agreement, actions of the board require the approval of a majority of the directors, and certain matters may require approval of the equity holders of the Joint Venture in accordance with the JV Agreement. The JV Agreement also contains provisions relating to licenses and contributions of intellectual property, transfer restrictions, rights of first refusal, tag-along and drag-along rights, deadlock resolution mechanisms, indemnification and limitations of liability. The JV Agreement will remain in effect unless terminated upon the occurrence of specified events, including mutual agreement of the parties, material breach, insolvency or dissolution of the Joint Venture.

The foregoing description of the IdeaForge JV Agreement and the IdeaForge JV Amending Agreement is a summary only, does not purport to be complete, and is qualified in its entirety by reference to the full text of the IdeaForge JV Agreement and the IdeaForge JV Amending Agreement, which is filed as Exhibit 10.3 and Exhibit 10.5 to this registration statement, respectively.

*Objective of the Joint Venture*

 

We expect the Joint Venture to address critical national and state security priorities and provide scalable, reliable aerial platforms for both government and enterprise applications. Our initial focus is the adaptation and localized manufacturing of select drone platforms originally developed by IdeaForge, modified to comply with U.S. defense and commercial aviation standards. Our products are being designed to qualify as "Made in the USA," aligning with federal policy directives that emphasize supply chain security and domestic sourcing for critical technologies. Our roadmap includes a pipeline of UAS platforms tailored for defense, public safety, infrastructure inspection, and precision agriculture, supported by a vertically integrated production model that prioritizes quality, traceability, and long-term sustainability.

We intend to operate as an independent U.S. entity, with research and development, manufacturing, and customer support functions based entirely within the United States. We intend to begin production, pilot deployments and acquire procurement contracts in early 2026, subject to regulatory approvals and successful customer trials. This partnership between us and IdeaForge positions the Joint Venture to become a key player in the rapidly growing North American drone ecosystem, aligning with U.S. initiatives to strengthen domestic technology supply chains and advance sovereign aerospace capabilities. Currently, IdeaForge drones take off for missions at an estimated rate of every 3 minutes worldwide, and IdeaForge was ranked the #3 dual category drone manufacturer and innovator worldwide by the Drone Industry Insights Global Drone Review 2024.

 ***April 2026 Note Financing***

On April 24, 2026, we entered into a note purchase agreement (the "April 2026 Note Purchase Agreement") with certain accredited investors (the "April 2026 Note Investors"), pursuant to which we agreed to sell and issue to the April 2026 Note Investors (i) senior secured convertible promissory notes (the "April 2026 Senior Notes") in an aggregate principal amount of up to approximately $15,615,385 (reflecting aggregate cash proceeds to us of up to $10,150,000 after giving effect to an original issue discount of 35.0%), and (ii) five-year warrants (the "April 2026 Note Warrants") to purchase shares of our common stock (the foregoing transactions, collectively, the "April 2026 Note Financing"). Pursuant to the April 2026 Note Purchase Agreement, we may conduct one or more additional closings for the purchase and sale of additional April 2026 Senior Notes and April 2026 Note Warrants in an aggregate amount sufficient to yield additional cash proceeds to us of up to $5,000,000 (the "Additional Closing Amount"), subject to the mutual written agreement of us and the participating April 2026 Note Investors and the satisfaction of customary closing conditions. The initial closing of the April 2026 Note Financing occurred on April 29, 2026.

The April 2026 Senior Notes bear interest at a rate of 6.0% per annum, payable in cash, and mature twelve (12) months from the date of issuance. The April 2026 Senior Notes are secured by a first-priority lien on substantially all of our assets pursuant to a security agreement entered into between us and the April 2026 Note Investors at the closing of the April 2026 Note Financing (the "April 2026 Security Agreement"). The April 2026 Senior Notes are convertible into shares of Common Stock at the election of the holder at any time at a fixed conversion price of $8.00 per share (the "Conversion Price"), subject to customary adjustments for stock splits, stock dividends and similar events as set forth in the April 2026 Senior Notes. Upon the occurrence of a Liquidity Event (as defined in the April 2026 Senior Notes), the April 2026 Senior Notes will mandatorily convert into shares of Common Stock at the Conversion Price. In connection with the issuance of the April 2026 Senior Notes, we issued to the April 2026 Note Investors April 2026 Note Warrants to purchase an aggregate of 507,500 shares of Common Stock, exercisable at an exercise price of $8.00 per share for a period of five (5) years from the date of issuance, subject to adjustment for certain anti-dilution events, including a full-ratchet anti-dilution provision as set forth in the April 2026 Note Warrants.

The April 2026 Note Purchase Agreement contains customary representations, warranties and covenants of the Company, and grants the April 2026 Note Investors certain rights, including: (i) preemptive rights to participate pro rata in future issuances of New Securities (as defined in the April 2026 Note Purchase Agreement) by the Company; (ii) individual preemptive rights in favor of Specified Holders to maintain their respective percentage ownership of the Company on a fully-diluted, as-converted basis; (iii) the right of Elbert Basolis to be appointed to the Board of Directors of the Company for a term of five (5) years from the date of the initial closing; (iv) the right of Bradford Johnson to attend all meetings of the Board of Directors in a non-voting observer capacity; (v) tag-along rights and drag-along rights in connection with certain sales of Common Stock by stockholders holding at least five percent (5%) of the outstanding Common Stock; (vi) a most favored nations provision entitling the April 2026 Note Investors to receive terms no less favorable than those provided to any subsequent investor in the Company's equity securities; and (vii) an exemption from any lock-up provisions, permitting the April 2026 Note Investors to sell the securities acquired in the April 2026 Note Financing immediately upon listing of the Common Stock on a national securities exchange. We intend to use the net proceeds from the April 2026 Note Financing for general corporate purposes and general working capital requirements, including the payment of transaction-related fees and expenses.

 ***Hellbender's Master Services Agreement***

 

On May 1, 2026, we entered into a Master Services Agreement (the "Hellbender MSA") with Hellbender, Inc., a Pennsylvania benefit corporation ("Hellbender"), pursuant to which Hellbender will provide technology hardware design, engineering, prototyping and manufacturing services to the Company. The Hellbender MSA governs the terms and conditions under which Hellbender will perform services as set forth in one or more statements of work. Concurrently with the execution of the Hellbender MSA, the parties entered into an initial statement of work (the "Initial SOW") for the development of two Class 1 attritable first-person-view drone platforms designed for deployment consistent with U.S. National Defense Authorization Act requirements and the Department of Defense Drone Dominance Program parameters.

Under the Initial SOW, Hellbender will design, engineer, prototype and demonstrate volume manufacturing capability for a Close Quarters Strike drone system and a Long Range Strike drone system, each utilizing common components to maximize parts commonality and enable high-volume production. The Initial SOW contemplates a two-phase development program consisting of (i) concept design and preliminary engineering, including the delivery of proof-of-concept prototype systems, and (ii) iterative engineering, design, prototyping and validation, including the delivery of production-intent prototype systems, manufacturing process analyses and preliminary production cost models. The estimated period of performance under the Initial SOW is approximately eleven months from the effective date thereof.

The total estimated cost of the Initial SOW is approximately $3,000,000 on a time-and-materials basis, inclusive of approximately $898,000 in estimated materials costs. Fees are structured on a retainer-based service model, with monthly draws and unused funds rolling over to subsequent periods. Upon termination, any unused retainer funds will be refunded to us.

Pursuant to the Hellbender MSA, except for open-source components, all intellectual property rights in deliverables produced under the agreement are owned by us. Hellbender has granted us a non-exclusive, worldwide, transferable, sublicensable, fully paid-up, royalty-free and perpetual license to use Hellbender's intellectual property rights in the deliverables to the extent necessary to enable us to make reasonable use of the deliverables and services. In addition, Hellbender has agreed that the overall design and completed drone systems produced under the agreement will remain exclusively our intellectual property and may not be shared with, marketed to or sold to any third party without our prior written consent.

The Hellbender MSA may be terminated by either party upon five days' written notice. The Hellbender MSA contains customary representations, warranties, indemnification obligations, confidentiality provisions and limitations of liability. Hellbender's aggregate liability under the agreement is limited to three times the aggregate amounts paid or payable under the applicable statement of work.

The foregoing description of the Hellbender MSA and the Initial SOW is a summary only, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Hellbender MSA and the Initial SOW, which are filed as Exhibit 10.19 and Exhibit 10.20 to this registration statement, respectively.

 ***May 2026 Note Financing***

  ****

On May 21, 2026, we entered into a securities purchase agreement (the "May 2026 Note Purchase Agreement") with certain accredited investors (the "May 2026 Note Investors"), pursuant to which we agreed to sell and issue to the May 2026 Note Investors secured convertible promissory notes (the "May 2026 Notes") in an aggregate principal amount of approximately $7,692,308 (reflecting aggregate cash proceeds to us of $5,000,000 after giving effect to an original issue discount of 35.0%) (the "May 2026 Note Financing"). The May 2026 Note Purchase Agreement was executed on May 21, 2026. Funding of the May 2026 Notes is conditioned upon the Company's filing of a request for acceleration of effectiveness of the registration statement of which this prospectus forms a part pursuant to Rule 461 under the Securities Act and the approval of our listing application by Nasdaq.

The May 2026 Notes do not bear interest. The May 2026 Notes mature twelve (12) months from the date of issuance. The May 2026 Notes are secured by a security interest in substantially all of our assets pursuant to a security agreement entered into between us and the May 2026 Note Investors (the "May 2026 Security Agreement"), which security interest is subordinate and junior in priority to the security interest held by the April 2026 Note Investors under the April 2026 Security Agreement. The May 2026 Notes are convertible into shares of Common Stock at the election of the holder at any time at a fixed conversion price of $8.00 per share, subject to customary adjustments for stock splits, stock dividends and similar events. No warrants were issued in connection with the May 2026 Note Financing. The May 2026 Notes contain a 4.99% beneficial ownership limitation, which restricts each holder from converting the May 2026 Notes to the extent that such conversion would result in such holder beneficially owning in excess of 4.99% of the outstanding shares of Common Stock. The Company has the option to prepay the May 2026 Notes at any time at the option of the Lead Investors (as defined in the May 2026 Notes), subject to a five Trading Day prior written notice requirement, during which period the holders have the exclusive right to convert all or any portion of the outstanding principal into shares of Common Stock. The shares of Common Stock issuable upon conversion of the May 2026 Notes are being registered for resale under the registration statement of which this prospectus forms a part.

Based on $5,000,000 of aggregate cash proceeds and the 35.0% original issue discount, the aggregate principal amount of the May 2026 Notes is approximately $7,692,308, which, at a conversion price of $8.00 per share, will result in the issuance of approximately 961,538 shares of our Common Stock upon full conversion, representing approximately 2.1% of our currently outstanding shares of Common Stock (based on 45,995,820 shares outstanding as of the date of this prospectus). The May 2026 Note Purchase Agreement contains customary representations, warranties and covenants of the Company, and provides that the Company shall use the net proceeds from the May 2026 Note Financing for general corporate purposes and general working capital requirements, including the payment of transaction-related fees and expenses.

 ***Equity Line of Credit***

  ****

On May 21, 2026, we entered into a share purchase agreement (the "ELOC Agreement") with RK Capital Management LLC, North Commerce Parkway Capital LP, and TQP Holdings LLC (collectively, the "ELOC Investors"), pursuant to which we have the right, but not the obligation, to sell to the ELOC Investors up to $50,000,000 in aggregate gross purchase price of newly issued shares of our Common Stock from time to time during the 36-month period following the effective date of the ELOC Agreement (the "Commitment Period"), subject to the satisfaction of certain conditions set forth therein (the "Equity Line of Credit" or "ELOC"). The ELOC Agreement was entered into concurrently with the May 2026 Note Purchase Agreement.

Under the ELOC Agreement, we may, at our sole discretion, deliver purchase notices to the ELOC Investors directing them to purchase shares of our Common Stock at a purchase price equal to 97% of the volume-weighted average price of our Common Stock during a specified pricing period. The ELOC Investors' obligation to purchase shares is subject to certain conditions, including, among other things, (i) the effectiveness of a registration statement registering the resale of the shares issuable under the ELOC Agreement, (ii) the listing and trading of our Common Stock on the Nasdaq Capital Market, (iii) the accuracy of our representations and warranties, and (iv) compliance with applicable ownership and exchange cap limitations. The shares issuable under the ELOC Agreement are not being registered under the registration statement of which this prospectus forms a part; we intend to file a separate registration statement covering the resale of such shares following the consummation of the Direct Listing.

In connection with the ELOC Agreement, we entered into a registration rights agreement (the "ELOC Registration Rights Agreement") with the ELOC Investors, pursuant to which we agreed to file a registration statement with the SEC covering the resale of (i) the shares issuable under the ELOC Agreement and (ii) the shares of Common Stock issuable upon conversion of the May 2026 Notes, within 10 calendar days following the consummation of the Direct Listing. The ELOC Registration Rights Agreement also provides the ELOC Investors with customary piggy-back registration rights.

**Description of Properties**

Our principal executive office and factory are located at 18450 Showalter Rd, Hagerstown, MD 21742. The facility is approximately 71,500 square feet and the company has the ability to lease an additional approximately 206,000 square feet of contiguous space from the same property owner. First Breach entered into a lease agreement for its current space in 2021 for seven years with two additional five-year options to extend our lease for a total of an additional ten years.

**Employees**

As of May 27, 2026, we had a total number of fourteen (14) employees, among which twelve (12) were full-time employees.

**Legal Proceedings**

From time to time, we are involved in legal proceedings and claims that arise in the ordinary course of business. Based on our current knowledge, we do not believe that any such matters, individually or in the aggregate, will have a material adverse effect on our business, results of operations, or financial condition.

However, the outcome of litigation is inherently uncertain. An unfavorable resolution of one or more proceedings could materially impact our future business, operating results, or financial condition. In addition, regardless of the outcome, litigation may result in significant costs, diversion of management attention, and other adverse effects.

**Corporate Information**

We were originally formed as a limited liability company named First Breach, LLC under the laws of the State of Maryland on April 9, 2018 and subsequently converted to a corporation named First Breach Inc. incorporated under the laws of the State of Delaware on October 22, 2021. Our principal executive office is located at 18450 Showalter Rd., Hagerstown, MD 21742, and our telephone number is (443) 900-9890. Our website is https://firstbreach.com. Information contained on, or available through, our website does not constitute part of, and is not deemed incorporated by reference into, this prospectus, and investors should not rely on such information in deciding whether to purchase shares of our common stock.

**MANAGEMENT**

**Executive Officers and Directors**

The following table sets forth information regarding our executive officers and directors as of the date of this prospectus. Unless otherwise stated, the business address for our executive officers and directors is that of our principal executive office at 18450 Showalter Rd., Hagerstown, MD 21742.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Jeffrey Low | 58 | Chief Executive Officer and Chairman |
| Jordan Low | 30 | President, Chief Operating Officer, and Director |
| Richard Leimbach | 57 | Interim Chief Financial Officer |
| Andrew Pearlman | 59 | Independent Director Nominee |
| Ori Schlank | 32 | Independent Director Nominee |
| Robert Brandt | 85 | Independent Director Nominee |
| David Peterson | 63 | Independent Director Nominee |
| Larry Meyer | 50 | Independent Director Nominee |
| Elbert Basolis | 64 | Independent Director Nominee |
| Denean Williams | 54 | Independent Director Nominee |

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***Jeffrey Low – Chief Executive Officer and Chairman***

Jeffrey Low has served as our Chief Executive Officer and Chairman since inception in April 2018. Mr. Low has over 30 years of experience in owning and operating businesses. Prior to joining the Company, Mr. Low owned and managed numerous outpatient abulatory surgical centers. Mr. Low holds a Master's Degree in Economics from Boston University.

We believe that Mr. Low is well qualified to serve as our Chairman because of his extensive experience in business, management, and key role in establishing and growing the Company.

***Jordan Low – President, Chief Operating Officer, and Director***

Jordan Low has served as our President, Chief Operating Officer and director since inception in April 2018. Mr. Low has overseen the growth and expansion of the Company. Prior to joining the Company, Mr. Low served in the Israeli Defense Forces in the Golani Brigade at the rank of Sergeant First Class and received honors for saving the lives of fellow soldiers during a combat mission in the Gaza Strip. Mr. Low holds a Bachelor's Degree in International Studies and graduated Summa Cum Laude from Georgetown University.

We believe that Mr. Low is well qualified to serve as our director because of his extensive experience in the industry and playing key roles in establishing and growing the Company.

***Richard Leimbach – Interim Chief Financial Officer***

Richard Leimbach has served as our Interim Chief Financial Officer since December 2025, as a consultant, and will serve as our Chief Financial Officer upon the effectiveness of the registration statement of which this prospectus is a part. Mr. Leimbach has overseen the financial reporting and audit process of the Company. Mr. Leimbach has served as the Principal of Carrollton Partners, LLC since 2012 as an outsourced consultant to public and private companies. Prior to Carrollton Partners, Mr. Leimbach was the Chief Financial Officer for Game Trading Technologies, Inc. and Telkonet, Inc. and the Manager of Corporate accounting for Snyder Communications, Inc. Mr. Leimbach also spent approximately seven years in public accounting at Reznick, Fedder and Silverman, and Wolpoff & Co. LLP. Mr. Leimbach is a Certified Public Accountant and graduate of Towson State University as well as a member of the Maryland Association of Certified Public Accountants.

***Andrew Pearlman – Independent Director Nominee***

Andrew Pearlman will serve as our director upon the effectiveness of the registration statement of which this prospectus is a part. Mr. Pearlman has over 30 years of experience in automation & IT support, as well as project management and analysis. Prior to joining the Company, Mr. Pearlman manages a private consulting firm for custom business systems integration since June 2011 and owned and operated an e-commerce distribution platform from April 2000 to April 2011. Mr. Pearlman holds a Master's Degree in Economics from Boston University.

We believe that Mr. Pearlman is well qualified to serve as our director because of his extensive experience in building and maintaining business infrastructure and his background in automation and technology.

***Ori Schlank – Independent Director Nominee***

Ori Schlank will serve as our director upon the effectiveness of the registration statement of which this prospectus is a part. Mr. Schlank has over 9 years of experience in Israeli government, internal auditing and business procedure oversight. Prior to joining the Company, Mr. Schlank held positions, including Chief Information Officer at Ben Dor & Co. from 2023 to 2025 and Internal Auditor at Alkalay & Co. from 2021 to 2022. Mr. Schlank has also served as an Administrative Aide in the Israeli Knesset (Parliament) from 2016 to 2018 and had been a Project Manager in the Israeli Ministry of Economy from 2019 to 2021. Mr. Schlank holds a Master of Business Administration degree from The Open University of Israel and a Bachelor's degree in Political Science from The Hebrew University of Jerusalem.

We believe that Mr. Schlank is well qualified to serve as our director because of his extensive experience in internal auditing and planning and his background in business administration.

***Robert Brandt – Independent Director Nominee***

Robert Brandt will serve as our director upon the effectiveness of the registration statement of which this prospectus is a part. Mr. Brandt has over 70 years of experience in business strategy and operations. Prior to joining the Company, Mr. Brandt built, owned and operated Yorkshire Carpet House, Inc., serving commercial, governmental, and residential flooring projects from 1952 to present. Mr. Brandt has also served as a director of the Four Seasons Association, Inc. for real estate governance and planning from 2011 to present. Mr. Brandt holds a Bachelor's Degree in Business Management from the University of Baltimore.

We believe that Mr. Brandt is well qualified to serve as our director because of his extensive experience in business strategy and operation and his background in government contracting.

***David Peterson – Independent Director Nominee***

David Peterson will serve as our director upon the effectiveness of the registration statement of which this prospectus is a part. Mr. Peterson has over 35 years of experience in information technology and strategic planning. Prior to joining the Company, Mr. Peterson held positions, including Senior Vice President and Chief Information Officer at VHC Health from January 2025 to present and Vice President and Chief Technology Officer at Inova Health Systems from 2020 to 2024. Mr. Peterson has also served as a director of Maryland Society of Healthcare Information Systems since 2003. Mr. Peterson holds a Master of Business Administration degree from City University and a Bachelor's Degree in Aeronautics from Embry-Riddle Aeronautical University.

We believe that Mr. Peterson is well qualified to serve as our director because of his extensive experience in strategic planning and organizational stability and his background in information technology security.

***Larry Meyer – Independent Director Nominee***

Larry Meyer will serve as our director upon the effectiveness of the registration statement of which this prospectus is a part. Mr. Meyer has over 25 years of experience in business management, planning and budgeting. Prior to joining the Company, Mr. Meyer held positions, including President at Red Tree Appraisals from 2013 to present and President at LM Appraisals from 1993 to 2013. Mr. Meyer holds a Bachelors degree from Towson University.

We believe that Mr. Meyer is well qualified to serve as our director because of his extensive experience in business management and his background in planning and budgeting.

***Elbert Basolis – Independent Director Nominee***

Elbert Basolis will serve as our director upon the effectiveness of the registration statement of which this prospectus is a part. Mr. Basolis has over 30 years of experience in corporate governance, strategic growth, operational leadership, and private equity. Prior to joining the Company, Mr. Basolis held positions, including CEO & Chairman at Garrison Enterprise Inc. and Director of Strategic Growth at Colt Group. Mr. Basolis has also served as a Board Director of Elauwit Connection, Inc. (NASDAQ:ELWT), and had been Board Director of First Bank of NJ (NASDAQ:FRBA). Mr. Basolis holds a Bachelors degree in Water & Waste Water Public Systems from Glassboro State College.

We believe that Mr. Basolis is well qualified to serve as our director because of his background in strategic organization, public & private board governance, and private equity.

***Denean Williams – Independent Director Nominee***

Denean Williams will serve as our director upon the effectiveness of the registration statement of which this prospectus is a part Mr. Williams has over 30 years of experience in financial management, accounting, investor relations, federal government contracting, and revenue building. Prior to joining the Company, Mr. Williams held positions, including CEO at GW Tax and Accounting LLC, Owner and Director at Full Circle Group, and CEO at 4Alphas Capital Management. Mr. Williams has also served as a Board Director of ICMA Retirement Corporation, Board Member at Bryn Mawr Trust Company (NYSE: BMTC),and had been Board Director of Egan-Jones Rating Company. Mr. Williams holds a Masters in Business Administration from Harvard University, a Masters of Science in Engineering Sciences from Purdue University, and a Bachelor of Science in Mechanical Engineering from Pennsylvania State University, State College. We believe that Mr. Williams is well qualified to serve as our director because of his extensive experience in financial management, investor relations, and federal contracting, and his background in accounting, public & private board governance, and business leadership.

We believe that Mr. Williams is well qualified to serve as our director because of his extensive experience in financial management and his background in accounting, investor relations, and federal government contracting.

**Family Relationships**

There are no family relationships between or among any of the current directors, executive officers or persons nominated or charged to become directors or executive officers, except that Jeffrey Low, our Chief Executive Officer and Chairman, is the father of Jordan Low, our President, Chief Operating Officer, and Director, and that Robert Brandt and David Peterson, the director nominees, are father-in-law and son-in-law, respectively.

**Number and Terms of Office of Officers and Directors**

Our business and affairs are organized under the direction of our board of directors. Upon the effectiveness of the registration statement of which this prospectus is a part, our board of directors will consist of nine (9) directors, including two (2) executive directors and seven (7) independent directors. Our bylaws provide that the number of directors will be fixed exclusively by the board of directors and that the directors need not be shareholders.

Our officers are appointed by the board of directors and shall hold office at the discretion of the board of directors until their successors are duly appointed and qualified, until the expiration of their term in office if appointed for a specified period of time, or until their earlier death, resignation or removal. Our board of directors is authorized to appoint officers to the offices set forth in our bylaws.

**Director Independence**

The Nasdaq listing standards require that a majority of our board of directors be independent. An "independent director" is defined generally as a person who has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with our company). Upon the effectiveness of the registration statement of which this prospectus is a part, we will have seven (7) "independent directors" as defined in the Nasdaq listing standards and applicable SEC rules.

Our board of directors has determined that Andrew Pearlman, Ori Schlank, Robert Brandt, David Peterson, Larry Meyer, Elbert Basolis, and Denean Williams would be independent directors under applicable Nasdaq and SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

**Board Committees**

Prior to the listing of our common stock on Nasdaq, our board of directors will establish an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Our board of directors will adopt a charter for each of these three committees. Copies of each committee's charter will be posted on the [Investor Relations] section of our website, https://firstbreach.com. Each of the committees of our board of directors shall have the composition and responsibilities described below. Our board of directors may from time to time establish other committees as it deems appropriate.

*Audit Committee*

 

Upon the effectiveness of the registration statement of which this prospectus is a part, Ori Schlank, Denean Williams, Elbert Basolis, and Robert Brandt will serve as members of our Audit Committee with Ori Schlank serving as the chairman of the Audit Committee. Each of our Audit Committee members satisfies the "independence" requirements of the Nasdaq listing rules and meets the independence standards under Rule 10A-3 under the Exchange Act. Our board of directors has determined that Ori Schlank possesses accounting or related financial management experience that qualifies him as an "audit committee financial expert" as defined by the rules and regulations of the SEC. Our Audit Committee oversees our accounting and financial reporting processes and the audits of our financial statements. Our Audit Committee performs several functions, including:

● evaluating the performance, independence and qualifications of our independent registered public accounting firm and determining whether to retain our existing independent registered public accounting firm or engage new independent registered public accounting firm;

● reviewing and approving the engagement of our independent registered public accounting firm to perform audit services and any permissible non-audit services;

● reviewing our annual and quarterly financial statements and reports, including the disclosures contained under the caption "*Management's Discussion and Analysis of Financial Condition and Results of Operations*," and discussing the statements and reports with our independent registered public accounting firm and management;

● reviewing with our independent registered public accounting firm and management significant issues that arise regarding accounting principles and financial statement presentation and matters concerning the scope, adequacy and effectiveness of our financial controls;

● reviewing our major financial risk exposures, including the guidelines and policies to govern the process by which risk assessment and risk management are implemented; and

● reviewing and evaluating on an annual basis the performance of the audit committee, including compliance of the audit committee with its charter.

*Compensation Committee*

 

Upon the effectiveness of the registration statement of which this prospectus is a part, Andrew Pearlman, Larry Meyer and Elbert Basolis will serve as members of our Compensation Committee with Andrew Pearlman serving as the chairman of the Compensation Committee. All of our Compensation Committee members satisfy the "independence" requirements of the Nasdaq listing rules and meet the independence standards under Rule 10A-3 under the Exchange Act. The functions of this committee include, among other things:

● reviewing, modifying and approving (or if it deems appropriate, making recommendations to the full board of directors regarding) our overall compensation strategy and policies;

● reviewing and approving the compensation, the performance goals and objectives relevant to the compensation, and other terms of employment of our executive officers;

● reviewing and approving (or if it deems appropriate, making recommendations to the full board of directors regarding) the equity incentive plans, compensation plans and similar programs advisable for us, as well as modifying, amending or terminating existing plans and programs;

● reviewing and approving the terms of any employment agreements, severance arrangements, change in control protections and any other compensatory arrangements for our executive officers;

● reviewing with management and approving our disclosures under the caption "*Compensation Discussion and Analysis*" in our periodic reports or proxy statements to be filed with the SEC; and

● preparing the report that the SEC requires in our annual proxy statement.

*Nominating and Corporate Governance Committee*

 

Upon the effectiveness of the registration statement of which this prospectus is a part, Elbert Basolis, Andrew Pearlman and David Peterson will serve as members of our Nominating and Corporate Governance Committee with Elbert Basolis serving as the chairman of the Nominating and Corporate Governance Committee. All of our Nominating and Corporate Governance Committee members satisfy the "independence" requirements of the Nasdaq listing rules and meet the independence standards under Rule 10A-3 under the Exchange Act. The functions of this committee include, among other things:

● identifying, reviewing and evaluating candidates to serve on our board of directors consistently with criteria approved by our board of directors;

● evaluating director performance on the board and applicable committees of the board and determining whether continued service on our board of directors is appropriate;

● evaluating, nominating and recommending individuals for membership on our board of directors; and

● evaluating nominations by stockholders of candidates for election to our board of directors.

The nominating and corporate governance committee takes into account many factors in determining recommendations for persons to serve on the board of directors, including the following:

● personal and professional integrity, ethics and values;

● experience in corporate management, such as serving as an officer or former officer of a publicly-held company;

● experience as a board member or executive officer of another publicly-held company;

● strong finance experience;

● diversity of expertise and experience in substantive matters pertaining to our business relative to other board members;

● diversity of background and perspective including, without limitation, with respect to age, gender, race, place of residence and specialized experience;

● experience relevant to our business industry and with relevant social policy concerns; and

● relevant academic expertise or other proficiency in an area of our business operations.

**Role of Board in Risk Oversight Process**

Our Chief Executive Officer and Chairman position is held by Jeffrey Low, who beneficially owns approximately 34.37% of the voting power of our common stock on a fully diluted basis as of the date of this prospectus. Periodically, our board of directors assesses this role and the board of directors leadership structure to ensure the interests of our company and our stockholders are best served. Our board of directors has determined that its current leadership structure is appropriate. Jeffrey Low, our Chief Executive Officer and Chairman, and Jordan Low, our President, Chief Operating Officer, and Director, have extensive knowledge of all aspects of our company, our business and risks.

While management is responsible for assessing and managing risks to our company, our board of directors is responsible for overseeing management's efforts to assess and manage risk. This oversight will be conducted primarily by our full board of directors, which has responsibility for general oversight of risks, and standing committees of our board of directors. Our board of directors will satisfy this responsibility through full reports by each committee chair regarding the committee's considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within our company. Our board of directors believes that full and open communications between management and the board of directors are essential for effective risk management and oversight.

**Compensation Committee Interlocks and Insider Participation**

None of our executive officers serves, or in the past has served, as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity that has one or more executive officers who serve as members of our board of directors or our compensation committee. None of the members of our compensation committee will be, or will have ever been, an officer or employee of our company.

**Code of Business Conduct and Ethics**

Prior to the listing of our common stock on Nasdaq, we will adopt a written code of business conduct and ethics that applies to our employees, officers, and directors. A current copy of the code will be posted on the [Corporate Governance] section of our website, https://firstbreach.com. We intend to disclose future amendments to certain provisions of our code of business conduct and ethics, or waivers of such provisions applicable to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and our directors, on our website identified above or in filings with the SEC.

**Involvement in Certain Legal Proceedings**

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

● been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

● had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

● been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, by any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

● been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

● been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

● been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

From time to time, we may be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our company's resources, including our company's management's time and attention.

**EXECUTIVE AND DIRECTOR COMPENSATION**

The following table sets forth the aggregate compensation awarded to, earned by, or paid to our named executive officers for the fiscal years ended December 31, 2025 and 2024. Individuals we refer to as our "named executive officers" include our Chief Executive Officer and any other highly compensated executive officers whose salary and bonus for services rendered in all capacities equaled or exceeded $100,000 during the fiscal years ended December 31, 2025 and 2024.

**Summary Compensation Table**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary<br> ($)** | **Bonus<br> ($)** | **Option<br> Awards<br> ($)<sup>(1)</sup>** | **Non-Equity<br> Incentive Plan<br> Compensation<br> ($)** | **Nonqualified<br> Deferred<br> Compensation<br> Earnings<br> ($)** | **All Other<br> Compensation<br> ($)** | **Total<br> ($)** |
| Jeffrey Low | 2025 | 343467 | 100000 | 2021265 | – |  | – | 2464732 |
| Chief Executive Officer and Chairman | 2024 | 132600 |  |  | – |  | – | 132600 |
| Jordan Low | 2025 | 294200 | 70000 | 2021265 | – |  | – | 2385465 |
| President, Chief Operating Officer, and Director | 2024 | 84600 |  |  | – |  | – | 84600 |

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(1) Amounts reported represent (i) the grant date fair value of option awards granted to our named executive officers in the applicable year as computed in accordance with FASB Accounting Standards Codification Topic 718 ("ASC 718"), rather than amounts paid to or realized by the individual. The assumptions used in calculating the grant date fair value of the awards are described in Note 14—Stock-Based Compensation to our financial statements included in this prospectus.

**Employment Arrangements with our Executive Officers and Directors**

*Jeffrey Low*

In October 2021, we entered into an employment agreement with Jeffrey Low (the "2021 Jeffrey Low Employment Agreement") in connection with his appointment as our Chief Executive Officer. The material terms of the Jeffrey Low Employment Agreement are as follows: (i) an annual base salary of $400,000; (ii) eligibility for our incentive and deferred compensation programs available to other executives or officers of the Company; and (iii) eligibility to participate in our employee benefit plans, policies, programs, or perquisites in which other executive or officers of the Company participate. Effective January 1, 2026, the 2021 Jeffrey Low Employment Agreement was terminated and we entered into a new employment agreement with Jeffrey Low on substantially identical terms effective January 1, 2026 (the "2026 Jeffrey Low Employment Agreement") as the 2021 Jeffrey Low Employment Agreement.

*Jordan Low*

In October 2021, we entered into an employment agreement with Jordan Low (the "Jordan Low Employment Agreement") in connection with his appointment as our President and Chief Operating Officer. The material terms of the Jordan Low Employment Agreement are as follows: (i) an annual base salary of $300,000; (ii) eligibility for our incentive and deferred compensation programs available to other executives or officers of the Company; and (iii) eligibility to participate in our employee benefit plans, policies, programs, or perquisites in which other executive or officers of the Company participate. Effective January 1, 2026, the 2021 Jordan Low Employment Agreement was terminated and we entered into a new employment agreement with Jordan Low on substantially identical terms effective January 1, 2026 (the "2026 Jordan Low Employment Agreement") as the 2021 Jordan Low Employment Agreement.

The above descriptions of the 2026 Jeffrey Low Employment Agreement and 2026 Jordan Low Employment Agreement do not purport to be complete and are subject to and qualified in their entirety by reference to the Jeffrey Low Employment Agreement and Jordan Low Employment Agreement, forms of which are included as Exhibit 10.1 and Exhibit 10.2, respectively, to the registration statement of which this prospectus forms a part.

**Compensation of Directors**

In January 2026, we entered into a director agreement with each of our seven independent directors pursuant to which they would serve on our board of directors upon the effectiveness of the registration statement of which this prospectus is a part, would be annually compensated $20,000 in cash and 50,000 stock options, and would be reimbursed for out-of-pocket expenses incurred by the directors in connection with their services as directors.

As of the date of this prospectus, no director received and/or accrued any cash compensation for their services as a director.

**Stock Equity Incentive Plan** 

On January 28, 2026, the board of directors adopted the stock equity incentive plan (the "Plan"). Below is a summary of the Plan, which is qualified in its entirety by the full text of the Plan, attached hereto as Exhibit 10.6 to the registration statement on Form S-1 of which this prospectus is a part, incorporated herein by reference.

***Overview and Purpose***

The purpose of the Plan is to attract, retain and provide incentives to key management employees and non-employee directors of, and non-employee consultants to, the Company and its Affiliates, and to align the interests of such employees, non-employee directors and non-employee consultants with those of the Company's shareholders. Accordingly, the Plan provides for the granting of distribution equivalent rights, incentive stock options, non-qualified stock options, performance unit awards, restricted stock awards, restricted stock unit awards, stock appreciation rights, tandem stock appreciation rights, unrestricted stock awards or any combination of the foregoing, as may be best suited to the circumstances of the particular employee, director or consultant as provided in the Plan.

***Material Terms of the Stock Incentive Plan***

The maximum aggregate number of shares that shall be available and may be issued pursuant to awards granted under the Plan shall be, a total of 12,000,000 shares of common stock, all of which may be granted as incentive stock options. During the terms of the awards, the Company shall keep available at all times the number of shares of common stock required to satisfy such awards. Shares of common stock shall be deemed to have been issued under the Plan solely to the extent actually issued and delivered pursuant to an award.

*Administration of the Plan*

 

The Plan designates the committee as the initial Plan administrator, if no such committee is appointed, the Board will be the Plan administrator.

The Plan administrator determines which directors, officers, consultants and employees are eligible to receive awards under the Plan, the time or times at which awards may be granted, the conditions under which awards may be granted or forfeited to the Company, the number of shares to be covered by any award, the exercise price of any award, whether restrictions or limitations are to be imposed on the shares issuable pursuant to grants of any award, and the nature of any such restrictions or limitations, any acceleration of exercisability or vesting, or waiver of termination regarding any award, based on such factors as the Plan administrator may determine.

*Eligibility*

All directors, employees and consultants are eligible to participate in the Plan. The extent to which any such individual is entitled to receive a grant of an award pursuant to the Plan will be determined in the sole and absolute discretion of the Plan administrator.

*Types of Awards*

An award may be granted on more than one occasion to the same employee, director or consultant, and, subject to the limitations set forth in the Plan, such award may include a non-qualified stock option, a restricted stock award, a restricted stock unit award, an unrestricted stock award, a performance unit award, a stock appreciation right, a tandem stock appreciation right, any combination thereof or, solely for employees, an incentive stock option.

*<u>Options</u>*

 

An option entitles a holder thereof to purchase a prescribed number of shares at an exercise price set at the time of the grant. The Plan administrator will establish the exercise price at the time each option is granted. To the extent that the aggregate fair market value (determined as of the grant date of the respective incentive stock option) of shares of common stock with respect to which incentive stock options are exercisable for the first time by an individual during any calendar year under all plans of the company and any "parent corporation" or "subsidiary corporation" thereof exceeds $100,000 (or such other individual limit as may be in effect on the grant date), the portion of such incentive stock options that exceeds such threshold shall be treated as a non-qualified stock option. incentive stock options shall be granted to employees only. No incentive stock option shall be granted more than 10 years from the earlier of (x) the date on which the Plan is adopted by the Board, or (y) the date on which the Plan is approved by the Company's shareholders.

*<u>Restricted Stock Awards</u>*

Shares of Common Stock awarded pursuant to a restricted stock award shall be recorded in the company's books and records in the name of the participant of such restricted stock award. if provided for under the award agreement for the restricted stock award, the participant shall have the right to vote shares of common stock subject thereto and to enjoy all other shareholder rights, including the entitlement to receive dividends on the shares of common stock during the restriction period, except that (i) the participant shall not be entitled to delivery of a share certificate (if any) until the restriction period shall have expired, (ii) the company shall retain custody of such share certificate (if any) during the restriction period (with a share power endorsed by the participant in blank), (iii) the participant may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the shares of common stock during the restriction period, and (iv) a breach of the terms and conditions established by the committee pursuant to the award agreement for the restricted stock award shall cause a forfeiture of the restricted stock award. At the time of such award, the committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to restricted stock award, including, but not limited to, rules pertaining to the effect of termination of employment, director status or consultant status prior to expiration of the restriction period. Such additional terms, conditions or restrictions shall be set forth in an award agreement for the restricted stock award made in conjunction with the award. Such award agreement for the restricted stock award may also include provisions relating to (x) subject to the provisions hereof, accelerated vesting of awards, including, but not limited to, accelerated vesting upon the occurrence of a change in control, (y) tax matters (including provisions covering any applicable withholding requirements), and (z) any other matters not inconsistent with the terms and provisions of the plan that the committee shall, in its sole discretion, determine. The terms and conditions of the respective award agreements for restricted stock awards need not be identical.

*<u>Restricted Stock Units</u>*

A RSU is a unit equivalent in value to a share credited by means of a bookkeeping entry in the books of the Company which entitles the holder to receive one share of common stock (or the value thereof) for each RSU after a specified vesting period. The Plan administrator may, from time to time, subject to the provisions of the Plan and such other terms and conditions as the Plan administrator may prescribe, grant RSUs to any participant in respect of a bonus or similar payment in respect of services rendered by the applicable participant in a taxation year. The plan administrator shall have the authority to determine the settlement and any vesting terms applicable to the grant of RSUs, provided that the terms applicable to RSUs granted to U.S. taxpayers comply with Section 409A of the Internal Revenue Code of 1986 (the "Code"), to the extent applicable. Upon settlement, holders will redeem each vested RSU for one fully paid and non-assessable share of common stock in respect of each vested RSU.

Holders of a restricted stock unit Award shall be entitled to receive either a cash payment equal to the Fair Market Value of one share of Common Stock or one share of Common Stock, as determined in the sole discretion of the Committee and as set forth in the Award Agreement for the Restricted Stock Unit Award, for each Restricted Stock Unit subject to such Restricted Stock Unit Award, if the Participant satisfies the applicable vesting requirement.

*Performance Unit Awards*

 

The Plan administrator sets forth in the applicable award agreement for a Performance Unit Award, the performance goals and the performance period to which such performance goals shall apply which the participant and/or the Company would be required to satisfy before the participant would become entitled to payment, the number of units awarded to the participant and the dollar value assigned to each such unit. At the time of such award, the Plan administrator may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Performance Unit Awards, including, but not limited to, rules pertaining to the effect of termination of employment, Director status or consultant status prior to expiration of the applicable performance period.

*Stock Appreciation Rights*

 

The Plan administrator sets forth in the applicable award agreement for a stock appreciation right award the terms and conditions of the stock appreciation right, including (i) the base value for the stock appreciation right, which for purposes of a stock appreciation right which is not a tandem stock appreciation right, shall be not less than the fair market value of a share of common stock on the grant date of the stock appreciation right (unless granted in substitution for an appreciation right previously granted by an entity that is acquired by or merged with the company or an affiliate), (ii) the number of shares of common stock subject to the stock appreciation right, (iii) the period during which the stock appreciation right may be exercised; provided, however, that no stock appreciation right shall be exercisable after the expiration of 10 years from the grant date, and (iv) any other special rules and/or requirements which the committee imposes upon the stock appreciation right. upon the exercise of all or a portion of a stock appreciation right, the participant shall receive a payment from the company, either in cash or in the form of shares of common stock having an equivalent fair market value or in a combination of both, as determined, in the sole discretion of the committee, equal to the product of: (a) the excess of (i) the fair market value of a share of common stock on the date of exercise, over (ii) the base value, multiplied by; (b) the number of shares of common stock with respect to which the stock appreciation right is exercised.

*Tandem Stock Appreciation Rights.*

 

If the Plan administrator grants a stock appreciation right which is intended to be a tandem stock appreciation right, the tandem stock appreciation right shall be granted at the same time as the related option, and the following special rules shall apply: (a) the base value shall be equal to or greater than the exercise price under the related option; (b) the tandem stock appreciation right may be exercised for all or part of the shares of common stock which are subject to the related option, but solely upon the surrender by the participant of the participant's right to exercise the equivalent portion of the related option (and when a share of common stock is purchased under the related option, an equivalent portion of the related tandem stock appreciation right shall be cancelled); (c) the tandem stock appreciation right shall expire no later than the date of the expiration of the related option; (d) the value of the payment with respect to the tandem stock appreciation right may be no more than 100% of the difference between the exercise price under the related option and the fair market value of a share of common stock subject to the related option at the time the tandem stock appreciation right is exercised, multiplied by the number of shares of common stock with respect to which the tandem stock appreciation right is exercised; and (e) the tandem stock appreciation right may be exercised only when the fair market value of a share of common stock subject to the related option exceeds the exercise price under the related option.

*Termination of Plan*

 

The Plan shall continue in effect, unless sooner terminated, until the 10th anniversary of the earlier of the date on which it is adopted by the Board or the date on which it is approved by the shareholders of the Company (in either case, except as to awards outstanding on such date). The Board, in its discretion, may terminate the Plan at any time with respect to any shares of common stock for which awards have not theretofore been granted; provided, however, that the plan's termination shall not materially and adversely impair the rights of a participant with respect to any award theretofore granted without the written consent of the participant.

*Adjustments Upon Changes in Common Stock*

In the event of changes in the outstanding common stock or in the capital structure of the company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the grant date of any award, awards granted under the Plan and any award agreements, the exercise price of options, the base value of stock appreciation rights, and the maximum number of shares of common stock will be equitably adjusted or substituted, as to the number, price or kind of a share of common stock or other consideration subject to such awards to the extent necessary to preserve the economic intent of such award. in the case of adjustments unless the committee specifically determines that such adjustment is in the best interests of the company or its affiliates, the committee shall, in the case of incentive stock options, ensure that any adjustments will not constitute a modification, extension or renewal of the incentive stock options within the meaning of Section 424(h)(3) of the Code and in the case of Non-Qualified Stock Options, ensure that any adjustments will not constitute a modification of such Non-Qualified Stock Options within the meaning of Section 409A of the Code.

*Effect Of a Change in Control*

 

In the event of a Change in Control, the Plan administrator may, but shall not be obligated to (i) accelerate, vest or cause the restrictions to lapse with respect to all or any portion of any award, (ii) cancel awards and cause to be paid to the holders of vested awards the value of such awards, if any, as determined by the committee, in its sole discretion, it being understood that in the case of any option with an exercise price that equals or exceeds the price paid for a share of common stock in connection with the change in control or any stock appreciation right with a base value that equals or exceeds the price paid for a share of common stock in connection with the change in control, the committee may cancel the option or stock appreciation right, as applicable, without the payment of consideration therefor, (iii) provide for the issuance of substitute awards or the assumption or replacement of such awards, or (iv) provide written notice to participants that for a reasonable period prior to the change in control, such awards shall be exercisable, to the extent applicable, as to all shares of common stock subject thereto and upon the occurrence of the change in control, any awards not so exercised shall terminate and be of no further force and effect. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its affiliates, taken as a whole.

*Restrictions on Transfer*

 

No Award under the Plan or any award agreement and no rights or interests therein, shall or may be assigned, transferred, sold, exchanged, encumbered, pledged or otherwise hypothecated or disposed of by a participant except (i) by will or by the laws of descent and distribution, or (ii) except for an incentive stock option, in the sole discretion of the Plan administrator, by gift to any family member of the participant. An award may be exercisable during the lifetime of the participant only by such participant or by the participant's guardian or legal representative unless it has been transferred by gift to a family member of the participant, in which case it shall be exercisable solely by such transferee. Notwithstanding any such transfer, the participant shall continue to be subject to the tax withholding obligations set forth in the award agreement.

The Plan and the awards granted under the Plan are intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan and award agreements shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the "short-term deferral period" as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. Notwithstanding anything to the contrary in the Plan or any award agreement, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six-month period immediately following the "separation from service" (within the meaning of Section 409A of the Code) of a Participant who is a "specified employee" (within the meaning of Section 409A of the Code) shall instead be paid on the first payroll date after the six-month anniversary of such Participant's separation from service (or such Participant's death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant under Section 409A of the Code, and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.

**Outstanding Equity Awards at Fiscal Year-End**

The following table provides information regarding outstanding options to acquire our common stock held by each of the named executive officers as of December 31, 2025, including the vesting dates for the portions of these awards that had not vested as of that date. The named executive officers did not hold any other outstanding equity awards as of that date.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Option Awards** | **Option Awards** | **Option Awards** | **Option Awards** | **Option Awards** | **Option Awards** | **Option Awards** |
| **Name** | **Number of**<br> **Securities**<br> **Underlying**<br> **Unexercised**<br> **Options (#)**<br> **Exercisable** | **Number of**<br> **Securities**<br> **Underlying**<br> **Unexercised**<br> **Options (#)**<br> **Unexercisable** | **Equity**<br> **Incentive**<br> **Plan Awards:**<br> **Number of**<br> **Securities**<br> **Underlying**<br> **Unexercised**<br> **Unearned**<br> **Options (#)** |  | **Option**<br> **Exercise**<br> **Price ($)** | **Option**<br> **Expiration**<br> **Date** |
| Jeffrey Low | 6095741 |  |  | (1) | $1.00 | N/A |
| Jeffrey Low | 1300000 |  |  | (2) | $1.46 | March 11, 2032 |
| Jeffrey Low | 2500000 |  |  | (3) | $1.00 | August 5, 2035 |
| Jordan Low | 677305 |  |  | (4) | $1.00 | N/A |
| Jordan Low | 700000 |  |  | (5) | $1.46 | March 11, 2032 |
| Jordan Low | 2500000 |  |  | (6) | $1.00 | August 5, 2035 |

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(1) Represents
 6,095,741 options held by Jeffrey Low, which vested in full on November 24, 2021.

(2) Represents
 1,300,000 options held by Jeffrey Low, which vested in full on March 12, 2022.

(3) Represents 2,500,000 options
 held by Jeffrey Low, which vested in full on August 4, 2025.

(4) Represents
 677,305 options held by Jordan Low, which vested in full on November 24, 2021.

(5) Represents
 700,000 options held by Jordan Low, which vested in full on March 12, 2022.

(6) Represents 2,500,000 options
 held by Jordan Low, which vested in full on August 4, 2025.

**Equity Awards Granted Subsequent to Fiscal Year End**

On January 23, 2026, subsequent to fiscal year end, the Company granted restricted stock units under the Plan to our CEO, Jeffrey Low and our President, Jordan Low.

The Company granted Jeffrey Low an award covering 6,000,000 shares of common stock, pursuant to which 2,437,500 shares vest on April 1, 2026, 1,687,500 shares vest on July 1, 2026 and 1,312,500 shares vest on October 1, 2026, in each case subject to continued service, and the remaining 562,500 shares vest upon the Company achieving specified fully diluted market capitalization thresholds of $250 million, $500 million and $750 million, with 187,500 shares vesting upon the achievement of each such milestone. On the same date, the Company granted Jordan Low an award covering 4,000,000 shares of common stock, pursuant to which 1,625,000 shares vest on April 1, 2026, 1,125,000 shares vest on July 1, 2026 and 875,000 shares vest on October 1, 2026, in each case subject to continued service, and the remaining 375,000 shares vest upon the Company achieving specified fully diluted market capitalization thresholds of $250 million, $500 million and $750 million, with 125,000 shares vesting upon the achievement of each such milestone. Each award is subject to the terms and conditions of the applicable award agreement and the Plan.

**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS**

During the period from January 1, 2023 to the date of this prospectus, we have not entered into or participated in any Related Party Transactions (as defined below) except as disclosed below.

The Company has accrued executive compensation, net of advances, of $25,044, $267,691 and $338,927 to Jeffrey Low, the Chief Executive Officer and Chairman of the Company, as of March 31, 2026 and the year ended December 31, 2025 and 2024, respectively.

The Company has accrued executive compensation, net of advances, of $26,477, $160,587 and $174,687 to Jordan Low, the President, Chief Operating Officer, and Director of the Company, as of March 31, 2026 and the year ended December 31, 2025 and 2024, respectively.

**Company Policies on Related Party Transactions**

A "Related Party Transaction" is a transaction, arrangement, or relationship in which we or any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any Related Person (as defined below) had, has or will have a direct or indirect material interest. A "Related Person" means:

● any person who is, or at any time during the applicable period was, one of our executive officers, one of our directors, or a nominee to become one of our directors;

● any person who is known by us to be the beneficial owner of more than 5.0% of any class of our voting securities;

● any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5.0% of any class of our voting securities, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5.0% of any class of our voting securities; or

● any firm, corporation, or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest.

Our board of directors intends to adopt a related party transactions policy. Pursuant to this policy, our Audit Committee will review all material facts of all Related Party Transactions and either approve or disapprove entry into the Related Party Transaction, subject to certain limited exceptions. In determining whether to approve or disapprove entry into a Related Party Transaction, our Audit Committee shall consider, among other factors, the following: (i) whether the Related Party Transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and (ii) the extent of the Related Person's interest in the transaction. Further, the policy will require that all Related Party Transactions required to be disclosed in our filings with the SEC be so disclosed in accordance with applicable laws, rules and regulations.

**PRINCIPAL AND REGISTERED STOCKHOLDERS**

The following table sets forth as of May 27, 2026:

● certain information regarding the beneficial ownership of our common stock as of May 27, 2026 by (a) each stockholder who is known to us to own beneficially 5% or more of our outstanding common stock; (b) our executive officers; (c) our directors and director nominees, and (d) all executive officers, directors and director nominees as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their common stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their common stock; and

● the number of shares of our common stock held by and registered for resale by means of this prospectus for the Registered Stockholders.

The Registered Stockholders include (i) affiliates of the Company and certain other stockholders with "restricted securities" (as defined in Rule 144 under the Securities Act) who, because of their status as affiliates pursuant to Rule 144 or because they acquired their common stock from an affiliate or the Company within the prior 12 months, would be unable to sell their securities pursuant to Rule 144 until the Company has been subject to the reporting requirements of Section 13 or Section 15(d) the Exchange Act for a period of at least 90 days and (ii) our non-executive officer employees, consultants, and service providers who acquired shares from us within the prior 12 months under Rule 701 and hold "restricted securities" (as defined in Rule 144 under the Securities Act). See "Shares Eligible for Future Sale" for further information regarding sales of such "restricted" securities if not sold pursuant to this prospectus. The Registered Stockholders may, or may not, elect to sell their common stock through transactions on Nasdaq at prevailing market prices. As such, the Company will have no input if and when any Registered Stockholder may, or may not, elect to sell their common stock or the prices at which any such sales may occur. See "*Plan of Distribution*."

Information concerning the Registered Stockholders may change from time to time and any changed information will be set forth in supplements to this prospectus, if and when necessary. Because the Registered Stockholders may sell all, some, or none of the common stock covered by this prospectus, we cannot determine the number of common stock that will be sold by the Registered Stockholders, or the amount or percentage of shares of common stock that will be held by the Registered Stockholders upon consummation of any particular sale. In addition, the Registered Stockholders listed in the table below may have sold, transferred, or otherwise disposed of, or may sell, transfer, or otherwise dispose of, at any time and from time to time, our common stock in transactions exempt from the registration requirements of the Securities Act, after the date on which they provided the information set forth in the table below.

The Registered Stockholders are not entitled to any registration rights with respect to the common stock. However, we currently intend to use our reasonable efforts to keep the registration statement effective for a period of 90 days after the effectiveness of the registration statement. We are not party to any arrangement with any Registered Stockholder or any broker-dealer with respect to sales of common stock by the Registered Stockholders. See "Plan of Distribution."

In accordance with the rules of the SEC, beneficial ownership includes voting or investment power with respect to securities and includes the common stock issuable pursuant to options, warrants, and other securities that are exercisable or convertible within 60 days. Shares of common stock issuable pursuant to options, warrants, and other securities that are exercisable or convertible within 60 days are deemed outstanding for computing the percentage of the class beneficially owned by the person holding such securities but are not deemed outstanding for computing the percentage of the class beneficially owned by any other person. The percentage of beneficial ownership for the following table is based on 45,034,282 shares of common stock outstanding, as of May 27, 2026.

The Registered Stockholders do not have, nor have they within the past three years had, any position, office, or other material relationship with us, other than as disclosed in this prospectus. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" for further information regarding the Registered Stockholders. The business address of our executive officers, directors, and director nominees is 18450 Showalter Rd., Hagerstown, MD 21742, unless otherwise indicated below.

---

| | | | |
|:---|:---|:---|:---|
| **Name and Address of Beneficial Owner** | **Amount and Nature of Beneficial Ownership** | **Total Voting % Shares** | **Shares of Common Stock Being Registered** |
| **Named Executive Officers, Directors, and Director Nominees:** |  |  |  |
| Jeffrey Low | 30502841<sup>(1)(2)</sup> | 67.7 | 30502841 |
| Jordan Low | 9499705<sup>(3)(4)</sup> | 21.1 | 9499705 |
| Richard Leimbach | 100 | \* | 100 |
| Andrew Pearlman | 100 | \* | 100 |
| Ori Schlank |  |  |  |
| Robert Brandt | 34247 | 0.1 | 34247 |
| David Peterson | 150000 | 0.3 | 150000 |
| Larry Meyer |  |  |  |
| Elbert Basolis | 4861538<sup>(5)</sup> | 10.8 | 3650000 |
| Denean Williams | 382934<sup>(6)</sup> | 0.9 | 382934 |
| **All Executive Officers, Directors, and Director Nominees as a Group (10 persons)** | 45431465 | 100.9 | 44219927 |
| **Other Stockholders:** |  |  |  |
| Bradford Johnson | 3367538<sup>(7)</sup> | 7.5 | 2156000<sup>(7)</sup> |
| Other Registered Stockholders | 40584435<sup>(8)(9)</sup> | 90.1 | 24352939<sup>(8)</sup> |
| &nbsp;&nbsp;&nbsp;**Total Number of Shares** | 89383438 | 198.5 | 70728866 |

---

\* Less than 1%.

(1) Includes 9,895,741 shares of common stock issuable upon the exercise
 of outstanding options within 60 days of the date of this prospectus, all of which are registered for resale pursuant to the
 registration statement of which this prospectus forms a part.

(2) Includes (i) 2,437,500 shares of vested restricted stock units
 that vested on April 1, 2026; (ii) 1,687,500 restricted stock units that vest on July 1, 2026; and (iii) 1,312,500 shares
 of that vest on October 1, 2026, in each case subject to continued service; and (iv) 562,500 shares of restricted stock units that
 vest upon the Company achieving certain market capitalization milestones. The underlying shares were issued and outstanding at
 the grant date but remain subject to vesting and forfeiture provisions. All of the foregoing shares are registered for resale
 pursuant to the registration statement of which this prospectus forms a part.

(3) Includes 3,877,305 shares of common stock issuable upon the exercise
 of outstanding options within 60 days of the date of this prospectus, all of which are registered for resale pursuant to the
 registration statement of which this prospectus forms a part.

(4) Includes (i) 1,625,000 shares of vested restricted stock units
 that vested on April 1, 2026; and (ii) 1,125,000 restricted stock units that vest on July 1, 2026; (iii) 875,000
 sharesthat vest on October 1, 2026, in each case subject to continued service; and (iv) 375,000 shares of restricted stock units
 that vest upon the Company achieving certain market capitalization milestones. The underlying shares were issued and outstanding
 at the grant date but remain subject to vesting and forfeiture provisions. All of the foregoing shares are registered for resale
 pursuant to the registration statement of which this prospectus forms a part.

(5) Includes (i) 3,650,000 shares of common stock and (ii) 250,000 shares
 issuable upon exercise of the April 2026 Note Warrants at an exercise price of $8.00 per share which are not registered for resale;
 and (iii) 961,538 shares of common stock issuable upon conversion of the April 2026 Senior Note at a conversion price of $8.00 per
 share that are not registered for resale.

(6) Includes 382,934 shares of common stock held of record by WF Future LLC. Denean Williams, as the managing member and control person of such entity, has voting and dispositive power over such shares and may be deemed to beneficially own such shares.

(7) Includes (i) 2,156,000 shares of common stock and (ii) 250,000 shares
 issuable upon exercise of the April 2026 Note Warrants at an exercise price of $8.00 per share which are not registered for resale;
 and (iii) 961,538 shares of common stock issuable upon conversion of the April 2026 Senior Note at a conversion price of $8.00 per
 share that are not registered for resale.

(8) Includes up to 961,538 shares of common stock issuable upon conversion
 of the May 2026 Notes at a fixed conversion price of $8.00 per share. The May 2026 Notes were issued pursuant to a securities purchase
 agreement entered into in May 2026 in connection with a private financing transaction. The shares reflected herein represent the
 maximum number of shares issuable upon full conversion of the outstanding principal amount of the May 2026 Notes, excluding any shares
 issuable for accrued interest or pursuant to any anti-dilution or adjustment provisions.

(9) Includes (i) an aggregate of 22,431,401 shares of common stock
 held by approximately 303 and non-accredited 198 stockholders (excluding the option holders identified in clauses (ii) through
 (iv) below and the directors, officers, and other beneficial owners individually identified in this table), each of whom,
 individually, holds less than 0.5% of the shares of common stock outstanding as of the date of this prospectus; (ii)
 an aggregate of 960,000 shares of common stock issuable upon the exercise of outstanding stock options held by six (6) option holders
 at exercise prices ranging from $1.00 to $1.46 per share, of which 652,500 are vested and exercisable within 60 days of the date
 of this prospectus and all of which are registered for resale pursuant to the registration statement of which this prospectus
 forms a part; and (iii) an aggregate of 16,231,496 shares of common stock issuable upon the exercise of outstanding warrants
held by two hundred thirty three (233) warrant holders at exercise prices ranging from $.50 to $8.00 per share, of which 16,231,496 are
vested and exercisable within 60 days of the date of this prospectus, which are not being registered for resale.

**DESCRIPTION OF CAPITAL STOCK**

In connection with the proposed listing of our common stock on Nasdaq, on January 19, 2026, we filed an amended and restated certificate of incorporation, which, among other things, increased the authorized number of shares of our common stock from 100,000,000 shares to 500,000,000 shares and authorized the issuance of preferred stock in one or more series, with the rights, preferences and privileges of each series to be determined by our board of directors. Where applicable, the following description summarizes the material terms of the amended and restated certificate of incorporation. The following summary of our capital stock and our certificate of incorporation and bylaws does not purport to be complete and is qualified in its entirety by reference to the provisions of applicable law and our certificate of incorporation and bylaws, which are filed as exhibits to the registration statement of which this prospectus forms a part.

As of the date of this prospectus, the aggregate number of shares that we are authorized to issue is 501,000,000, consisting of 500,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. As of the date of this prospectus, there are 45,034,282 shares of common stock outstanding and there are no shares of preferred stock outstanding.

**Common Stock**

*Voting Rights.* Holders of shares of common stock are entitled to one vote per share held of record on all matters to be voted upon by the stockholders, except that holders of common stock shall not be entitled to vote on any amendment to our certificate of incorporation (including any certificate of designations relating to any class or series of preferred stock) that relates solely to the terms of one or more outstanding classes or series of preferred stock if the holders of such affected class or series of preferred stock are entitled, either separately or together with the holders of one or more other such affected classes or series of preferred stock, to vote thereon pursuant to our certificate of incorporation (including any certificate of designations relating to any class or series of preferred stock) or pursuant to the Delaware General Corporation Law (the "DGCL").

*Quorum*. Our bylaws provide that the holders of a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote constitutes a quorum, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business.

*Dividend Rights.* The board of directors may from time to time declare, and the Company may pay, dividends (payable in cash, property or shares of the Company's capital stock) on the Company's outstanding shares of capital stock, subject to applicable law and our certificate of incorporation.

*Liquidation Rights.* Upon liquidation, dissolution, distribution of assets or other winding up of the Company, the holders of common stock are entitled to receive ratably the assets available for distribution to the holders after payment of liabilities and the liquidation preference of any of our outstanding shares of preferred stock.

*Other Matters.* The shares of common stock have no preemptive or preferential right to acquire any of our shares or securities, including shares or securities held in our treasury. All outstanding shares of our common stock are fully paid and non-assessable.

**Preferred Stock**

Our certificate of incorporation gives the board of directors the power to issue shares of preferred stock in one or more series without stockholder approval. The board of directors has the discretion to determine the designations, rights, qualifications, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. The purpose of authorizing the board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from acquiring, a majority of our outstanding voting stock.

**Anti-Takeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws**

Provisions of the DGCL and our certificate of incorporation and bylaws could make it more difficult to acquire us by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors. These provisions would be expected to discourage certain types of takeover practices and takeover bids our board of directors may consider inadequate and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us will outweigh the disadvantages of discouraging takeover or acquisition proposals because, among other things, negotiation of these proposals could result in an improvement of their terms.

**Certificate of Incorporation and Bylaw Provisions**

Our purpose is to engage in any lawful act or activity for which a corporation may be organized under the DGCL.

*Board of Directors*

 

Our bylaws provide that the number of directors will be fixed exclusively by the board of directors, subject to our certificate of incorporation, and that the directors need not be stockholders.

*Authorized but Unissued Capital Stock*

Our authorized but unissued shares of common stock and preferred stock will be available for future issuance without stockholder approval, except as may be required under the listing rules of any stock exchange on which our common stock is then listed. We may use additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

 

 

*Stockholder Action by Written Consent*

Any action required or permitted by the DGCL to be taken at a meeting of shareholders may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by the shareholders holding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all of the shares entitled to vote thereon were present and voted.

**Limitations on Liability and Indemnification of Officers and Directors**

The DGCL authorizes corporations to limit or eliminate the personal liability of directors and officers to corporations and their stockholders for monetary damages for breaches of directors' and officers' fiduciary duties, subject to certain exceptions. Our certificate of incorporation generally includes a provision that our directors and officers shall be indemnified and held harmless by the Company to the fullest extent authorized by the DGCL. The effect of these provisions is to eliminate the rights of us and our stockholders, through stockholders' derivative suits on our behalf, to recover monetary damages from a director or an officer for breach of fiduciary duty as a director or an officer, including breaches resulting from grossly negligent behavior. However, exculpation does not apply to any breaches of the director's or officer's duty of loyalty, any acts or omissions not in good faith or that involve intentional misconduct or knowing violation of law, any authorization of dividends or stock redemptions or repurchases paid or made in violation of the DGCL, for any transaction from which the director derived an improper personal benefit or any action against an officer in any action by or in the right of the Company.

Our bylaws generally provide that we shall indemnify, hold harmless, and advance expenses to our directors and officers to the fullest extent permitted by applicable law. We also are expressly authorized to carry directors' and officers' liability insurance providing indemnification for our directors, officers and certain employees for some liabilities. We believe that these indemnification and advancement provisions and insurance are useful to attract and retain qualified directors and executive officers.

The limitation of liability, indemnification and advancement provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors or officers for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

**Dissenters' Rights of Appraisal and Payment**

Under the DGCL, with certain exceptions, our stockholders will have appraisal rights in connection with a merger or consolidation of us. Pursuant to Section 262 of the DGCL, stockholders who properly demand and perfect appraisal rights in connection with such merger or consolidation will have the right to receive payment of the fair value of their shares as determined by the Delaware Court of Chancery.

**Transfer Agent and Registrar**

The transfer agent and registrar of our common stock is VStock Transfer LLC. The transfer agent and registrar's address is 18 Lafayette Place, Woodmere, NY 11598.

**Listing**

We plan to have our common stock listed on Nasdaq under the symbol "FBDT". This offering is conditioned upon Nasdaq's final approval of our listing application, and there is no guarantee or assurance that our common stock will be approved for listing on Nasdaq.

**PLAN OF DISTRIBUTION**

The shares being registered herein may be freely sold in market transactions following the listing and upon the effectiveness of this registration statement. None of the Company's outstanding shares registered herein may be freely sold in reliance on an exemption from registration such as Rule 144 at this time. The shares of common stock beneficially owned by the Registered Stockholders covered by this prospectus may be offered and sold from time to time by the Registered Stockholders. The term "Registered Stockholders" includes donees, pledgees, transferees or other successors in interest selling securities received after the date of this prospectus from a Registered Stockholder as a gift, pledge, partnership distribution or other transfer. We will not receive any of the proceeds from the sale of the securities by the Registered Stockholders. The Registered Stockholders will not be involved in Nasdaq's price-setting mechanism, including any decision to delay or proceed with trading, nor will they control or influence RBW Capital Partners LLC (the "Advisor" or "RBW") in carrying out its role as a financial adviser to advise and assist us with respect to certain matters relating to the Direct Listing. We will not be involved in the price setting process. Additionally, the price of our shares in prior private transactions may have little or no relation to the opening price and subsequent public price of our stock on Nasdaq. The Registered Stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. The Registered Stockholders may offer, sell or distribute all or a portion of the securities registered hereby publicly at prevailing market prices. We are not party to any arrangement with any Registered Stockholder or any broker-dealer with respect to sales of shares of common stock by the Registered Stockholders. As such, we do not anticipate receiving notice as to if and when any Registered Stockholder may, or may not, elect to sell their shares of common stock or the prices at which any such sales may occur, and there can be no assurance that any Registered Stockholders will sell any or all of the shares of common stock covered by this prospectus.

On the day that our shares of common stock are initially listed on Nasdaq, Nasdaq will begin accepting, but not executing, pre-opening buy and sell orders and will begin to continuously generate the indicative Current Reference Price (as defined below) on the basis of such accepted orders. The Current Reference Price is calculated each second and, during a 10-minute "Display Only" period, is disseminated, along with other indicative imbalance information, to market participants by Nasdaq on its NOII and BookViewer tools. Following the "Display Only" period, a "Pre-Launch" period begins, during which the Advisor, in its capacity as our financial advisor, must notify Nasdaq that our shares are "ready to trade." Once the Advisor has notified Nasdaq that our shares of common stock are ready to trade, Nasdaq will confirm the Current Reference Price for our shares of common stock, in accordance with the Nasdaq rules. If the Advisor then approves proceeding at the Current Reference Price, the applicable orders that have been entered will then be executed at such price and regular trading of our shares of common stock on Nasdaq will commence, subject to Nasdaq conducting validation checks in accordance with the Nasdaq rules.

Under the Nasdaq rules, the Current Reference Price means: (i) the single price at which the maximum number of orders to buy or sell can be matched; (ii) if there is more than one price at which the maximum number of orders to buy or sell can be matched, then it is the price that minimizes the imbalance between orders to buy or sell (i.e. minimizes the number of shares that would remain unmatched at such price); (iii) if more than one price exists under (ii), then it is the entered price (i.e. the specified price entered in an order by a customer to buy or sell) at which our shares of common stock will remain unmatched (i.e. will not be bought or sold); and (iv) if more than one price exists under (iii), a price determined by Nasdaq in consultation with the Advisor in its capacity as our financial advisor. In the event that more than one price exists under (iii), the Advisor will exercise any consultation rights only to the extent that it can do so consistent with the anti-manipulation provisions of the federal securities laws, including Regulation M, or applicable relief granted thereunder.

In determining the Current Reference Price, Nasdaq's cross algorithms will match orders that have been entered into and accepted by Nasdaq's system. This occurs with respect to a potential Current Reference Price when orders to buy shares of common stock at an entered bid price that is greater than or equal to such potential Current Reference Price are matched with orders to sell a like number of shares of common stock at an entered asking price that is less than or equal to such potential Current Reference Price. To illustrate, as a hypothetical example of the calculation of the Current Reference Price, if Nasdaq's cross algorithms matched all accepted orders as described above, and two limit orders remained — a limit order to buy 500 shares of common stock at an entered bid price of $10.01 per share and a limit order to sell 200 shares of common stock at an entered asking price of $10.00 per share — the Current Reference Price would be selected as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Under clause (i), if the Current Reference Price is $10.00, then the maximum number of additional shares that can be matched is 200. If the Current Reference Price is $10.01, then the maximum number of additional shares that can be matched is also 200, which means that the same maximum number of additional shares would be matched at the price of either $10.00 or $10.01.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Because more than one price under clause (i) exists, under clause (ii), the Current Reference Price would be the price that minimizes the imbalance between orders to buy or sell (i.e. minimizes the number of shares that would remain unmatched at such price). Selecting either $10.00 or $10.01 as the Current Reference Price would create the same imbalance in the limit orders that cannot be matched, because at either price 300 shares would not be matched.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● Because more than one price under clause (ii) exists, under clause (iii), the Current Reference Price would be the entered price at which orders for shares of common stock at such entered price will remain unmatched. In such case, choosing $10.01 would cause 300 shares of the 500 share limit order with the entered price of $10.01 to remain unmatched, compared to choosing $10.00, where all 200 shares of the limit order with the entered price of $10.00 would be matched, and no shares at such entered price remain unmatched. Thus, Nasdaq would select $10.01 as the Current Reference Price, because orders for shares at such entered price will remain unmatched. The above example (including the prices) is provided solely by way of illustration.

The Advisor will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on considerations of volume, timing and price. In particular, the Advisor will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. If the Advisor does not approve proceeding at the Current Reference Price (for example, due to the absence of adequate pre-opening buy and sell interest), the Advisor will request that Nasdaq delay the opening until such a time that sufficient price discovery has been made to ensure that a reasonable amount of volume crosses on the opening trade. Further, in the highly unlikely event that Nasdaq consults with the Advisor as described in clause (iv) of the definition of Current Reference Price, the Advisor would request that Nasdaq delay the opening to ensure a single opening price within clauses (i), (ii) or (iii) of the definition of the Current Reference Price. The Registered Stockholders will not be involved in Nasdaq's price-setting mechanism, and will not coordinate or be in communication with the Advisor including with respect to any decision by the Advisor to delay or proceed with trading.

Similar to a Nasdaq-listed firm-commitment underwritten initial public offering, in connection with the listing of our shares of common stock, buyers and sellers who have subscribed will have access to Nasdaq's Order Imbalance Indicator (the "Net Order Imbalance Indicator"), a widely available, subscription-based data feed, prior to submitting buy or sell orders. Nasdaq's electronic trading platform simulates auctions every second to calculate a Current Reference Price, the number of shares of common stock that can be paired off the Current Reference Price, the number of shares of common stock that would remain unexecuted at the Current Reference Price and whether a buy-side or sell-side imbalance exists, or whether there is no imbalance, to disseminate that information continuously to buyers and sellers via the Net Order Imbalance Indicator data feed.

As compensation for successful listing, RBW will be granted 1.0% of our fully diluted common stock outstanding immediately prior to the Direct Listing, which we currently calculate at 887,472 shares (the "Advisory Shares"). Such shares are not registered pursuant to this prospectus and the Advisor is not a Registered Shareholder. In addition, upon a successful direct listing, we will pay RBW a one-time cash advisory fee of $250,000.

Pursuant to the terms of our engagement with the Advisor, we have granted the Advisor the right to act as exclusive provider of capital markets services for the Company for a period of 6 months after consummation of the Direct Listing.

However, because this is not an initial public offering being conducted on a firm-commitment underwritten basis, there will be no traditional book building process. Moreover, prior to the opening trade, there will not be a price at which underwriters initially sold shares of common stock to the public, as there would be in a firm-commitment underwritten initial public offering. The lack of an initial public offering price could impact the range of buy and sell orders collected by Nasdaq from various broker-dealers. Consequently, the public price of our shares of common stock may be more volatile than in an initial public offering underwritten on a firm-commitment basis and could, upon being listed on Nasdaq, decline significantly and rapidly. See "Risk Factors—Risks Related to this Direct Listing and Ownership of Our Common Stock — Our shares of common stock currently have no public market. An active trading market may not develop or continue to be liquid and the market price of our shares of common stock may be volatile."

In addition, to list on Nasdaq, we are also required to have at least three registered and active market makers. We expect that the Advisor will act as a registered and active market maker and will engage other market makers.

In addition to sales made pursuant to this prospectus, the shares of common stock covered by this prospectus may be sold by the Registered Stockholders in private transactions exempt from the registration requirements of the Securities Act.

Under the securities laws of some states, shares of common stock may be sold in such states only through registered or licensed brokers or dealers.

If any of the Registered Stockholders utilize a broker-dealer in the sale of the shares of common stock being offered by this prospectus, such broker-dealer may receive commissions in the form of discounts, concessions or commissions from such Registered Stockholder or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal.

We have engaged RBW as our financial advisor to advise and assist us with respect to certain matters relating to our listing. The services expected to be performed by the Advisor will include providing advice and assistance with respect to defining objectives, analyzing, structuring and planning the listing and developing and assisting with our investor communication strategy in relation to this listing.

However, the Advisor will not be engaged to otherwise facilitate or coordinate price discovery activities or sales of shares of our common stock in consultation with us, and will not be permitted to, and will not be instructed by us to, plan or actively participate in any investor education activities, except as described herein.

Prior to the financial advisory services provided by the Advisor to the Company in connection with the listing of our securities, neither the Advisor nor any affiliates of the Advisor have provided services of any kind to the Company. However, the Advisor is a full service financial institution engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The Advisor and their affiliates may, from time to time, perform financial advisory and investment banking services for us, for which they would receive customary fees, discounts and customary payments including but not limited to certain expense reimbursements.

**SHARES ELIGIBLE FOR FUTURE SALE**

Immediately prior to the listing of our common stock on Nasdaq, there has been no market for our common stock, and a liquid trading market for our common stock may not develop or be sustained after the listing. Future sales of substantial amounts of our common stock in the public market, or the perception that such sales could occur, could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through the sale of our equity securities. We will have no input if and when any Registered Stockholders may, or may not, elect to sell their shares or the prices at which any such sales may occur.

Based on the number of shares outstanding as of the date of this prospectus, upon the listing of our common stock on Nasdaq, approximately 45,034,282 shares of common stock will be outstanding or approximately 48,455,243 shares on a fully converted basis, assuming conversion of the April 2026 Senior Notes and the May 2026 Notes). Of the shares to be outstanding immediately after the listing, 70,728,866 shares will be registered under this registration statement (including 961,538 shares issuable upon conversion of the May 2026 Notes). Any shares not registered hereunder will be deemed "restricted securities" as defined in Rule 144. Restricted securities may be sold in the public market only if they are registered under the Securities Act or if they qualify for an exemption from registration under Rule 144 or Rule 701 promulgated under the Securities Act, which rules are summarized below. Restricted securities also may be sold outside of the United States to non-U.S. persons in accordance with Rule 904 of Regulation S.

**Rule 144**

In general, under Rule 144 as currently in effect, beginning 90 days after the effective date of the registration statement of which this prospectus is a part, any person who is not an affiliate of ours and has held their shares for at least six months, as measured by SEC rule, including the holding period of any prior owner other than one of our affiliates, may sell shares without restriction, provided current public information about us is available. In addition, under Rule 144, any person who is not an affiliate of ours and has held their shares for at least one year, as measured by SEC rule, including the holding period of any prior owner other than one of our affiliates, would be entitled to sell an unlimited number of shares immediately upon the listing of our common stock on Nasdaq without regard to whether current public information about us is available. Beginning 90 days after the effective date of the registration statement of which this prospectus is a part, a person who is an affiliate of ours and who has beneficially owned restricted securities for at least six months, as measured by SEC rule, including the holding period of any prior owner other than one of our affiliates, is entitled to sell a number of restricted shares within any three-month period that does not exceed the greater of:

● 1% of the number of shares of our common stock then outstanding, which will equal approximately 469,862 shares immediately after the listing of our common stock on Nasdaq; and

● the average weekly trading volume of our common stock on Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales of restricted shares under Rule 144 held by our affiliates are also subject to requirements regarding the manner of sale, notice and the availability of current public information about us. Rule 144 also provides that affiliates relying on Rule 144 to sell shares of our common stock that are not restricted shares must nonetheless comply with the same restrictions applicable to restricted shares, other than the holding period requirement.

**Rule 701**

Under Rule 701 under the Securities Act, shares of our common stock acquired upon the exercise of currently outstanding options or pursuant to other rights granted under our stock plans may be resold, by:

● persons other than affiliates, beginning 90 days after the effective date of the registration statement of which this prospectus is a part, subject only to the manner-of-sale provisions of Rule 144; and

● our affiliates, beginning 90 days after the effective date of the registration statement of which this prospectus is a part, subject to the manner-of-sale and volume limitations, current public information and filing requirements of Rule 144, in each case, without compliance with the six-month holding period requirement of Rule 144.

**SALE PRICE HISTORY OF COMMON STOCK**

We have applied to list our common stock on Nasdaq. Prior to the initial listing, no public market existed for our common stock. Our common stock has a limited history of trading in private transactions. During the period from March 2023 through October 2023, the Company issued to certain accredited investors an aggregate of 1,747,289 units, each consisting of one share of common stock and one warrant to purchase one-half share of common stock, at $1.50 per unit for an aggregate purchase price of $2,620,934. During the period from February 2024 through July 2024, the Company issued to a certain accredited investor an aggregate of 437,500 shares of common stock at $1.60 per share for an aggregate purchase price of $700,000. During the period from July 2024 through October 2024, the Company issued to certain accredited investors an aggregate of 91,000 shares of common stock at $1.00 per share for an aggregate purchase price of $91,000. During the period from August 2025 through February 2026, the Company issued to certain accredited investors an aggregate of 3,207,500 shares of common stock at $1.00 per share for an aggregate purchase price of $3,207,500. In November and December 2025, the Company issued to certain accredited investors an aggregate of 60,000 shares of common stock at $2.00 per share for an aggregate purchase price of $120,000. During the period from January to March 2026, the Company issued to certain accredited investors an aggregate of 406,669 shares of common stock at $3.00 per share for an aggregate purchase price of $1,220,004. In March 2026, the Company issued to an accredited investor an aggregate of 2,500 shares of common stock at $8.00 per share for an aggregate purchase price of $20,000.

While the Advisor is expected to consider this price in connection with setting the opening public price of our common stock, this information may have little or no relation to broader market demand for our common stock and thus the opening public price and subsequent public price of our common stock on Nasdaq. As a result, you should not place undue reliance on these historical private sale prices as it may differ materially from the opening public price and subsequent public price of our common stock on Nasdaq. See "Risk Factors*—* Risks Related to this Direct Listing and Ownership of Our Common Stock"

**MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS**

The following is a summary of the material U.S. federal income tax consequences of the ownership and disposition of our common stock acquired in this offering by a "non-U.S. holder" (as defined below), but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based upon the provisions of the United States Internal Revenue Code of 1986, as amended, or the Code, Treasury Regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof. These authorities may be changed, possibly retroactively, so as to result in U.S. federal income tax consequences different from those set forth below. We have not sought, and do not intend to seek, any ruling from the Internal Revenue Service, or IRS, with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS or a court will agree with such statements and conclusions.

This summary also does not address the tax considerations arising under the laws of any state or local or non-U.S. jurisdiction or under U.S. federal gift and estate tax rules, or rising out of other non-income tax rules, except to the limited extent set forth below. In addition, this discussion does not address tax considerations applicable to an investor's particular circumstances or to investors that may be subject to special tax rules, including, without limitation:

● banks, insurance companies, regulated investment companies, real estate investment trusts or other financial institutions;

● persons subject to the alternative minimum tax or the tax on net investment income;

● persons subject to special tax accounting rules as a result of any item of gross income with respect to our common stock being taken into account in an applicable financial statement;

● tax-exempt organizations or governmental organizations;

● pension plans and tax-qualified retirement plans;

● controlled foreign corporations, passive foreign investment companies and corporations that accumulate earnings to avoid U.S. federal income tax;

● partnerships or other entities or arrangements treated as partnership for U.S. federal income tax purposes (and investors therein);

● brokers or dealers in securities or currencies;

● traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

● persons that own, or are deemed to own, more than five percent of our capital stock (except to the extent specifically set forth below);

● certain former citizens or long-term residents of the United States;

● persons who hold our common stock as a position in a hedging transaction, "straddle," "conversion transaction" or other risk reduction transaction or integrated investment;

● persons who hold or receive our common stock pursuant to the exercise of any option or otherwise as compensation;

● persons who do not hold our common stock as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment); and

● persons deemed to sell our common stock under the constructive sale provisions of the Code.

In addition, if a partnership, entity or arrangement classified as a partnership or flow-through entity for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner generally will depend on the status of the partner and upon the activities of the partnership or other entity. A partner in a partnership or other such entity that will hold our common stock should consult his, her or its own tax advisor regarding the tax consequences of the ownership and disposition of our common stock through a partnership or other such entity, as applicable.

**This summary is for informational purposes only and is not tax advice. Each non-U.S. holder is urged to consult its own tax advisor with respect to the application of the U.S. federal income tax laws to its particular situation, as well as any tax consequences of the purchase, ownership and disposition of our common stock arising under the U.S. federal gift or estate tax rules or under the laws of any state, local, non-U.S. or other taxing jurisdiction or under any applicable tax treaty.**

**Non-U.S. Holder Defined**

For purposes of this discussion, a "non-U.S. holder" is a beneficial owner of our common stock that, for U.S. federal income tax purposes, is neither a "U.S. person" nor an entity (or arrangement) treated as a partnership. A "U.S. person" is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:

● an individual who is a citizen or resident of the United States;

● a corporation or other entity taxable as a corporation created or organized in the United States or under the laws of the United States or any political subdivision thereof, or otherwise treated as such for U.S. federal income tax purposes;

● an estate whose income is subject to U.S. federal income tax regardless of its source; or

● a trust (x) whose administration is subject to the primary supervision of a U.S. court and that has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (y) that has made a valid election under applicable Treasury Regulations to be treated as a U.S. person.

**Distributions**

As described in the section titled "*Dividend Policy*," we have never declared or paid cash dividends on our common stock. However, following the listing of our common stock on Nasdaq, if we do make distributions of cash or property on our common stock to non-U.S. holders, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed both our current and our accumulated earnings and profits, the excess will first constitute a return of capital and will reduce each non-U.S. holder's adjusted tax basis in our common stock, but not below zero. Any additional excess will then be treated as capital gain from the sale of stock, as discussed under "*Gain on Disposition of Common Stock*."

Subject to the discussions below on effectively connected income, backup withholding and the Foreign Account Tax Compliance Act, or FATCA, any dividend paid to a non-U.S. holder generally will be subject to U.S. federal withholding tax either at a rate of 30% of the gross amount of the dividend or such lower rate as may be specified by an applicable income tax treaty between the United States and such non-U.S. holder's country of residence. In order to receive a reduced treaty rate, such non-U.S. holder must provide the applicable withholding agent with an IRS Form W-8BEN or W-8BEN-E or other appropriate version of IRS Form W-8 certifying qualification for the reduced treaty rate. A non-U.S. holder of shares of our common stock eligible for a reduced rate of U.S. federal withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the IRS. If such non-U.S. holder holds our common stock through a financial institution or other agent acting on the non-U.S. holder's behalf, the non-U.S. holder will be required to provide appropriate documentation to such agent, which then will be required to provide certification to the applicable withholding agent, either directly or through other intermediaries. Each non-U.S. holder should consult its own tax advisors regarding their entitlement to benefits under any applicable income tax treaty.

Dividends received by a non-U.S. holder that are treated as effectively connected with such non-U.S. holder's conduct of a trade or business within the United States (and, if an applicable income tax treaty so provides, such non-U.S. holder maintains a permanent establishment or fixed base in the United States to which such dividends are attributable) are generally exempt from the 30% U.S. federal withholding tax, subject to the discussion below on backup withholding and FATCA withholding. To claim this exemption, a non-U.S. holder must provide the applicable withholding agent with a properly executed IRS Form W-8ECI or other applicable IRS Form W-8 properly certifying such exemption. Such effectively connected dividends, although not subject to U.S. federal withholding tax, are taxed at the same graduated rates applicable to U.S. persons, net of certain deductions and credits, subject to an applicable income tax treaty providing otherwise. In addition, if a non-U.S. holder is a corporation, dividends such non-U.S. holder receives that are effectively connected with its conduct of a U.S. trade or business may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable income tax treaty between the United States and such non-U.S. holder's country of residence. Each non-U.S. holder should consult its own tax advisor regarding the tax consequences of the ownership and disposition of our common stock, including any applicable tax treaties that may provide for different rules.

**Gain on Disposition of Common Stock**

Subject to the discussion below regarding backup withholding and FATCA withholding, a non-U.S. holder generally will not be required to pay U.S. federal income tax on any gain realized upon the sale or other disposition of our common stock unless:

● the gain is effectively connected with such non-U.S. holder's conduct of a U.S. trade or business (and, if an applicable income tax treaty so provides, such non-U.S. holder maintains a permanent establishment or fixed base in the United States to which such gain is attributable);

● such non-U.S. holder is an individual who is present in the United States for an aggregate 183 days or more during the taxable year in which the sale or disposition occurs and certain other conditions are met; or

● our common stock constitutes a United States real property interest, or USRPI, by reason of our status as a "United States real property holding corporation," or USRPHC, for U.S. federal income tax purposes.

We believe that we are not currently and will not become a USRPHC for U.S. federal income tax purposes, and the remainder of this discussion so assumes. However, because the determination of whether we are a USRPHC depends on the fair market value of our U.S. real property interests relative to the fair market value of our U.S. and worldwide real property interests plus our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even if we become a USRPHC, however, as long as our common stock is regularly traded on an established securities market, your common stock will be treated as U.S. real property interests only if you actually (directly or indirectly) or constructively hold more than 5% of such regularly traded common stock at any time during the shorter of the five-year period preceding your disposition of, or your holding period for, our common stock.

A non-U.S. holder described in the first bullet above will be required to pay U.S. federal income tax on the gain derived from the sale (net of certain deductions and credits) under regular graduated U.S. federal income tax rates. In addition, a non-U.S. holder that is a corporation may be subject to the branch profits tax at a 30% rate on a portion of its effectively connected earnings and profits for the taxable year that are attributable to such gain, as adjusted for certain items. A lower rate may be specified by an applicable income tax treaty.

A non-U.S. holder described in the second bullet above will be subject to tax at 30% (or such lower rate specified by an applicable income tax treaty) on the gain derived from the sale, which gain may be offset by U.S. source capital losses of such non-U.S. holder for the taxable year, provided such non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses.

Each non-U.S. holder should consult its own tax advisor regarding any applicable income tax or other treaties that may provide for different rules.

**Information Reporting and Backup Withholding**

Generally, we or an applicable withholding agent must report annually to the IRS the amount of dividends paid to a non-U.S. holder, such non-U.S. holder's name and address, and the amount of tax withheld, if any. A similar report is sent to such non-U.S. holder. Pursuant to any applicable income tax treaty or other agreement, the IRS may make such report available to the tax authority in such non-U.S. holder's country of residence.

Dividends paid by us (or our paying agent) to a non-U.S. holder may also be subject to backup withholding at a current rate of 24%.

Such information reporting and backup withholding requirements may be avoided, however, if such non-U.S. holder establishes an exemption by providing a properly executed, and applicable, IRS Form W-8, or otherwise establishes an exemption. Generally, such information reporting and backup withholding requirements will not apply to a non-U.S. holder where the transaction is effected outside the United States, through a non-U.S. office of a non-U.S. broker. Notwithstanding the foregoing, backup withholding and information reporting may apply, however, if the applicable withholding agent has actual knowledge, or reason to know, that such non-U.S. holder is a U.S. person.

Backup withholding is not an additional tax; rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund or credit may generally be obtained from the IRS, provided that the required information is furnished to the IRS in a timely manner.

**Foreign Account Tax Compliance Act (FATCA)**

Sections 1471 to 1474 of the Code, Treasury Regulations issued thereunder and related official IRS guidance, commonly referred to as FATCA, generally impose a U.S. federal withholding tax of 30% on dividends on our common stock paid to a "foreign financial institution" (as defined under FATCA, and which may include banks, traditional financial institutions, investment funds, and certain holding companies), unless such institution enters into an agreement with the U.S. Department of the Treasury to, among other things, identify accounts held by certain "specified United States persons" or "United States-owned foreign entities" (each as defined under FATCA), report annually substantial information about such accounts, and withhold on certain payments to non-compliant foreign financial institutions and certain other account holders. FATCA also generally imposes a U.S. federal withholding tax of 30% on dividends on our common stock paid to a "non-financial foreign entity" (as specially defined under FATCA), unless such entity provides identifying information regarding each of its direct or indirect "substantial United States owners" (as defined under FATCA), certifies that it does not have any substantial United States owners, or otherwise establishes an exemption. Accordingly, the institution or entity through which our common stock is held will affect the determination of whether such withholding is required.

The withholding obligations under FATCA generally apply to dividends on our common stock. Such withholding will apply regardless of whether the beneficial owner of the payment otherwise would be exempt from withholding pursuant to an applicable tax treaty with the United States, the Code, or other exemptions described above. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes.

Under proposed regulations, FATCA withholding on payments of gross proceeds has been eliminated. These proposed regulations are subject to change.

An intergovernmental agreement between the United States and an applicable foreign country may modify the requirements described in this section. Prospective investors are encouraged to consult with their own tax advisors regarding the application of FATCA withholding to their investment in, and ownership and disposition of, our common stock.

**The preceding discussion of U.S. federal tax considerations is for general information only. It is not tax advice to investors in their particular circumstances. Each prospective investor should consult its own tax advisor regarding the particular U.S. federal, state and local and non-U.S. tax consequences of purchasing, holding and disposing of our common stock, including the consequences of any proposed change in applicable laws.**

**LEGAL MATTERS**

The validity of the shares of common stock offered hereby will be passed upon for us by Lucosky Brookman LLP, Woodbridge, New Jersey.

**EXPERTS**

Grassi & Co., CPAs, P.C., our independent registered public accounting firm, has audited our balance sheets as of December 31, 2025 and 2024, and the related statements of operations, changes in stockholders' equity and cash flows for the years then ended, as set forth in their report dated March 20, 2026. We have included our audited financial statements and our unaudited interim financial statements as of and for the three months ended March 31, 2026 and 2025 in this prospectus and in this registration statement in reliance on their report given on their authority as experts in accounting and auditing.

**WHERE YOU CAN FIND ADDITIONAL INFORMATION**

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits filed therewith. For further information about us and the common stock offered hereby, reference is made to the registration statement and the exhibits filed therewith. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete; thus, please see the copy of the contract or document that has been filed for the complete contents of that contract or document. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The exhibits to the registration statement should be reviewed for the complete contents of these contracts and documents.

We currently do not file periodic reports with the SEC. Upon the listing of our common stock on Nasdaq, we will be required to file periodic reports, proxy statements and other information with the SEC pursuant to the Exchange Act. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is *www.sec.gov*.

We also maintain a website at https://firstbreach.com. Upon the listing of our common stock on Nasdaq, you may access these materials at our website free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained in, or that can be accessed through, our website is not a part of, and is not incorporated into, this prospectus.

**FIRST BREACH, INC.**

**INDEX TO FINANCIAL STATEMENTS**

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| | |
|:---|:---|
| **Unaudited Interim Condensed Financial Statements** | **Page** |
| [Condensed Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025](#JA_001) | F-3 |
| [Condensed Statements of Operations for the Three Months Ended March 31, 2026 and 2025 (Unaudited)](#JA_002) | F-4 |
| [Condensed Statements of Changes in Stockholders' Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited)](#JA_003) | F-5 |
| [Condensed Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited)](#JA_004) | F-6 |
| [Notes to Interim Condensed Financial Statements](#JA_005) | F-7 |

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| | |
|:---|:---|
| **Audited** **Financial Statements for the Years Ended December 31, 2025 and 2024** | **Page** |
| [Report of Independent Registered Public Accounting Firm](#cy_001) (PCAOB ID #606) | F-27 |
| [Balance Sheets as of December 31, 2025 and 2024](#G_001) | F-28 |
| [Statements of Operations for the Years Ended December 31, 2025 and 2024](#G_002) | F-29 |
| [Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2025 and 2024](#G_003) | F-30 |
| [Statements of Cash Flows for the Years Ended December 31, 2025 and 2024](#G_004) | F-31 |
| [Notes to Financial Statements](#G_005) | F-32 |

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**FIRST BREACH, INC.**

**FINANCIAL STATEMENTS**

**FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025**

**FIRST BREACH, INC.**

**CONDENSED BALANCE SHEETS**

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| | | |
|:---|:---|:---|
|  | **March 31,** <br> **2026** <br> **(Unaudited)**  | **December 31,** <br> **2025**  |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp; Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash | $1414608 | $2477122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | 72335 | 51889 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories, net | 824419 | 918359 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid and other current assets | 41484 | 46192 |
| &nbsp;&nbsp;&nbsp; **Total current assets** | 2352846 | 3493562 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property and equipment, net | 8055752 | 8201957 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Right-of-use assets | 1183073 | 1271638 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets | 53625 | 53625 |
| &nbsp;&nbsp;&nbsp; **Total assets** | $11645296 | $13020782 |
| **Liabilities and stockholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp; **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $1647689 | $2041908 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities | 390134 | 431659 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities, related party | 51521 | 428278 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Employee loan payable, related party | 121739 | 121739 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Note payable – related party | 50000 | 50000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Note payable – current portion |  | 7166 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Convertible notes payable, net of debt discount – current portion | 504236 | 284146 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liability – current portion | 380020 | 372665 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financing lease liability – current portion | 945720 | 893710 |
| &nbsp;&nbsp;&nbsp; **Total current liabilities** | 4091059 | 4631271 |
| &nbsp;&nbsp;&nbsp; **Long-term liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Note payable |  | 27523 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Convertible notes payable, net of debt discount | 36183 | 201215 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liability – net of current portion | 891596 | 988471 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financing lease liability – net of current portion | 524356 | 767822 |
| &nbsp;&nbsp;&nbsp; **Total liabilities** | 5543194 | 6616302 |
| **Commitments and Contingencies (Note 17)** |  |  |
| **Stockholders' Equity:** |  |  |
| &nbsp;&nbsp;&nbsp; Preferred stock, $0.0001 par value, 1,000,000 authorized, no shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively |  |  |
| &nbsp;&nbsp;&nbsp; Common stock, $0.0001 par value, 500,000,000 and 100,000,000 authorized, 45,011,281 and 44,500,111 shares issued and outstanding as of March 31, 2026 and December 31, 2025 respectively | 4500 | 4450 |
| &nbsp;&nbsp;&nbsp; Additional paid-in capital | 55987679 | 41643152 |
| &nbsp;&nbsp;&nbsp; Accumulated deficit | (49890077) | (35243122) |
| &nbsp;&nbsp;&nbsp; **Total stockholders' equity** | 6102102 | 6404480 |
| &nbsp;&nbsp;&nbsp; **Total liabilities and stockholders' equity** | $11645296 | $13020782 |

---

 

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

 

**FIRST BREACH, INC.**

**CONDENSED STATEMENTS OF OPERATIONS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended <br>March 31,** | **Three Months Ended <br>March 31,** |
|  | **2026** | **2025** |
| **Net revenues** | $266004 | $15685 |
| Cost of revenues | 629850 | 327496 |
| Net loss associated with liquidation of raw materials | - | 386189 |
| &nbsp;&nbsp;&nbsp; Gross margin | (363846) | (698000) |
| &nbsp;&nbsp;&nbsp; **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp; Selling, general, and administrative expense | 14085908 | 472582 |
| **Total operating expenses** | 14085908 | 472582 |
| **Loss from operations** | (14449754) | (1170582) |
| **Other expense, net:** |  |  |
| &nbsp;&nbsp;&nbsp; Interest expense, net | (144356) | (406330) |
| &nbsp;&nbsp;&nbsp; Loss on sale of assets | (39457) |  |
| &nbsp;&nbsp;&nbsp; Other income |  | 17000 |
| &nbsp;&nbsp;&nbsp; Other expense | (13388) | (10263) |
| **Total other expense, net** | (197201) | (399593) |
| **Net loss before income taxes** | (14646955) | (1570175) |
| &nbsp;&nbsp;&nbsp; Income tax provision | - | - |
| **Net loss** | $(14646955) | $(1570175) |
| **Net loss per share:** |  |  |
| &nbsp;&nbsp;&nbsp; Basic and diluted | $(0.28) | $(0.04) |
| Weighted average number of shares outstanding: |  |  |
| &nbsp;&nbsp;&nbsp; Basic & diluted | 51407478 | 37784611 |

---

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

**FIRST BREACH, INC.**

**CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025**

**(Unaudited)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional** <br> **Paid-in** <br> **Capital** | **Accumulated**<br> **Deficit** |<br> **Total** |
| **Balance at January 1, 2026** | 44500111 | $4450 | $41643152 | $(35243122) | $6404480 |
| Equity offering proceeds | 511170 | 50 | 1341953 |  | 1342003 |
| Share-based compensation |  |  | 13002574 |  | 13002574 |
| Net loss | - | - | - | (14646955) | (14646955) |
| **Balance at March 31, 2026** | 45011281 | $4500 | $55987679 | $(49890077) | $6102102 |
| **Balance at January 1, 2025** | 37764611 | 3778 | 26526826 | (21421001) | 5109603 |
| Warrants issued in conjunction with convertible notes payable (as restated) |  |  | 164818 |  | 164818 |
| Net loss | - | - | - | (1570175) | (1570175) |
| **Balance at March 31, 2025** | 37784611 | $3778 | $26691644 | $(22991176) | $3704246 |

---

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

**FIRST BREACH, INC**.

**CONDENSED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** <br> **March 31**,  | **Three Months Ended** <br> **March 31**,  |
|  | **2026** | **2025** |
| Cash flows from operating activities: |  |  |
| Net loss | $(14646955) | $(1570175) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp; Stock-based compensation | 13002574 |  |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 335238 | 332566 |
| &nbsp;&nbsp;&nbsp; Amortization of debt discount | 13388 | 13388 |
| &nbsp;&nbsp;&nbsp; Amortization of debt discount – warrant feature and OID interest | 39946 | 181681 |
| &nbsp;&nbsp;&nbsp; Non-cash PIK interest | 15113 | 62596 |
| &nbsp;&nbsp;&nbsp; Loss on sale of asset | (39457) |  |
| &nbsp;&nbsp;&nbsp; Right-of-use assets, net of lease liabilities | (955) | 2088 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp; Accounts receivable | (20446) | 20739 |
| &nbsp;&nbsp;&nbsp; Inventories | 93940 | 876031 |
| &nbsp;&nbsp;&nbsp; Prepaid and other current assets | 4708 | (14985) |
| &nbsp;&nbsp;&nbsp; Accounts payable | (394219) | (159111) |
| &nbsp;&nbsp;&nbsp; Accrued liabilities | (41525) | (202326) |
| &nbsp;&nbsp;&nbsp; Accrued liabilities, related party | (376757) | (6200) |
| &nbsp;&nbsp;&nbsp; Contract liabilities | - | (54410) |
| Net cash used in operating activities | (2015407) | (518118) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp; Capitalized expenditures | (149577) | (14181) |
| Net cash used in investing activities | (149577) | (14181) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp; Proceeds from convertible notes payable |  | 500000 |
| &nbsp;&nbsp;&nbsp; Principal payments on financing lease | (204844) | (170599) |
| &nbsp;&nbsp;&nbsp; Proceeds from issuance on equity offerings | 1342003 |  |
| &nbsp;&nbsp;&nbsp; Net payments on note payable | (34689) | - |
| Net cash provided by financing activities | 1102470 | 329401 |
| Net change to cash | (1062514) | (202898) |
| Cash at beginning of period | 2477122 | 434613 |
| &nbsp;&nbsp;&nbsp; Cash at end of period | $1414608 | $231715 |
| Supplemental disclosure of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp; Cash paid for interest | $95616 | $134334 |
| &nbsp;&nbsp;&nbsp; Cash paid for taxes | $- | $- |
| Supplemental Non-cash Financing Activities |  |  |
| &nbsp;&nbsp;&nbsp; Issuance of warrants in conjunction with convertible notes payable | $- | $164818 |

---

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

 **FIRST BREACH, INC**.

 **NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

 **(Unaudited)**

**NOTE 1 — ORGANIZATION AND NATURE OF BUSINESS**

First Breach (the "Company") was originally formed as a limited liability company named First Breach, LLC under the laws of the State of Maryland on April 9, 2018, and subsequently converted to a corporation named First Breach, Inc. ("First Breach") incorporated under the laws of the State of Delaware on October 22, 2021.

The Company is a match-grade ammunition component manufacturer offering brass cups, brass casings, full-metal-jacket projectiles, lead projectile cores, and lead wire. Equipped with numerous quality control checks, the Company offers match-grade, SAAMI-specification products. Customers will have the ability to order custom head-stamped casings as well as a wide range of grain-size options for projectiles. The majority of customers are resellers and direct-to-consumers primarily within the United States.

The Company is dedicated to building upon its industry experience while emphasizing placing integrity first along with competitive pricing, building customer relations, and utilizing quality raw materials.

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

***Basis of Presentation***

The accompanying interim unaudited condensed financial statements and the related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to SEC rules and regulations applicable to interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying interim unaudited condensed financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company's financial position, results of operations, and cash flows for the periods presented. These interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Current Report on Form 10-K for the year ended December 31, 2025. Financial information as of December 31, 2025 has been derived from our audited financial statements and notes thereto as of this date.

 ****

***Liquidity and Going Concern***

The Company has incurred losses since inception, devoting substantially all of its efforts toward manufacturing buildout and related operational activities, and have an accumulated deficit of $49,890,077 as of March 31, 2026. The Company generated a net loss of $14,646,955 during the three months ended March 31, 2026. Net cash used in its operating activities during the three months ended March 31, 2026 was $2,015,407. The Company expects to continue to generate operating losses and negative cash flow from operations for the foreseeable future. The Company plans to continue to actively pursue financing alternatives, but there can be no assurance that it will obtain the necessary funding in the future when needed.

The Company's management concluded that its recurring losses from operations and the fact that it has not generated significant revenue or positive cash flows from operations raise substantial doubt about its ability to continue as a going concern for the next 12 months after the date that these interim unaudited condensed financial statements are issued.

 ****

***Revenue Recognition and Cost of Revenue***

The Company generates revenue from the production and sale of ammunition, which includes shipping income. The Company recognizes revenue according to Accounting Standard Codification – Revenue from Contract with Customers ("ASC 606"). When the customer obtains control over the promised goods or services, the Company records revenue in the amount of consideration that it can expect to receive in exchange for those goods and services. The Company applies the following five-step model to determine revenue recognition:

● Identification of a contract with a customer

● Identification of the performance obligations in the contact

● Determination of the transaction price

● Allocation of the transaction price to the separate performance allocation

● Recognition of revenue when performance obligations are satisfied

The Company only applies the five-step model when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception and once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company's contracts contain a single performance obligation, and the entire transaction price is allocated to the single performance obligation. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Accordingly, The Company recognizes net revenues when the customer obtains control of its product, which typically occurs upon shipment of the product from our warehouse or the performance of the service.

The Company applies ASC 606, *Revenue from Contracts with Customers*, (ASC 606) utilizing the following allowable exemptions or practical expedients:

● Portfolio approach practical expedient relative to the estimation of variable consideration.

● Shipping and handling practical expedient to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities.

● Costs of obtaining a contract practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset is one year or less.

● Sales taxes practical expedient to exclude sales taxes and other similar taxes from the transaction price.

● Significant financing component practical expedient.

Substantially all the Company's sales are domestic and are made to customers under agreements which do not include rights of return or warranty for the three month ended March 31, 2026 and 2025. Revenue from product sales is recognized as net of discounts and estimated returns.

Cost of revenue includes the cost of purchased merchandise plus freight and any applicable delivery charges from the vendor to the Company. Sales are to individual retail consumers through the Company's ecommerce sales and wholesale distribution partners. The majority of customers are resellers and direct-to-consumers primarily within the United States.

Cost of revenues earned includes all finished material, supplies and raw materials, equipment rental, and freight.

---

| | |
|:---|:---|
| Total accounts receivable |  |
| January 1, 2025 | $30265 |
| January 1, 2026 | $51889 |
| March 31, 2026 | $72335 |

---

 ****

 ****

***Contract Liabilities***

As of the three months ended March 31, 2026 and the year ended December 31, 2025, the Company did not have any contract assets or contract liabilities arising from contracts with customers. All remaining performance obligations associated with these deposits are expected to be satisfied within the following calendar year.

***Use of Estimates***

Management uses estimates and assumptions in preparing its financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. The most significant estimates relate to the estimated determination of the allowance for credit losses, allowance for obsolete inventory, warrant fair value and stock-based compensation. On an ongoing basis, management evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities.

***Segments***

In November 2023, the FASB issued Accounting Standards Update ASC 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASC 2023-07 requires public entities to disclose significant segment expense categories that are regularly provided to the Chief Operating Decision Maker ("CODM") and included in the measure of segment profit or loss, as well as the title and position of the CODM. The amendments also require disclosure of all annual segment profit or loss and asset disclosures in interim periods and provide expanded disclosure requirements for entities with a single reportable segment.

The primary financial measures used by the CODM to evaluate performance and allocate resources are Net loss and Loss from operations. The CODM uses Net loss and Loss from operations to evaluate the performance of the Company's ongoing operations and as part of the Company's internal planning and forecasting processes. Information on Net loss and Loss from operations is disclosed in the interim unaudited condensed statements of operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the interim unaudited condensed statements of operations.

The CODM does not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the notes to the financial statements.

The Company has determined that its current business and operations consist of one reporting segment.

***Cash***

Cash includes cash on hand as of March 31, 2026 and December 31, 2025, the Company maintained an aggregate cash balance of $1,414,608 and $2,477,122, respectively, in two bank deposit accounts held at a single financial institution. Of this amount, $1,164,608 and $2,227,122 exceeded the federally insured limit of $250,000 as of March 31, 2026 and December 31, 2025, respectively. There were no cash equivalents as of March 31, 2026 and December 31, 2025.

The Company has not experienced any losses in such accounts, and management believes it is not exposed to significant credit risk on its cash balances.

 ****

***Accounts Receivable, net***

Trade accounts receivable are stated at the amount the Company expects to collect and do not bear interest. For its financial instruments subject to credit risk, consisting of its receivables, the Company recognizes as an allowance its estimate of lifetime expected credit losses under the current expected credit loss (CECL) model of ASC 326. The approach is based on the Company's internal knowledge and historical default rates over the expected life of the receivables and is adjusted to reflect current economic conditions. This evaluation takes into account the customer's ability and intention to pay the consideration when it is due along with incorporating changes in the forward-looking estimates. If the expected financial condition of the Company's customers were to improve, the allowances may be reduced accordingly. Provisions to the allowances for credit losses are recorded in selling, general and administrative expenses. As of March 31, 2026 and December 31, 2025, the Company determined that the vast majority of its accounts receivable were fully collectible and, accordingly, did not record an allowance for credit losses.

***Inventories***

Inventories are valued at the lower of cost and net realizable value, with cost determined using the weighted average cost method on a first-in first-out basis. Net realizable value is defined as sales price less cost of completion, disposable and transportation. Production costs, including labor and manufacturing overhead, are applied to finished goods based on estimated production capacity. Any excess production costs that result from abnormally low production levels are expensed as incurred and included in cost of revenues.

The Company evaluates inventory for excess or obsolescence and records provisions when necessary to reduce inventories to their net realizable value. The reserve for excess or obsolete inventories was $20,105 as of March 31, 2026 and December 31, 2025.

***Property and Equipment, Net***

The Company states property and equipment at historical cost less accumulated depreciation and amortization. The Company computes depreciation and amortization using the straight-line method at rates intended to depreciate the cost of assets over their estimated useful lives, which are generally three to ten years. Upon retirement or sale of property and equipment, The Company removes the cost of the disposed assets and related accumulated depreciation and amortization from the accounts, and any resulting gain or loss is credited or charged to other income or expenses. The Company charges expenditures for normal repairs and maintenance to expenses as incurred.

The Company capitalizes additions and expenditures for improving or rebuilding existing assets that extend the useful life. Leasehold improvements made either at the inception of the lease or during the lease term are amortized over the shorter of their economic lives or the lease term including any renewals that are reasonably assured.

Property and equipment is stated at historical cost less accumulated depreciation. The estimated useful lives as follows:

---

| | |
|:---|:---|
| **Asset Class** | **Useful Life (Years)** |
| Vehicles | 3-6 |
| Leasehold improvements | 6-7 |
| Office furniture & fixtures | 7 |
| Tooling, machinery and equipment | 3-10 |

---

***Long-Lived Assets***

Recoverability of long-lived assets, including property and equipment and certain identifiable intangible assets are evaluated whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Factors considered important which could trigger an impairment review include but are not limited to significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for the overall business, significant decrease in the market value of the assets and significant negative industry or economic trends. In the event the carrying amount of the long-lived assets may not be recoverable based upon the existence of one or more of the indicators, the assets are assessed for impairment based on the estimated future undiscounted cash flows expected to result from the use of the asset and its eventual deposition. If the carrying amount of an asset exceeds the sum of the estimated future undiscounted cash flow, an impairment loss is recorded for the excess of the asset's carrying amount over its fair value. There was no impairment during the three months ended March 31, 2026 and 2025.

***Fair Value of Financial Instruments***

The Company complies with ASC 820, *Fair Value Measurements and Disclosures*, which defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP and expands disclosure requirements about fair value measurements. Under ASC 820, there are three categories for the classification and measurement of assets and liabilities carried at fair value:

Level 1: Valuation based on quoted market prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Examples include publicly traded equity securities and publicly traded mutual funds that are actively traded on a major exchange or over-the-counter market.

Level 2: Valuation based on quoted market prices of investments that are not actively traded or for which certain significant inputs are not observable, either directly or indirectly. Examples include municipal bonds, where fair value is estimated using recently executed transactions, bid asked prices and pricing models that factor in, where applicable, interest rates, bond spreads and volatility.

Level 3: Valuation based on inputs that are unobservable and reflect management's best estimate of what market participants would use as fair value. Examples include limited partnerships and private equity investments.

The estimated fair value of cash, trade receivables, accounts payable, accrued expenses and other current liabilities are based on Level 1 inputs as the fair values approximate carrying amounts as of March 31, 2026 and December 31, 2025, based on the short-term nature and maturity of these instruments.

The fair value of the Company's convertible notes payable, approximated the carrying value as of March 31, 2026 and December 31, 2025. Factors that the Company considered when estimating the fair value of its debt included market conditions and the terms of the debt. The level of the debt would be considered as Level 2.

The estimated fair value of warrants shares is determined based on various valuation methodologies, including the Monte Carlo pricing model and other appropriate valuation techniques. These methodologies consider underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e., stock price, exercise/conversion price, etc.). Probabilities were assigned to each variable such as the timing and pricing of events over the term of the instruments based on management projections.

 ****

***Equity Classified Warrants***

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, *Distinguishing Liabilities from Equity* ("ASC 480") and ASC 815, *Derivatives and Hedging* ("ASC 815"). The Company's assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance.

The issuance of warrants in conjunction with convertible debt (see Note 9) and the issuance of warrants to investors and placement agents (see Note 14) qualify for the derivative scope exception under ASC 815 and are therefore presented as a component of Stockholders' Equity on the interim unaudited condensed balance sheets without subsequent fair value re-measurement.

 ****

 **

***Net loss per share***

 **

Basic net loss per share is computed by dividing net income available to common shareholders by the weighted average shares outstanding during the period. Diluted net loss per share takes into account the potential dilution that could occur if securities or other contracts to issue shares, such as stock options, warrants, and unvested restricted stock units, were exercised and converted into common shares and the impact would not be antidilutive. Diluted net loss per share is computed by dividing net income available to common shareholders by the weighted average shares outstanding during the period, increased by the number of additional shares that would have been outstanding if the potential shares had been issued and were dilutive. Contingently issuable shares are included in basic net loss per share only when there is no circumstance under which those shares would not be issued.

***Advertising***

Advertising and marketing costs are expensed as incurred. During the three months ended March 31, 2026 and 2025, advertising costs incurred by the Company totaled $1,000 and $20,592, respectively, and are included in selling, general and administrative expenses in the accompanying interim unaudited condensed statements of operations.

***Deferred Financing Costs***

Deferred financing costs relating to the Company's convertible notes payable are deferred and amortized ratably over the life of the debt using the straight-line method. Deferred financing costs are included as an addition to interest expense on the interim unaudited condensed statements of operations and are included in Convertible notes payable, net of debt discount on the interim unaudited condensed balance sheets.

***Shipping and Handling Costs***

The Company accounts for shipping and handling activities as fulfillment activities. As such, the Company does not evaluate shipping and handling as promised services to its customers. Shipping and handling costs are included in cost of revenues in the accompanying interim unaudited condensed statements of operations.

***Leases***

The Company is a lessee in multiple noncancelable operating and financing leases. If the contract provides the Company with the right to substantially all the economic benefits and the right to direct the use of the identified asset, it is generally considered to be or contain a lease. Right-of-Use (ROU) assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term. The ROU asset is also adjusted for any lease prepayments made, lease incentives received, and initial direct costs incurred.

The lease liability is initially and subsequently recognized based on the present value of its future lease payments. Variable payments are included in the future lease payments when those variable payments depend on an index or a rate. Increases (decreases) to variable lease payments due to subsequent changes in an index or rate are recorded as variable lease expense (income) in the future period in which they are incurred.

The discount rate used is the implicit rate in the lease contract, if it is readily determinable, or the Company's incremental borrowing rate. The Company uses the incremental borrowing rate based on the information available at the commencement date for all leases. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment.

The ROU asset for operating leases is subsequently measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. Operating leases with fluctuating lease payments: For operating leases with lease payments that fluctuate over the lease term, the total lease costs are recognized on a straight-line basis over the lease term. The ROU asset for finance leases is amortized on a straight-line basis over the economic life of the asset as the financing leases include an option to purchase the underlying asset that the Company is reasonably certain to exercise

For all underlying classes of assets, the Company has elected the practical expedient to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement. The Company recognizes short-term lease cost on a straight-line basis over the lease term.

***Stock-Based Compensation***

The Company accounts for stock awards issued under ASC 718, *Compensation – Stock Compensation* ("ASC 718"). The Company classifies awards granted to employees, directors and non-employee consultants as either equity-classified or liability-classified based on the terms of the award. Equity-classified awards are measured at the grant-date fair value and recognized as compensation expense over the requisite service period, which is generally the vesting period. Equity-classified awards are not subsequently remeasured. As of March 31, 2026 and December 31, 2025, all stock awards issued were equity-classified.

Stock-based compensation is recognized as an expense over the employee's requisite vesting period and over the non-employee's period of providing goods or services. The fair value of each stock option or warrant award is estimated on the date of grant using the Black-Scholes option valuation model or the Monte Carlo simulation method.

 ****

***Income Taxes***

The Company accounts for income taxes in accordance with ASC Topic 740, *Income Taxes.* Deferred income taxes are recorded for the expected tax consequences of temporary differences between the basis of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. As of March 31, 2026 and December 31, 2025, the Company recorded a valuation allowance equal to the full recorded amount of its net deferred tax assets since it is more-likely-than-not that benefits from its deferred tax assets will not be realized. The valuation allowance is reviewed quarterly and is maintained until sufficient positive evidence exists to support its reversal.

The Company recognizes the impact of an uncertain tax position if the position will more likely than not be sustained upon examination by a taxing authority, based on the technical merits of the position. The Company's policy is to record interest and penalties related to income taxes as part of its income tax provision. As of March 31, 2026 and December 31, 2025, the Company had no unrecognized tax benefits and as such, no liability, interest or penalties were required to be recorded. The Company does not expect this to change significantly in the next twelve months.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recover or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is entirely dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

The Company files income tax returns in the U.S. federal jurisdiction and the State of Maryland.

 **

***Accounting Pronouncements***

 

***Recently Issued and Adopted Pronouncements***

 ****

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. We are also a "smaller reporting company," as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be permitted to do so for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter. The amendments also require disclosure of all annual segment profit or loss and asset disclosures in interim periods and provide expanded disclosure requirements for entities with a single reportable segment.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. The Company adopted ASU 2023-07 for its year ended December 31, 2024, in accordance with the required effective date for non-accelerated filers. The adoption did not impact the Company's financial position, results of operations, or cash flows; however, it resulted in enhanced segment disclosures in the notes to the financial statements in accordance with ASC 280, *Segment Reporting*. These enhancements include the identification of significant segment expense categories, disclosure of the measures of segment profit or loss used by the Chief Operating Decision Maker ("CODM"), related reconciliations to the most comparable GAAP measure, and expanded disclosures for entities with a single reportable segment.

In December 2023, the FASB issued ASU 2023-09*, Income Taxes (Topic 740): Improvements to Income Tax Disclosures*. The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as reconciling items that meet a quantitative threshold. Further, the ASU requires additional disclosures on income tax expense and taxes paid, net of refunds received, by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024 on a prospective basis with the option to apply it retrospectively. Early adoption is permitted. The Company adopted ASC 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

***Recently Issued but Not Yet Adopted Accounting Pronouncements***

In November 2024, the FASB issued ASU 2024-03, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures* (Subtopic 220-40): Disaggregation of Income Statement Expenses to expand the disclosure requirements for certain costs and expenses. In January 2025, FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03 as periods beginning after December 15, 2026 for annual reporting, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact this standard will have on its financial statements.

**NOTE 3 — INVENTORIES**

Inventories, net consisted of the following at:

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| | | |
|:---|:---|:---|
|  | **March 31,** <br> **2026**  | <br> **December 31,** <br> **2025**  |
| Finished products | $154492 | $319131 |
| Raw materials | 601561 | 472863 |
| Work in progress | 88471 | 146470 |
| &nbsp;&nbsp;&nbsp; Inventory, gross | 844524 | 938464 |
| Allowance for obsolete inventory | (20105) | (20105) |
| &nbsp;&nbsp;&nbsp; Total inventory | $824419 | $918359 |

---

 

 

*Net Loss from Liquidation of Raw Materials*

The net loss on liquidation of raw materials for the three months ended March 31, 2026 and 2025 was $0 and $386,189, respectively, attributable to the liquidation of certain raw material inventory outside the normal course of operations to support operating cash flow and working capital management, which resulted in proceeds below the inventory's carrying value.

**NOTE 4 — PREPAID ASSETS**

Prepaid assets consist of the following at:

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| | | |
|:---|:---|:---|
|  | **March 31,** <br> **2026**  | **December 31,** <br> **2025**  |
| Prepaid insurance | $30681 | $35389 |
| Prepaid other | 10803 | 10803 |
|  | $41484 | $46192 |

---

**NOTE 5 — PROPERTY AND EQUIPMENT, NET**

Property and equipment, net consist of the following at:

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| | | |
|:---|:---|:---|
| **Classification** | **March 31,** <br> **2026**  | **December 31,** <br> **2025**  |
| Vehicles | $376434 | $340210 |
| Leasehold improvements | 1669367 | 1656123 |
| Office furniture & fixtures | 60328 | 60328 |
| Tooling, machinery and equipment | 9957058 | 9876922 |
| &nbsp;&nbsp;&nbsp; Total property and equipment | 12063187 | 11933583 |
| Less: Accumulated depreciation and amortization | (4007435) | (3731626) |
| Property and equipment, net | $8055752 | $8201957 |

---

Depreciation and amortization expense was $335,238 and $332,566 for the three months ended March 31, 2026 and 2025, respectively.

**NOTE 6 — ACCRUED LIABILITIES**

Accrued liabilities consisted of the following at:

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br> **2026** | **December 31,**<br> **2025** |
| Accrued outstanding lease payments | $27403 | $22439 |
| Accrued professional fees | 15178 | 106120 |
| Accrued utilities |  | 10991 |
| Accrued employee compensation | 80553 | 25109 |
| Accrued contractor costs | 267000 | 267000 |
|  | $390134 | $431659 |

---

**NOTE 7 — OPERATING LEASES**

On March 18, 2021, the Company entered into a lease agreement with New Heights Industrial Park, LLC for a new office and manufacturing space totaling 71,500 square feet in Hagerstown, Maryland. The lease commenced upon the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) manufacturing certification received on May 22, 2022, and shall expire 84 months thereafter. The initial monthly rent was $31,877 with annual increases of 3% per annum. The lease agreement grants the Company two successive five-year extension options, with rent for each extension term commencing at 103% of the prior year's annual rent, subject to timely notice and the absence of default.

Components of lease expense were as follows for the three months ended:

---

| | | |
|:---|:---|:---|
|  | **March 31,** <br> **2026**  | **December 31,** <br> **2025**  |
| Operating lease right-of-use lease asset | $2465275 | $2465275 |
| Accumulated amortization | (1282202) | (1193637) |
| Net balance | $1183073 | $1271638 |
| Lease liability, current portion | $380020 | $372665 |
| Lease liability, long term | 891596 | 988471 |
| Total operating lease liabilities | $1271616 | $1361136 |
| Weighted Average Remaining Lease Term – operating leases | 37 months | 40 months |
| Weighted Average Discount Rate – operating leases | 4.5% | 4.5% |

---

Future minimum lease payments under this operating lease as of March 31, 2026, were as follows:

---

| | |
|:---|:---|
| 2026 (remaining 9 months) | $321856 |
| 2027 | 439146 |
| 2028 | 452320 |
| 2029 | 152252 |
| Total lease payments | 1365574 |
| Less imputed interest | (93958) |
| Maturities of lease liabilities | $1271616 |

---

Total operating lease expense for the three months ended March 31, 2026 and 2025, was $103,543 and is recorded in Selling, general, and administrative expenses in the accompanying interim unaudited condensed statements of operations.

Supplemental cash flows information related to leases was as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br> **2026** | **March 31,**<br> **2025** |
| Cash paid for amounts included in the measurement of lease liability: |  |  |
| Operating cash flows from operating lease | $104499 | $101455 |

---

**NOTE 8 — FINANCING LEASES**

On February 8, 2023, the Company entered into an equipment financing agreement with Utica Leaseco, LLC ("Utica"), pursuant to a Master Lease Agreement, ("Master Lease Agreement"), between Utica, as lessor, and the Company as the lessee (collectively, the "Lessee"). Under the Master Lease Agreement, Utica loaned an aggregate of $1,800,000 for certain of the Company's equipment listed therein (the "Equipment"), which it leases to the Lessee. The initial term of the Master Lease Agreement was for 51 months. Under the Master Lease Agreement, the Lessee agreed to pay an initial monthly rent of $50,040. The Lessor will have the option to charge Lessee a surcharge of 1% of the monthly payment amount per month for every 0.25% that the prime rate of Renasant Bank exceeds 5.5%.

On August 31, 2023, the parties entered into a second equipment schedule to the Master Lease Agreement, pursuant to which Utica loaned an aggregate of $1,500,000 for certain equipment listed therein. The term of the second equipment schedule is 48 months and agreed monthly payments are $44,250. The Lessor will have the option to charge Lessee a surcharge of 1% of the monthly payment amount per month for every 0.25% that the prime rate of Renasant Bank exceeds 8.25%.

If any rent is not received by Utica within five (5) calendar days of the due date, the Lessee shall pay a late charge equal to ten (10%) percent of the amount. In addition, in the event that any payment is not processed or is returned on the basis of insufficient funds, upon demand, the Lessee shall pay Utica a charge equal to five percent (5%) of the amount of such payment. The Lessee is also required to pay an annual administration fee of $5,000 for each agreement.

Upon the expiration of the term of the Master Lease Agreement, the Lessee is required to pay, together with all other amounts then due and payable under the Master Lease Agreement, in cash, an end of term buyout price equal to the lesser of: (a) $90,000 for the initial lease and $75,000 for the second lease (five percent (5%) of the Total Invoice Cost (as defined in the Master Lease Agreement)).

Provided that no default under the Master Lease Agreement has occurred and is continuing beyond any applicable grace or cure period, the Lessee has an early buy-out option with respect to all but not less than all of the Equipment, upon the payment of any outstanding rental payments or other fees then due, plus an additional amount set forth in the Master Lease Agreement, which represents the anticipated fair market value of the Equipment as of the anticipated end date of the Master Lease Agreement. In addition, the Lessee shall pay Utica an administrative charge to be determined by Utica to cover its time and expenses incurred in connection with the exercise of the option to purchase, including, but not limited to, reasonable attorney fees and costs. Furthermore, upon the exercise by the Lessee of this option to purchase the Equipment, the Lessee shall pay all sales and transfer taxes and all fees payable to any governmental authority as a result of the transfer of title of the Equipment to Lessee.

In connection with the Master Lease Agreement, the Lessee granted a security interest on all of its right, title and interest in and to: (i) the Equipment, together with all related software (embedded therein or otherwise) and general intangibles, all additions, attachments, accessories and accessions thereto whether or not furnished by the supplier; (ii) all accounts, chattel paper, deposit accounts, documents, other equipment, general intangibles, instruments, inventory, investment property, letter of credit rights and any supporting obligations related to any of the foregoing; (iii) all books and records pertaining to the foregoing; (iv) all property of such Lessee held by Utica, including all property of every description, in the custody of or in transit to Utica for any purpose, including safekeeping, collection or pledge, for the account of such Lessee or as to which such Lessee may have any right or power, including but not limited to cash; and (v) to the extent not otherwise included, all insurance, substitutions, replacements, exchanges, accessions, proceeds and products of the foregoing.

At March 31, 2026 and December 31, 2025, supplemental information related to the collateralized assets of the finance leases was as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2026** | **December 31,<br> 2025** |
| Equipment | $9000000 | $9000000 |
| Accumulated depreciation | (2765323) | (2540323) |
|  | $6234677 | $6459677 |

---

The following table presents information about the amount and timing of the liability arising from the Company's financing lease as of March 31, 2026:

---

| | |
|:---|:---|
| **Future Minimum Financing Lease Payments** | **Financing** <br> **Lease** <br> **Liability**  |
| 2026 | $688866 |
| 2027 | 843321 |
| Total undiscounted financing lease payments | 1532187 |
| Unamortized debt discount | (62111) |
| Financing lease liability – current portion | (945720) |
| Present value of financing lease liability | $524356 |
| Weighted average remaining lease term | 1.4 years |
| Weighted average discount rate | 22.7% |

---

**NOTE 9 — CONVERTIBLE DEBT**

***Summary of Convertible Notes Payable***

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2026** | **December 31,<br> 2025**  |
| December 2, 2025, principal of $45,400 and accrued PIK interest of $1,480 and $361, net of unamortized OID interest of $4,225 and $5,114 and unamortized debt discount of $6,472 and $7,832 as of March 31, 2026 and December 31, 2025, respectively | $36183 | $32815 |
| August 8, 2025, principal of $227,000, and accrued PIK interest of $14,615 and $9,018, net of unamortized OID interest of $15,443 and $19,868 and unamortized debt discount of $37,111 and $47,750 as of March 31, 2026 and December 31, 2025, respectively | 189061 | 168400 |
| May 8, 2025, principal of $340,500 and accrued PIK interest of $30,505 and $22,109, net of unamortized OID interest of $16,377 and $23,016 and unamortized debt discount of $39,453 and $55,447, respectively | 315175 | 284146 |
| Total of convertible notes payable | 540419 | 485361 |
| Convertible notes payable, net of debt discount – current portion | (504236) | (284146) |
| Convertible notes payable, net of debt discount – long-term portion | $36183 | $201215 |

---

***Senior Secured Promissory Notes Outstanding as of March 31, 2026***

 ****

***December 2, 2025 Convertible Notes Payable - Investor A***

On December 2, 2025 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $40,000 (the "Note") plus OID of $5,400, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $40,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 10% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 20,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

 ****

 ****

***August 8, 2025 Convertible Notes Payable - Investor B***

On August 8, 2025 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $200,000 (the "Note") plus OID of $27,000, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $200,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 10% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 100,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

***May 8, 2025 Convertible Notes Payable - Investor C***

On May 8, 2025 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $300,000 (the "Note") plus OID of $40,500, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $300,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 10% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 150,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

**NOTE 10 — NOTE PAYABLE**

On May 6, 2025, the Company entered into a note payable in the principal amount of $38,692 to finance the purchase of a vehicle. The note bears interest at a fixed annual rate of 5.44% and matures in May 2030. The note requires monthly principal and interest payments and is secured by the underlying vehicle. As of December 31, 2025, the outstanding principal balance was $34,689. The note was repaid in full in January 2026.

**NOTE 11 — STOCKHOLDERS' EQUITY**

 ****

The Company is authorized to issue 500,000,000 and 100,000,000 common shares, par value $0.0001 per share as of March 31, 2026 and December 31, 2025, respectively, and 5,000,000 and 1,000,000 shares of preferred stock, par value $0.0001 per share as of March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026 and December 31, 2025, the Company had 45,011,281 and 44,500,111 common shares issued and outstanding, respectively. The common shares entitle the holder thereof to one vote per share on all matters coming before the shareholders of the Company for a vote. No shares of preferred stock have been issued or designated by First Breach, Inc.

 ****

***LLC conversion to C-Corp.***

On October 22, 2021, First Breach, LLC converted from a Delaware limited liability company to a Delaware corporation, First Breach, Inc. The Certificate of Incorporation of First Breach, Inc. authorizes the issuance of 100,000,000 shares of common stock and 1,000,000 shares of preferred stock. No shares of preferred stock have been issued or designated by First Breach, Inc. The former equity unit holders of First Breach, LLC were issued 16,235,000 shares of common stock following the limited liability company's conversion to a Delaware corporation.

 ****

***Amended and Restated Certificate of Incorporation***

On January 19, 2026, the Company's Board of Directors and stockholders approved an Amended and Restated Certificate of Incorporation. The Restated Certificate, among other matters, (i) authorizes the issuance of preferred stock in one or more series with terms to be determined by the Board, (ii) provides for one vote per share of common stock, and (iii) increases the authorized number of shares of common stock from 100,000,000 to 500,000,000 shares.

***Share issuances***

During the period from January 2026 through March 2026, the Company issued to certain accredited investors an aggregate of 406,670 shares of common stock at $3.00 per share for an aggregate purchase price of $1,220,003.

In January 2026, the Company issued to certain accredited investors an aggregate of 102,000 shares of common stock at $1.00 per share for an aggregate purchase price of $102,000.

In March 2026, the Company issued to certain accredited investors an aggregate of 2,500 shares of common stock at $8.00 per share for an aggregate purchase price of $20,000.

**NOTE 12 — CUSTOMER AND SUPPLIER CONCENTRATION**

Significant dealers and suppliers are those that account for greater than 10% of the Company's revenues and purchases.

During the three months ended March 31, 2026, the Company had sales to two individual customers over 10% of total sales, which represented 59% and 24% of total sales. During the three months ended March 31, 2025, the Company had sales to two individual customers over 10% of total sales, which represented 63% and 60% of total sales.

The Company is dependent on third-party manufacturers and distributors for certain materials utilized in the manufacturing process. During the three months ended March 31, 2026 and 2025, the Company purchased 100% of raw materials from one vendor. The Company believes there are other suppliers that could be substituted should this supplier become unavailable or non-competitive.

**NOTE 13 — STOCK-BASED COMPENSATION**

***Equity Compensation Plan***

 ****

On January 22, 2026, the board of directors (the "Board") of the Company approved the 2026 Equity Incentive Plan (the "2026 Plan"), which permits the grant of incentive share options ("ISOs"), non-qualified share options, performance unit awards, restricted share awards, restricted unit awards ("RSUs"), share appreciation rights and other stock awards (collectively, the "Awards" or "Award") to employees, directors and consultants of the Company. The Company initially reserved 12 million shares of common stock (the "Share Reserve") for issuance of awards under the 2026 Plan. The Share Reserve will automatically increase on January 1 of each year for a period of up five years commencing on January 1, 2026 and ending on and including January 1, 2031, in an amount equal to fifteen percent (15%) of the total number of shares of common stock outstanding on December 31, of the immediately preceding year. As of March 31, 2026, the number of shares available for issuance under the 2026 Plan was 2,000,000.

In the event of any recapitalization or otherwise changes its capital structure, or other such transaction as defined in the 2026 Plan, thereafter upon any exercise or satisfaction of a previously granted Awards, holders of such are entitled to receive (or purchase, if applicable) under such Award, in lieu of the number of common stock then covered by such Award, what the holder would have been entitled to pursuant to the terms of any such event. No fractional shares or rights for fraction shares of common stock shall be issued under the 2026 Plan.

***Stock Options and Restricted Unit Awards***

 ****

During the three months ended March 31, 2026, the Company's Board approved grants for an aggregate of 10,000,000 RSUs to certain officers of the Company. The RSUs are subject to both time-based and market-based vesting conditions. The time-based RSUs vest in three tranches in April 2026, July 2026, and October 2026. There were no RSUs that vested during the three months ended March 31, 2026. No stock options were granted during the three months ended March 31, 2026. Stock-based compensation expense is measured based on the fair value of awards in accordance with ASC 718. Equity-classified awards are measured at their grant-date fair value and are not subsequently remeasured. The cost of stock-based compensation is recognized over the requisite service period, which is generally the vesting period of the respective award. No grants issued by the Company during the three months ended March 31, 2025.

 ****

***Stock Options***

The following table summarizes the Company's ISO activity and related information for the three months ended March 31, 2026:

---

| | | | |
|:---|:---|:---|:---|
|  |<br><br> **Number of**<br> **Options** |<br> **Weighted**<br> **Average**<br> **Exercise**<br> **Price** | **Weighted**<br> **Average**<br> **Contractual**<br> **Term in**<br> **Years** |
| Outstanding at January 1, 2026 | 15113046 | $1.07 | 7.44 |
| Granted |  |  |  |
| Exercised |  |  |  |
| Forfeited |  |  |  |
| Cancelled |  |  |  |
| Vested |  |  |  |
| Expired | - | - | - |
| Outstanding at March 31, 2026 | 15113046 | $1.07 | 7.19 |
| Exercisable at March 31, 2026 | 14768046 | $1.07 | 7.14 |

---

As of March 31, 2026, vested outstanding stock options had approximately $29,214,092 intrinsic value as the estimated fair value of the underlying common stock is greater than the exercise price. As of March 31, 2026, there was approximately $265,000 of total unrecognized share-based compensation related to unvested stock options, which the Company expects to recognize over the next 2 years.

The Company determined the fair market value of its Common Stock underlying the stock options based upon recent sales of securities.

The risk-free interest rate assumption for options granted is based upon observed interest rates on the United States government securities appropriate for the expected term of the Company's employee stock options.

The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Accordingly, the Company has elected to use the "simplified method" to estimate the expected term of its share-based awards. The simplified method computes the expected term as the sum of the award's vesting term plus the original contractual term divided by two.

Based on the lack of historical data of volatility for the Company's common stock, the Company based its estimate of expected volatility on a weighted average of the historical volatility of comparable public companies that manufacture similar products and are similar in size, stage of life cycle, and financial leverage.

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.

The Company recognizes stock option forfeitures as they occur as there is insufficient historical data to accurately determine future forfeitures rates.

The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period.

 ****

***Restricted Unit Issuances***

On January 23, 2026, the Company granted RSUs under the stock equity incentive plan to officers. The Company granted the CEO an award covering 6,000,000 shares of common stock, pursuant to which 2,437,500 shares vest on April 1, 2026, 1,687,500 shares vest on July 1, 2026 and 1,312,500 shares vest on October 1, 2026, in each case subject to continued service, and the remaining 562,500 shares vest upon the Company achieving specified fully diluted market capitalization thresholds of $250 million, $500 million and $750 million, with 187,500 shares vesting upon the achievement of each such milestone. On the same date, the Company granted the President an award covering 4,000,000 shares of common stock, pursuant to which 1,625,000 shares vest on April 1, 2026, 1,125,000 shares vest on July 1, 2026 and 875,000 shares vest on October 1, 2026, in each case subject to continued service, and the remaining 375,000 shares vest upon the Company achieving specified fully diluted market capitalization thresholds of $250 million, $500 million and $750 million, with 125,000 shares vesting upon the achievement of each such milestone. Each award is subject to the terms and conditions of the applicable award agreement and the stock equity incentive plan.

The following table summarizes the Company's RSU activity for the three months ended March 31, 2026:

---

| | | |
|:---|:---|:---|
|  |<br> **Number of**<br> **Units** | **Weighted**<br> **Average**<br> **Grant Date**<br> **Fair Value** |
| Unvested as of December 31, 2025 |  | $- |
| Granted | 10000000 | 2.99 |
| Vested |  |  |
| Forfeited or cancelled | - | - |
| Unvested as of March 31, 2026 | 10000000 | $2.99 |

---

As of March 31, 2026, there was approximately $16,808,850 of total unrecognized share-based compensation related to unvested RSUs, which the Company expects to recognize over the next 4.83 years.

The Company classifies stock-based compensation expense in the interim unaudited condensed statement of operations in the same manner in which the award recipient's costs are classified in the interim unaudited condensed statement of operations. Total stock-based compensation expense for the three months ended March 31, 2026 and 2025, was $13,002,574 and $0, respectively.

**NOTE 14 — WARRANTS**

During the three months ended March 31, 2025, the Company issued 250,000 five-year warrants to purchase company common stock in conjunction with convertible notes payable issued five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share. The warrant provides for full ratchet anti-dilution if the Company issues securities at less than $0.50 per share. No warrants were issued during the three months ended March 31, 2026

The following table shows a summary of common stock warrants for the three months ended March 31, 2026:

---

| | | | |
|:---|:---|:---|:---|
| <br>**Number of** |<br> **Weighted**<br> **Average**<br> **Exercise**<br> **Warrants** |<br><br> **Price** | **Weighted**<br> **Average**<br> **Contractual**<br> **Term in**<br> **Years** |
| Outstanding at January 1, 2026 | 16223996 | $1.06 | 1.41 |
| Granted |  |  |  |
| Exercised |  |  |  |
| Forfeited |  |  |  |
| Cancelled |  |  |  |
| Expired | - | - | - |
| Outstanding at March 31, 2026 | 16223996 | $1.06 | 1.17 |
| Exercisable at March 31, 2026 | 16223996 | $1.06 | 1.17 |

---

As of March 31, 2026, vested outstanding warrants had approximately $31,471,047 intrinsic value as the as the estimated fair value of the underlying common stock is greater than the exercise price.

**NOTE 15 — LOSS PER SHARE**

Basic and diluted net loss per share was determined by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding during the period.

The following table sets forth the computation of basic and diluted net loss per share for the periods indicated:

---

| | | |
|:---|:---|:---|
| | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| <br> **Basic and diluted net loss per share** | **2026** | **2025** |
| Numerator: |  |  |
| &nbsp;&nbsp;&nbsp; Net loss | $(14646955) | $(1570175) |
| Denominator: |  |  |
| &nbsp;&nbsp;&nbsp; Weighted average common shares outstanding | 51407478 | 37784611 |
| &nbsp;&nbsp;&nbsp; Net loss per share of common stock – Basic and Diluted | $(0.28) | $(0.04) |

---

The following warrants to purchase common stock, RSUs, and options to purchase common stock have been excluded from the computation of net loss per share of common stock for the periods presented because including them would have had an anti-dilutive effect:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
| Warrants to purchase common stock | 16223996 | 17203996 |
| RSUs | 937500 |  |
| Options to purchase common stock | 15113046 | 8973046 |
|  | 2274542 | 26177042 |

---

**NOTE 16 — RELATED PARTY TRANSACTIONS**

The Company has accrued executive compensation, net of advances, of $25,044 and $267,691 to the CEO of the Company as of March 31, 2026 and December 31, 2025, respectively.

The Company has accrued executive compensation, net of advances, of $26,477 and $160,587 to the COO of the Company as of March 31, 2026 and December 31, 2025, respectively.

 ***Restricted Unit Awards***

 

On January 23, 2026, the Company granted an aggregate of 10,000,000 shares of RSUs to certain related parties. The RSUs are subject to vesting upon the satisfaction of both time-based and market-based conditions (see Note 13).

 ***<u>April 2026 Convertible Notes</u>***

 

On April 24, 2026, the Company entered into a securities purchase agreement with certain related parties with a principal amount of $10,500,000 plus OID of $5,465,385 (see Note 18).

***Employee Loan Payable***

During the three months ended March 31, 2026, the Company had an unsecured loan payable to an employee (the "Employee Loan"). The outstanding balances amount to $121,739 as of March 31, 2026 and December 31, 2025.

There is no formal written loan agreement, stated maturity date, or stated interest rate associated with the Employee Loan. The Employee Loan is payable on demand. Because the Employee Loan does not bear stated interest, management evaluated the requirements of ASC 835-30, Imputation of Interest. Given (i) the short-term nature of the borrowing, (ii) the related-party nature of the transaction, and (iii) the absence of a stated repayment schedule, management determined that imputing interest would not have a material impact on the financial statements. Accordingly, no interest expense has been recorded in connection with the Employee Loan.

The Employee Loan is classified as a current liability on the accompanying interim unaudited condensed balance sheet as of March 31, 2026.

***Related Party Loan Payable***

On November 6, 2025, the Company entered into a promissory note agreement (the "Related Party Note") with a related party. The Related Party Note provides for a principal amount of $50,000 and bears interest at a rate of 6% per annum.

The Related Party Note matures and becomes due and payable in a single balloon payment consisting of all unpaid principal and accrued interest ninety (90) calendar days following the date on which the Company's common stock is publicly listed on a national securities exchange in the United States. The Company may prepay the Related Party Note, in whole or in part, at any time without penalty. As of March 31, 2026 and December 31, 2025, the outstanding principal balance under the Related Party Note was $50,000.

**NOTE 17 — COMMITMENTS AND CONTINGENCIES**

 

***Joint Venture***

The Company entered into a joint venture agreement with IdeaForge Technology Inc., ("IdeaForge") on September 23, 2025 (the "IdeaForge JV Agreement"), as amended on March 11, 2026 (the "IdeaForge JV Amending Agreement", together with the IdeaForge JV Agreement, the "JV Agreement"), pursuant to which the parties agreed to form First Forge Technology Inc., a Delaware entity (the "Joint Venture"). The core objective of the Joint Venture is to co-develop and manufacture high-performance drones that are fully compliant with U.S. regulatory and defense standards, as well as the development of new intellectual property and drone technology, while being certified and labeled as "Made in the USA." Pursuant to the JV Agreement, the Company and IdeaForge are each entitled to 50% of the outstanding equity interests of the Joint Venture, with each party to be issued 5,000 shares for a purchase price of $1.00 upon issuance.

On March 11, 2026, the Joint Venture amended its certificate of incorporation to authorize and designate a new class of Series A Preferred Stock. The Series A Preferred Stock is non-voting, non-convertible, does not carry dividend or liquidation preference rights and does not otherwise participate in the governance or economic rights of the Joint Venture ("JV Preferred Shares").

 

***Obligations of the Joint Venture***

Pursuant to the JV Agreement, the Company agreed, among other things, to (i) make a total capital contribution to the Joint Venture in such amount as may be required for its operations and as agreed between the parties, which shall include a capital contribution of up to $25,000,000 ("Capital Contribution"), of which a first tranche of $10,000,000 shall be invested on or before December 31, 2026 and applied toward the Capital Contribution, with the remaining balance to be invested on or before December 31, 2027, each of which amounts may be adjusted by mutual agreement of the parties, and which investment may be made through the purchase of JV Preferred Shares; (ii) facilitate the provision of a demarcated manufacturing facility for manufacturing services, including through lease assistance; (iii) provide the Joint Venture with such technical know-how, expertise and operational assistance as may be reasonably required in connection with obtaining applicable licenses, permits, approvals and regulatory clearances; and (iv) support the Joint Venture's commercial development efforts by sharing relevant customer contacts in the defense, law enforcement and related sectors globally.

***Commitments***

 ****

The Company enters into various agreements with suppliers for the products it distributes. The Company had no long-term purchase commitments or arrangements with its suppliers as of the three months ended March 31, 2026 and 2025 respectively.

 

***Litigation***

 ****<br> The Company may be subject to legal proceedings and claims that arise in the ordinary course of business. Management is not currently aware of any matters that will have a material effect on the financial position, results of operations, or cash flows of the Company.

**NOTE 18 — SUBSEQUENT EVENTS**

In accordance with ASC 855 – Subsequent Events, the Company evaluated subsequent events after March 31, 2026, through the date these interim unaudited condensed financial statements were issued and has no transactions or events requiring disclosure except as disclosed below.

 ***Common stock issuances***

Between March 30 and April 7 2026, the Company issued an aggregate of 23,000 shares of common stock to consultants in connection with a public relations agreement and an investor relations agreement for services to be rendered through September 30, 2026 and April 3, 2027, respectively. The common stock was issued at $19.13 per share for an aggregate of $440,000.

***April 2026 Convertible Notes***

 ****

On April 24, 2026 (the "Original Issuance Date"), the Company entered into a securities purchase agreement with certain related parties, pursuant to which the Company issued senior secured convertible promissory notes in the principal amount of $10,500,000 (the "Notes") plus OID of $5,465,385, and matures twelve (12) months from the Original Issuance Date. The cash proceeds received by the Company were $10,500,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Notes bear interest at a rate of 6% per annum per annum on the original outstanding principal amount.

In connection with the issuance of the Notes, the accredited investors were also issued a total of 282,500 six month warrants to purchase shares of the Company's common stock at an exercise price of $8.00 per share (the "Warrant Shares"). If, while the Warrant Shares are outstanding, the Company issues common stock for consideration per share less than $8.00, the exercise price of the Warrant Shares will be reduced to the latest common stock issuance price.

***May 2026 Convertible Notes***

 ****

On May 21, 2026 (the "Original Issuance Date"), the Company entered into a securities purchase agreement with certain related parties, pursuant to which the Company issued senior secured convertible promissory notes in the principal amount of $5,000,000 (the "Notes") plus OID of $2,692,308, and matures twelve (12) months from the Original Issuance Date. The cash proceeds to be received by the Company are $5,000,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Notes do not bear interest.

***Equity Line of Credit***

 ****

On May 21, 2026, the company entered into a Equity Line of Credit Agreement (the "ELOC Agreement") with certain accredited investors (the "ELOC Investors"), pursuant to which the Company can issue $50,000,000 in Common Stock. The term of the ELOC Agreement is thirty six (36) months from the date of the agreement. Under the ELOC Agreement, the Company may, at its sole discretion, deliver purchase notices to ELOC Investors directing them to purchase shares of the Company's Common Stock at a purchase price equal to 97% of the volume-weighted average price of the Common Stock during a specified pricing period. In connection with the ELOC Agreement, the Company has paid $25,000 in legal expenses. There are no commitment fees associated with the ELOC Agreement.

***Drone Development***

On May 1, 2026, the Company entered into a master services agreement with Hellbender Inc. ("Hellbender") for the design, engineering, and prototyping of two attritable drone platforms (the "Hellbender Agreement"). The Hellbender Agreement has an estimated total contract value of approximately $3,000,000. The estimated service period for the Hellbender Agreement is approximately eleven months. The Company has incurred $150,000 in costs associated with the Hellbender Agreement.

 **FIRST BREACH, INC.**

 **FINANCIAL STATEMENTS**

 **YEARS ENDED DECEMBER 31, 2024 AND 2023**

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors and Stockholders of

First Breach, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying balance sheets of First Breach, Inc. (the "Company") as of December 31, 2025 and 2024, and the related statements of operations, changes in stockholders' equity, and cash flows for the years ended December 31, 2025 and 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements 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 each of the years ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.

**Restatement of Financial Statements**

As discussed in Note 3 to the financial statements, the 2024 financial statements have been restated to correct certain misstatements.

**Substantial Doubt Regarding 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 2 to the financial statements, the Company incurred net losses and had negative cash flows from operations that raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

*/s/ Grassi & Co., CPAs, P.C.*

We have served as the Company's auditor since 2025.

Jericho, New York

March 20, 2026

**FIRST BREACH, INC.**

**BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,**<br> **2024**<br>**(Restated)** |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash | $2477122 | $434613 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 51889 | 30265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories, net | 918359 | 1845982 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other current assets | 46192 | 44081 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | 3493562 | 2354941 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net | 8201957 | 9483383 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets | 1271638 | 1616052 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 53625 | 53625 |
| &nbsp;&nbsp;&nbsp;**Total assets** | $13020782 | $13508001 |
| **Liabilities and stockholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp;**Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $2041908 | $1852202 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 431659 | 358906 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities, related party | 428278 | 513614 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee loan payable, related party | 121739 | 121739 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note payable – related party | 50000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities |  | 54410 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note payable – current portion | 7166 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible notes payable, net of debt discount – current portion | 284146 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability – current portion | 372665 | 344177 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing lease liability – current portion | 893710 | 712795 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | 4631271 | 3957843 |
| &nbsp;&nbsp;&nbsp;**Long-term liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note payable | 27523 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible notes payable, net of debt discount | 201215 | 1471436 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability – net of current portion | 988471 | 1361137 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing lease liability – net of current portion | 767822 | 1607982 |
| &nbsp;&nbsp;&nbsp;**Total liabilities** | 6616302 | 8398398 |
| **Commitments and Contingencies (Note 18)** |  |  |
| **Stockholders' Equity:** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.0001 par value, 1,000,000 authorized, no shares issued and outstanding as of December 31, 2025 and 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 100,000,000 authorized, 44,500,111 and 37,784,611 shares issued and outstanding as of December 31, 2025 and 2024, respectively | 4450 | 3778 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 41643152 | 26526826 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (35243122) | (21421001) |
| &nbsp;&nbsp;&nbsp;**Total stockholders' equity** | 6404480 | 5109603 |
| &nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' equity** | $13020782 | $13508001 |

---

 

*The accompanying notes are an integral part of these financial statements.*

 

**FIRST BREACH, INC.**

**STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
|  | **Year ended**<br> **December 31,**<br> **2025** | **Year ended** <br> **December 31,**<br> **2024**<br> **(Restated)** |
| **Net revenues** | $384129 | $773870 |
| Cost of revenues | 1761368 | 2235004 |
| Net loss associated with liquidation of raw materials | 684960 | 943278 |
| &nbsp;&nbsp;&nbsp;Gross margin | (2062199) | (2404412) |
| &nbsp;&nbsp;&nbsp;**Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general, and administrative expense | 7926714 | 2836942 |
| **Total operating expenses** | 7926714 | 2836942 |
| **Loss from operations** | (9988913) | (5241354) |
| **Other expense, net:** |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (1866438) | (791730) |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | (2017314) |  |
| &nbsp;&nbsp;&nbsp;Loss on sale of assets | (1906) |  |
| &nbsp;&nbsp;&nbsp;Other income | 93500 |  |
| &nbsp;&nbsp;&nbsp;Other expense | (41050) | (41050) |
| **Total other expense, net** | (3833208) | (832780) |
| **Net loss before income taxes** | (13822121) | (6074134) |
| &nbsp;&nbsp;&nbsp;Income tax provision |  |  |
| **Net loss** | $(13822121) | $(6074134) |
| **Net loss per share:** |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $(0.36) | $(0.16) |
| Weighted average number of shares outstanding: |  |  |
| &nbsp;&nbsp;&nbsp;Basic & diluted | 38276140 | 37530778 |

---

*The accompanying notes are an integral part of these financial statements.*

**FIRST BREACH, INC.**

**STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional**<br> **Paid-in**<br>**Capital**  | **Accumulated**<br>**Deficit**  |<br>**Total** |
| **Balance at January 1, 2024** | 37196111 | 3719 | 25092195 | (15346867) | 9749047 |
| Equity offering proceeds, net of stock issuance costs | 528500 | 53 | 734947 |  | 735000 |
| Warrants issued in conjunction with convertible notes payable (as restated) |  |  | 639690 |  | 639690 |
| Share-based compensation | 60000 | 6 | 59994 |  | 60000 |
| Net loss |  |  |  | (6074134) | (6074134) |
| **Balance at December 31, 2024 (as restated)** | 37784611 | $3778 | $26526826 | $(21421001) | $5109603 |
| Issuance of common stock for the conversion of debt | 1775000 | 178 | 3549822 |  | 3550000 |
| Equity offering proceeds in conjunction with the conversion of convertible notes payable | 2195000 | 219 | 4389781 |  | 4390000 |
| Warrants issued in conjunction with the conversion of convertible notes payable |  |  | 677374 |  | 677374 |
| Issuance of common stock for the exercise of warrants | 1775000 | 178 | 887322 |  | 887500 |
| Equity offering proceeds | 970500 | 97 | 1030403 |  | 1030500 |
| Share-based compensation |  |  | 4581625 |  | 4581625 |
| Net loss |  |  |  | (13822121) | (13822121) |
| **Balance at December 31, 2025** | 44500111 | $4450 | $41643152 | $(35243122) | $6404480 |

---

*The accompanying notes are an integral part of these financial statements.*

**FIRST BREACH, INC**.

**STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **Year ended**<br> **December 31,**<br> **2025** | **Year ended**<br> **December 31,**<br> **2024**<br> **(Restated)** |
| Cash flows from operating activities: |  |  |
| Net loss | $(13822121) | $(6074134) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 4581625 | 60000 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 1332393 | 1327482 |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 2017314 |  |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount | 53550 | 53550 |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount – warrant feature and OID interest | 984834 | 82872 |
| &nbsp;&nbsp;&nbsp;Non-cash PIK interest | 344151 | 28255 |
| &nbsp;&nbsp;&nbsp;Loss on sale of asset | (1906) |  |
| &nbsp;&nbsp;&nbsp;Right-of-use assets, net of lease liabilities | 235 | 12290 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (21624) | (28440) |
| &nbsp;&nbsp;&nbsp;Inventories | 927623 | 1036453 |
| &nbsp;&nbsp;&nbsp;Prepaid and other current assets | (2111) | 10401 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 189706 | 1194423 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 72753 | 283924 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities, related party | (85337) | 246344 |
| &nbsp;&nbsp;&nbsp;Employee loan payable, related party |  | 121739 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | (54410) | 54410 |
| Net cash used in operating activities | (3483325) | (1590431) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of assets | 78000 |  |
| &nbsp;&nbsp;&nbsp;Capitalized expenditures | (88369) | (190390) |
| Net cash used in investing activities | (10369) | (190390) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from convertible notes payable | 2090000 | 2000000 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock upon exercise of warrants | 887500 |  |
| &nbsp;&nbsp;&nbsp;Principal payments on financing lease | (712794) | (568567) |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance on equity offerings | 3225500 | 791000 |
| &nbsp;&nbsp;&nbsp;Proceeds from note payable – related party | 50000 |  |
| &nbsp;&nbsp;&nbsp;Net payments on note payable | (4003) |  |
| &nbsp;&nbsp;&nbsp;Stock issuance costs |  | (56000) |
| Net cash provided by financing activities | 5536203 | 2166433 |
| Net change to cash | 2042509 | 385612 |
| Cash at beginning of year | 434613 | 49001 |
| &nbsp;&nbsp;&nbsp;Cash at end of year | $2477122 | $434613 |
| Supplemental disclosure of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $530700 | $665101 |
| &nbsp;&nbsp;&nbsp;Cash paid for taxes | $— | $— |
| Supplemental Non-cash Financing Activities |  |  |
| &nbsp;&nbsp;&nbsp;Issuance of common stock for the conversion of convertible notes payables | $3550000 | $— |
| &nbsp;&nbsp;&nbsp;Issuance of warrants in conjunction with convertible notes payable | $677374 | $639690 |

---

*The accompanying notes are an integral part of these financial statements.*

**NOTE 1 — ORGANIZATION AND NATURE OF BUSINESS**

First Breach ("The Company") was originally formed as a limited liability company named First Breach, LLC under the laws of the State of Maryland on April 9, 2018 and subsequently converted to a corporation named First Breach, Inc. ("First Breach") incorporated under the laws of the State of Delaware on October 22, 2021.

The Company is a match-grade ammunition component manufacturer offering brass cups, brass casings, full-metal-jacket projectiles, lead projectile cores, and lead wire. Equipped with numerous quality control checks, the Company offers match-grade, SAAMI-specification products. Customers will have the ability to order custom head-stamped casings as well as a wide range of grain-size options for projectiles. The majority of customers are resellers and direct-to-consumers primarily within the United States.

The Company is dedicated to building upon its industry experience while emphasizing placing integrity first along with competitive pricing, building customer relations, and utilizing quality raw materials.

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

***Basis of Presentation***

The accompanying financial statements and the related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission ("SEC").

***Liquidity and Going Concern***

The Company has incurred losses since inception, devoting substantially all of its efforts toward manufacturing buildout and related operational activities, and have an accumulated deficit of $35,243,122 as of December 31, 2025. The Company generated a net loss of $13,822,121 during the year ended December 31, 2025. Net cash used in its operating activities during the year ended December 31, 2025 was $3,483,325. The Company expects to continue to generate operating losses and negative cash flow from operations for the foreseeable future. The Company plans to continue to actively pursue financing alternatives, but there can be no assurance that it will obtain the necessary funding in the future when needed.

The Company's management concluded that its recurring losses from operations and the fact that it has not generated significant revenue or positive cash flows from operations raise substantial doubt about its ability to continue as a going concern for the next 12 months from the date of filing this Audit Report for the year ended December 31, 2025. The Company's auditors also included an explanatory paragraph in its report on our financial statements as of and for the year ended December 31, 2025 with respect to this uncertainty.

***Revenue Recognition and Cost of Revenue***

The Company generates revenue from the production and sale of ammunition, which includes shipping income. The Company recognizes revenue according to Accounting Standard Codification – Revenue from Contract with Customers ("ASC 606"). When the customer obtains control over the promised goods or services, the Company records revenue in the amount of consideration that it can expect to receive in exchange for those goods and services. The Company applies the following five-step model to determine revenue recognition:

● Identification of a contract with a customer

● Identification of the performance obligations in the contact

● Determination of the transaction price

● Allocation of the transaction price to the separate performance allocation

● Recognition of revenue when performance obligations are satisfied

The Company only applies the five-step model when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception and once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company's contracts contain a single performance obligation, and the entire transaction price is allocated to the single performance obligation. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Accordingly, The Company recognizes net revenues when the customer obtains control of its product, which typically occurs upon shipment of the product from our warehouse or the performance of the service.

The Company applies ASC 606, *Revenue from Contracts with Customers*, (ASC 606) utilizing the following allowable exemptions or practical expedients:

● Portfolio approach practical expedient relative to the estimation of variable consideration.

● Shipping and handling practical expedient to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities.

● Costs of obtaining a contract practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset is one year or less.

● Sales taxes practical expedient to exclude sales taxes and other similar taxes from the transaction price.

● Significant financing component practical expedient.

Substantially all the Company's sales are domestic and are made to customers under agreements which do not include rights of return or warranty for the years ended December 31, 2025 and 2024. Revenue from product sales is recognized as net of discounts and estimated returns.

Cost of revenue includes the cost of purchased merchandise plus freight and any applicable delivery charges from the vendor to the Company. Sales are to individual retail consumers through the Company's ecommerce sales and wholesale distribution partners. The majority of customers are resellers and direct-to-consumers primarily within the United States.

Cost of revenues earned includes all finished material, supplies and raw materials, equipment rental, and freight.

---

| | |
|:---|:---|
| Total accounts receivable |  |
| January 1, 2024 | $1825 |
| January 1, 2025 | $30265 |
| December 31, 2025 | $51889 |

---

 ****

***Contract Liabilities***

As of December 31, 2025 and 2024, the Company did not have any contract assets or contract liabilities arising from contracts with customers other than customer deposits of $0 and $54,410, respectively. Customer deposits represent amounts received in advance of the Company's satisfaction of its performance obligations under customer contracts. These deposits will be recognized as revenue when the related products are delivered or services are performed. All remaining performance obligations associated with these deposits are expected to be satisfied within the following calendar year.

The following table provides information about contract liabilities from contracts with customers.

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Customer deposit | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $54410 |
| &nbsp;&nbsp;&nbsp;Total Contract Liabilities | $— | $54410 |

---

Significant changes in the contract liabilities balance during the period are as follows:

---

| | |
|:---|:---|
|  | ***Contract liabilities*** |
| Balance, December 31, 2024 | $54410 |
| Contracts with customers entered during the period |  |
| Contracts with customers canceled during the period | (54410) |
| &nbsp;&nbsp;&nbsp;Balance, December 31, 2025 | $— |

---

***Use of Estimates***

Management uses estimates and assumptions in preparing its financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. The most significant estimates relate to the estimated determination of the allowance for credit losses, allowance for obsolete inventory, warrant fair value and stock-based compensation. On an ongoing basis, management evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities.

***Segments***

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosures about a public entity's reportable segments, including significant segment expense categories and expanded interim reporting requirements. The amendments are effective for years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-07 for the year ended December 31, 2024. The adoption of this standard did not have a material impact on the Company's financial statements.

In November 2023, the FASB issued Accounting Standards Update ASC 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASC 2023-07 requires public entities to disclose significant segment expense categories that are regularly provided to the Chief Operating Decision Maker ("CODM") and included in the measure of segment profit or loss, as well as the title and position of the CODM. The amendments also require disclosure of all annual segment profit or loss and asset disclosures in interim periods and provide expanded disclosure requirements for entities with a single reportable segment.

The primary financial measures used by the CODM to evaluate performance and allocate resources are Net loss and Loss from operations. The CODM uses Net loss and Loss from operations to evaluate the performance of the Company's ongoing operations and as part of the Company's internal planning and forecasting processes. Information on Net loss and Loss from operations is disclosed in the interim unaudited condensed statements of operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the interim unaudited condensed statements of operations.

The CODM does not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the notes to the financial statements.

The Company has determined that its current business and operations consist of one reporting segment.

***Cash***

Cash includes cash on hand as of December 31, 2025 and 2024, the Company maintained an aggregate cash balance of $2,477,122 and $434,613, respectively, in two bank deposit accounts held at a single financial institution. Of this amount, $2,227,122 and $184,613 exceeded the federally insured limit of $250,000 as of December 31, 2025 and 2024, respectively. There were no cash equivalents as of December 31, 2025 and 2024.

The Company has not experienced any losses in such accounts, and management believes it is not exposed to significant credit risk on its cash balances.

 ****

***Accounts Receivable, net***

Trade accounts receivable are stated at the amount the Company expects to collect and do not bear interest. For its financial instruments subject to credit risk, consisting of its receivables, the Company recognizes as an allowance its estimate of lifetime expected credit losses under the current expected credit loss (CECL) model of ASC 326. The approach is based on the Company's internal knowledge and historical default rates over the expected life of the receivables and is adjusted to reflect current economic conditions. This evaluation takes into account the customer's ability and intention to pay the consideration when it is due along with incorporating changes in the forward-looking estimates. If the expected financial condition of the Company's customers were to improve, the allowances may be reduced accordingly. Provisions to the allowances for credit losses are recorded in selling, general and administrative expenses. As of December 31, 2025 and 2024, the Company determined that the vast majority of its accounts receivable were fully collectible and, accordingly, did not record an allowance for credit losses.

 ****

***Inventories***

Inventories are valued at the lower of cost and net realizable value, with cost determined using the weighted average cost method on a first-in first-out basis. Net realizable value is defined as sales price less cost of completion, disposable and transportation. Production costs, including labor and manufacturing overhead, are applied to finished goods based on estimated production capacity. Any excess production costs that result from abnormally low production levels are expensed as incurred and included in cost of revenues.

The Company evaluates inventory for excess or obsolescence and records provisions when necessary to reduce inventories to their net realizable value. The reserve for excess or obsolete inventories was $20,105 as of December 31, 2025 and 2024.

***Property and Equipment, Net***

The Company states property and equipment at historical cost less accumulated depreciation and amortization. The Company computes depreciation and amortization using the straight-line method at rates intended to depreciate the cost of assets over their estimated useful lives, which are generally three to ten years. Upon retirement or sale of property and equipment, The Company removes the cost of the disposed assets and related accumulated depreciation and amortization from the accounts, and any resulting gain or loss is credited or charged to other income or expenses. The Company charges expenditures for normal repairs and maintenance to expenses as incurred.

The Company capitalizes additions and expenditures for improving or rebuilding existing assets that extend the useful life. Leasehold improvements made either at the inception of the lease or during the lease term are amortized over the shorter of their economic lives or the lease term including any renewals that are reasonably assured.

Property and equipment is stated at historical cost less accumulated depreciation. The estimated useful lives as follows:

---

| | |
|:---|:---|
| **Asset Class** | **Useful Life (Years)** |
| Vehicles | 3-6 |
| Leasehold improvements | 6-7 |
| Office furniture & fixtures | 7 |
| Tooling, machinery and equipment | 3-10 |

---

***Long-Lived Assets***

Recoverability of long-lived assets, including property and equipment and certain identifiable intangible assets are evaluated whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Factors considered important which could trigger an impairment review include but are not limited to significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for the overall business, significant decrease in the market value of the assets and significant negative industry or economic trends. In the event the carrying amount of the long-lived assets may not be recoverable based upon the existence of one or more of the indicators, the assets are assessed for impairment based on the estimated future undiscounted cash flows expected to result from the use of the asset and its eventual deposition. If the carrying amount of an asset exceeds the sum of the estimated future undiscounted cash flow, an impairment loss is recorded for the excess of the asset's carrying amount over its fair value. There was no impairment during the years ended December 31, 2025 and 2024.

 ****

***Fair Value of Financial Instruments***

The Company complies with ASC 820, *Fair Value Measurements and Disclosures*, which defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP and expands disclosure requirements about fair value measurements. Under ASC 820, there are three categories for the classification and measurement of assets and liabilities carried at fair value:

Level 1: Valuation based on quoted market prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Examples include publicly traded equity securities and publicly traded mutual funds that are actively traded on a major exchange or over-the-counter market.

Level 2: Valuation based on quoted market prices of investments that are not actively traded or for which certain significant inputs are not observable, either directly or indirectly. Examples include municipal bonds, where fair value is estimated using recently executed transactions, bid asked prices and pricing models that factor in, where applicable, interest rates, bond spreads and volatility.

Level 3: Valuation based on inputs that are unobservable and reflect management's best estimate of what market participants would use as fair value. Examples include limited partnerships and private equity investments.

The estimated fair value of cash, trade receivables, accounts payable, accrued expenses and other current liabilities are based on Level 1 inputs as the fair values approximate carrying amounts as of December 31, 2025 and 2024, based on the short-term nature and maturity of these instruments.

The fair value of the Company's convertible notes payable, approximated the carrying value as of December 31, 2025. Factors that the Company considered when estimating the fair value of its debt included market conditions and the terms of the debt. The level of the debt would be considered as Level 2.

The estimated fair value of warrants shares is determined based on various valuation methodologies, including the Monte Carlo pricing model and other appropriate valuation techniques. These methodologies consider underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e., stock price, exercise/conversion price, etc.). Probabilities were assigned to each variable such as the timing and pricing of events over the term of the instruments based on management projections.

 ****

***Equity Classified Warrants***

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, *Distinguishing Liabilities from Equity* ("ASC 480") and ASC 815, *Derivatives and Hedging* ("ASC 815"). The Company's assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance.

The issuance of warrants in conjunction with convertible debt (see Note 10) and the issuance of warrants to investors and placement agents (see Note 12) qualify for the derivative scope exception under ASC 815 and are therefore presented as a component of Stockholders' Equity on the balance sheets without subsequent fair value re-measurement.

 **

***Net loss per share***

 **

Basic net loss per share is computed by dividing net income available to common shareholders by the weighted average shares outstanding during the period. Diluted net loss per share takes into account the potential dilution that could occur if securities or other contracts to issue shares, such as stock options, warrants, and unvested restricted stock units, were exercised and converted into common shares and the impact would not be antidilutive. Diluted net loss per share is computed by dividing net income available to common shareholders by the weighted average shares outstanding during the period, increased by the number of additional shares that would have been outstanding if the potential shares had been issued and were dilutive. Contingently issuable shares are included in basic net loss per share only when there is no circumstance under which those shares would not be issued.

 ****

***Advertising***

Advertising and marketing costs are expensed as incurred. During the years ended December 31, 2025 and 2024, advertising costs incurred by the Company totaled $2,000 and $8,098, respectively, and are included in selling, general and administrative expenses in the accompanying statements of operations.

**Deferred Financing Costs**

Deferred financing costs relating to the Company's convertible notes payable are deferred and amortized ratably over the life of the debt using the straight-line method. Deferred financing costs are included as an addition to interest expense on the of statements of operations and are included in Convertible notes payable, net of debt discount on the balance sheets.

***Shipping and Handling Costs***

The Company accounts for shipping and handling activities as fulfillment activities. As such, the Company does not evaluate shipping and handling as promised services to its customers. Shipping and handling costs are included in cost of revenues in the accompanying statements of operations.

***Leases***

The Company is a lessee in multiple noncancelable operating and financing leases. If the contract provides the Company with the right to substantially all the economic benefits and the right to direct the use of the identified asset, it is generally considered to be or contain a lease. Right-of-Use (ROU) assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term. The ROU asset is also adjusted for any lease prepayments made, lease incentives received, and initial direct costs incurred.

The lease liability is initially and subsequently recognized based on the present value of its future lease payments. Variable payments are included in the future lease payments when those variable payments depend on an index or a rate. Increases (decreases) to variable lease payments due to subsequent changes in an index or rate are recorded as variable lease expense (income) in the future period in which they are incurred.

The discount rate used is the implicit rate in the lease contract, if it is readily determinable, or the Company's incremental borrowing rate. The Company uses the incremental borrowing rate based on the information available at the commencement date for all leases. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment.

The ROU asset for operating leases is subsequently measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. Operating leases with fluctuating lease payments: For operating leases with lease payments that fluctuate over the lease term, the total lease costs are recognized on a straight-line basis over the lease term. The ROU asset for finance leases is amortized on a straight-line basis over the economic life of the asset as the financing leases include an option to purchase the underlying asset that the Company is reasonably certain to exercise

For all underlying classes of assets, the Company has elected the practical expedient to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement. The Company recognizes short-term lease cost on a straight-line basis over the lease term.

***Stock-Based Compensation***

The Company accounts for stock awards issued under ASC 718, *Compensation – Stock Compensation*. Under ASC 718, stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award.

Stock-based compensation is recognized as an expense over the employee's requisite vesting period and over the non-employee's period of providing goods or services. 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 Taxes***

The Company accounts for income taxes in accordance with ASC Topic 740, *Income Taxes.* Deferred income taxes are recorded for the expected tax consequences of temporary differences between the basis of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. As of December 31, 2025 and 2024, the Company recorded a valuation allowance equal to the full recorded amount of its net deferred tax assets since it is more-likely-than-not that benefits from its deferred tax assets will not be realized. The valuation allowance is reviewed quarterly and is maintained until sufficient positive evidence exists to support its reversal.

The Company recognizes the impact of an uncertain tax position if the position will more likely than not be sustained upon examination by a taxing authority, based on the technical merits of the position. The Company's policy is to record interest and penalties related to income taxes as part of its income tax provision. As of December 31, 2025 and 2024, the Company had no unrecognized tax benefits and as such, no liability, interest or penalties were required to be recorded. The Company does not expect this to change significantly in the next twelve months.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recover or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is entirely dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

The Company files income tax returns in the U.S. federal jurisdiction and the State of Maryland.

 **

***Accounting Pronouncements***

 

***Recently Issued and Adopted Pronouncements***

 ****

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. We are also a "smaller reporting company," as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be permitted to do so for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter. The amendments also require disclosure of all annual segment profit or loss and asset disclosures in interim periods and provide expanded disclosure requirements for entities with a single reportable segment.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. The Company adopted ASU 2023-07 for its year ended December 31, 2024, in accordance with the required effective date for non-accelerated filers. The adoption did not impact the Company's financial position, results of operations, or cash flows; however, it resulted in enhanced segment disclosures in the notes to the financial statements in accordance with ASC 280, *Segment Reporting*. These enhancements include the identification of significant segment expense categories, disclosure of the measures of segment profit or loss used by the Chief Operating Decision Maker ("CODM"), related reconciliations to the most comparable GAAP measure, and expanded disclosures for entities with a single reportable segment.

In December 2023, the FASB issued ASU 2023-09*, Income Taxes (Topic 740): Improvements to Income Tax Disclosures*. The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as reconciling items that meet a quantitative threshold. Further, the ASU requires additional disclosures on income tax expense and taxes paid, net of refunds received, by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024 on a prospective basis with the option to apply it retrospectively. Early adoption is permitted. The Company adopted ASC 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. For additional information, see Note 19 "Income Taxes" to the financial statements.

***Recently Issued but Not Yet Adopted Accounting Pronouncements***

In November 2024, the FASB issued ASU 2024-03, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures* (Subtopic 220-40): Disaggregation of Income Statement Expenses to expand the disclosure requirements for certain costs and expenses. In January 2025, FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03 as periods beginning after December 15, 2026 for annual reporting, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact this standard will have on its financial statements.

In November 2024, the FASB issued ASU 2024-04, *Debt—Debt with Conversion and Other Options* (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt - Debt with Conversion and Other Options. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of the annual reporting period for all entities that have adopted the amendments in Update 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. The Company is currently evaluating the impact this standard will have on its financial statements.

**NOTE 3 — RESTATEMENT**

During the preparation of our financial statements for the year ended December 31, 2025, we identified errors related to (i) the incorrect number of warrants used to calculate the debt discount associated with warrants issued in conjunction with convertible debt and (ii) the Company determined that certain inventory units had a net realizable value below recorded cost. The warrant error affected the allocation of proceeds between debt and equity, resulting in adjustments to the debt discount, interest expense, and Additional Paid-in Capital. The inventory valuation error impacted inventory, cost of goods sold, and retained earnings in the related periods. As a result, we restated our previously issued financial statements for the year ended December 31, 2024.

The following tables present the effect of the Restatement Items on the Company's balance sheet, statement of operations, and cash flow for the year ended December 31, 2024.

**FIRST BREACH, INC.**

**BALANCE SHEETS**

**(as restated)**

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024**<br>**As Previously reported** |<br>**Restatement adjustment** | **December 31, 2024**<br>**As restated** |
| **Assets** | | | |
| &nbsp;&nbsp;&nbsp;Current assets: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash | $434613 | $- | $434613 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 30265 |  | 30265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories, net | 1999982 | (154000)**(a)** | 1845982 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other current assets | 44081 | - | 44081 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | 2508941 | (154000) | 2354941 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net | 9483383 |  | 9483383 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets | 1616052 |  | 1616052 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 53625 | - | 53625 |
| **Total assets** | $13662001 | $(154000) | $13508001 |
| **Liabilities and stockholdersw' equity** |  |  |  |
| &nbsp;&nbsp;&nbsp;**Current liabilities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $1852202 | $- | $1852202 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 358906 |  | 358906 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities, related party | 513614 |  | 513614 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee loan payable, related party | 121739 |  | 121739 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 54410 |  | 54410 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability - current portion | 344177 |  | 344177 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing lease liability - current portion | 712795 | - | 712795 |
| **Total current liabilities** | 3957843 | - | 3957843 |
| **Long-term liabilities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible notes payable, net of current portion | 868788 | 602648 **(b)** | 1471436 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Opertaing lease liability - net of current portion | 1361137 |  | 1361137 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing lease, net of current portion | 1607982 |  | 1607982 |
|  | - | - | - |
| **Total liabilities** | 7795750 | 602648 | 8398398 |
| Commitments and Contingencies (Note 16) |  |  |  |
| Stockholders' Equity: |  |  |  |
| Common stock, $0.0001 par value, 100,000,000 authorized, 44,500,111 issued and outstanding as of December 31, 2024 | 3778 |  | 3778 |
| Additional paid- in capital | 27189689 | (662863)**(b)** | 26526826 |
| Accumulated deficit | (21327216) | (93785) | (21421001) |
| **Total stockholders' equity** | 5866251 | (756648) | 5109603 |
| **Total liabilities and stockholders' equity** | $13662001 | $(154000) | $13508001 |

---

**FIRST BREACH, INC.**

**STATEMENT OF OPERATIONS**

**(Restated)**

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024**<br>**As Previously reported** |<br>**Restatement adjustment** | **December 31, 2024**<br>**As restated** |
| Net revenues | $773870 | $- | $773870 |
| Cost of revenues | 2081004 | 154000 **(a)** | 2235004 |
| Net loss associated with liquidation of raw materials | 943278 |  | 943278 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross margin | (2250412) | $(154000) | (2404412) |
| &nbsp;&nbsp;&nbsp;Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales, general and administrative | 2836942 | - | 2836942 |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 2836942 |  | 2836942 |
| Loss from operations | (5087354) | (154000) | (5241354) |
| Other expenses, net: |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (851945) | 60215 **(b)** | (791730) |
| &nbsp;&nbsp;&nbsp;Other expense | (41050) | - | (41050) |
| Total other expenses, net | (892995) | 60215 | (832780) |
| Net loss before income taxes | (5980349) | (93785) | (6074134) |
| &nbsp;&nbsp;&nbsp;Income tax provision |  |  |  |
| Net loss | $(5980349) | $(93785) | $(6074134) |

---

**FIRST BREACH, INC.**

**STATEMENTS OF CASH FLOW**

**(Restated)**

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024**<br>**As Previously reported** |<br>**Restatement adjustment** | **December 31, 2024**<br>**As restated** |
| Cash flows from operating activities: |  |  |  |
| Net loss | $(5980349) | (93785) | $(6074134) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |
| Stock-based compensation | 60000 |  | 60000 |
| Depreciation and amortization | 1327482 |  | 1327482 |
| Amortization of debt discount | 81805 | (28255) | 53550 |
| Amortization of debt discount – warrant feature | 171342 | (88470) | 82872 |
| Non-cash PIK interest |  | 28255 | 28255 |
| Right-of-use assets, net of lease liabilities | 12290 |  | 12290 |
| Changes in operating assets and liabilities: |  |  |  |
| Accounts receivable | (28440) |  | (28440) |
| Inventories | 882453 | 154000 | 1036453 |
| Prepaid and other current assets | 10401 |  | 10401 |
| Accounts payable | 1194423 |  | 1194423 |
| Accrued liabilities | 283924 |  | 283924 |
| Accrued liabilities, related party | 246344 |  | 246344 |
| Employee loan payable, related party | 121739 |  | 121739 |
| Contract liabilities | 54410 | - | 54410 |
| Net cash used in operating activities | (1562176) | (28255) | (1590431) |
| Cash flows from investing activities: |  |  |  |
| Capitalized expenditures | (190390) | - | (190390) |
| Net cash used in investing activities | (190390) |  | (190390) |
| Cash flows from financing activities: |  |  |  |
| Proceeds from convertible notes payable | 2000000 |  | 2000000 |
| Principal payments on financing lease | (596822) | 28255 | (568567) |
| Proceeds from issuance on equity offerings | 791000 |  | 791000 |
| Stock issuance costs | (56000) |  | (56000) |
| Net cash provided by financing activities | 2138178 | 28255 | 2166433 |
| Net change to cash | 385612 | - | 385612 |
| Cash at beginning of year | 49001 |  | 49001 |
| Cash at end of year | $434613 | $- | $434613 |

---

The following adjustments were recorded to correct errors identified in the previously issued financial statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** Adjustment in the amount of $154,000 to reduce inventory to net realizable value, as certain inventory units had a net realizable value below their recorded cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** Adjustment in the amount of $60,215 to correct the number of warrants used in calculating the debt discount associated with warrants issued in conjunction with convertible debt, which resulted in an overstatement of the debt discount and additional paid-in capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)** Reclassification adjustment in the amount of $28,255 between debt discount and principal payments related to financing leases to properly present the amounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)** Reclassification in the amount of $28,255 of non-cash PIK interest to be consistent with current year reporting.

**NOTE 4 —** **INVENTORIES**

Inventories consisted of the following at:

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| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,**<br> **2024**<br> **(Restated)** |
| Finished products | $319131 | $275617 |
| Raw materials | 472863 | 1588930 |
| Work in progress | 146470 | 1540 |
| &nbsp;&nbsp;&nbsp;Inventory, gross | 938464 | 1866087 |
| Allowance for obsolete inventory | (20105) | (20105) |
| &nbsp;&nbsp;&nbsp;Total inventory | $918359 | $1845982 |

---

 

*Net Loss from Liquidation of Raw Materials*

The net loss on liquidation of raw materials for the years ended December 31, 2025 and 2024 was $684,960 and $943,278, respectively, attributable to the liquidation of certain raw material inventory outside the normal course of operations to support operating cash flow and working capital management, which resulted in proceeds below the inventory's carrying value.

**NOTE 5 — PREPAID ASSETS**

Prepaid assets consist of the following at:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Prepaid insurance | 35389 | 2978 |
| Prepaid other | 10803 |  |
| Equipment deposits |  | 41103 |
|  | $46192 | $44081 |

---

**NOTE 6 — PROPERTY AND EQUIPMENT, NET**

Property and equipment, net consist of the following at:

---

| | | |
|:---|:---|:---|
| **Classification** | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Vehicles | $340210 | $335218 |
| Leasehold improvements | 1656123 | 1656123 |
| Office furniture & fixtures | 60328 | 57362 |
| Tooling, machinery and equipment | 9876922 | 9865708 |
| &nbsp;&nbsp;&nbsp;Total property and equipment | 11933583 | 11914411 |
| Less: Accumulated depreciation and amortization | (3731626) | (2431028) |
| Property and equipment, net | $8201957 | $9483383 |

---

Depreciation and amortization expense was $1,332,393 and $1,327,482 for each of the years ended December 31, 2025 and 2024, respectively.

**NOTE 7 — ACCRUED LIABILITIES**

Accrued liabilities consisted of the following at:

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| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Accrued outstanding lease payments | $22439 | $171919 |
| Accrued professional fees | 106120 | 54662 |
| Accrued utilities | 10991 |  |
| Accrued employee compensation | 25109 | 32325 |
| Accrued contractor costs | 267000 | 100000 |
|  | $431659 | $358906 |

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**NOTE 8 — OPERATING LEASES**

On March 18, 2021, the Company entered into a lease agreement with New Heights Industrial Park, LLC for a new office and manufacturing space totaling 71,500 square feet in Hagerstown, Maryland. The lease commenced upon the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) manufacturing certification received on May 22, 2022, and shall expire 84 months thereafter. The initial monthly rent is $31,877 with annual increases of 3% per annum. The lease agreement grants the Company two successive five-year extension options, with rent for each extension term commencing at 103% of the prior year's annual rent, subject to timely notice and the absence of default.

Components of lease expense were as follows for the twelve months ended:

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| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,**<br> **2024** |
| Operating lease right-of-use lease asset | $2465275 | $2465275 |
| Accumulated amortization | (1193637) | (849223) |
| Net balance | $1271638 | $1616052 |
| Lease liability, current portion | $372665 | $344177 |
| Lease liability, long term | 988471 | 1361137 |
| Total operating lease liabilities | $1361136 | $1705314 |
| Weighted Average Remaining Lease Term – operating leases | 40 months | 52 months |
| Weighted Average Discount Rate – operating leases | 4.5% | 4.5% |

---

Future minimum lease payments under this operating lease as of December 31, 2025, were as follows:

---

| | |
|:---|:---|
| 2026 | $426355 |
| 2027 | 439146 |
| 2028 | 452320 |
| 2029 | 152252 |
| Total lease payments | 1470073 |
| Less imputed interest | (108937) |
| Maturities of lease liabilities | $1361136 |

---

Total operating lease expense for the years ended December 31, 2025, and 2024, was $414,172, and is recorded in selling, general, and administrative expenses in the accompanying statements of operations.

Supplemental cash flows information related to leases was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2025** | **December 31,**<br>**2024** |
| Cash paid for amounts included in the measurement of lease liability: |  |  |
| Operating cash flows from operating lease | $413937 | $401881 |

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**NOTE 9 — FINANCING LEASES**

On February 8, 2023, the Company entered into an equipment financing agreement with Utica Leaseco, LLC ("Utica"), pursuant to a Master Lease Agreement, ("Master Lease Agreement"), between Utica, as lessor, and the Company as the lessee (collectively, the "Lessee"). Under the Master Lease Agreement, Utica loaned an aggregate of $1,800,000 for certain of the Company's equipment listed therein (the "Equipment"), which it leases to the Lessee. The initial term of the Master Lease Agreement was for 51 months. Under the Master Lease Agreement, the Lessee agreed to pay an initial monthly rent of $50,040 . The Lessor will have the option to charge Lessee a surcharge of 1% of the monthly payment amount per month for every 0.25% that the prime rate of Renasant Bank exceeds 5.5%.

On August 31, 2023, the parties entered into a second equipment schedule to the Master Lease Agreement, pursuant to which Utica loaned an aggregate of $1,500,000 for certain equipment listed therein. The term of the second equipment schedule is 48 months and agreed monthly payments are $44,250. The Lessor will have the option to charge Lessee a surcharge of 1% of the monthly payment amount per month for every 0.25% that the prime rate of Renasant Bank exceeds 8.25%.

If any rent is not received by Utica within five (5) calendar days of the due date, the Lessee shall pay a late charge equal to ten (10%) percent of the amount. In addition, in the event that any payment is not processed or is returned on the basis of insufficient funds, upon demand, the Lessee shall pay Utica a charge equal to five percent (5%) of the amount of such payment. The Lessee is also required to pay an annual administration fee of $5,000 for each agreement.

Upon the expiration of the term of the Master Lease Agreement, the Lessee is required to pay, together with all other amounts then due and payable under the Master Lease Agreement, in cash, an end of term buyout price equal to the lesser of: (a) $90,000 for the initial lease and $75,000 for the second lease (five percent (5%) of the Total Invoice Cost (as defined in the Master Lease Agreement)).

Provided that no default under the Master Lease Agreement has occurred and is continuing beyond any applicable grace or cure period, the Lessee has an early buy-out option with respect to all but not less than all of the Equipment, upon the payment of any outstanding rental payments or other fees then due, plus an additional amount set forth in the Master Lease Agreement, which represents the anticipated fair market value of the Equipment as of the anticipated end date of the Master Lease Agreement. In addition, the Lessee shall pay Utica an administrative charge to be determined by Utica to cover its time and expenses incurred in connection with the exercise of the option to purchase, including, but not limited to, reasonable attorney fees and costs. Furthermore, upon the exercise by the Lessee of this option to purchase the Equipment, the Lessee shall pay all sales and transfer taxes and all fees payable to any governmental authority as a result of the transfer of title of the Equipment to Lessee.

In connection with the Master Lease Agreement, the Lessee granted a security interest on all of its right, title and interest in and to: (i) the Equipment, together with all related software (embedded therein or otherwise) and general intangibles, all additions, attachments, accessories and accessions thereto whether or not furnished by the supplier; (ii) all accounts, chattel paper, deposit accounts, documents, other equipment, general intangibles, instruments, inventory, investment property, letter of credit rights and any supporting obligations related to any of the foregoing; (iii) all books and records pertaining to the foregoing; (iv) all property of such Lessee held by Utica, including all property of every description, in the custody of or in transit to Utica for any purpose, including safekeeping, collection or pledge, for the account of such Lessee or as to which such Lessee may have any right or power, including but not limited to cash; and (v) to the extent not otherwise included, all insurance, substitutions, replacements, exchanges, accessions, proceeds and products of the foregoing.

At December 31, 2025 and 2024, supplemental balance sheet information related to the collateralized assets of the finance leases was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Equipment | $9000000 | $9000000 |
| Accumulated depreciation | (2540323) | (1640323) |
|  | $6459677 | $7359677 |

---

The following table presents information about the amount and timing of the liability arising from the Company's financing lease as of December 31, 2025:

---

| | |
|:---|:---|
| **Future Minimum Financing Lease Payments** | **Financing**<br> **Lease**<br> **Liability** |
| 2026 | $893710 |
| 2027 | 843321 |
| Total undiscounted financing lease payments | 1737031 |
| Unamortized debt discount | (75499) |
| Financing lease liability – current portion | (893710) |
| Present value of financing lease liability | $767822 |
| Weighted average remaining lease term | 1.7 years |
| Weighted average discount rate | 22.7% |

---

**NOTE 10 — CONVERTIBLE DEBT**

***Summary of Convertible Notes Payable***

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024**<br> **(as restated)** |
| December 2, 2025, principal of $45,400 and accrued PIK interest of $361, net of unamortized OID interest of $5,114 and unamortized debt discount of $7,832 as of December 31, 2025 | $32815 | $— |
| August 8, 2025, principal of $227,000, and accrued PIK interest of $9,018, net of unamortized OID interest of $19,868 and unamortized debt discount of $47,750 | 168400 |  |
| May 8, 2025, principal of $340,500 and accrued PIK interest of $22,109, net of unamortized OID interest of $23,016 and unamortized debt discount of $55,447 | 284146 |  |
| December 16, 2024, principal of $227,000 and accrued PIK interest of $925, net of unamortized OID interest of $26,273 and of unamortized debt discount of $126,444 |  | 139788 |
| November 26, 2024, principal of $1,135,000 and accrued PIK interest of $9,931, net of unamortized OID interest of $126,346 and unamortized debt discount of $612,124 |  | 717922 |
| October 15, 2024, principal of $908,000, and accrued PIK interest of $17,479, net of unamortized OID interest of $92,797 and unamortized debt discount of $445,563 |  | 613726 |
| Total of convertible notes payable | 485361 | 1471436 |
| Convertible notes payable, net of debt discount – current portion | (284146) |  |
| Convertible notes payable, net of debt discount – long-term portion | $201215 | $1471436 |

---

***Senior Secured Promissory Notes Outstanding as of December 31, 2025***

 ****

***December 2, 2025 Convertible Notes Payable - Investor D***

On December 2, 2025 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $40,000 (the "Note") plus OID of $5,400, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $40,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 10% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 20,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

 ****

***August 8, 2025 Convertible Notes Payable - Investor C***

On August 8, 2025 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $200,000 (the "Note") plus OID of $27,000, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $200,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 10% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 100,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

***May 8, 2025 Convertible Notes Payable -Investor C***

On May 8, 2025 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $300,000 (the "Note") plus OID of $40,500, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $300,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 10% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 150,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

***Senior Secured Promissory Notes - Debt Conversion and Warrant Exercise***

On December 15, 2025, the Company entered into agreements with two investors to settle and extinguish promissory notes that were contractually convertible only upon the occurrence of an initial public offering, which had not occurred as of the settlement date. Accordingly, the transaction was accounted for as an extinguishment of debt in accordance with ASC 470-50.

The promissory notes had a gross principal balance of $4,029,250 and accrued payment-in-kind ("PIK") interest of $340,998, resulting in a total stated balance of $4,370,248. The carrying amount of the notes at the settlement date was $3,727,678, net of unamortized original issue discount of $189,021 and unamortized warrant debt discount of $453,549.

Pursuant to the settlement agreements, the Company issued shares of its common stock at a negotiated conversion price of $2.00 per share. In addition, as part of the overall negotiated settlement arrangement, the investors were granted the right to purchase 2,195,000 shares of the Company's common stock at $1.00 per share. Management concluded that the equity issuance at $2.00 per share and the $1.00 per share purchase right were negotiated contemporaneously and constituted a single integrated package transaction.

In accordance with ASC 470-50-40-2, the Company measured the total consideration transferred based on the fair value of the equity instruments issued at the settlement date, including the fair value attributable to the in-the-money purchase right. The fair value of the Company's common stock on the settlement date was $2.00 per share.

The excess of the fair value of the total consideration transferred over the carrying amount of the extinguished debt resulted in a loss on extinguishment of debt of $2,017,314, which is included in other expense, net in the statements of operations for the year ended December 31, 2025.

***July 14, 2025 Convertible Notes Payable - Investor B***

On July 14, 2025 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $500,000 (the "Note") plus OID of $67,500, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $500,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 10% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 250,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

As described above, on December 15, 2025, the Note was settled and extinguished through conversion into shares of the Company's common stock, and 250,000 of the outstanding Warrants were exercised for cash pursuant to their contractual terms.

***May 13, 2025 Convertible Notes Payable - Investor A***

On May 13, 2025 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $250,000 (the "Note") plus OID of $33,750, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $250,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 10% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 125,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

As described above, on December 15, 2025, the Note was settled and extinguished through conversion into shares of the Company's common stock, and 125,000 of the outstanding Warrants were exercised for cash pursuant to their contractual terms.

***April 18, 2025 Convertible Notes Payable - Investor B***

On April 18, 2025 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $300,000 (the "Note") plus OID of $40,500, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $300,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 10% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 150,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

As described above, on December 15, 2025, the Note was settled and extinguished through conversion into shares of the Company's common stock, and 150,000 of the outstanding Warrants were exercised for cash pursuant to their contractual terms.

***January 15, 2025 Convertible Notes Payable - Investor B***

On January 15, 2025 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $500,000 (the "Note") plus OID of $67,500, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $500,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 9% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 250,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

As described above, on December 15, 2025, the Note was settled and extinguished through conversion into shares of the Company's common stock, and 250,000 of the outstanding Warrants were exercised for cash pursuant to their contractual terms.

***December 16, 2024 Convertible Notes Payable - Investor A***

On December 16, 2024 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $200,000 (the "Note") plus OID of $27,000, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $200,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 10% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 100,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

As described above, on December 15, 2025, the Note was settled and extinguished through conversion into shares of the Company's common stock, and 100,000 of the outstanding Warrants were exercised for cash pursuant to their contractual terms.

***November 26, 2024 Convertible Notes Payable - Investor B***

On November 26, 2024 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $1,000,000 (the "Note") plus OID of $135,000, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $1,000,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 9% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 500,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

As described above, on December 15, 2025, the Note was settled and extinguished through conversion into shares of the Company's common stock, and 500,000 of the outstanding Warrants were exercised for cash pursuant to their contractual terms.

***October 15, 2024 Convertible Notes Payable - Investor A***

On October 15, 2024 (the "Issuance Date"), the Company entered into a securities purchase agreement (the "Purchase Agreement") with an investor, pursuant to which the Company issued a senior secured convertible promissory note in the principal amount of $800,000 (the "Note") plus original issue discount ("OID") of $108,000, on the date on which is eighteen (18) months from the Original Issue Date (the "Maturity Date"). The proceeds received by the Company were $800,000. The Company intends to use the net proceeds for working capital and general corporate purposes. The Note has a maturity date of eighteen months from the Issuance Date. The Note bears interest at a rate of 9% per annum per annum paid-in-kind ("PIK interest") quarterly, with a minimum guaranteed interest of six months on the original outstanding principal amount.

In connection with the issuance of the Note, the investor was also issued a total of 400,000 five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share (the "Warrant shares"). The Warrants include a full-ratchet anti-dilution provision that adjusts the exercise price if the Company issues equity securities at a price below $0.50 per share.

As described above, on December 15, 2025, the Note was settled and extinguished through conversion into shares of the Company's common stock, and 400,000 of the outstanding Warrants were exercised for cash pursuant to their contractual terms.

**NOTE 11 — NOTE PAYABLE**

On May 6, 2025, the Company entered into a note payable in the principal amount of $38,692 to finance the purchase of a vehicle. The note bears interest at a fixed annual rate of 5.44% and matures in May 2030. The note requires monthly principal and interest payments and is secured by the underlying vehicle. As of December 31, 2025, the outstanding principal balance was $34,689.

Future principal maturities under the note as of December 31, 2025 are as follows:

---

| | |
|:---|:---|
| 2026 | $7165 |
| 2027.0 | 7565 |
| 2028.0 | 7987 |
| 2029.0 | 8433 |
| 2030.0 | 3539 |
|  | $34689 |

---

**NOTE 12 — STOCKHOLDERS' EQUITY**

 ****

The Company is authorized to issue 100,000,000 common shares, par value $0.0001 per share and 1,000,000 shares of preferred stock, par value $0.0001 per share as of December 31, 2025 and December 31, 2024. As of December 31, 2025 and 2024, the Company had 44,500,111 and 37,784,611 common shares issued and outstanding, respectively. The common shares entitle the holder thereof to one vote per share on all matters coming before the shareholders of the Company for a vote. No shares of preferred stock have been issued or designated by First Breach, Inc.

 ****

***LLC conversion to C-Corp.***

On October 22, 2021, First Breach, LLC converted from a Delaware limited liability company to a Delaware corporation, First Breach, Inc. The Certificate of Incorporation of First Breach, Inc. authorizes the issuance of 100,000,000 shares of common stock and 1,000,000 shares of preferred stock. No shares of preferred stock have been issued or designated by First Breach, Inc. The former equity unit holders of First Breach, LLC were issued 16,235,000 shares of common stock following the limited liability company's conversion to a Delaware corporation.

 ****

***Share issuances***

On December 15, 2025, in connection with the settlement of a previously issued promissory note, the Company issued 1,775,000 shares of its common stock at an agreed upon conversion price of $2.00 per share. The issuance resulted in the elimination of the outstanding note balance, and the related accounting treatment is described in the Convertible Debt section above (see Note 10). The investors purchased 2,195,000 shares of the Company's common stock at a purchase price of $1.00 per share, resulting in aggregate cash proceeds of $2,195,000. Management determined that the fair value of the Company's common stock on the date of issuance was $2.00 per share. Accordingly, the shares were issued at a price below their estimated fair value on the issuance date.

Additionally, the investors exercised 1,775,000 outstanding warrants at an exercise price of $0.50 per share, resulting in aggregate cash proceeds of $887,500 to the Company.

During the period from August 2025 through December 2025, the Company issued to certain accredited investors an aggregate of 910,500 shares of common stock at $1.00 per share for an aggregate purchase price of $910,500. In November 2025, the Company issued to certain accredited investors an aggregate of 60,000 shares of common stock at $2.00 per share for an aggregate purchase price of $120,000.

From February through July 2024, the Company issued 437,500 shares of common stock through an underwritten offering at an offering price of $1.60 per share for gross proceeds of $700,000. Net proceeds to the Company were $644,000 after consideration of $56,000 issuance costs to underwriters.

From July through October 2024, the Company issued 91,000 shares of common stock at an offering price of $1.00 per share for proceeds of $91,000.

In December 2024, the Company issued 60,000 shares of Common Stock to a 3<sup>rd</sup> party as $60,000 compensation, respectively.

**NOTE 13 — CUSTOMER AND SUPPLIER CONCENTRATION**

Significant dealers and suppliers are those that account for greater than 10% of the Company's revenues and purchases.

During the year ended December 31, 2025, the Company had sales to three individual customers over 10% of our total sales which represented 22%, 24% and 29% of total sales. During the year ended December 31, 2024, the Company had sales to three individual customers over 10% of our total sales which represented 12%, 13% and 19% of total sales.

The Company is dependent on third-party manufacturers and distributors for certain materials utilized in the manufacturing process. During the year ended December 31, 2025 and 2024, the Company purchased a substantial portion of raw materials from two vendors representing 94% and 91%, respectively, of total purchases. The Company believes there are other suppliers that could be substituted should the supplier become unavailable or non-competitive.

**NOTE 14 — STOCK-BASED COMPENSATION**

***Stock options***

The following table summarizes the Company's incentive stock option activity and related information for the years ended December 31, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
| <br>**Number of**<br>**Options** |<br>**Weighted**<br>**Average**<br>**Exercise**<br>**Price** | | **Weighted**<br>**Average**<br>**Contractual**<br>**Term in**<br>**Years** |
| Outstanding at January 1, 2024 | 8973046 | $1.11 | 7.97 |
| Granted |  |  |  |
| Exercised |  |  |  |
| Forfeited |  |  |  |
| Cancelled |  |  |  |
| Vested |  |  |  |
| Expired |  |  |  |
| Outstanding at December 31, 2024 | 8973046 | 1.11 | 6.97 |
| Granted | 6140000 | 1.00 | 10.00 |
| Exercised |  |  |  |
| Forfeited |  |  |  |
| Cancelled |  |  |  |
| Vested |  |  |  |
| Expired |  |  |  |
| Outstanding at December 31, 2025 | 15113046 | $1.07 | 7.44 |
| Exercisable at December 31, 2025 | 14653046 | $1.07 | 7.37 |

---

On August 4, 2025, the Company granted stock options to officers and certain employees to purchase an aggregate of 5,630,000 shares of the Company's common stock at an exercise price of $1.00 per share. The option vested in full upon the grant date and became exercisable immediately.

On August 4, 2025, the Company granted stock options to certain employees to purchase an aggregate of 460,000 shares of the Company's common stock at an exercise price of $1.00 per share. The options vest over a two-year period, with 25% vesting six months from the grant date and an additional 25% vesting every six months thereafter.

On September 4, 2025, the Company granted a nonemployee contractor a stock option to purchase 50,000 shares of the Company's common stock at an exercise price of $1.00 per share. The option vested in full upon the grant date and became exercisable immediately.

As of December 31, 2025, vested outstanding stock options had approximately $14,101,000 intrinsic value as the exercise price is greater than the estimated fair value of the underlying common stock. As of December 31, 2025, there was approximately $381,800 of total unrecognized share-based compensation related to unvested stock options, which the Company expects to recognize over the next 24 months.

The Company determined the fair market value of its Common Stock underlying the stock options based upon recent sales of securities and with the assistance of third parties.

The risk-free interest rate assumption for options granted is based upon observed interest rates on the United States government securities appropriate for the expected term of the Company's employee stock options.

The Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Accordingly, the Company has elected to use the "simplified method" to estimate the expected term of its share-based awards. The simplified method computes the expected term as the sum of the award's vesting term plus the original contractual term divided by two.

Based on the lack of historical data of volatility for the Company's common stock, the Company based its estimate of expected volatility on a weighted average of the historical volatility of comparable public companies that manufacture similar products and are similar in size, stage of life cycle, and financial leverage.

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.

The Company recognizes stock option forfeitures as they occur as there is insufficient historical data to accurately determine future forfeitures rates.

The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period. The following assumptions were used to calculate share-based compensation expense for year ended December 31, 2025:

---

| | |
|:---|:---|
|  | **2025** |
| Exercise price | 1.00 |
| Share price | 1.00 |
| Volatility | 111.33% - 118.54 |
| Risk-free interest rate | 3.65% - 3.77 |
| Dividend yield | 0 |
| Expected term | 5.0 to 5.63 years |

---

**NOTE 15 — WARRANTS**

In 2025, the Company issued 1,045,000 five-year warrants to purchase company common stock in conjunction with convertible notes payable issued five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share. The warrant provides for full ratchet anti-dilution if the Company issues securities at less than $0.50 per share (see Note 10).

In 2024, the Company issued 1,000,000 five-year warrants to purchase company common stock in conjunction with convertible notes payable issued five-year warrants to purchase shares of the Company's common stock at an exercise price of $0.50 per share. The warrant provides for full ratchet anti-dilution if the Company issues securities at less than $0.50 per share (see Note 10).

The following table shows a summary of common stock warrants for the years ended December 31, 2025 and 2024.

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| | | | |
|:---|:---|:---|:---|
| <br>**Number of** |<br>**Weighted**<br>**Average**<br>**Exercise**<br>**Warrants** |<br><br>**Price** | **Weighted**<br>**Average**<br>**Contractual**<br>**Term in**<br>**Years** |
| Outstanding at January 1, 2024 | 15953996 | 1.07 | 3.09 |
| Granted | 1000000 | 0.50 | 5.00 |
| Exercised |  |  |  |
| Forfeited |  |  |  |
| Cancelled |  |  |  |
| Expired |  |  |  |
| Outstanding at December 31, 2024 | 16953996 | $0.96 | 2.65 |
| Granted | 1045000 | 0.50 | 5 |
| Exercised | (1775000) | 0.50 |  |
| Forfeited |  |  |  |
| Cancelled |  |  |  |
| Expired |  |  |  |
| Outstanding at December 31, 2025 | 16223996 | $1.06 | 1.41 |
| Exercisable at December 31, 2025 | 16223996 | $1.06 | 1.41 |

---

As of December 31, 2025, vested outstanding warrants had approximately $15,247,000 intrinsic value as the exercise price is greater than the estimated fair value of the underlying common stock.

**NOTE 16 — LOSS PER SHARE**

Basic and diluted net loss per common share was determined by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding during the period.

The following table sets forth the computation of basic and diluted net loss per share for the periods indicated:

---

| | | |
|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** |
| <br>**Basic and diluted net loss per common share** | **2025** | **2024**<br> **(Restated)** |
| Numerator: |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(13822121) | $(6074134) |
| Denominator: |  |  |
| &nbsp;&nbsp;&nbsp;Weighted average common shares outstanding | 38276140 | 37530778 |
| &nbsp;&nbsp;&nbsp;Net loss per share of common stock – Basic and Diluted | $(0.36) | $(0.16) |

---

The following warrants to purchase common stock and options to purchase common stock have been excluded from the computation of net loss per share of common stock for the periods presented because including them would have had an anti-dilutive effect:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended** | **Year ended** | **Year ended** | **Year ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2025** | **2024**<br> **(Restated)** | **2024**<br> **(Restated)** |
| Warrants to purchase common stock |  | 16223996 |  | 16953996 |
| Options to purchase common stock | | 15,113,046 | | 9,818,471 |
|  | | 31,337,042 | | 26,772,467 |

---

**NOTE 17 — RELATED PARTY TRANSACTIONS**

The Company has accrued executive compensation, net of advances, of $267,691 and $338,927 to the CEO of the Company as of the year ended December 31, 2025 and 2024, respectively.

The Company has accrued executive compensation, net of advances, of $160,587 and $174,687 to the COO of the Company as of the year ended December 31, 2025 and 2024, respectively.

***Employee Loans Payable***

During the year ended December 31, 2025, the Company had an unsecured loan payable to a consultant (the "Employee Loan") with an outstanding balance of $50,000. During the year ended December 31, 2024, the Company had an unsecured loan payable to an employee with an outstanding balance of $121,739. The Employee Loan was provided to fund short-term working capital needs. The balances outstanding amount to $171,739 and $121,739 as of December 31, 2025 and 2024, respectively.

There is no formal written loan agreement, stated maturity date, or stated interest rate associated with this borrowing. The loan is payable on demand. Because the loan does not bear stated interest, management evaluated the requirements of ASC 835-30, Imputation of Interest. Given (i) the short-term nature of the borrowing, (ii) the related-party nature of the transaction, and (iii) the absence of a stated repayment schedule, management determined that imputing interest would not have a material impact on the financial statements. Accordingly, no interest expense has been recorded in connection with this loan.

The Employee Loans are classified as a current liability on the accompanying interim unaudited condensed balance sheet as of March 31, 2026, as the employees may demand repayment at any time.

***Related Party Loan Payable***

On November 6, 2025, the Company entered into a promissory note agreement (the "Related Party Note") with a related party. The Related Party Note provides for a principal amount of $50,000 and bears interest at a rate of 6% per annum.

The Related Party Note matures and becomes due and payable in a single balloon payment consisting of all unpaid principal and accrued interest ninety (90) calendar days following the date on which the Company's common stock is publicly listed on a national securities exchange in the United States. The Company may prepay the Note, in whole or in part, at any time without penalty. As of December 31, 2025, the outstanding principal balance under the Note was $50,000.

 ***Restricted Unit Awards***

  ****

On January 23, 2026, the Company granted an aggregate of 10,000,000 shares of RSUs to certain related parties. The RSUs are subject to vesting upon the satisfaction of both time-based and market-based conditions (see Note 13).

 ***April 2026 Convertible Notes***

  ****

On April 24, 2026 (the "Original Issuance Date"), the Company entered into a securities purchase agreement with certain related parties with a principal amount of $10,500,000 plus OID of $5,465,385 (see Note 18).

**NOTE 18 — COMMITMENTS AND CONTINGENCIES**

 

***Joint Venture***

*The JV Agreement*

We entered into a joint venture agreement with IdeaForge Technology Inc., ("IdeaForge") on September 23, 2025 (the "IdeaForge JV Agreement"), as amended on March 11, 2026 (the "IdeaForge JV Amending Agreement", together with the IdeaForge JV Agreement, the "JV Agreement"), pursuant to which the parties agreed to form First Forge Technology Inc., a Delaware entity (the "Joint Venture"). The core objective of the Joint Venture is to co-develop and manufacture high-performance drones that are fully compliant with U.S. regulatory and defense standards, as well as the development of new intellectual property and drone technology, while being certified and labeled as "Made in the USA." Pursuant to the JV Agreement, we and IdeaForge are each entitled to 50% of the outstanding equity interests of the Joint Venture, with each party to be issued 5,000 shares for a purchase price of $1.00 upon issuance.

*Obligations of the Joint Venture*

 

<br> Pursuant to the JV Agreement, we agreed, among other things, to (i) make a total capital contribution to the Joint Venture in such amount as may be required for its operations and as agreed between the parties, which shall include a capital contribution of up to $25,000,000 ("Capital Contribution"), of which a first tranche of $10,000,000 shall be invested on or before December 31, 2026 and applied toward the Capital Contribution, with the remaining balance to be invested on or before December 31, 2027, each of which amounts may be adjusted by mutual agreement of the parties, and which investment may be made through the purchase of Series A Preferred Stock which is non-voting, non-convertible, does not carry dividend or liquidation preference rights and does not otherwise participate in the governance or economic rights in the Joint Venture; (ii) facilitate the provision of a demarcated manufacturing facility for manufacturing services, including through lease assistance; (iii) provide the Joint Venture with such technical know-how, expertise and operational assistance as may be reasonably required in connection with obtaining applicable licenses, permits, approvals and regulatory clearances; and (iv) support the Joint Venture's commercial development efforts by sharing relevant customer contacts in the defense, law enforcement and related sectors globally.

***Commitments***

 ****

The Company enters into various agreements with suppliers for the products it distributes. The Company had no long-term purchase commitments or arrangements with its suppliers as of December 31, 2025 and 2024.

 

***Litigation***

 ****

<br> The Company may be subject to legal proceedings and claims that arise in the ordinary course of business. Management is not currently aware of any matters that will have a material effect on the financial position, results of operations, or cash flows of the Company.

**NOTE 19 — INCOME TAXES**

The Company has incurred net operating losses since inception. At December 31, 2025 and 2024, the Company had available federal and state net operating loss carryforwards of approximately $23,700,000 and $16,800,000, respectively. The federal net operating losses will carry forward indefinitely.

Pursuant to Code Sec. 382 of the Internal Revenue Code ("the Code"), the utilization of our net operating loss carryforwards could be limited as a result of a cumulative change in stock ownership of more than 50% over a three-year period. We have not completed a Sec. 382 study and as such our net operating loss carry forwards may be subject to such limitation.

Our provision (benefit) for income taxes for the years ended December 31, 2025 and 2024 was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31, <br> 2025** | **December 31,<br> 2024**<br> **(as restated)** |
| Current Federal and State | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |
| Deferred Federal and State | - | - |
| Total (benefit) provision for income taxes | $- | $- |

---

A reconciliation of our effective income tax rate and statutory income tax rate for the years ended December 31, 2025 and 2024 is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024**<br> **(as restated)** |
| Federal tax | 21.0% | 21.0% |
| State tax | 6.5% | 6.5% |
| Non-deductible loss on extinguishment of debt | (4.0)% | -% |
| Permanent items | (1.3)% | (0.6)% |
| Valuation Allowance | (22.2)% | (26.9)% |
| Effective income tax rate | -% | -% |

---

The significant components of our deferred tax assets and liabilities for Federal and state income taxes consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31, <br> 2025** | **December 31,<br> 2024**<br> **(as restated)** |
| Deferred tax assets |  |  |
| Share-based compensation | $2874700 | $1614800 |
| Loss carryforward | 6521600 | 4620400 |
| Accrued payroll | 241600 | 241600 |
| Other | 30100 |  |
| Valuation Allowance | (8910100) | (5838900) |
| Total deferred tax assets | $757900 | $637900 |
| Deferred tax liabilities |  |  |
| Fixed assets | $(757900) | $(637900) |
|  | - | - |
| Total deferred tax liabilities | $(757900) | $(637900) |
| Total net deferred income tax assets (liabilities) | $- | $- |

---

The valuation allowance reflects limitations on our ability to use the tax attributes and reduces the value of such attributes to the more-likely-than-not realizable amount. We assessed the available positive and negative evidence to estimate if sufficient taxable income will be generated to use the existing net deferred tax assets. Based on a weighting of the objectively verifiable negative evidence primarily in the form of cumulative operating losses, we believe that it is not more likely than not that the deferred tax assets will be realized and, accordingly, a full valuation allowance has been established. The valuation allowance increased by $3,071,200 and $1,631,800 for the years ended December 31, 2025 and 2024, respectively.

The Company recognizes potential liabilities for uncertain tax positions using a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% of being realized upon settlement. We have not recorded any uncertain tax positions. The Company's tax returns for the year 2025 have not yet been filed and therefore remain open to examination by the relevant taxing authorities once filed. As of December 31, 2025 and 2024, the Company had no accrued penalties or interest related to uncertain tax positions.

The Company files U.S. Federal income tax returns, as well as state tax returns for Maryland. There are currently no income tax examinations underway for these jurisdictions. However, tax years from and including 2022 remain open for examination by federal and state income tax authorities.

**NOTE 20 — SUBSEQUENT EVENTS**

In accordance with ASC 855 "Subsequent Events", the Company evaluated subsequent events after December 31, 2025, through the date these Financial Statements were issued and has no transactions or events requiring disclosure except as disclosed below.

***Amended and Restated Certificate of Incorporation***

On January 19, 2026, the Company's Board of Directors and stockholders approved an Amended and Restated Certificate of Incorporation. The Restated Certificate, among other matters, (i) authorizes the issuance of preferred stock in one or more series with terms to be determined by the Board, (ii) provides for one vote per share of common stock, and (iii) increases the authorized number of shares of common stock from 100,000,000 to 500,000,000 shares.

On March 11, 2026, the Company entered into the IdeaForge JV Amending Agreement with IdeaForge, pursuant to amended the terms of the IdeaForge JV Agreement. The Joint Venture was established to co-develop and manufacture high-performance drones compliant with U.S. regulatory and defense standards, including the development of related intellectual property and drone technologies to be certified and labeled as "Made in the USA."

Pursuant to the JV Agreement, the Company and IdeaForge are each entitled to 50% of the outstanding equity interests of the Joint Venture, with each party to be issued 5,000 shares for a purchase price of $1.00.

***Common stock issuances***

During the period from January 2026 through March 2026, the Company issued to certain accredited investors an aggregate of 406,670 shares of common stock at $3.00 per share for an aggregate purchase price of $1,220,000. In January 2026, the Company issued to certain an accredited investor an aggregate of 102,000 shares of common stock at $1.00 per share for an aggregate purchase price of $102,000.

The Company is currently evaluating the accounting impact of this subsequent financial transaction, and the final determination will be reflected in a future reporting period.

***Restricted stock issuances***

On January 23, 2026, the Company granted an aggregate of 6,000,000 shares of restricted stock units to its Chief Executive Officer pursuant to a restricted stock award agreement. The underlying shares were issued and outstanding at the grant date but remain subject to vesting and forfeiture provisions. The underlying shares vest upon the satisfaction of both time-based and market-based conditions, including (i) 2,437,500 shares on April 1, 2026, 1,687,500 shares on July 1, 2026, and 1,312,500 shares on October 1, 2026, and (ii) 187,500 shares upon achieving each of $250 million, $500 million, and $750 million in fully diluted market capitalization. The underlying shares are held by the Company on behalf of the Chief Executive Officer, together with a stock power executed in favor of the Company, until such time as the vesting conditions are satisfied. The Chief Executive Officer has the right to vote the underlying shares on matters that require a stockholder vote; however, no cash dividends will be paid unless and until the shares vest, at which time any accumulated dividends declared during the vesting period will be paid, while any stock dividends will remain subject to the same vesting conditions, and unvested dividends will be forfeited if the underlying shares are forfeited. As the award was granted subsequent to December 31, 2025, no compensation expense related to this grant has been recognized in the accompanying financial statements, and the Company is in the process of determining the grant-date fair value of the award.

On January 23, 2026, the Company granted an aggregate of 4,000,000 shares of restricted stock unit to its Chief Operating Officer pursuant to a restricted stock award agreement. The underlying shares were issued and outstanding at the grant date but are subject to vesting and forfeiture provisions. The underlying shares vests upon the satisfaction of both time-based and market-based conditions, including (i) 1,625,000 shares on April 1, 2026, 1,125,000 shares on July 1, 2026, and 875,000 shares on October 1, 2026, and (ii) 125,000 shares upon achieving each of $250 million, $500 million, and $750 million in fully diluted market capitalization. The underlying shares are held by the Company on behalf of the Chief Operating Officer, together with a stock power executed in favor of the Company, until such time as the vesting conditions are satisfied. The Chief Operating Officer has the right to vote the underlying shares; however, no cash dividends will be paid unless and until the shares vest, at which time any accumulated dividends declared during the vesting period will be paid, while any stock dividends will remain subject to the same vesting conditions, and unvested dividends will be forfeited if the underlying shares are forfeited. As the award was granted subsequent to December 31, 2025, no compensation expense related to this grant has been recognized in the accompanying financial statements, and the Company is in the process of determining the grant-date fair value of the award.

**Through and including [●], 2026 (the 25th day after the date of this prospectus) all dealers that effect transactions in these securities, whether or not participating in the listing, may be required to deliver a prospectus.**

**[●] Shares**

**Common Stock**

**FIRST BREACH INC.**

**PROSPECTUS**

**[●], 2026**

**PART II — INFORMATION NOT REQUIRED IN PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution**

The following table sets forth an itemized statement of the amounts of all expenses payable by us in connection with the issuance and distribution of the common stock registered hereby. With the exception of the SEC registration fee and the Nasdaq initial listing fee, the amounts set forth below are estimates.

---

| | |
|:---|:---|
| SEC registration fee | $[●] |
| Nasdaq initial listing fee | [●] |
| Transfer agent fees | [●] |
| Accounting fees and expenses | [●] |
| Legal fees and expenses | [●] |
| Printing and engraving expenses | [●] |
| Miscellaneous expenses | [●] |
| Total | $[●] |

---

**Item 14. Indemnification of Directors and Officers**

Our certificate of incorporation provides that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent authorized by the Delaware General Corporation Law (the "DGCL"). We are incorporated under the laws of the State of Delaware. Under Delaware law, a corporation may indemnify any person who was or is a party or is threatened to be made a party to an action (other than an action by or in the right of the corporation) by reason of his or her service as a director or officer of the corporation, or his or her service, at the corporation's request, as a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys' fees) that are actually and reasonably incurred by him or her expenses, and judgments, fines and amounts paid in settlement that are actually and reasonably incurred by him or her, in connection with the defense or settlement of such action, provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation's best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. Although Delaware law permits a corporation to indemnify any person referred to above against such expenses in connection with the defense or settlement of an action by or in the right of the corporation, provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation's best interests, if such person has been judged liable to the corporation, indemnification is only permitted to the extent that the Court of Chancery (or the court in which the action was brought) determines that, despite the adjudication of liability, such person is entitled to indemnity for such expenses as the court deems proper. The DGCL also provides for mandatory indemnification of any director, officer, employee or agent against such expenses to the extent such person has been successful in any proceeding covered by the statute. In addition, the DGCL provides the general authorization of advancement of a director's or officer's litigation expenses in lieu of requiring the authorization of such advancement by the board of directors in specific cases, and that indemnification and advancement of expenses provided by the statute shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by law, agreement or otherwise.

We maintain a policy of directors' and officers' liability insurance which reimburses us for expenses which we may incur in connection with the foregoing indemnity provisions and which may provide direct indemnification to directors and officers where we are unable to do so.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the above, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

**Item 15. Recent Sales of Unregistered Securities**

The following is a summary of transactions during the past three years involving sales of our securities that were not registered under the Securities Act. The offers, sales and issuances of the securities described below were exempt from registration either (i) under Section 4(a)(2) of the Securities Act and the rules and regulations promulgated thereunder in that the transactions were between an issuer and sophisticated investors or members of its senior executive management and did not involve any offering within the meaning of Section 4(a)(2), (ii) under Regulation S promulgated under the Securities Act in that offers, sales and issuances were not made to persons in the United States and no directed selling efforts were made in the United States, or (iii) under Rule 144A under the Securities Act in that the shares were offered and sold by the initial purchasers to qualified institutional buyers or (iv) under Rule 701 promulgated under the Securities Act in that the transactions were under compensatory benefit plans and contracts relating to compensation.

During the period from March 2023 through October 2023, the Company issued to certain accredited investors an aggregate of 1,747,289 units, each consisting of one share of common stock and one warrant to purchase one-half share of common stock, at $1.50 per unit for an aggregate purchase price of $2,620,934.

During the period from February 2024 through July 2024, the Company issued to a certain accredited investor an aggregate of 437,500 shares of common stock at $1.60 per share for an aggregate purchase price of $700,000.

During the period from July 2024 through October 2024, the Company issued to certain accredited investors an aggregate of 91,000 shares of common stock at $1.00 per share for an aggregate purchase price of $91,000.

During the period from October 2024 through December 2024, the Company issued convertible promissory notes in the aggregate principal amount of $2,000,000 to accredited investors in private placements. In connection with the issuance of such notes, the Company also issued warrants to purchase an aggregate of 4,000,000 shares of common stock at an exercise price of $0.50 per share, with expiration dates of five years from issuance.

In December 2024, the Company issued 60,000 shares of common stock to a consultant as compensation.

During January 2025 through December 2025, the Company issued convertible promissory notes in the aggregate principal amount of $2,090,000 to accredited investors in private placements. In connection with the issuance of such notes, the Company also issued warrants to purchase an aggregate of 4,180,000 shares of common stock at an exercise price of $0.50 per share, with expiration dates of five years from issuance.

During the period from August 2025 through February 2026, the Company issued to certain accredited investors an aggregate of 3,207,500 shares of common stock at $1.00 per share for an aggregate purchase price of $3,207,500.

In November and December 2025, the Company issued to certain accredited investors an aggregate of 60,000 shares of common stock at $2.00 per share for an aggregate purchase price of $120,000.

In January to March 2026, the Company issued to certain accredited investors an aggregate of 325,836 shares of common stock at prices ranging from $3.00 to $8.00 per share for an aggregate purchase price of $990,004.

In March 2026, the Company issued to an accredited investor an aggregate of 2,500 shares of common stock at $8.00 per share for an aggregate purchase price of $20,000.

On April 24, 2026, the Company issued (i) senior secured convertible promissory notes in the aggregate principal amount of approximately $15,615,385 (reflecting aggregate cash proceeds of $10,150,000 after a 35.0% original issue discount), convertible into shares of common stock at $8.00 per share, and (ii) warrants to purchase 507,500 shares of common stock at $8.00 per share. The Company granted the holders a first-priority security interest in substantially all of its assets.

On May 21, 2026, the Company agreed to issue secured convertible promissory notes in the aggregate principal amount of approximately $7,692,308 (reflecting aggregate cash proceeds of $5,000,000 after a 35.0% original issue discount), convertible into shares of common stock at the election of the holders at $8.00 per share. Funding is conditioned upon the Company's filing of a request for acceleration of effectiveness of this registration statement pursuant to Rule 461 under the Securities Act and the approval of the Company's listing application by Nasdaq. The Company granted the holders a subordinated security interest in substantially all of its assets. No warrants were issued.

The foregoing securities were issued in reliance on Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.

**Item 16. Exhibits**

The following is a list of exhibits filed as a part of this registration statement:

---

| | |
|:---|:---|
| **Exhibit Number** | **Description of Document** |
| 3.1\* | Amended and Restated Certificate of Incorporation of the Registrant |
| 3.2\* | Bylaws of the Registrant |
| 5.1\* | Opinion of Lucosky Brookman LLP |
| 10.1\*\* | [Employment Agreement, dated January 1, 2026, by and between the Company and Jeffrey Low](ex10-1.htm) |
| 10.2\*\* | [Employment Agreement, dated January 1, 2026, by and between the Company and Jordan Low](ex10-2.htm) |
| 10.3\*\* | [Joint Venture Agreement, dated September 23, 2025, by and between ideaForge Technology Inc. and the Company](ex10-3.htm) |
| 10.4\*\* | [Lease Agreement by and between the Company and New Heights Industrial Park LLC](ex10-4.htm) |
| 10.5\*\* | [Amending Agreement to the Joint Venture Agreement, dated March 11, 2026, by and between the Company and ideaForge Technology Inc.](ex10-5.htm) |
| 10.6\*\* | [Form of Omnibus Securities and Incentive Plan](ex10-6.htm) |
| 10.7\*\* | [Securities Purchase Agreement, dated April 24, 2026 by and between the Company and Elbert Basolis](ex10-7.htm) |
| 10.8\*\* | [Securities Purchase Agreement, dated April 24, 2026 by and between the Company and Bradford Johnson](ex10-8.htm) |
| 10.9\*\* | [Securities Purchase Agreement, dated April 24, 2026 by and between the Company and C. Kenneth Leith](ex10-9.htm) |
| 10.10\*\* | [Elbert Basolis's Senior Secured Note dated April 24, 2026](ex10-10.htm) |
| 10.11\*\* | [Bradford Johnson's Senior Secured Note dated April 24, 2026](ex10-11.htm) |
| 10.12\*\* | [C. Kenneth Leith's Senior Secured Note dated April 24, 2026](ex10-12.htm) |
| 10.13\*\* | [Security Agreement, dated April 24, 2026 by and between the Company and Elbert Basolis](ex10-13.htm) |
| 10.14\*\* | [Security Agreement, dated April 24, 2026 by and between the Company and Bradford Johnson](ex10-14.htm) |
| 10.15\*\* | [Security Agreement dated April 24, 2026 by and between the Company and C. Kenneth Leith](ex10-15.htm) |
| 10.16\*\* | [Elbert Basolis's Common Stock Purchase Warrant, dated April 24, 2026](ex10-16.htm) |
| 10.17\*\* | [Bradford Johnson's Common Stock Purchase Warrant, dated April 24, 2026](ex10-17.htm) |
| 10.18\*\* | [C. Kenneth Leith's Common Stock Purchase Warrant, dated April 24, 2026](ex10-18.htm) |
| 10.19\*\* | [Master Services Agreement, dated May 1, 2026, by and between the Company and Hellbender Inc.](ex10-19.htm) |
| 10.20\*\* | [Statement of Work No. 1 (Attritable Drone Development), dated May 1, 2026, by and between the Company and Hellbender Inc.](ex10-20.htm) |
| 10.21\*\* | [Secured Convertible Promissory Note, dated May 21, 2026, issued by the Company to the May 2026 Note Investors](ex10-21.htm) |
| 10.22\*\* | [Securities Note Purchase Agreement, dated May 21, 2026, by and among the Company and the May 2026 Note Investors](ex10-22.htm) |
| 10.23\*\* | [Securities Purchase Agreement (ELOC Agreement), dated May 21, 2026, by and among the Company, RK Capital Management LLC, North Commerce Parkway Capital LP, and TQP Holdings LLC](ex10-23.htm) |
| 10.24\*\* | [Registration Rights Agreement, dated May 21, 2026, by and among the Company, RK Capital Management LLC, North Commerce Parkway Capital LP, and TQP Holdings LLC](ex10-24.htm) |
| 10.25\*\* | [Security Agreement, dated May 21, 2026, by and between the Company and the May 2026 Note Investors](ex10-25.htm) |
| 23.1\*\* | [Consent of Grassi & Co., CPAs, P.C., Independent Registered Public Accounting Firm](ex23-1.htm) |
| 23.2\* | Consent of Lucosky Brookman LLP (included in Exhibit 5.1) |
| 24.1\* | Powers of Attorney (included on signature page of this registration statement) |
| 99.1\* | Form of Audit Committee Charter |
| 99.2\* | Form of Compensation Committee Charter |
| 99.3\* | Form of Nominating and Corporate Governance Committee Charter |
| 99.4\*\* | [Consent of Andrew Pearlman to be named as an independent director nominee](ex99-4.htm) |
| 99.5\*\* | [Consent of Ori Schlank to be named as an independent director nominee](ex99-5.htm) |
| 99.6\*\* | [Consent of Robert Brandt to be named as an independent director nominee](ex99-6.htm) |
| 99.7\*\* | [Consent of David Peterson to be named as an independent director nominee](ex99-7.htm) |
| 99.8\*\* | [Consent of Larry Meyer to be named as an independent director nominee](ex99-8.htm) |
| 99.9\*\* | [Consent of Elbert Basolis to be named as an independent director nominee](ex99-9.htm) |
| 99.10\*\* | [Consent of Denean Williams to be named as an independent director nominee](ex99-10.htm) |
| 107\*\* | [Filing Fee Table](ex107.htm) |

---

\* To be filed by amendment.

\*\* Filed herewith.

**Item 17. Undertakings**

(a) The undersigned registrant hereby undertakes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission (the "Commission") pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

Provided, however, that Paragraphs (a)(1)(i), (ii), and (iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference in the registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial *bona fide* offering thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) That, for the purpose of determining liability under the Securities Act to any purchaser: If the registrant is subject to Rule 430C (§230.430C of this chapter), each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§230.424 of this chapter);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(d) The undersigned registrant hereby undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

**SIGNATURES**

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Hagerstown, State of Maryland, on May 27, 2026.

---

| | |
|:---|:---|
| **First Breach Inc.** | **First Breach Inc.** |
| By: | */s/ Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | Chief Executive Officer |

---

Pursuant to the requirements of the Securities Act, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| */s/ Jeffrey Low* | Chief Executive Officer and Chairman <br> (Principal Executive Officer) | May 27, 2026 |
| Jeffrey Low |  |  |
| */s/ Richard Leimbach* | Interim Chief Financial Officer (Principal <br> Financial and Accounting Officer) | May 27, 2026 |
| Richard Leimbach |  |  |
| */s/ Jordan Low* | President, Chief Operating Officer, and Director | May 27, 2026 |
| Jordan Low |  |  |

---

## Exhibit 10.1

**Exhibit 10.1**

**FIRST BREACH, INC.**

**Executive Employment Agreement**

This Employment Agreement is entered into as of the date of the last signature affixed hereto, by and between First Breach, Inc., a Delaware corporation ("First Breach" or "the Company"), and <u>Jeffrey Low</u> ("Employee").

In consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, First Breach and Employee hereby agree as follows:

---

| | |
|:---|:---|
| 1. | Position of Employment. The Company will employ the Employee in the position of <u>CEO</u> of First Breach and, in that position, Employee will report to <u>BOD</u>, the <u>Board</u> of First Breach. First Breach retains the right to change Employee's title, duties, and reporting relationships as may be determined to be in the best interests of the Company; provided, however, that any such change in Employee's duties shall be consistent with Employee's training, experience, and qualifications. |
|  | The terms and conditions of the Employee's employment shall, to the extent not addressed or described in this Employment Agreement, be governed by First Breach's Policies and Procedures Manual and existing practices. In the event of a conflict between this Employment Agreement and the Policies and Procedures Manual or existing practices, the terms of this Agreement shall govern. |
| 2. | Term of Employment. Employee's employment with First Breach shall begin on <u>January 1</u>, <u>2026</u>, and shall continue for a period of <u>Ten</u> (<u>10</u>) years, after which time continued employment shall be on an "at will" basis, unless: |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Employee's
 employment is terminated by either party in accordance with the terms of Section 5 of this
 Employment Agreement; or

b. Such
 term of employment is extended or shortened by a subsequent agreement duly executed by each
 of the parties to this Employment Agreement, in which case such employment shall be subject
 to the terms and conditions contained in the subsequent written agreement.

&nbsp;&nbsp;&nbsp;&nbsp;3. Compensation
 and Benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Base
 Salary. Employee shall be paid a base salary of $<u>33,334</u> monthly, which is $<u>400,008</u> annually ("Base Salary"), subject to applicable federal, state, and local withholding,
 such Base Salary to be paid to Employee in the same manner and on the same payroll schedule
 in which all First Breach employees receive payment. Employee's base salary shall increase by 10% every calendar year for the duration of this agreement. Any additional increases in Employee's Base
 Salary for years beyond the first year of Employee's employment shall be in the sole
 discretion of First Breach management, and nothing herein shall be deemed to require any
 such increase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Incentive
 and Deferred Compensation. Employee shall be eligible to participate in all incentive and
 deferred compensation programs available to other executives or officers of First Breach,
 such participation to be in the same form, under the same terms, and to the same extent that
 such programs are made available to other such executives or officers. Employee shall receive a cash bonus every calendar year at a minimum of 50% of their base salary. Any additional
bonus offered shall be at the discretion of the Company or Compensation Committee of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Employee Benefits. Employee
 shall be eligible to participate in all employee benefit plans, policies, programs, or perquisites in which other First Breach Company
 executive or officers participate, including, if and when applicable, the First Breach Stock Option program. The terms and conditions
 of Employee's participation in First Breach's employee benefit plans, policies, programs, or perquisites shall be governed
 by the terms of each such plan, policy, or program.

d. Paid Time Off (PTO) and Sick Leave.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. PTO:
 Employe shall be entitled to <u>25 days</u> 

2. Sick
 Leave: Employee shall accrue up to 40 hours of paid sick leave per calendar year in accordance
 with Maryland law at a rate of one hour of paid leave earned for every thirty hours worked.
 Employee may carry over any earned but unused sick and safe leave up to 40 hours, but an
 employee may not accrue more than 64 hours of sick and safe leave at any time. Employee will
 not be paid for any unused sick and safe leave upon termination of employment.

&nbsp;&nbsp;&nbsp;&nbsp;4. Duties
 and Performance. The Employee acknowledges and agrees that he is being offered a position
 of employment by the Company with the understanding that the Employee possesses a unique
 set of skills, abilities, and experiences which will benefit the Company, and he agrees that
 his continued employment with the Company, whether during the term of this Employment Agreement
 or thereafter, is contingent upon his successful performance of his duties in his position
 as noted above, or in such other position to which he may be assigned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. General
 Duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Employee
 shall render to the very best of Employee's ability, on behalf of the Company, services
 to and on behalf of the Company, and shall undertake diligently all duties assigned to him
 by the Company.

2. Employee
 shall devote his full time, energy and skill to the performance of the services in which
 the Company is engaged, at such time and place as the Company may direct. Employee shall
 not undertake, either as an owner, director, shareholder, employee or otherwise, the performance
 of services for compensation (actual or expected) for any other entity without the express
 written consent of the Board of Directors of First Breach.

3. Employee
 shall faithfully and industriously assume and perform with skill, care, diligence and attention
 all responsibilities and duties connected with his employment on behalf of the Company.

4. Employee
 shall have no authority to enter into any contracts binding upon the Company, or to deliberately
 create any obligations on the part of the Company, except as may be specifically authorized by the Board of Directors of First Breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Specific
 Duties. <u> </u> 

&nbsp;&nbsp;&nbsp;&nbsp;5. Termination
 of Employment. Employee's employment with the Company may be terminated prior to the
 expiration of the term of this Employment Agreement, in accordance with any of the following
 provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Termination
 by Employee. The Employee may terminate his employment at any time during the course of this
 agreement by giving <u>2 weeks</u> [weeks/months)]' notice in writing to the Board of
 Directors of First Breach. During the notice period, Employee must fulfill all his duties
 and responsibilities set forth above and use his best efforts to train and support his replacement,
 if any. Failure to comply with this requirement may result in Termination for Cause described
 below, but otherwise Employee's salary and benefits will remain unchanged during the
 notification period.

b. Termination
 by the Company Without Cause. First Breach may terminate Employee's employment at any
 time during the course of this agreement by giving <u>1 month</u> [weeks/months]' notice
 in writing to the Employee. During the notice period, Employee must fulfill all of Employee's
 duties and responsibilities set forth above and use Employee's best efforts to train
 and support Employee's replacement, if any. Failure of Employee to comply with this
 requirement may result in Termination for Cause described below, but otherwise Employee's
 salary and benefits will remain unchanged during the notification period. First Breach shall
 pay Employee severance pay in the amount of the total value of Base Salary for the remaining
 contract period in lieu of actual employment, and nothing herein shall require Company to
 maintain employee in active employment for the duration of the notice period.

c. Termination
 by the Company for Cause. The Company may, at any time and without notice, terminate the
 Employee for "cause". Termination by the Company of the Employee for "cause"
 shall include but not be limited to termination based on any of the following grounds: (a)
 failure to perform the duties of the Employee's position in a satisfactory manner;
 (b) fraud, misappropriation, embezzlement or acts of similar dishonesty; (c) conviction of
 a felony involving moral turpitude; (d) use of illegal drugs or narcotics (e) excessive use
 of alcohol in the workplace; (f) intentional and willful misconduct that may subject the
 Company to criminal or civil liability; (g) breach of the Employee's duty of loyalty,
 including the diversion or usurpation of corporate opportunities properly belonging to the
 Company; (i) willful disregard of Company policies and procedures; (j) breach of any of the
 material terms of this Agreement and/or the First Breach Restrictive Covenant Agreement attached
 hereto and incorporated herein as Appendix A; and (k) insubordination or deliberate refusal
 to follow the instructions of the Board of Directors of First Breach. First Breach shall
 pay Employee severance pay in the amount of the total value of Base Salary for the remaining contract
 period if termination is pursuant to this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Termination
 By Death or Disability. The Employee's employment and rights to compensation under this
 Employment Agreement shall terminate if the Employee is unable to perform the duties of his
 position due to death or disability lasting more than 90 days, and the Employee's heirs,
 beneficiaries, successors, or assigns shall not be entitled to any of the compensation or
 benefits to which Employee is entitled under this Agreement, except: (a) to the extent specifically
 provided in this Employment Agreement (b) to the extent required by law; or (c) to the extent
 that such benefit plans or policies under which Employee is covered provide a benefit to
 the Employee's heirs, beneficiaries, successors, or assigns.

&nbsp;&nbsp;&nbsp;&nbsp;6. Expenses.
 The Company shall pay or reimburse Employee for any expenses reasonably incurred by him in
 furtherance of his duties hereunder, including expenses for entertainment, travel, meals
 and hotel accommodations.

7. Company
 Property

a. Employee
 may be provided with a company-issued laptop and/or other company-owned equipment to facilitate
 the proper execution of Employee's job responsibilities. Employee agrees to handle
 the laptop, and all company property, with utmost care and acknowledge responsibility for
 any damage incurred beyond normal wear and tear.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Employee
 acknowledges that the laptop remains the property of Company. Employee should therefore have
 no expectation of privacy whatsoever in any message, file, data, document, or any other kind
 or form of information or communication transmitted to, received, or printed from, or stored
 or recorded on the laptop or any other company electronic device. Employee is expressly advised
 that to prevent against misuse, Company reserves the right to monitor, intercept, and review,
 without further notice, Employee's activities using the company's IT resources
 and communications systems, including but not limited to email (both outgoing and incoming).

c. Upon
 conclusion of Employee's employment with Company, the Employee will return the laptop
 and any other Company property in Employee's possession or control promptly using a
 prepaid shipping label provided by Company, within a timeframe not exceeding 7 calendar days.

&nbsp;&nbsp;&nbsp;&nbsp;8. General Provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Notices.
 All notices and other communications required or permitted by this Agreement to be delivered
 by First Breach or Employee to the other party shall be delivered in writing to the address
 shown below, either personally, by facsimile transmission or by registered, certified or express
 mail, return receipt requested, postage prepaid, to the address for such party specified
 below or to such other address as the party may from time to time advise the other party,
 and shall be deemed given and received as of actual personal delivery, on the first business
 day after the date of delivery shown on any such facsimile transmission or upon the date
 or actual receipt shown on any return receipt if registered, certified or express mail is
 used, as the case may be.

First Breach:

First Breach, Inc.

18450 Showalter Road

Hagerstown, Maryland 21742

Attention: Board Chairman

Employee:

<u>Jeffrey Low</u>

<u> </u>

<u> </u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Legal
 Fees and Other Remedies. In the event First Breach brings any action to enforce any term
 or provision of this Agreement and/or the RCA, the court in such proceeding shall award the
 Employer such attorney's fees and costs as it determines reasonable and appropriate.
 Such award shall not be merged into any judgment, and the Employer shall be entitled to an
 award of attorney's fees and costs incurred seeking to collect any award or judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Partial
 Invalidity. In the event that any one or more of the provisions of this Agreement or any
 word, phrase, clause, sentence, or other portion thereof (including without limitation the
 temporal restrictions contained herein) shall be deemed by a court of competent jurisdiction
 to be illegal or unenforceable for any reason, such provision or portion thereof shall be
 considered modified or deleted in such manner as to make this Agreement, as modified, legal
 and enforceable to the fullest extent permitted under applicable laws. The validity and enforceability
 of the remaining provisions or portions thereof shall continue unimpaired.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Amendments
 and Termination; Entire Agreement. This Agreement may not be amended or terminated except
 by a writing executed by all of the parties hereto. This Agreement constitutes the entire
 agreement of First Breach and Employee relating to the subject matter hereof and supersedes
 all prior oral and written understandings and agreements relating to such subject matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. Successors
 and Assigns. The rights and obligations of the parties hereunder are not assignable to another
 person without prior written consent; provided, however, that First Breach, without obtaining
 Employee's consent, may assign its rights and obligations hereunder to a wholly-owned
 subsidiary and provided further that any post-employment restrictions shall be assignable
 by First Breach to any entity which purchases all or substantially all of the Company's
 assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. Waiver
 of Rights. No waiver by First Breach or Employee of a right or remedy hereunder shall be
 deemed to be a waiver of any other right or remedy or of any subsequent right or remedy of
 the same kind.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. Definitions;
 Headings; and Number. A term defined in any part of this Employment Agreement shall have
 the defined meaning wherever such term is used herein. The headings contained in this Agreement
 are for reference purposes only and shall not affect in any manner the meaning or interpretation
 of this Employment Agreement. Where appropriate to the context of this Agreement, use of
 the singular shall be deemed also to refer to the plural, and use of the plural to the singular.

k. Counterparts.
 This Agreement may be executed in separate counterparts, each of which shall be deemed an
 original but both of which taken together shall constitute but one and the same instrument.

h. Governing
 Laws and Venue. This Agreement shall be governed by, construed, and enforced in accordance
 with the laws of the State of Maryland. The parties hereto further agree that any action brought
 to enforce any right or obligation under this Agreement must be brought in the courts of
 the State of Maryland or the United States District Court of Maryland.

IN WITNESS WHEREOF, First Breach and Employee have executed and delivered this Agreement as of the date written below.

---

| | | | |
|:---|:---|:---|:---|
| First Breach, Inc. | First Breach, Inc. | Employee | Employee |
| By | */s/ Jeffrey Low* | By | */s/ Jeffrey Low* |
| Name | Jeffrey Low | Name | Jeffrey Low |
| Title | CEO | Date | January 1, 2026 |
| Date | January 1, 2026 |  |  |

---

## Exhibit 10.2

**Exhibit 10.2**

**FIRST BREACH, INC.**

**Executive Employment Agreement**

This Employment Agreement is entered into as of the date of the last signature affixed hereto, by and between First Breach, Inc., a Delaware corporation ("First Breach" or "the Company"), and <u>Jordan Low</u> ("Employee").

In consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, First Breach and Employee hereby agree as follows:

---

| | |
|:---|:---|
| 1. | Position of Employment. The Company will employ the Employee in the position of <u>President & COO</u> of First Breach and, in that position, Employee will report to <u>Jeffrey Low</u>, the <u>CEO</u> of First Breach. First Breach retains the right to change Employee's title, duties, and reporting relationships as may be determined to be in the best interests of the Company; provided, however, that any such change in Employee's duties shall be consistent with Employee's training, experience, and qualifications. |
|  | The terms and conditions of the Employee's employment shall, to the extent not addressed or described in this Employment Agreement, be governed by First Breach's Policies and Procedures Manual and existing practices. In the event of a conflict between this Employment Agreement and the Policies and Procedures Manual or existing practices, the terms of this Agreement shall govern. |
| 2. | Term of Employment. Employee's employment with First Breach shall begin on <u>January 1</u>, <u>2026</u>, and shall continue for a period of <u>Ten</u> (<u>10</u>) years, after which time continued employment shall be on an "at will" basis, unless: |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Employee's
 employment is terminated by either party in accordance with the terms of Section 5 of this Employment Agreement; or

b. Such
 term of employment is extended or shortened by a subsequent agreement duly executed by each of the parties to this Employment Agreement,
 in which case such employment shall be subject to the terms and conditions contained in the subsequent written agreement.

&nbsp;&nbsp;&nbsp;&nbsp;3. Compensation
 and Benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Base
 Salary. Employee shall be paid a base salary of $<u>25,000</u> monthly, which is $<u>300,000</u> annually ("Base Salary"),
 subject to applicable federal, state, and local withholding, such Base Salary to be paid to Employee in the same manner and on the
 same payroll schedule in which all First Breach employees receive payment. Employee's base salary shall increase by 10% every calendar year for the duration of this agreement. Any additional increases in Employee's Base Salary for years
 beyond the first year of Employee's employment shall be in the sole discretion of First Breach management, and nothing herein
 shall be deemed to require any such increase.

b. Incentive
 and Deferred Compensation. Employee shall be eligible to participate in all incentive and deferred compensation programs available
 to other executives or officers of First Breach, such participation to be in the same form, under the same terms, and to the same
 extent that such programs are made available to other such executives or officers. Employee shall receive a cash bonus every
 calendar year at a minimum of 50% of their base salary. Any additional bonus offered shall be at the discretion of the Company or
 Compensation Committee of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Employee
 Benefits. Employee shall be eligible to participate in all employee benefit plans, policies, programs, or perquisites in which other
 First Breach Company executive or officers participate, including, if and when applicable, the First Breach Stock Option program.
 The terms and conditions of Employee's participation in First Breach's employee benefit plans, policies, programs, or
 perquisites shall be governed by the terms of each such plan, policy, or program.

d. Paid
 Time Off (PTO) and Sick Leave.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. PTO:
Employe shall be entitled to <u>25 days</u> 

2. Sick
 Leave: Employee shall accrue up to 40 hours of paid sick leave per calendar year in accordance with Maryland law at a rate of one
 hour of paid leave earned for every thirty hours worked. Employee may carry over any earned but unused sick and safe leave up to
 40 hours, but an employee may not accrue more than 64 hours of sick and safe leave at any time. Employee will not be paid for any
 unused sick and safe leave upon termination of employment.

&nbsp;&nbsp;&nbsp;&nbsp;4. Duties
 and Performance. The Employee acknowledges and agrees that he is being offered a position
 of employment by the Company with the understanding that the Employee possesses a unique
 set of skills, abilities, and experiences which will benefit the Company, and he agrees that
 his continued employment with the Company, whether during the term of this Employment Agreement
 or thereafter, is contingent upon his successful performance of his duties in his position
 as noted above, or in such other position to which he may be assigned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. General
 Duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Employee
 shall render to the very best of Employee's ability, on behalf of the Company, services to and on behalf of the Company, and
 shall undertake diligently all duties assigned to him by the Company.

2. Employee
 shall devote his full time, energy and skill to the performance of the services in which the Company is engaged, at such time and
 place as the Company may direct. Employee shall not undertake, either as an owner, director, shareholder, employee or otherwise,
 the performance of services for compensation (actual or expected) for any other entity without the express written consent of the
 Chief Executive Officer of First Breach.

3. Employee
 shall faithfully and industriously assume and perform with skill, care, diligence and attention all responsibilities and duties connected
 with his employment on behalf of the Company.

4. Employee
 shall have no authority to enter into any contracts binding upon the Company, or to deliberately create any obligations on the part
 of the Company, except as may be specifically authorized by the Chief Executive Officer of First Breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Specific
 Duties. <u> </u> 

&nbsp;&nbsp;&nbsp;&nbsp;5. Termination
 of Employment. Employee's employment with the Company may be terminated prior to the expiration of the term of this Employment
 Agreement, in accordance with any of the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Termination
 by Employee. The Employee may terminate his employment at any time during the course of this agreement by giving <u>2 weeks</u> [weeks/months]'
 notice in writing to the Chief Executive Officer of First Breach. During the notice period, Employee must fulfill all his duties
 and responsibilities set forth above and use his best efforts to train and support his replacement, if any. Failure to comply with
 this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain
 unchanged during the notification period.

b. Termination
 by the Company Without Cause. First Breach may terminate Employee's employment at any time during the course of this agreement
 by giving <u>1 month</u> [weeks/months]' notice in writing to the Employee. During the notice period, Employee must fulfill
 all of Employee's duties and responsibilities set forth above and use Employee's best efforts to train and support Employee's
 replacement, if any. Failure of Employee to comply with this requirement may result in Termination for Cause described below, but
 otherwise Employee's salary and benefits will remain unchanged during the notification period. First Breach shall pay Employee
 severance pay in the amount of the total value of Base Salary for the remaining contract period in lieu of actual employment, and
 nothing herein shall require Company to maintain employee in active employment for the duration of the notice period.

c. Termination
 by the Company for Cause. The Company may, at any time and without notice, terminate the Employee for "cause".
 Termination by the Company of the Employee for "cause" shall include but not be limited to termination based on any of
 the following grounds: (a) failure to perform the duties of the Employee's position in a satisfactory manner; (b) fraud,
 misappropriation, embezzlement or acts of similar dishonesty; (c) conviction of a felony involving moral turpitude; (d) use of
 illegal drugs or narcotics; (e) excessive use of alcohol in the workplace; (f) intentional and willful misconduct that may subject
 the Company to criminal or civil liability; (g) breach of the Employee's duty of loyalty, including the diversion or
 usurpation of corporate opportunities properly belonging to the Company; (i) willful disregard of Company policies and procedures;
 (j) breach of any of the material terms of this Agreement and/or the First Breach Restrictive Covenant Agreement attached hereto and
 incorporated herein as Appendix A; and (k) insubordination or deliberate refusal to follow the instructions of Employee's
 direct supervisor and/or the Chief Executive Officer of First Breach. First Breach shall pay Employee severance pay in the amount of
 the total value of Base Salary for the remaining contract period if termination is pursuant to this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Termination
 By Death or Disability. The Employee's employment and rights to compensation under this Employment Agreement shall terminate
 if the Employee is unable to perform the duties of his position due to death or disability lasting more than 90 days, and the Employee's
 heirs, beneficiaries, successors, or assigns shall not be entitled to any of the compensation or benefits to which Employee is entitled
 under this Agreement, except: (a) to the extent specifically provided in this Employment Agreement (b) to the extent required by
 law; or (c) to the extent that such benefit plans or policies under which Employee is covered provide a benefit to the Employee's
 heirs, beneficiaries, successors, or assigns.

6. Expenses.
 The Company shall pay or reimburse Employee for any expenses reasonably incurred by him in furtherance of his duties hereunder, including
 expenses for entertainment, travel, meals and hotel accommodations.

&nbsp;&nbsp;&nbsp;&nbsp;7. Company
 Property

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Employee
 may be provided with a company-issued laptop and/or other company- owned equipment to facilitate the proper execution of Employee's
 job responsibilities. Employee agrees to handle the laptop, and all company property, with utmost care and acknowledge responsibility
 for any damage incurred beyond normal wear and tear.

b. Employee
 acknowledges that the laptop remains the property of Company. Employee should therefore have no expectation of privacy whatsoever
 in any message, file, data, document, or any other kind or form of information or communication transmitted to, received, or printed
 from, or stored or recorded on the laptop or any other company electronic device. Employee is expressly advised that to prevent against
 misuse, Company reserves the right to monitor, intercept, and review, without further notice, Employee's activities using the
 company's IT resources and communications systems, including but not limited to email (both outgoing and incoming).

c. Upon
 conclusion of Employee's employment with Company, the Employee will return the laptop and any other Company property in Employee's
 possession or control promptly using a prepaid shipping label provided by Company, within a timeframe not exceeding 7 calendar days.

&nbsp;&nbsp;&nbsp;&nbsp;8. General
 Provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Notices.
 All notices and other communications required or permitted by this Agreement to be delivered by First Breach or Employee to the other
 party shall be delivered in writing to the address shown below, either personally, by facsimile transmission or by registered, certified
 or express mail, return receipt requested, postage prepaid, to the address for such party specified below or to such other address
 as the party may from time to time advise the other party, and shall be deemed given and received as of actual personal delivery,
 on the first business day after the date of delivery shown on any such facsimile transmission or upon the date or actual receipt
 shown on any return receipt if registered, certified or express mail is used, as the case may be.

First Breach:

First Breach, Inc.

18450 Showalter Road

Hagerstown, Maryland 21742

Attention: Jeffrey Low, Chief Executive Officer

Employee:

<u>Jordan Low</u>

<u> </u>

<u> </u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Legal
 Fees and Other Remedies. In the event First Breach brings any action to enforce any term or provision of this Agreement and/or the
 RCA, the court in such proceeding shall award the Employer such attorney's fees and costs as it determines reasonable and appropriate.
 Such award shall not be merged into any judgment, and the Employer shall be entitled to an award of attorney's fees and costs
 incurred seeking to collect any award or judgment.

c. Partial
 Invalidity. In the event that any one or more of the provisions of this Agreement or any word, phrase, clause, sentence, or other
 portion thereof (including without limitation the temporal restrictions contained herein) shall be deemed by a court of competent
 jurisdiction to be illegal or unenforceable for any reason, such provision or portion thereof shall be considered modified or deleted
 in such manner as to make this Agreement, as modified, legal and enforceable to the fullest extent permitted under applicable laws.
 The validity and enforceability of the remaining provisions or portions thereof shall continue unimpaired.

d. Amendments
 and Termination; Entire Agreement. This Agreement may not be amended or terminated except by a writing executed by all of the parties
 hereto. This Agreement constitutes the entire agreement of First Breach and Employee relating to the subject matter hereof and supersedes
 all prior oral and written understandings and agreements relating to such subject matter.

f. Successors
 and Assigns. The rights and obligations of the parties hereunder are not assignable to another person without prior written consent;
 provided, however, that First Breach, without obtaining Employee's consent, may assign its rights and obligations hereunder
 to a wholly-owned subsidiary and provided further that any post-employment restrictions shall be assignable by First Breach to any
 entity which purchases all or substantially all of the Company's assets.

g. Waiver
 of Rights. No waiver by First Breach or Employee of a right or remedy hereunder shall be deemed to be a waiver of any other right
 or remedy or of any subsequent right or remedy of the same kind.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. Definitions;
 Headings; and Number. A term defined in any part of this Employment Agreement shall have the defined meaning wherever such term is
 used herein. The headings contained in this Agreement are for reference purposes only and shall not affect in any manner the meaning
 or interpretation of this Employment Agreement. Where appropriate to the context of this Agreement, use of the singular shall be
 deemed also to refer to the plural, and use of the plural to the singular.

k. Counterparts.
 This Agreement may be executed in separate counterparts, each of which shall be deemed an original but both of which taken together
 shall constitute but one and the same instrument.

h. Governing
 Laws and Venue. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Maryland.
 The parties hereto further agree that any action brought to enforce any right or obligation under this Agreement must be brought
 in the courts of the State of Maryland or the United States District Court of Maryland.

IN WITNESS WHEREOF, First Breach and Employee have executed and delivered this Agreement as of the date written below.

---

| | | | |
|:---|:---|:---|:---|
| First Breach, Inc. | First Breach, Inc. | Employee | Employee |
| By | */s/ Jeffrey Low* | By | */s/ Jordan Low* |
| Name | Jeffrey Low | Name | Jordan Low |
| Title | CEO | Date | January 1, 2026 |
| Date | January 1, 2026 |  |  |

---

## Exhibit 10.3

**Exhibit 10.3**

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## Exhibit 10.4

**Exhibit 10.4**

**<u>LEASE AGREEMENT</u>**

THIS LEASE AGREEMENT (this "**Lease**") is made as of February 1, 2022 (the "**Effective Date**") by and between NEW HEIGHTS INDUSTRIAL PARK LLC, a Delaware limited liability company ("**Landlord**"), and FIRST BREACH INC., a Delaware corporation (**"Tenant**").

<u>R E C I T A L S</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Landlord is the owner of the improved real property located at 18450 Showalter Road, Hagerstown, Maryland 21742, which is more particularly described on **Exhibit A** (the "**Property**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Tenant desires to lease a portion of the Property referred to as Bay 1 and Bay 2, comprising approximately 71,500 rentable square feet, as more particularly shown on **Exhibit B** (the "**Premises**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Landlord has agreed to lease to Tenant, and Tenant has agreed to rent from Landlord, the Premises on the terms of this Lease.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions contained herein, Landlord and Tenant hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Term</u>.

&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) <u>Initial Term</u>. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises pursuant to the terms, and subject to the conditions, of this Lease. The term of this Lease (the "**Term**") shall commence at 12:01 a.m. on February 1, 2022 (the "**Commencement Date**") and expire at 11:59 p.m. on January 31, 2029 (the "**Expiration Date**"). "**Lease Year**" means a period of twelve (12) consecutive months during the Term.

&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) <u>Extension Term</u>. Tenant shall have the right and option (the "**Extension Option**") to extend the Term upon all of the same terms and conditions (except as this Lease otherwise expressly states) for two (2) successive periods of five (5) years (each, an "**Extension Term**"). Tenant shall exercise the Extension Option (if at all) by delivering to Landlord written notice of such exercise at least twelve (12), and no more than twenty-four (24), months before the commencement of such Extension Term (the "**Option Exercise Period**"), TIME BEING OF THE ESSENCE. If Tenant does not timely and validly exercise the Extension Option, then the Term shall unconditionally expire and terminate as of the Expiration Date and, thereafter, Tenant shall have no right to extend the Term. Tenant waives and disclaims any rights, and covenants not to assert any claim, that would extend any Option Exercise Period or that would validate, or require Landlord to accept, any Extension Option exercised outside any Option Exercise Period. Any purported exercise of the Extension Option shall be null and void if: (i) not timely and validly exercised; (ii) Tenant assigned this Lease or sublet or licensed any of the Premises before the Extension Term commences; or (iii) an Event of Default exists at the time of exercise or on the day before the Extension Term commences. If Tenant timely and validly exercises the Extension Option, then the "Term" shall extend to include the Extension Term, and the "Expiration Date" shall become the last day of the Extension Term. Annual Rent for the first Lease Year of the Extension Term shall be one hundred three percent (103%) of Annual Rent in the last Lease Year before the Extension Term, and thereafter Annual Rent shall be one hundred three percent (103%) of the Annual Rent for the immediately preceding Lease Year. Landlord need not provide any Landlord work or Rent abatement during the Extension Term. After each of the two (2) Extension Terms, Tenant shall have no further right to extend the Term.

&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) <u>Termination Right</u>. If by February 28, 2022 Tenant has not obtained a Federal Firearm License necessary for the operation of the Permitted Use in the Premises, then Tenant may terminate this Lease by delivering written notice to Landlord before February 28, 2022, TIME BEING OF THE ESSENCE, in which event Tenant shall forfeit (and Landlord shall retain) Twenty-Six Thousand Eight Hundred Twelve and 50/100 Dollars ($26,812.50) of the Security Deposit and this Lease shall terminate and be of no further force or effect and the balance of the Security Deposit will be returned to Tenant as provided for in Section 2(g). If Tenant does not timely and validly exercise its termination right under this paragraph, then such termination right shall expire and be of no further force or effect and Tenant shall have no right to terminate this Lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Rent</u>.

&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) <u>Annual Rent</u>. Tenant shall pay to Landlord (without demand, offset or deduction) annual base rent ("**Annual Rent**") of Three Hundred Twenty-One Thousand Seven Hundred Fifty Dollars ($321,750), payable in advance on the first day of each and every month during the Term in equal monthly installments of Twenty-Six Thousand Eight Hundred Twelve and 50/100 Dollars ($26,812.50) each. However, upon Tenant's execution and delivery of this Lease, Tenant shall deliver to Landlord the monthly installment of Annual Rent and Expense Rent (defined below) for the first monthly installment of Annual Rent and Expense Rent due under this Lease. Beginning with the second (2<sup>nd</sup>) Lease Year and for each successive Lease Year (including each Extension Term), the Annual Rent shall increase by three percent (3%) of the Annual Rent for the immediately preceding Lease Year. For any period during the Term of less than a calendar month, (a) Landlord shall reasonably prorate Rent and (b) Tenant shall pay prorated Rent on the first day of such period. Upon request, Tenant shall execute and deliver to Landlord an instrument in form reasonably satisfactory to Landlord confirming the Commencement Date, the Expiration Date, the Annual Rent, Additional Rent and such other items as Landlord reasonably may request; <u>provided</u>, <u>however</u>, that Tenant's failure to execute or deliver such instrument shall not affect Landlord's calculation of such dates, amounts or other items (which shall be final and conclusive absent manifest error) or otherwise affect the validity of this Lease.

&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) <u>Expenses</u>. Tenant shall pay to Landlord, as Additional Rent, an amount (the "**Expense Rent**") equal to Sixty Thousand Seven Hundred Seventy-Five Dollars ($60,775.00), payable in advance in monthly installments of Five Thousand Sixty-Four and 58/100 Dollars ($5,064.58) each. Beginning with the second (2<sup>nd</sup>) Lease Year and for each successive Lease Year (including each Extension Term), the Expense Rent shall increase by three percent (3%) of the Expense Rent for the immediately preceding Lease 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;(c) <u>Additional Rent.</u> All money other than Annual Rent that this Lease requires Tenant to pay constitutes additional rent ("**Additional Rent**"). Annual Rent and Additional Rent are sometimes referred to as "**Rent**."

&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) <u>Rent Abatement</u>. Notwithstanding anything to the contrary contained in this Lease, Annual Rent (but not Expense Rent) shall abate for February 2022 (the "**Rent Abatement Period**") provided that Tenant is not in default under this Lease during the Rent Abatement Period.

&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) <u>Payment</u>. Rent shall be made payable to Landlord and shall be sent to Landlord c/o The Bluestone Group, 225 Broadway, 32<sup>nd</sup> Floor, New York, NY 10007, Attn: Mr. Eli Tabak, or at such other place or person or entity as Landlord may from time to time designate in writing to Tenant. If any sum due under this Lease payable to Landlord by Tenant is paid by check and such check is returned for non-sufficient funds, then, in addition to the rights and remedies set forth in this Lease pertaining to default, Landlord shall have the right to require that any replacement payment and all future payments be made in cash or by certified check or money order.

&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) <u>Late Fee</u>. If Landlord does not receive any payment from Tenant within seven (7) days after it is due, Tenant shall pay Landlord upon demand a late charge of five percent (5%) of the late payment. Any money not paid when due under this Lease shall bear interest at one percent (1%) per month from the date due until the date on which Landlord receives it.

&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) <u>Security Deposit</u>. Simultaneously with its execution and delivery of this Lease, Tenant shall deposit with Landlord Fifty-Three Thousand Six Hundred Twenty-Five Dollars ($53,625) as security for the payment and performance of Tenant's obligations under this Lease (the "**Security Deposit**"). Landlord shall hold the Security Deposit without interest payable to Tenant. If any Rent or other sums payable by Tenant to Landlord is overdue and unpaid, or if Landlord makes any payment on behalf of Tenant, or if Tenant fails to perform any of the terms of this Lease, then Landlord, at its option and without prejudice to any other remedy that Landlord may have on account thereof, may apply the entire Security Deposit (or so much thereof as may be necessary) to compensate Landlord. Tenant shall replenish the Security Deposit (to the extent so applied) within seven (7) days after written demand and, upon request, shall increase the amount of the Security Deposit as Annual Rent increases during the Term so that the Security Deposit at all times equals two (2) monthly installments of Annual Rent. Landlord shall refund to Tenant the Security Deposit (less any amounts applied to pay Tenant's obligations and liabilities) within forty-five (45) days after the later of the expiration of the Term and Tenant's vacation of the Premises. If Landlord sells or transfers its estate or interest in the Premises, Landlord may transfer the Security Deposit to the purchaser or transferee and thereafter shall be released from all liability in connection with the Security Deposit and Tenant shall look solely to the purchaser or transferee for the return of the Security Deposit.

&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) Any description or depiction of the Premises in this Lease is only an approximation. It might not include, or might inaccurately show, existing conditions. Neither party shall have any rights or obligations because of variations between any such description or depiction and the Premises as delivered. The Premises and the Rent are not subject to remeasurement, survey, or adjustment for "rentable square footage," "loss factor recalculation," or any other recomputation or recalculation of any kind.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Use</u>. The Premises shall be used and occupied solely for the manufacture of ammunition components and related products (the "**Permitted Use**"). In any event, Tenant shall not use or suffer the use of the Premises for any unlawful, disreputable or ultra-hazardous purpose. Tenant (at its sole expense) shall obtain, maintain in good standing and comply with the terms of all licenses, permits and other governmental approvals required for Tenant's lawful use and occupation of, and operations in, the Premises. Tenant shall have access to the Premises twenty-four (24) hours a day, seven (7) days a week during the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Conduct</u>.

&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) Tenant shall not do (or suffer or permit) anything in the Premises that reasonably could invalidate or conflict with the fire insurance policies on the Property, fixtures or on personalty kept therein, or obstruct or interfere with the rights of Landlord or of other tenants, or in any other way injure or annoy Landlord or the other tenants, or subject Landlord to any liability for injury to persons or damage to property. Without Landlord's prior written approval (which Landlord may grant, condition or withhold in its sole and absolute discretion), Tenant shall not install (or suffer or permit to be installed) anything in the Premises other than Tenant's equipment and trade fixtures required for the Permitted Use.

&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) <u>Operational Covenants.</u> Tenant covenants: (i) to use, maintain and occupy the Premises in a careful, safe and proper manner; (ii) to maintain the Premises in a clean, orderly and sanitary condition, free of insects, rodents, vermin and other pests; (iii) to keep all mechanical apparatus reasonably free of vibration and noise which may be transmitted beyond the Premises; (iv) to properly vent and control any odors and not cause or permit objectionable odors to emanate or be dispelled from the Premises; (v) not to obstruct any driveway, corridor, footwalks or parking area, or any other common area; (vi) not to place a load upon any floor which exceeds the floor load which the floor was designed to carry; (vii) not to use the Premises for any unlawful or illegal business, use or purpose, , or for any purpose or in any way in violation of the certificates of occupancy (or other similar approvals of applicable governmental authorities); and (viii) not to use the parking areas or any common areas in any way or in any manner reasonably objectionable to Landlord.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Common Areas; Parking</u>. In addition to the Premises, Tenant shall have a license for the non-exclusive use in common with Landlord and other tenants and each of their agents, employees, contractors and invitees, of such loading facilities, elevators, and other facilities as may be constructed and intended for common use, and of the common driveways, footways and parking areas on the Property, subject to such rules and regulations as Landlord may, from time to time, prescribe governing such common areas and which Landlord provides to Tenant in writing, and to Landlord's right to designate limited reserve parking areas for other tenants, provided that such designation does not materially and adversely affect Tenant's use of the existing common areas. Landlord shall at all times have full and exclusive control, management and direction of all common areas. Tenant shall observe and comply (and cause its invitees, employees, contractors, agents and representatives to observe and comply) with any rules and regulations that Landlord promulgates or modifies from time to time with respect to the Property (including the Premises) and provides to Tenant in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Condition; Landlord Work</u>. (a) Landlord delivers, and Tenant accepts, possession of the Premises in its "AS IS, WHERE IS, HOW IS, WITH ALL FAULTS" condition as of the Effective Date. However, Landlord shall deliver the Premises in broom clean condition with all electrical and mechanical services in good working order. Tenant has thoroughly inspected and is fully familiar with the Premises. Except as expressly set forth in this Lease, (i) Landlord has not made any representation, warranty, covenant or guaranty with respect to the Premises, (ii) Landlord has no obligation to perform or provide any work, alterations, improvements, repairs, decorations, furniture or equipment and (iii) Tenant shall be solely responsible for any and all work. Tenant fully, unconditionally and forever waives, and releases and discharges Landlord and its affiliates, parents, subsidiaries, partners, members, managers, officers, directors, employees, agents, representatives, investors and lenders from, any and all actions, claims, demands, damages, obligations and liabilities with respect to the physical and environmental condition of the Premises.

&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) Notwithstanding anything to the contrary set forth in subsection (a) above, (i) before the Commencement Date, Landlord shall install a wet sprinkler system in the Premises, and (ii) before March 15, 2022, Landlord shall level (and cure large cracks in) the warehouse floor.

&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) In addition to subsection (b) above, upon Tenant's receipt of a Federal Firearms License, Landlord shall provide Tenant with a work allowance (the "**Work Allowance**") not to exceed Two Hundred Eighty-Six Thousand Dollars ($286,000) for the hard costs of coating the warehouse floors and constructing an office in the Premises (collectively, the "**Tenant Work**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Landlord shall disburse the Work Allowance to Tenant in installments (in amounts not less than Twenty Thousand Dollars ($20,000) and not more frequently than once per calendar month) after March 1, 2022 to reimburse Tenant for the Tenant Work upon Landlord's receipt and approval of (A) a written request for payment specifying the work and materials for which payment is requested and stating that such work and materials have been finally and satisfactorily performed or installed (as applicable) in accordance with all applicable legal and contractual requirements, (B) an invoice from the applicable contractor or supplier and (C) a lien waiver from each contractor and supplier to be paid (conditional only upon receipt of payment). Upon completion of the Tenant Work and before the final disbursement of the Work Allowance, Tenant shall deliver to Landlord an affidavit from Tenant's general contractor that all subcontractors, laborers and suppliers have been paid in full and that all liens have been waived or discharged of record, together with such other documentation as Landlord reasonably may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Tenant (promptly after the Effective Date, before commencing any Tenant Work and at its sole cost and expense) diligently shall design the Tenant Work, file plans for the Tenant Work with applicable governmental authorities, and pay all fees and obtain all permits and approvals required for the Tenant Work. Tenant promptly shall deliver to Landlord a copy of all applications and correspondence with governmental authorities, approved plans and specifications and issued permits and approvals, and Tenant shall keep Landlord reasonably informed about the status of the Tenant Work. Tenant shall pay all amounts necessary to fully and finally complete all Tenant Work to the extent such cost exceeds the Work Allowance. Tenant (at its sole cost and expense) shall complete all Tenant Work lien-free, close out all related permits and deliver to Landlord a final certificate of occupancy promptly (but in all events before August 1, 2022). Upon the expiration or sooner termination of the Term, all decorations, installations, alterations, additions or other improvements affixed to the realty so that they cannot be removed without material damage shall become the property of Landlord and shall remain upon, and be surrendered with, the Premises as a part thereof unless Landlord elects otherwise, in which event Tenant (at its sole expense) shall remove those items that Landlord requires and restore the Premises to its original condition before the expiration of the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Alterations</u>. Except for Tenant Work in accordance with the terms of this Lease, Tenant shall not perform, suffer or permit any demolition, construction, reconstruction, renovation, alteration, addition, improvement or installation in, on, at or to the Premises (collectively, "**Alterations**") without Landlord's prior written approval in each instance (which Landlord may grant, condition or withhold in its sole and absolute discretion). If Landlord approves any Alterations, then Tenant shall perform and complete all Alterations (including Tenant Work) (a) in a diligent, good, workmanlike and lien-free manner that does not impair the building's structural integrity, (b) in accordance with all applicable legal and insurance requirements, (c) after receiving, and delivering to Landlord a copy of, all necessary governmental permits, licenses and approvals, (d) in accordance with plans and specifications that Landlord approves in writing, (e) at Tenant's sole expense and (f) in accordance with any other conditions or restrictions that Landlord requires. At the end of the Term, all Alterations (including equipment, fixtures and trade fixtures) shall, at Landlord's election, either (i) belong to and become the property of Landlord (in which case Tenant shall surrender them in good order and condition as part of the Premises) or (ii) be removed by Tenant at its sole expense. Tenant shall not install on, affix to, penetrate or otherwise use the roof of the Premises without Landlord's prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Maintenance and Repair</u>.

&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) <u>Landlord</u>. Landlord shall maintain the roof, foundation and exterior walls (excluding windows and doors) of the Premises at its sole expense; <u>provided</u>, <u>however</u>, that Tenant, promptly and at its sole expense, shall repair any damage to the roof, foundation or exterior walls caused by Tenant or its employees, contractors, agents, licensees and invitees.

&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) <u>Tenant</u>. Tenant shall, during the Term, keep and maintain the Premises and the improvements therein in good, safe, clean and orderly condition and in compliance with all legal requirements and, at the expiration of the Term (or at the sooner termination of the Term), deliver the same in the same good order and condition as of the Commencement Date (reasonable wear and tear excepted). Tenant shall not (a) commit, permit or suffer any damage, destruction or waste to, or nuisance or any other act or thing that may disturb the quiet enjoyment of any other tenant at, the Premises, (b) do or fail to do anything in, on or about the Premises that results in an unsafe, unsanitary or unsightly condition or in violation of any applicable legal requirement, (c) generate, use, store, handle, deposit or release (or suffer or permit the generation, use, storage, handling, deposit or release of) in, on or about the Premises any hazardous or toxic substances, materials or wastes that are regulated or prohibited by applicable legal requirements other than in compliance with applicable law or (d) install any underground storage tank at the Premises. Except as set forth in Section 9(a), Tenant shall pay for all maintenance of and repairs to the Premises and its fixtures, equipment and appurtenances, as well as all damages sustained by Tenant or occupants of the Property due to any waste, misuse or neglect of the Premises, its fixtures, equipment and appurtenances, by Tenant, its employees or any other person or persons upon the Premises by Tenant's permission. Tenant shall not place a load upon any floor of the Premises exceeding the floor load per square foot area which such floor was designed to carry, and which may be allowed by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Services and Utilities</u>. Tenant shall arrange to obtain, and timely pay directly to the utility company or service provider all charges for, water, sewer, gas, electricity, telephone, cable, trash removal and other utilities and services that Tenant desires to be furnished to the Premises. No change, interference, interruption, disruption, reduction, defect, or failure in the character or supply of any services or utilities furnished to the Premises (regardless of duration), and no unavailability or unsuitability of the quantity or character of any services or utilities, shall: (i) constitute an eviction (actual or constructive) of Tenant (in whole or in part); (ii) impose any liability on Landlord; (iii) entitle Tenant to any damages or offset; (iv) relieve or release Tenant from any obligation under this Lease; or (v) entitle Tenant to terminate this Lease (and Tenant waives all benefits of any law permitting Tenant to assert any claim or terminate this Lease on account thereof). If any utilities or services are metered or billed jointly with any other portion of the Property, Landlord shall bill Tenant, and Tenant promptly shall pay Landlord, the amount that Landlord estimates for such utilities as Additional Rent. Landlord may install separate meters, sub-meters or other devices to measure the usage of any utilities for the Premises, in which event Tenant shall reimburse Landlord for the cost to install, operate, maintain, repair and replace such meters and shall pay the utility provider directly for the cost of Tenant's usage of such utilities and, until such meters are installed, Tenant shall pay the amount that Landlord estimates for such utilities. This paragraph shall survive the expiration or earlier termination of this Lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Landlord Access</u>. Landlord shall retain duplicate keys to all of the doors of the Premises. During normal business hours and upon prior written notice (except in the event of an emergency), Landlord and its agents shall have (a) access to the Premises in order to inspect, clean, make necessary repairs or conduct tests and investigations within the Premises or on the Property and (b) the right to enter the Premises for the purpose of making necessary repairs to any other portion of the Property adjacent to the Premises that may require entering the Premises; <u>provided</u>, <u>however</u>, that it shall be done at such time or times and under such circumstances as to cause the least disturbance or interference with Tenant's occupancy of the Premises. Landlord shall have the right to display a "for rent" sign and to show the Premises to prospective tenants at all reasonable times during the last six (6) months of the Term. Except in the event of an emergency, Tenant's representatives may accompany Landlord's representatives while in the Premises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Subordination and Attornment</u>.

&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) <u>Subordination</u>. This Lease and all of Tenant's rights under this Lease are and shall remain subject and subordinate in all respects to the operation and effect of any mortgage, deed of trust or other security instrument encumbering the Premises or Landlord's interest therein, whether in existence on the Effective Date or subsequently created, and to any and all modifications, amendments, replacements, renewals, extensions, consolidations or substitutions thereof. Any such mortgage, deed of trust or other security instrument (as may be modified, amended, replaced, renewed, extended, consolidated or substituted) is referred to as a "**Mortgage**", and the mortgagee, trustee, noteholder or other secured or beneficial party under a Mortgage is referred to as a "**Mortgagee**". Such subordination shall be automatic (without the execution of any further subordination agreement by Tenant), however if (at any time and from time to time) any Mortgagee requests a written subordination agreement consistent with the foregoing terms, Tenant shall execute, acknowledge and deliver it; if Tenant fails to do so, Landlord may, in addition to any other remedies for breach of covenant hereunder, execute, acknowledge and deliver it as Tenant's agent or attorney-in-fact, and Tenant hereby irrevocably constitutes Landlord as Tenant's attorney-in-fact for such purpose. However, in any foreclosure or other enforcement of rights under a Mortgage, Tenant's quiet enjoyment of the Premises shall not be disturbed unless Tenant is in default under this Lease beyond all applicable notice and cure periods.

&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) <u>Mortgagee's Unilateral Subordination</u>. Notwithstanding the terms of subsection (a) above, at any Mortgagee's election by delivering notice to Tenant or recording a unilateral declaration of subordination, this Lease and Tenant's rights hereunder shall be superior and prior to the rights under the Mortgage of which such Mortgagee has the benefit, with the same force and effect as if this Lease had been executed, delivered and recorded before the execution, delivery and recording of such Mortgage, subject, nevertheless, to such conditions as may be set forth in any such notice or declaration.

&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) <u>Attornment</u>. If any person shall succeed to all or part of Landlord's interest in the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale, termination of lease or otherwise, and if so requested in writing or required by such successor in interest, Tenant shall attorn to such successor in interest and shall execute such agreement in confirmation of such attornment as such successor in interest shall reasonably request.

&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) <u>Estoppel Certificates</u>. Tenant and Landlord shall, without charge, at any time and from time to time, within ten (10) days after receipt of written request therefor by the other party, execute, acknowledge and deliver to the other and to such Mortgagee or other party as may be designated by the requesting party a written estoppel certificate in form and substance as may be requested from time to time, certifying to the requesting party, any Mortgagee, any purchaser, or any other person or entity designated by the requesting party, as of the date of such estoppel certificate, the following: (i) whether Tenant is in possession of the Premises; (ii) whether this Lease is in full force and effect; (iii) whether there are any amendments to this Lease, and if so, specifying such amendments; (iv) whether there are any then-existing setoffs or defenses against the enforcement of any rights hereunder, and if so, specifying such matters in detail; (v) the dates, if any, to which any rent or other sums due hereunder have been paid in advance and the amount of any security deposit; (vi) that the responding party has no knowledge of any then-existing defaults under this Lease, or if there are such defaults, specifying them in detail; and (vii) any and all other matters requested. Any such estoppel certificate may be relied upon by any Mortgagee and/or any other person or entity to whom it is directed or by any other person or entity who could reasonably be expected to rely on it in the normal course of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Assignment and Subletting</u>. Tenant agrees for itself and its permitted successors and assigns in interest hereunder that it will not (a) assign, encumber or otherwise transfer this Lease or any of its rights hereunder, (b) sublet, transfer, mortgage or otherwise encumber the Premises or any part thereof or permit the occupancy or use of the Premises or any part thereof by any person other than Tenant or (c) permit the assignment or other transfer of this Lease or any of Tenant's rights hereunder by operation of law or otherwise (each of the events referred to in the foregoing clauses (a)-(c) is referred to as a "**Transfer**"), without Landlord's prior written consent in each instance (which Landlord may grant, condition or withhold in its sole, absolute and unfettered discretion). Any consent given shall not constitute a consent to any subsequent Transfer. Any attempted Transfer without Landlord's consent shall be null and void and shall not confer any rights upon any purported transferee, assignee, mortgagee, sublessee, or occupant. No Transfer, regardless of whether Landlord's consent has been granted, shall be deemed to release Tenant from any of its obligations hereunder or to alter, impair or release the obligations of any person guaranteeing the obligations of Tenant hereunder. A Transfer shall be deemed to include any Transfer by sale, assignment, bequest, inheritance, operation of law, or other disposition of partnership interests or corporate shares or assets. However, Landlord shall not unreasonably withhold, condition or delay its consent to one assignment of this Lease by Tenant to any third party (unaffiliated with Tenant) that acquires all or substantially all of the business and/or assets of Tenant (whether by asset sale, merger, stock sale or otherwise).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Signage</u>. Tenant shall not erect, display or maintain (or permit to be erected, displayed or maintained) any signs or lights on the exterior of the Premises without Landlord's prior written approval with respect to location, size, appearance and content. Landlord's approval of any signs shall be conditioned upon Tenant obtaining (at its sole expense) all necessary governmental approvals and permits for such signs. Upon expiration or termination of this Lease, Tenant shall pay for the costs of removing any such signs and for any damage to the Premises caused thereby. Landlord (in its reasonable discretion) may establish and from time to time change the specifications for Tenant signage to comply with applicable laws or Landlord's signage program for the Property. As used in this paragraph, "signs" shall include all signs, designs, monuments, canopies, poles, logos, banners, projected images, pennants, decals, advertisements, pictures, notices, lettering, numerals, graphics, or decoration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Damage</u>.

&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) <u>Landlord's Obligation to Repair</u>. If the Premises shall be damaged by fire, the elements, accident or other casualty (any of such causes being referred to herein as a "**Casualty**"), but the Premises shall not be thereby rendered wholly or partially untenantable, Landlord shall promptly (due allowance being made for delay which may arise by reason of adjustment of loss under insurance policies and for reasonable delays due to causes beyond Landlord's control such as strikes, weather, acts of G-d, etc.) cause such damage to be repaired with the same improvements that existed as of the Commencement Date and there shall be no abatement of rent. If, as the result of a Casualty, the Premises shall be rendered wholly or partially untenantable, then, subject to the provisions of Section 15(b), Landlord shall cause such damage to be repaired with the same improvements that existed as of the Commencement Date and all Rent, except for that rent due Landlord by reason of Tenant's failure to perform any of its obligations hereunder, shall be abated proportionately as to the portion of the Premises rendered untenantable during the period of such untenantability. Such repairs shall be made at the expense of Landlord. Landlord shall not be liable for interruption to Tenant's business or for damage to, or replacement or repair of, Tenant's personal property (including inventory, trade fixtures, floor coverings, furniture and other property removable by Tenant under the provisions of this Lease) or to any leasehold improvements installed in the Premises by or on behalf of Tenant or otherwise, all of which damage, replacement or repair shall be undertaken and completed by Tenant promptly.

&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) <u>Landlord's Termination Option</u>. If the Premises are: (i) rendered wholly untenantable; (ii) damaged as a result of any cause which is not covered by Landlord's insurance; or (iii) damaged or destroyed in whole or in part during the last one (1) year of the Term, or, if in the opinion of Landlord, the Property is totally or substantially damaged or destroyed and Landlord elects not to rebuild the same to its prior condition, then, in any of such events, Landlord may elect to terminate this Lease by giving to Tenant notice of such election within thirty (30) days after the occurrence of such event. If such notice is given, the rights and obligations of the parties shall cease as of the date of such notice, and Rent (other than any Additional Rent due Landlord by reason of Tenant's failure to perform any of its obligations hereunder) shall be adjusted as of the date of such termination.

&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) <u>Insurance Proceeds</u>. If Landlord does not elect to terminate this Lease pursuant to Section 15(b), Landlord shall, subject to the prior rights of any Mortgagee, disburse and apply any insurance proceeds received by Landlord to the restoration and rebuilding of the Premises in accordance with Section 15(a). All insurance proceeds payable with respect to the Premises (excluding Tenant's trade fixtures, inventory and other movable personal property) shall belong to and shall be payable to Landlord.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Condemnation</u>. If any or all of the Premises is taken by condemnation or eminent domain, this Lease shall terminate as to the part so taken on the day when Tenant is required to yield possession thereof, and Landlord shall (subject to the sufficiency of the condemnation award and Landlord's right to terminate described below) repair and restore the portion not taken to useful condition. Upon such taking, Rent shall be reduced proportionately by the portion of the Premises so taken. If the portion of the Premises so taken substantially impairs the usefulness of the Premises for the Permitted Use, then either party may terminate this Lease as of the date when Tenant is required to yield possession by delivering written notice of termination to the other party within thirty (30) days after such taking. The compensation awarded for any taking (both as to Landlord's reversionary interest and Tenant's leasehold interest) shall belong to and be the sole property of Landlord. Tenant shall have no claim or entitlement (and waives all claims and entitlements) against Landlord and the condemning authority for any award or damages in connection with any taking of the Premises or the Property by condemnation or eminent domain. Notwithstanding the foregoing, Landlord may terminate this Lease if any of the Premises is taken by condemnation or eminent domain (or sale in lieu thereof) if, in Landlord's sole and absolute discretion, any taking by condemnation or eminent domain materially impairs the economic viability of the Property (regardless of the effect of any such taking on the Premises).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Indemnification; Insurance</u>.

&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) <u>Indemnification</u>. Tenant shall indemnify, defend and hold harmless Landlord, and its affiliates, partners, members, managers, officers, directors, employees, agents, representatives, investors and lenders, from and against any and all actions, claims, demands, suits, judgments, settlements, awards, damages, fines, penalties, obligations, liabilities, losses, costs and expenses (including reasonable attorneys' fees and litigation costs) suffered or incurred by, imposed on or asserted against any of them caused by, arising out of or relating to (i) the use or occupancy of, or alterations or damage to, the Premises by Tenant or any of its employees, contractors, agents, representatives, licensees or invitees, (ii) any act or omission of Tenant or any of its employees, contractors, agents, representatives, licensees or invitees, (iii) any occurrence in, on or about the Premises during the Term, or (iv) Tenant's breach of this Lease. This paragraph shall survive the expiration or earlier termination of this Lease. Tenant's obligations under this paragraph shall not be limited to the insurance coverage that Tenant maintains (or is required to maintain) under this Lease.

&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) <u>Exculpation</u>. Landlord shall not be responsible or liable to Tenant, or to those claiming by, through or under Tenant, for any loss or damage which may be occasioned by or through the acts or omissions of persons occupying space adjoining the Premises or any part of the premises adjacent to or connecting with the Premises or any other part of the Property, or otherwise, or for any loss or damage resulting to Tenant, or those claiming by, through or under Tenant, or its or their property, from the breaking, bursting, stoppage or leaking of electrical cable and wires, or water, gas, sewer or steam pipes. To the maximum extent permitted by law, Tenant agrees to use and occupy the Premises, and to use such other portions of the Property as Tenant is herein given the right to use, at Tenant's own risk.

&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) <u>Insurance Requirements</u>. The company or companies writing any insurance which Tenant is required to carry and maintain or cause to be carried or maintained pursuant to Sections 17(d)-(e), as well as the form of such insurance, shall at all times be subject to Landlord's reasonable approval and any such company or companies shall be licensed to do business in the State of Maryland. Commercial general liability and special form insurance policies evidencing such insurance shall name Landlord and/or its designee(s) as additional insured, shall be primary and non-contributory, and shall also contain a provision by which the insurer agrees that such policy shall not be canceled, materially changed or not renewed without at least thirty (30) days advance notice to Landlord. All policies shall be written on an occurrence, rather than a claims made, basis. Each such policy, or a certificate thereof, shall be deposited with Landlord by Tenant promptly upon commencement of Tenant's obligation to procure the same. If Tenant shall fail to perform any of its obligations under Sections 17(d)-(e), Landlord may perform the same and the cost of same shall be deemed Additional Rent and shall be payable upon Landlord's demand.

&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) <u>Tenant's Insurance</u>. At all times after the Premises are released to Tenant for construction of its improvements, Tenant shall carry and maintain, at its sole expense:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Commercial general liability insurance, including insurance against assumed or contractual liability under this Lease against any liability arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto, to afford protection with limits of not less than:

---

| | |
|:---|:---|
| $2000000 | General Aggregate |
| $1000000 | Products/Completed Operation |
| $1000000 | Per Occurrence |
| $1000000 | Personal/Advertising Injury |
| $10000 | Medical Payments |
| $500000 | Damage to Premises Rented to You (formerly Fire/Legal) |
| $5000000 | Umbrella |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Special form property insurance, including full replacement cost endorsement, covering the value of the leasehold improvements made to the Premises by or for Tenant and the value of Tenant's personal property in the Premises (including inventory, trade fixtures, floor coverings, furniture and other property removable by Tenant under the provisions of this Lease). Any deductible under any such policy shall not exceed $5,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Commercial automobile liability insurance with a combined single limit of not less than $1,000,000 for bodily injury and property damage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Worker's compensation or similar insurance in form and amounts required by 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; (v) Rental interruption insurance in an amount equal to twelve (12) months' Rent.

Additionally, Tenant shall obtain such other insurance coverages in such amounts (or such increases in the amounts of the insurance coverages this Lease requires), as Landlord may reasonably require from time to time.

&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) <u>Tenant's Contractor's Insurance</u>. Tenant shall require any contractor of Tenant performing work on the Premises to carry and maintain, at no expense to Landlord:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Commercial
 general liability with limits of not less than:

---

| | |
|:---|:---|
| $2000000 | General Aggregate |
| $1000000 | Products/Completed Operation |
| $1000000 | Per Occurrence |
| $1000000 | Personal/Advertising Injury |
| $10000 | Medical Payments |
| $500000 | Fire Legal |
| $5000000 | Umbrella |

---

or such other reasonable levels as Landlord deems appropriate and approves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Property
 damage insurance in an amount not less than $2,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Commercial automobile liability insurance with a combined single limit of not less than $1,000,000 for bodily injury and property damage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Worker's
 compensation or similar insurance in form and amounts required
by 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;(f) <u>Increase in Insurance Premiums</u>. Tenant shall not cause, permit or suffer the Premises to be used in any way that violates Landlord's insurance policies, prevents Landlord from obtaining any insurance, or results in a premium increase, or a cancellation, for any insurance for the Property. Without limiting Landlord's remedies, if because of the nature or manner of Tenant's use of the Premises Landlord cannot obtain and maintain any insurance whose amount, cost, scope, form and coverage are reasonably acceptable to Landlord, then Tenant shall pay any resulting increased premiums.

&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) <u>Waiver of Right of Recovery</u>. Notwithstanding anything to the contrary contained in this Lease, Tenant waives all rights to recover against Landlord, its officers, directors, shareholders, partners, joint ventures, employees or agents, for any loss or damage to Tenant's property to the extent covered by insurance either actually carried or required to be carried hereunder. Landlord waives (except for the amount of any deductible) all rights to recover against Tenant, its officers, directors, shareholders, partners, joint ventures, employees or agents, for any loss or damage to Landlord's property to the extent covered by insurance either actually carried or required to be carried hereunder. The foregoing waiver by Landlord shall not release the Tenant of its maintenance, repair and other obligations under this Lease. Neither Landlord nor Tenant shall be liable to each other or any insurance company (by way of subrogation or otherwise) which insured any such losses, damages or expenses. Each party shall use reasonable efforts to cause their respective insurers to issue appropriate waiver of subrogation rights endorsements to all policies of insurance carried in connection with the Property or the Premises or the contents of either of them, and if obtained then each party shall deliver to the other party (within a reasonable period of time after a written request for the same) adequate written proof (for example, a policy and certificate of insurance with attached endorsement) of the issuance of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Landlord's Liability</u>.

&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) Landlord shall not be liable for any damage to property placed in the custody of its employees, nor for the loss of any property by theft or otherwise. Landlord shall not be liable for interference with the light, air or other incorporeal hereditaments; nor shall Landlord be liable for any latent defect on the Property or its equipment; nor shall Landlord be liable for the negligence or willful misconduct of any other tenant or occupant. Landlord shall in no event be liable to Tenant, its agents, employees, contractors, customers or other visitors for any injury or damage to persons or property resulting from falling sheetrock or ceiling tiles, steam, gas, electricity, water, rain, snow, or dampness which may leak or issue from or through any part of the Premises, or from pipes, appliances or plumbing, or from sewers, or the street, or subsurface, or from any other place by dampness or other cause of whatsoever nature and Tenant shall defend and indemnify Landlord from any claim of liability from which Landlord is hereby exonerated.

&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) If Landlord sells, assigns, conveys, or otherwise transfers its estate in and to the Property, then the transferee shall be deemed to have assumed and succeeded to Landlord's rights and obligations under this Lease and the transferor shall be relieved, released and discharged of all obligations and liabilities as Landlord under this Lease. Any deed of the Property automatically shall assign Landlord's interest in and rights under this Lease and shall fully evidence the transfer of Landlord's rights to the grantee, and no separate assignment or assumption of such interest or rights shall be necessary. Each Landlord's obligations under this Lease shall bind that Landlord only while it holds Landlord's interest under this Lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Holding Over; Surrender</u> 

&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) <u>Holding Over</u>. This Lease and the tenancy hereby created shall cease and expire at the end of the Term without the necessity of any notice of termination from either Landlord or Tenant, and Tenant hereby waives any statutorily or otherwise required notice to remove, quit or vacate. If Tenant holds possession of the Premises after the expiration or sooner termination of this Lease for any reason, Tenant shall be deemed to be a tenant-at-will and Tenant shall pay Landlord 125% of the Rent (including Annual Rent, Additional Rent and any taxes or operating or maintenance costs pass-through to the Tenant under the terms of this Lease) reserved in this Lease for the first month that Tenant remains in possession of the Premises and 150% for each month thereafter; but such payment of rent shall not create any lease arrangement whatsoever between Landlord and Tenant. During such period, Landlord shall retain all of Landlord's rights under this Lease and shall be entitled to the benefit of any law respecting summary recovery of possession of leased premises from a tenant holding over regardless of whether or not any required statutory notice to quit, vacate or surrender has been given by Landlord. If the Premises be not surrendered at the expiration or sooner termination of this Lease, then Tenant shall indemnify, defend and hold Landlord harmless against all loss, claim, expense or liability resulting from the delay by Tenant in so surrendering the Premises, including any claims made by any succeeding occupant founded on such delay. Tenant's obligations under this Section shall survive the expiration of the Term (including renewal(s)) or the earlier termination of this Lease.

&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) <u>Surrender</u>. On or before the expiration or earlier termination of the Term, Tenant shall at its sole expense: (i) surrender to the Landlord possession of the Premises (excluding any trade fixtures, machinery, equipment or other improvements or personal property owned by Tenant) in good order and repair (ordinary wear and tear excepted) and broom clean, together with all keys and combinations to locks, safes and vaults; (ii) carefully remove (so as not to damage any portion of the Premises) all signs, personalty, furniture, equipment, machinery and fixtures; and (iii) repair any damage caused by such removal. If Tenant does not remove any of Tenant's personalty, furniture, equipment, machinery or fixtures (to the extent not retained by Landlord), such items shall be conclusively presumed to have been abandoned by the Tenant and the Landlord, may at the Landlord's sole option, thereafter take possession of such property and either declare the same to be the property of the Landlord or, at the expense of the Tenant, dispose of such property in any manner and for whatever consideration the Landlord, in its sole discretion, deems advisable without liability to Tenant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Default; Remedies</u>.

&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) <u>Events of Default</u>. Each of the following events shall constitute an "**Event of Default** ":
 payment is due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) If Tenant fails to pay any Rent within seven (7) days after such

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) If Tenant makes any assignment or sublet that requires Landlord's consent without obtaining such consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) If Tenant fails to maintain the insurance this Lease requires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) If Tenant fails to perform or observe any other term of this Lease and such failure continues for fifteen (15) days after written notice from Landlord.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) If Tenant either (a) becomes bankrupt, insolvent, makes an assignment for the benefit of creditors, ceases to pay its debts as they become due or admits in writing that it is unable to pay its debts as they become due, or becomes a "debtor" or is otherwise the subject of any similar proceeding or (b) a custodian, administrator, receiver or trustee is appointed to take possession of, or an attachment, execution or other judicial seizure is made for, all or a substantial part of its assets or its interest in this Lease; and in either case was either voluntarily initiated by (or with the collusion of) Tenant or is not dismissed, cancelled, vacated, discharged, and rescinded within forty-five (45) days.

&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) <u>Remedies</u>. Upon the occurrence of an Event of Default, Landlord, after written notice to Tenant, may do any one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) perform, on behalf and at the expense of Tenant, any obligation of Tenant under this Lease which Tenant has failed to perform and of which Landlord shall have given Tenant notice, the cost of which performance by Landlord, shall be deemed Additional Rent and shall be payable by Tenant to Landlord upon demand. Notwithstanding the provisions of this clause and regardless of whether an Event of Default shall have occurred, Landlord may exercise the remedy described in this clause after written notice to Tenant if Landlord, in its good faith judgment, believes it would be materially injured by failure to take rapid action or if the unperformed obligation of Tenant constitutes an emergency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) elect to terminate this Lease and the tenancy created hereby by giving notice of such election to Tenant, or elect to terminate Tenant's possessory rights and all other rights of Tenant without terminating this Lease, and in either event, at any time thereafter without notice or demand and without any liability whatsoever, re-enter the Premises by force, summary proceedings or otherwise, and remove Tenant and all other persons and property from the Premises, and store such property in a public warehouse or elsewhere at the cost and for the account of Tenant without resort to legal process and without Landlord being deemed guilty of trespass or becoming liable for any loss or damage occasioned thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) exercise any other legal or equitable right or remedy (including obtaining injunctive relief) which it may have.

&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) <u>Expenses; Waiver</u>. Any costs and expenses incurred by Landlord (including attorneys' fees and expenses) in enforcing this Lease shall constitute Additional Rent and shall be paid to Landlord by Tenant upon demand. To the extent permitted by law, Tenant hereby expressly waives any and all rights of redemption which Tenant may have under any current or future laws in the event Tenant is evicted for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Mechanics' Liens</u>. No work performed by Tenant pursuant to this Lease, whether in the nature of erection, construction, alteration, or repair, shall be deemed to be done at the direction of or for the immediate use and benefit of Landlord. No mechanic's or other lien shall be allowed against the estate of Landlord by reason of any consent given by Landlord to Tenant to improve the Premises. Tenant shall pay promptly all persons furnishing labor or materials with respect to any work performed by Tenant or its contractor on or about the Premises. If any mechanic's or other lien shall at any time be filed against the Premises by reason of work, labor, services or materials performed or furnished, or alleged to have been performed or furnished to Tenant or to anyone holding the Premises through or under Tenant, or if Landlord or Tenant shall receive a written notice of any intent to file a lien, Tenant shall cause the same to be discharged of record or bonded to the satisfaction of Landlord. If Tenant shall fail to cause such lien to be so discharged or bonded after being notified of the filing thereto or the intent to file such lien, then, in addition to any other right or remedy of Landlord, Landlord may bond or discharge the same by paying the amount claimed to be due, and the amount so paid by Landlord including reasonable attorneys' fees incurred by Landlord, either in defending against such lien or in procuring the bonding or discharge of such lien shall be due and payable by Tenant to Landlord upon demand as Additional Rent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Broker</u>. Except for Lee & Associates of Eastern Pennsylvania, LLC (who Landlord shall pay pursuant to a separate written agreement), Landlord and Tenant represent and warrant to each other that no broker, agent or finder brought about or was involved in the making of this Lease and that no brokerage fee or commission is due as a result of the execution of this Lease. Each of the parties hereto agrees to indemnify and hold harmless the other against any claim by any broker, agent or finder based upon the execution of this Lease and predicated upon a breach of the above representation and warranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>Compliance with Law</u>.

&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) Tenant (at its sole expense) shall promptly and timely observe and comply with all laws, statutes, regulations, orders, requirements and rules (whether now in force or which may hereafter be in force) of all federal, state and local governmental authorities and of any board of fire underwriters or other similar organization respecting the Premises and the manner in which the Premises are or should be used, occupied and maintained by Tenant, whether that compliance requires work or remedial measures to the Premises that is ordinary or extraordinary, foreseen or unforeseen, or expenditures that are capital in nature, and pay all fines and penalties due to any lack of observance or compliance. All licenses, fees, and charges arising out of Tenant's use of the Premises and all charges for minor privileges occasioned by the occupancy of Tenant shall be the responsibility of Tenant.

&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) Tenant (at its sole expense) shall comply with all requirements of (i) the Americans with Disabilities Act of 1990 and with all rules, regulations and guidelines thereto, as the same are in effect on the date hereof and may hereafter be amended, modified or supplemented (collectively the "**ADA**") and any other similar laws, rules or regulations, as they relate to the Premises and the conduct of Tenant's business therein. Any Alterations shall be subject to the requirements of this Section. Notwithstanding anything contained herein to the contrary, if the Alterations, or Tenant's use and occupancy of the Premises, necessitate any Alterations to any other parts of the Property outside the Premises, Tenant shall pay the full cost of such alterations or improvements promptly upon demand by Landlord. Tenant shall indemnify, defend and hold harmless Landlord from any and all lawsuits, actions, claims, losses, damages, costs and expenses (including court costs and reasonable attorneys' fees) incurred by Landlord as a result of Tenant's failure to comply with any provisions of this Section, which obligation shall survive the expiration or earlier termination of this Lease. If Tenant fails to comply with its obligations hereunder, Landlord shall have the right, in its sole discretion, to do or cause to be done any and all work necessary to comply with same, and Tenant shall pay the cost thereof as Additional Rent. Tenant shall pay such Additional Rent within ten (10) days after receipt of a bill from Landlord. Within ten (10) days after receipt, Tenant shall provide Landlord with copies of any notices alleging violation of the ADA relating to any portion of the Premises; any claims made or threatened in writing regarding non-compliance with the ADA and relating to any portion of the Premises; or any governmental or regulatory actions or investigations instituted or threatened regarding non-compliance with the ADA and relating to any portion of the Premises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. <u>Environmental Requirements</u>.

&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) Tenant shall (i) not engage in any activity that reasonably may result in any Contamination (defined below), (ii) promptly deliver notice and a description to Landlord upon acquiring knowledge of the presence of any "hazardous substance" or "hazardous material" or "hazardous waste" (defined below) in the Premises in violation of applicable laws or any Contamination; (iii) comply with all laws, ordinances, rules, regulations, orders and directives requiring the removal, treatment or disposal of any Contamination and provide to Landlord, upon demand, satisfactory evidence of such compliance; (iv) provide to Landlord, within thirty (30) days after notice, reasonable assurance that Tenant has the funds necessary to pay the cost of removing, treating and disposing of any Contamination caused by Tenant or any of its shareholders, members, officers, directors, employees, contractors, agents, invitees, assignees or subtenants; (v) discharge any lien that may be established on the Premises as a result of any Contamination; and (vi) indemnify, hold harmless and defend Landlord and any Mortgagee from any and all claims, losses, costs, damages and expenses (including reasonable attorneys' fees and court costs) that may be asserted as a result of the presence of any hazardous substance , hazardous material or hazardous waste on the Premises or any Contamination due to any action or omission by Tenant or any of its shareholders, members, officers, directors, employees, contractors, agents, invitees, assignees or subtenants. "**Contamination**" means the contamination of the Premises, facilities, soil, ground water, air, or other elements on, or off, any other property as a result of any hazardous substance, hazardous material or hazardous waste at any time emanating from the Premises. "**Hazardous waste**" has the meaning set forth in the Resource Conservation and Recovery Act of 1976, as amended from time to time, and regulations promulgated thereunder. "**Hazardous substance**" has the meaning set forth in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, and regulations promulgated thereunder, and the Environment Article of the Annotated Code of Maryland (1987 Vol., as amended). "**Hazardous material**" means (A) any "oil" as defined in Section 4-401(g) of the Environment Article of the Annotated Code of Maryland (1987 Vol., as amended), or (B) any substance, material or waste that, whether by its nature or use, is subject to regulation under any present or future law, ordinance, rule, regulation, order or directive, addressing environmental health or safety issues, of or by any federal, state or local government or governmental agency (collectively, "**Environmental Requirements**").

&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) If at any time it is determined that Tenant, its shareholders, members, officers, directors, employees, contractors, agents, invitees, assignees or subtenants have placed or stored on or brought onto the Property materials which under any Environmental Requirements require special handling in collection, storage, treatment, or disposal, Tenant promptly shall take or cause to be taken, at its sole expense, such actions as may be necessary to comply with all Environmental Requirements. If Tenant fails to take such action, Landlord may make advances or payments towards performance or satisfaction of the same but shall be under no obligation to do so; and all sums so advanced or paid, including all sums advanced or paid in connection with any judicial or administrative investigation or proceeding relating thereto, including reasonable attorneys' fees, fines, or other costs, shall be repaid by Tenant, upon demand by Landlord, and shall bear interest at one percent (1%) per month, compounded annually. Failure of Tenant to comply with all Environmental Requirements shall be a default under this Lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. Notices.

&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) <u>Sending of Notices</u>. All notices, demands, requests, approvals and consents (collectively referred to as "**Notices**") required or permitted under this Lease shall be in writing and shall be either (i) personally delivered with signed receipt, or (ii) sent by a nationally-recognized, overnight courier and addressed (i) if to Landlord, c/o of The Bluestone Group, 225 Broadway, 32<sup>nd</sup> Floor, New York, NY, Attn: Mr. Eli Tabak, with a copy to Neuberger, Quinn, Gielen, Rubin & Gibber, P.A., 1 South Street, 27<sup>th</sup> Floor, Baltimore, MD 21202, Attn: Isaac M. Neuberger, Esq., imn@nqgrg.com, or (ii) if to Tenant, at the Premises. All Notices personally delivered shall conclusively be deemed delivered at the time of such delivery. All Notices delivered by overnight courier shall conclusively be deemed made one (1) business day after delivery to such courier service. Any party may designate a change of address by notice to the other party, given at least ten (10) days before such change of address is to become effective.

&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) <u>Notice to Mortgagees</u>. If any Mortgagee shall notify Tenant that it is the holder of a mortgage affecting the Premises, no notice, request or demand thereafter sent by Tenant to Landlord shall be effective unless and until a copy of the same shall also be sent to such Mortgagee to such address as such Mortgagee shall designate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26. <u>Miscellaneous</u>.

&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) <u>Accord and Satisfaction</u>. No payment by Tenant or receipt or retention by Landlord of any payment in connection with this Lease will give rise to, support or constitute an accord and satisfaction, notwithstanding any accompanying statement, instruction, or other assertion to the contrary (whether by notation on a check or in a transmittal letter or otherwise), unless Landlord expressly agrees to an accord and satisfaction in a separate writing duly executed by the appropriate persons. Landlord may receive and retain, absolutely and for itself, any and all payments so tendered, notwithstanding any accompanying instructions by Tenant to the contrary. Landlord will be entitled to treat any such payments as being received on account of any item or items of rent, interest, expense, or damage due in connection herewith, in such amounts and in such order as Landlord may determine at its sole discretion.

&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) <u>Captions and Pronouns</u>. The captions are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope of this Lease, or the intent of any provision thereof. Reference to masculine, feminine, or neuter gender shall include all other genders.

&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) <u>Corporate Tenants</u>. If Tenant is a corporation, the persons executing this Lease on behalf of Tenant hereby covenant and warrant that: Tenant is a duly constituted corporation qualified to do business in the State of Maryland; all Tenant's franchises and corporate taxes have been paid to date; all future forms, reports, fees and other documents necessary for Tenant to comply with applicable laws will be filed by Tenant when due; and such persons are duly authorized by the board of directors of such corporation to execute and deliver this Lease on behalf of the corporation.

&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) <u>Fees and Expenses</u>. If Tenant shall default in the observance or performance of any term or covenant on Tenant's part to be observed or performed under or by virtue of any of the terms or provisions in this Lease, Landlord may immediately, or at any time thereafter and without notice, perform the same for the account of Tenant, and if Landlord makes any expenditures or incurs any obligations for the payment of money in connection therewith including attorneys' fees in instituting, prosecuting or defending any action or proceeding, such sums paid or obligations incurred and costs shall be deemed to be Additional Rent hereunder and shall be paid by Tenant to Landlord within seven (7) days of rendition of any bill or statement to Tenant therefor.

&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) <u>Governing Law</u>. This Lease shall be governed by and construed in accordance with the laws of the State of Maryland (without regard to principles of conflicts of laws).

&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) <u>Interpretation</u>. This Lease represents the results of bargaining and negotiations between the parties (each of which is represented by legal counsel of its own choosing) and a combined draftsmanship effort and therefore shall be construed without regard to any custom or rule of law requiring construction or interpretation against the party responsible for drafting this Lease. As used in this Lease, the word "including" shall be interpreted as if followed by the words "without limitation."

&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) <u>Non-Recourse</u>. Notwithstanding anything to the contrary contained in this Lease, Landlord's liability under this Lease is limited to and shall not extend beyond Landlord's interest in the Property and Tenant shall not enforce any judgment for Landlord's breach of this Lease against any asset or property of Landlord (or of any shareholder, partner, member or other equity interest holder of Landlord) beyond Landlord's interest in the Property. Landlord has no personal liability under this Lease. This provision, which shall inure to Landlord's successors and assigns (including any Mortgagee), is not intended to relieve Landlord from the performance of its obligations under this Lease but rather to limit Landlord's liability in the event Tenant obtains a judgment against Landlord.

&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) <u>No Option</u>. The submission of this Lease for examination does not constitute a reservation of, or option for, the Premises, and this Lease shall become effective only upon execution thereof by both parties.

&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) <u>No Oral Modification</u>. This writing is intended by the parties as a final expression of their agreement and as a complete and exclusive statement of the terms thereof, all negotiations, considerations and representations between the parties having been incorporated herein. No course of prior dealings between the parties or their officers, employees, agents or affiliates shall be relevant or admissible to supplement, explain, or vary any of the terms of this Lease. Acceptance of, or acquiescence in, a course of performance rendered under this or any prior agreement between the parties or their affiliates shall not be relevant or admissible to determine the meaning of any of the terms of this Lease. No representations, understandings, or agreements have been made or relied upon in the making of this Lease other than those specifically set forth herein. This Lease can be modified only in writing and when signed by the party against whom the modification is enforceable.

&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) <u>No Waivers</u>. The failure of Landlord to insist, in any one or more instances, upon a strict performance of any of the covenants of this Lease, or to exercise any option herein contained, shall not be construed as a waiver, or a relinquishment for the future, of such covenant or option, but the same shall continue and remain in full force and effect. The receipt by Landlord of Rent, with knowledge of the breach of any covenant hereof, shall not be deemed a waiver of such breach, and no waiver by Landlord of any provision hereof shall be deemed to have been made unless expressed in writing and signed by Landlord.

&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) <u>Performance of Landlord's Obligations by Mortgagee</u>. Tenant shall accept performance of any of Landlord's obligations hereunder by any Mortgagee.

&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) <u>Possession</u>. Landlord covenants and agrees that possession of the Premises shall be given to Tenant as soon as the Premises are ready for occupancy by said Tenant. In case possession, in whole or in part, cannot be given to Tenant on or before the Commencement Date of this Lease, Landlord agrees to abate the Annual Rent proportionately until possession is given to Tenant, and Tenant agrees to accept such pro-rata abatement as liquidated damages for the failure to obtain possession. If Tenant takes possession of the Premises, in whole or in part, prior to the Commencement Date, Tenant's obligation to pay Rent as set forth in this Lease shall commence as of the day Tenant obtains possession of the Premises.

&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) <u>No Recordation</u>. Tenant shall not record this Lease or a memorandum of this Lease. If Tenant violates the previous sentence, then at Landlord's option Tenant shall be deemed to have committed an incurable Event of Default and Landlord may record a "Notice of Termination" of this Lease that shall be effective without Tenant's signature.

&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) <u>Remedies Cumulative</u>. No reference to any specific right or remedy shall preclude Landlord from exercising any other right or from having any other remedy or from maintaining any action to which it may otherwise be entitled at law or in equity. No failure by Landlord to insist upon strict performance of any agreement, term, covenant or condition hereof, or to exercise any right or remedy consequent upon a breach thereof, and no acceptance of full or partial rent during the continuance of any such breach shall constitute a waiver of any such breach. No waiver by Landlord of any breach by Tenant under this Lease or of any breach by any other tenant under any other lease of any portion of the Property shall affect or alter this Lease in any way whatsoever.

&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) <u>Severability</u>. The provisions of this Lease are severable, and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of any other provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Several Liability</u>. If Tenant shall be one or more individuals, corporations or other entities, whether or not operating as a partnership or joint venture, then each such individual, corporation, entity, joint venturer or partner shall be deemed to be both jointly and severally liable for the payment of the entire rent and other payments specified herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Prior Information</u>. The Tenant acknowledges and agrees that no prior information provided or statements made by the Landlord or its agent(s) ("**Prior Information**"), including estimated gross sales and common area maintenance calculations, any other financial matters, and any matters related to: (i) any of the premises on the Property; (ii) the Property itself; or (iii) the number or kind of tenants on the Property, have in any way induced the Tenant to enter into this Lease. The Tenant acknowledges that prior to entering into this Lease, the Tenant has satisfied itself of all its concerns by conducting an independent investigation of the validity of such Prior 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;(r) <u>Successors and Assigns</u>. This Lease and the covenants, terms and conditions contained herein shall inure to the benefit of and be binding on Landlord, its successors and assigns, provided that, if Landlord shall transfer title to the Property, by operation of law or otherwise, Landlord shall be relieved of all covenants and obligations hereunder upon completion of such sale or transfer, and it shall be considered that the transferee has assumed and agreed to carry out all of the obligations of Landlord hereunder. This Lease and the covenants, terms and conditions contained herein shall be binding on and inure to the benefit of Tenant, its heirs, personal representatives, and permitted successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Third Party Beneficiary</u>. Nothing contained in this Lease shall be construed so as to confer upon any other party the rights of a third-party beneficiary except rights contained herein for the benefit of a Mortgagee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Time of the Essence</u>. TIME IS OF THE ESSENCE OF THIS LEASE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Waiver of Jury Trial</u>. LANDLORD AND TENANT HEREBY MUTUALLY WAIVE ANY AND ALL RIGHTS WHICH EITHER MAY HAVE TO REQUEST A JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIM AT LAW OR IN EQUITY IN ANY COURT OF COMPETENT JURISDICTION ARISING OUT OF THIS LEASE OR TENANT'S OCCUPANCY OF OR RIGHT TO OCCUPY THE LEASED PREMISES. TENANT FURTHER AGREES THAT IF LANDLORD COMMENCES ANY SUMMARY PROCEEDING FOR NONPAYMENT OF RENT OR POSSESSION OF THE LEASED PREMISES, TENANT WILL NOT, AND HEREBY WAIVES, ALL RIGHT TO INTERPOSE ANY COUNTERCLAIM OF WHATEVER NATURE IN ANY SUCH PROCEEDING. TENANT FURTHER WAIVES ANY RIGHT TO REMOVE SAID SUMMARY PROCEEDING TO ANY OTHER COURT OR TO CONSOLIDATE SAID SUMMARY PROCEEDING WITH ANY OTHER ACTION, WHETHER BROUGHT PRIOR OR SUBSEQUENT TO THE SUMMARY PROCEEDING.

&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) <u>Disclosure</u>. Tenant certifies that: (i) it is not acting, directly or indirectly, for or on behalf of any person, group, entity or nation named by an Executive Order or the United States Treasury Department as a terrorist, "Specially Designated National and Blocked Person," or other banned or blocked person, entity, nation or transaction pursuant to any law, order, rule, or regulation that is enforced or administered by the Office of Foreign Assets Control; and (ii) it is not engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any person, group, entity, or nation. Tenant hereby agrees to defend, indemnify, and hold harmless Landlord from and against any and all claims, damages, losses, risks, liabilities, and expenses (including attorney's fees and costs) arising from or related to any breach of the foregoing certification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>Confidentiality</u>. Tenant, and its agents, employees and third party contractors, shall maintain the contents of this Lease and all discussions between Tenant and Landlord, Landlord's agents, employees and representatives, regarding this Lease in confidence. Tenant agrees that Tenant shall not at any time or in any manner, either directly or indirectly, divulge, disclose or communicate to any person, entity or association the contents of this Lease, except as necessary for legal or accounting purposes. If Tenant fails to comply with this paragraph, Tenant acknowledges that because its failure to comply with the provisions of this paragraph could cause irreparable injury to Landlord that cannot be compensated by the payment of money, Landlord shall have the right to all remedies available to it at law or in equity in addition to those available at law for other violations of the Lease.

&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) <u>Exhibits and Counterparts</u>. The Recitals set forth above and the exhibits attached below are incorporated in and made a material part of this Lease. This Lease may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same Lease. Electronic signatures, and counterparts transmitted by e-mail or facsimile, shall be valid and binding to the same extent as originals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) <u>Fixtures, Machinery and Equipment</u>. All fixtures, machinery and equipment in the Premises that are not owned by Landlord ("<u>Tenant's Equipment</u>") shall be and remain owned by Tenant. During the first two (2) Lease Years, Tenant shall not remove any of Tenant's Equipment from the Property. Tenant shall not convey any Tenant's Equipment to any other person or entity (even if affiliated with Tenant) unless Tenant promptly replaces it with items of equal or greater value, quality and utility. Nothing in this Lease prohibits Tenant from granting a lien on or security interest in Tenant's Equipment to Tenant's bona-fide third party lender.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, Landlord and Tenant have signed, sealed and delivered this Lease Agreement as of the Effective Date.

---

| | |
|:---|:---|
| **LANDLORD:** | **LANDLORD:** |
| **NEW HEIGHTS INDUSTRIAL PARK LLC**, | **NEW HEIGHTS INDUSTRIAL PARK LLC**, |
| a Delaware limited liability company | a Delaware limited liability company |
| By: | New Heights Industrial Park Venture LLC, a Delaware limited liability company, its Sole Member |
| By: | New Heights GP LLC, a Delaware limited liability company, its Managing Member |
| By: | TBSG New Heights GP LLC, a Delaware limited liability company, its Managing Member |

---

---

| | | |
|:---|:---|:---|
| By: | */s/ Michael Langer* | [SEAL] |
|  | Michael Langer | Michael Langer |
|  | Manager | Manager |

---

---

| | | |
|:---|:---|:---|
| **TENANT:** | **TENANT:** |  |
| **FIRST BREACH INC.**, a Delaware corporation | **FIRST BREACH INC.**, a Delaware corporation | **FIRST BREACH INC.**, a Delaware corporation |
| By: | */s/ Jordan Low* | [SEAL] |
|  | Name: Jordan Low |  |
|  | Title: President/COO |  |

---

**Exhibit A<u> </u>**

**<u>PROPERTY</u>**

All that certain land, together with the improvements, rights, privileges and appurtenances to the same belonging, situate in the Washington County, State of Maryland, and described as follows, to wit:

All that land in the Twenty Seventh (27th) Election District, Washington County, Maryland and being known and designated as Unit 2, in that Condominium Regime known as "First Flight Air Park Condominium, Inc." as established by that "Condominium Declaration of First Flight Air Park Condominium, Inc." Dated May 31, 2008 and recorded among the Land Records of Washington County, Maryland, in Liber No. 3511 folio 557 and per plat thereof recorded among Land Records at Condominium Plat Nos. 429, 420 and 431.

Together with an undivided 97% interest or such undivided interest as may be established from time to time, in the common elements as set forth in the Condominium Declaration of First Flight Air Park Condominium, Inc. above referred to.

Being the same property as conveyed by Deed recorded among the said Land Records in Liber 836 at folio 438.

Together with the buildings and improvements thereon erected, made or being; and all and every, the rights, alleys, ways, waters, privileges, appurtenances and advantages thereto belonging, or in anywise appertaining.

Tax ID# 27-038166

The improvements thereon being known as: **18450 Showalter Road, Unit 2**

Being the same property conveyed to New Heights Industrial Park LLC, a Delaware limited liability company by Special Warranty Deed from Topflight Owner LLC, a New York limited liability company, dated 01/22/2020, filed 01/24/2020, of record in Book KRT 6166, page 342, Recorder Office for Washington County, Maryland.

**<u>Exhibit B</u>**

**<u>LEASED PREMISES</u>**

Bay 1

![](ex10-4_002.jpg)

Bay 2

![](ex10-4_003.jpg)

## Exhibit 10.5

**Exhibit 10.5**

![](ex10-5_001.jpg)

![](ex10-5_002.jpg)

![](ex10-5_003.jpg)

![](ex10-5_004.jpg)

![](ex10-5_005.jpg)

## Exhibit 10.6

**Exhibit 10.6**

**FIRST BREACH INC.**

OMNIBUS SECURITIES AND INCENTIVE PLAN

**TWELVE MILLION SHARES OF COMMON STOCK**

**Table of Contents**

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **Page** |
| ARTICLE I | PURPOSE | PURPOSE | 1 |
| ARTICLE II | DEFINITIONS | DEFINITIONS | 1 |
| ARTICLE III | EFFECTIVE DATE OF PLAN | EFFECTIVE DATE OF PLAN | 4 |
| ARTICLE IV | ADMINISTRATION | ADMINISTRATION | 4 |
|  | Section 4.1 | Administration |  |
|  | Section 4.2 | Powers |  |
|  | Section 4.3 | Additional Powers |  |
|  | Section 4.4 | Delegation |  |
|  | Section 4.5 | Power and Authority of the Board |  |
| ARTICLE V | SHARES SUBJECT TO PLAN AND LIMITATIONS THEREON | SHARES SUBJECT TO PLAN AND LIMITATIONS THEREON | 5 |
|  | Section 5.1 | Shares Grant and Award Limits |  |
|  | Section 5.2 | Prior Stock Plan |  |
|  | Section 5.3 | Common Stock Offered |  |
|  | Section 5.4 | Limitations on Awards for Directors |  |
| ARTICLE VI | ELIGIBILITY FOR AWARDS | ELIGIBILITY FOR AWARDS | 6 |
| ARTICLE VII | OPTIONS | OPTIONS | 6 |
|  | Section 7.1 | Option Period |  |
|  | Section 7.2 | Limitations on Exercise of Option |  |
|  | Section 7.3 | Special Limitations on Incentive Share Options |  |
|  | Section 7.4 | Option Agreement |  |
|  | Section 7.5 | Option Price and Payment |  |
|  | Section 7.6 | Stockholder Rights and Privileges |  |
|  | Section 7.7 | Options and Rights in Substitution for Stock or Share Options Granted by Other Corporations |  |
|  | Section 7.8 | Prohibition Against Repricing |  |
| ARTICLE VIII | RESTRICTED SHARE AWARDS | RESTRICTED SHARE AWARDS | 7 |
|  | Section 8.1 | Restriction Period |  |
|  | Section 8.2 | Other Terms and Conditions |  |
|  | Section 8.3 | Payment for Restricted Shares |  |
|  | Section 8.4 | Restricted Share Award Agreements |  |
| ARTICLE IX | UNRESTRICTED SHARE AWARDS | UNRESTRICTED SHARE AWARDS | 8 |
| ARTICLE X. | RESTRICTED SHARE UNIT AWARDS | RESTRICTED SHARE UNIT AWARDS | 8 |
|  | Section 10.1 | Terms and Conditions |  |
|  | Section 10.2 | Payments |  |
| ARTICLE XI | PERFORMANCE UNIT AWARDS | PERFORMANCE UNIT AWARDS | 9 |
|  | Section 11.1 | Terms and Conditions |  |
|  | Section 11.2 | Payments |  |

---

-i-

---

| | | | |
|:---|:---|:---|:---|
| ARTICLE XII | DISTRIBUTION EQUIVALENT RIGHTS | DISTRIBUTION EQUIVALENT RIGHTS | 9.0 |
|  | Section 12.1 | Terms and Conditions |  |
|  | Section 12.2 | Interest Equivalents |  |
| ARTICLE XIII | SHARE APPRECIATION RIGHTS | SHARE APPRECIATION RIGHTS | 9.0 |
|  | Section 13.1 | Terms and Conditions |  |
|  | Section 13.2 | Tandem Share Appreciation Rights |  |
| ARTICLE XIV | RECAPITALIZATION OR REORGANIZATION | RECAPITALIZATION OR REORGANIZATION | 10.0 |
|  | Section 14.1 | Adjustments to Common Stock |  |
|  | Section 14.2 | Recapitalization |  |
|  | Section 14.3 | Other Events |  |
|  | Section 14.4 | Powers Not Affected |  |
|  | Section 14.5 | No Adjustment for Certain Awards |  |
| ARTICLE XV | AMENDMENT AND TERMINATION OF PLAN | AMENDMENT AND TERMINATION OF PLAN | 11.0 |
| ARTICLE XVI | MISCELLANEOUS | MISCELLANEOUS | 11.0 |
|  | Section 16.1 | No Right to Award |  |
|  | Section 16.2 | No Rights Conferred |  |
|  | Section 16.3 | Other Laws; No Fractional Shares; Withholding |  |
|  | Section 16.4 | No Restriction on Corporate Action |  |
|  | Section 16.5 | Restrictions on Transfer |  |
|  | Section 16.6 | Beneficiary Designations |  |
|  | Section 16.7 | Rule 16b-3 |  |
|  | Section 16.8 | Section 409A |  |
|  | Section 16.9 | Indemnification |  |
|  | Section 16.10 | Other Plans |  |
|  | Section 16.11 | Limits of Liability |  |
|  | Section 16.12 | Governing Law |  |
|  | Section 16.13 | Severability of Provisions |  |
|  | Section 16.14 | No Funding |  |
|  | Section 16.15 | Headings |  |
|  | Section 16.16 | Terms of Award Agreements |  |

---

-ii-

**FIRST BREACH INC.**

OMNIBUS SECURITIES AND INCENTIVE PLAN

**TWELVE MILLION SHARES OF COMMON STOCK**

**ARTICLE I<br> PURPOSE**

The purpose of this First Breach Inc. Omnibus Securities and Incentive Plan (the "Plan") is to benefit the stockholders of First Breach Inc., a Delaware corporation (the "Company"), by assisting the Company to attract, retain and provide incentives to key management employees and non-employee directors of, and non-employee consultants to, the Company and its Affiliates, and to align the interests of such employees, non-employee directors and non-employee consultants with those of the Company's stockholders. Accordingly, the Plan provides for the granting of Distribution Equivalent Rights, Incentive Share Options, Non-Qualified Share Options, Performance Unit Awards, Restricted Share Awards, Restricted Share Unit Awards, Share Appreciation Rights, Tandem Share Appreciation Rights, Unrestricted Share Awards or any combination of the foregoing, as may be best suited to the circumstances of the particular Employee, Director or Consultant as provided herein.

**ARTICLE II<br> DEFINITIONS**

The following definitions shall be applicable throughout the Plan unless the context otherwise requires:

"Affiliate" shall mean any corporation which, with respect to the Company, is a "subsidiary corporation" within the meaning of Section 424(f) of the Code.

"Award" shall mean, individually or collectively, any Distribution Equivalent Right, Option, Performance Unit Award, Restricted Share Award, Restricted Share Unit Award, Share Appreciation Right or Unrestricted Share Award.

"Award Agreement" shall mean a written agreement between the Company and the Holder with respect to an Award, setting forth the terms and conditions of the Award, and each of which shall constitute a part of the Plan.

"Board" shall mean the Board of Directors of the Company.

"Change of Control" shall mean (i) for a Holder who is a party to an employment or consulting agreement with the Company or an Affiliate which agreement defines "Change of Control" (or a similar term) therein, "Change of Control" shall have the same meaning as provided for in such agreement, or (ii) for a Holder who is not a party to such an agreement, "Change of Control" shall mean the satisfaction of any one or more of the following conditions (and the "Change of Control" shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have been satisfied):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any person (as such term is used in paragraphs 13(d) and 14(d)(2) of the Exchange Act, hereinafter in this definition, "Person"), other than the Company or an Affiliate or an employee benefit plan of the Company or an Affiliate, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The closing of a merger, consolidation or other business combination (a "Business Combination") other than a Business Combination in which holders of the Common Stock immediately prior to the Business Combination have substantially the same proportionate ownership of the Company or surviving corporation immediately after the Business Combination as immediately before;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The closing of an agreement for the sale or disposition of all or substantially all of the Company's assets to any entity that is not an Affiliate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The approval by the holders of shares of Common Stock of a Plan of complete liquidation of the Company other than a liquidation of the Company into any subsidiary or a liquidation a result of which Persons who were stockholders of the Company immediately prior to such liquidation have substantially the same proportionate ownership of shares of the surviving corporation immediately after such liquidation as immediately before; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Within any twenty-four (24)-month period, the Incumbent Directors shall cease to constitute at least a majority of the Board or the board of directors of any successor to the Company; provided, however, that any director elected to the Board, or nominated for election, by a majority of the Incumbent Directors then still in office, shall be deemed to be an Incumbent Director for purposes of this paragraph (e), but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, entity or "group" other than the Board (including, but not limited to, any such assumption that results from paragraph (a), (b), (c) or (d) of this definition).

Notwithstanding the foregoing, a "Change of Control" shall not be deemed to occur if the Company files for bankruptcy, liquidation or reorganization under the United States Bankruptcy Code.

"Code" shall mean the Internal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code shall be deemed to include any amendments or successor provisions to any section and any regulation under such section.

"Committee" shall mean such other committee designated by the Board to administer the Plan. "Common Share" shall mean a share of Common Stock.

"Common Stock" shall mean the common stock, par value $0.01 per share, of the Company. "Company" shall mean First Breach Inc., a Delaware corporation, and any successor thereto.

"Consultant" shall mean any non-Employee advisor to the Company or an Affiliate who or which has contracted directly with the Company or an Affiliate to render bona fide consulting or advisory services thereto.

"Director" shall mean a member of the Board or a member of the board of directors of an Affiliate, in either case, who is not an Employee.

"Distribution Equivalent Right" shall mean an Award granted under Article XII of the Plan which entitles the Holder to receive bookkeeping credits, cash payments and/or Common Share distributions equal in amount to the distributions that would have been made to the Holder had the Holder held a specified number of Common Stock during the period the Holder held the Distribution Equivalent Right.

"Distribution Equivalent Right Award Agreement" shall mean a written agreement between the Company and a Holder with respect to a Distribution Equivalent Right Award.

"Effective Date" shall have the meaning ascribed to that term in Article III.

"Employee" shall mean any employee, including officers, of the Company or an Affiliate. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

"Fair Market Value" shall mean, as determined consistent with the applicable requirements of Sections 409A and 422 of the Code, as of any specified date, the closing sales price of the Common Stock for such date (or, in the event that the Common Stock are not traded on such date, on the immediately preceding trading date) as reported in *The Wall Street Journal* or a comparable reporting service. If the Common Stock are not listed on a national securities exchange, but are quoted on the OTC Markets OTC Link, the Fair Market Value of the Common Stock shall be the mean of the bid and asked prices per Common Share for such date. If the Common Stock are not quoted or listed as set forth above, Fair Market Value shall be determined by the Committee in good faith by any fair and reasonable means (which means, with respect to a particular Award grant, may be set forth with greater specificity in the applicable Award Agreement). The Fair Market Value of property other than Common Stock shall be determined by the Committee in good faith by any fair and reasonable means, and consistent with the applicable requirements of Sections 409A and 422 of the Code.

"Family Member" shall mean any child, stepchild, grandchild, parent, stepparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, any person sharing the Holder's household (other than a tenant or employee of the Holder), a trust in which such persons have more than fifty percent (50%) of the beneficial interest, a foundation in which such persons (or the Holder) control the management of assets and any other entity in which such persons (or the Holder) own more than fifty percent (50%) of the voting interests.

"Holder" shall mean an Employee, Director or Consultant who has been granted an Award or any such individual's beneficiary, estate or representative, to the extent applicable.

"Incentive Share Option" shall mean an Option which is intended by the Committee to constitute an "incentive stock option" under Section 422 of the Code.

"Incumbent Director" shall mean, with respect to any period of time specified under the Plan for purposes of determining whether or not a Change of Control has occurred, the individuals who were members of the Board at the beginning of such period.

"Non-Qualified Share Option" shall mean an Option which is not an Incentive Share Option.

"Option" shall mean an Award granted under Article VII of the Plan of an option to purchase Common Stock and includes both Incentive Share Options and Non-Qualified Share Options.

"Option Agreement" shall mean a written agreement between the Company and a Holder with respect to an Option.

"Performance Unit" shall mean a Unit awarded to a Holder pursuant to a Performance Unit Award.

"Performance Unit Award" shall mean an Award granted under Article XI of the Plan under which, upon the satisfaction of predetermined individual and/or Company (and/or Affiliate) performance goals and/or objectives, a cash payment shall be made to the Holder, based on the number of Units awarded to the Holder.

"Performance Unit Award Agreement" shall mean a written agreement between the Company and a Holder with respect to a Performance Unit Award.

"Plan" shall mean this First Breach Inc. Omnibus Securities and Incentive Plan, as amended from time to time, together with each of the Award Agreements utilized hereunder.

"Restricted Share Award" shall mean an Award granted under Article VIII of the Plan of Common Stock, the transferability of which by the Holder shall be subject to Restrictions.

"Restricted Share Award Agreement" shall mean a written agreement between the Company and a Holder with respect to a Restricted Share Award.

"Restricted Share Unit Award" shall mean an Award granted under Article X of the Plan under which, upon the satisfaction of predetermined individual service-related vesting requirements, a cash payment shall be made to the Holder, based on the number of Units awarded to the Holder.

"Restricted Share Unit Award Agreement" shall mean a written agreement between the Company and a Holder with respect to a Restricted Share Unit Award.

"Restriction Period" shall mean the period of time for which Common Stock subject to a Restricted Share Award shall be subject to Restrictions, as set forth in the applicable Restricted Share Award Agreement.

"Restrictions" shall mean forfeiture, transfer and/or other restrictions applicable to Common Stock awarded to an Employee, Director or Consultant under the Plan pursuant to a Restricted Share Award and set forth in a Restricted Share Award Agreement.

"Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act, as such may be amended from time to time, and any successor rule, regulation or statute fulfilling the same or a substantially similar function.

"Share Appreciation Right" shall mean an Award granted under Article XIII of the Plan of a right, granted alone or in connection with a related Option, to receive a payment on the date of exercise.

"Share Appreciation Right Award Agreement" shall mean a written agreement between the Company and a Holder with respect to a Share Appreciation Right.

"Tandem Share Appreciation Right" shall mean a Share Appreciation Right granted in connection with a related Option, the exercise of which shall result in termination of the otherwise entitlement to purchase some or all of the Common Stock under the related Option, all as set forth in Section 13.2.

"Ten Percent Shareholder" shall mean an Employee who, at the time an Option is granted to him or her, owns shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or of any parent corporation or subsidiary corporation thereof (both as defined in Section 424 of the Code), within the meaning of Section 422(b)(6) of the Code.

"Units" shall mean bookkeeping units, each of which represents such monetary amount as shall be designated by the Committee in each Performance Unit Award Agreement, or represents one (1) Common Share for purposes of each Restricted Share Unit Award.

"Unrestricted Share Award" shall mean an Award granted under Article IX of the Plan of Common Stock which are not subject to Restrictions.

"Unrestricted Share Award Agreement" shall mean a written agreement between the Company and a Holder with respect to an Unrestricted Share Award.

**ARTICLE III <br> EFFECTIVE DATE OF PLAN**

The Plan shall be effective as of January 22, 2026 (the "Effective Date"), subject to approval by the board of the Company.

**ARTICLE IV <br> ADMINISTRATION**

Section 4.1. **Administration**. The Plan shall be administered by the Committee.

Section 4.2. **Powers**. Subject to the provisions of the Plan, the Committee shall have the sole authority, in its discretion, to make all determinations under the Plan, including, but not limited to, determining which Employees, Directors or Consultants shall receive an Award, the time or times when an Award shall be made (the date of grant of an Award shall be the date on which the Award is awarded by the Committee), what type of Award shall be granted, the term of an Award, the date or dates on which an Award vests (including acceleration of vesting), the form of any payment to be made pursuant to an Award, the terms and conditions of an Award (including the forfeiture of the Award (and/or any financial gain) if the Holder of the Award violates any applicable restrictive covenant thereof), the Restrictions under a Restricted Share Award and the number of Common Stock which may be issued under an Award, all as applicable. In making such determinations, the Committee may take into account the nature of the services rendered by the respective Employees, Directors and Consultants, their present and potential contribution to the Company's (or the Affiliate's) success and such other factors as the Committee, in its discretion, shall deem relevant.

Section 4.3. **Additional Powers**. The Committee shall have such additional powers as are delegated to it under the other provisions of the Plan. Subject to the express provisions of the Plan, the Committee is authorized to construe the Plan and the respective Award Agreements executed hereunder, to prescribe such rules and regulations relating to the Plan as it may deem advisable to carry out the intent of the Plan, and to determine the terms, restrictions and provisions of each Award, including such terms, restrictions and provisions as shall be requisite in the judgment of the Committee to cause designated Options to qualify as Incentive Share Options, and to make all other determinations necessary or advisable for administering the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in any Award Agreement in the manner and to the extent it shall deem expedient to carry it into effect. The determinations of the Committee on the matters referred to in this Article IV shall be conclusive and binding on the Company and all Holders.

Section 4.4. **Delegation**. The Committee may delegate to one or more officers or Directors of the Company, subject to such terms, conditions and limitations as the Committee may establish, in its sole discretion, the authority to grant Awards; provided, however, that the Committee shall not delegate such authority (i) with regard to grants of Awards to be made to officers of the Company or any Affiliate who are subject to Section 16 of the Exchange Act, or (ii) in such a manner as would cause the Plan not to comply with the requirements of applicable law or applicable exchange rules.

Section 4.5. **Power and Authority of the Board**. Notwithstanding anything to the contrary contained herein, (i) the Board may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan, unless the exercise of such powers and duties by the Board would cause the Plan not to comply with the requirements of Rule 16b-3, other applicable law or applicable exchange rules, and (ii) only the Committee (or another committee of the Board comprised of directors who qualify as independent directors within the meaning of the independence rules of any applicable securities exchange where the shares of Common Stock are then listed) may grant Awards to Directors who are not also Employees.

**ARTICLE V**

**SHARES SUBJECT TO PLAN AND LIMITATIONS THEREON**

Section 5.1. **Shares Grant and Award Limits**. The Committee may from time to time grant Awards to one or more Employees, Directors and/or Consultants determined by it to be eligible for participation in the Plan in accordance with the provisions of Article VI. Subject to Article XIV, the aggregate number of Common Shares (including Common Shares underlying Options designated as Incentive Share Options) that may be issued under the Plan shall not exceed the sum of (i)]**twelve million (12,000,000)** Common Shares, plus (ii) an annual increase on the first day of each calendar year beginning January 1, 2026 and ending on and including January 1, 2031 equal to a fifteen percent (15%) of the Common Shares outstanding on the final day of the immediately preceding calendar year. The Common Stock shall be deemed to have been issued under the Plan solely to the extent actually issued and delivered pursuant to an Award. To the extent that an Award lapses, expires, is canceled, is terminated unexercised or ceases to be exercisable for any reason, or the rights of its Holder terminate, any Common Stock subject to such Award shall again be available for the grant of a new Award.

Section 5.2. **Prior Awards**. All outstanding awards previously granted by the Company shall remain outstanding and subject to their terms.

Section 5.3. **Common Stock Offered**. The Common Stock to be offered pursuant to the grant of an Award will be authorized but unissued Common Stock or Common Stock previously issued and outstanding and reacquired by the Company.

Section 5.4. **Limitations on Awards for Directors**. Notwithstanding any provision to the contrary in the Plan, the sum of the grant date fair value of equity-based Awards (such value computed as of the date of grant in accordance with applicable financial accounting rules) and the amount of any cash-based compensation granted to a Director during any calendar year shall not exceed [Five Hundred Thousand] Dollars ($[500,000]). The independent members of the Board may make exceptions to this limit for a non-executive chair of the Board, provided that the non-employee Director receiving such additional compensation may not participate in the decision to award such compensation.

**ARTICLE VI <br> ELIGIBILITY FOR AWARDS**

Awards made under the Plan may be granted solely to persons who, at the time of grant, are Employees, Directors or Consultants (or any such person to whom an offer of employment or engagement with the Company or any Affiliate is extended). An eligible person must be a natural person, and may only be granted an Award in connection with the provision of services. An Award may be granted on more than one occasion to the same Employee, Director or Consultant, and, subject to the limitations set forth in the Plan, such Award may include a Non-Qualified Share Option, a Restricted Share Award, an Unrestricted Share Award, a Distribution Equivalent Right Award, a Performance Unit Award, a Share Appreciation Right, a Tandem Share Appreciation Right, any combination thereof or, solely for Employees, an Incentive Share Option.

**ARTICLE VII**

**OPTIONS**

Section 7.1. **Option Period**. The term of each Option shall be as specified in the Option Agreement; provided, however, that except as set forth in Section 7.3, no Option shall be exercisable after the expiration of ten (10) years from the date of its grant.

Section 7.2. **Limitations on Exercise of Option**. An Option shall be exercisable in whole or in such installments and at such times as specified in the Option Agreement.

Section 7.3. **Special Limitations on Incentive Share Options**. To the extent that the aggregate Fair Market Value (determined at the time the respective Incentive Share Option is granted) of Common Stock with respect to which Incentive Share Options are exercisable for the first time by an individual during any calendar year under all plans of the Company and any parent corporation or subsidiary corporation thereof (both as defined in Section 424 of the Code) which provide for the grant of Incentive Share Options exceeds One Hundred Thousand Dollars ($100,000) (or such other individual limit as may be in effect under the Code on the date of grant), the portion of such Incentive Share Options that exceeds such threshold shall be treated as Non-Qualified Share Options. Incentive Share Options shall be granted to Employees only. The Committee shall determine, in accordance with applicable provisions of the Code, Treasury Regulations and other administrative pronouncements, which of a Holder's Options, which were intended by the Committee to be Incentive Share Options when granted to the Holder, will not constitute Incentive Share Options because of such limitation, and shall notify the Holder of such determination as soon as practicable after such determination. No Incentive Share Option shall be granted to an Employee if, at the time the Incentive Share Option is granted, such Employee is a Ten Percent Shareholder, unless (i) at the time such Incentive Share Option is granted the Option price is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock subject to the Incentive Share Option, and (ii) such Incentive Share Option by its terms is not exercisable after the expiration of five (5) years from the date of grant. No Incentive Share Option shall be granted more than ten (10) years from the date on which the Plan is approved by the Company's stockholders. The designation by the Committee of an Option as an Incentive Share Option shall not guarantee the Holder that the Option will satisfy the applicable requirements for "incentive stock option" status under Section 422 of the Code.

Section 7.4. **Option Agreement**. Each Option shall be evidenced by an Option Agreement in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time shall approve, including, but not limited to, provisions intended to qualify an Option as an Incentive Share Option. An Option Agreement may provide for the payment of the Option price, in whole or in part, by the delivery of a number of Common Stock (plus cash if necessary) that have been owned by the Holder for at least six (6) months and having a Fair Market Value equal to such Option price, or such other forms or methods as the Committee may determine from time to time, in each case, subject to such rules and regulations as may be adopted by the Committee. Each Option Agreement shall specify the effect of termination of employment, Director status or Consultant status on the exercisability of the Option. Moreover, without limiting the generality of the foregoing, an Option Agreement may provide for a "cashless exercise" of the Option, in whole or in part, by (a) establishing procedures whereby the Holder, by a properly-executed written notice, directs (i) an immediate market sale or margin loan as to all or a part of Common Stock to which he is entitled to receive upon exercise of the Option, pursuant to an extension of credit by the Company to the Holder of the Option price, (ii) the delivery of the Common Stock from the Company directly to a brokerage firm, and (iii) the delivery of the Option price from sale or margin loan proceeds from the brokerage firm directly to the Company, or (b) reducing the number of Common Stock to be issued upon exercise of the Option by the number of such Shares having an aggregate Fair Market Value equal to the Option price (or portion thereof to be so paid) as of the date of the Option's exercise. Each Option Agreement shall specify the effect of the termination of the Holder's employment, Director status or Consultant status on the exercisability of the Option. An Option Agreement may also include provisions relating to (i) subject to the provisions hereof, accelerated vesting of Options, including, but not limited to, upon the occurrence of a Change of Control, (ii) tax matters (including provisions covering any applicable Employee wage withholding requirements), and (iii) any other matters not inconsistent with the terms and provisions of the Plan that the Committee shall, in its sole discretion, determine. The terms and conditions of the respective Option Agreements need not be identical.

Section 7.5. **Option Price and Payment**. The price at which a Common Share may be purchased upon exercise of an Option shall be determined by the Committee and shall not be less than the Fair Market Value of a Common Share on the date of grant of such Option; provided, however, that such Option price as determined by the Committee shall be subject to adjustment as provided in Article XIV. The Option price or portion thereof shall be paid in full in the manner prescribed by the Committee as set forth in the Plan and the applicable Option Agreement, which manner, with the consent of the Committee, may include the withholding of Common Stock otherwise issuable in connection with the exercise of the Option, for purposes of Section 7.4(b). Separate share certificates shall be issued by the Company for those Common Stock acquired pursuant to the exercise of an Incentive Share Option and for those Common Stock acquired pursuant to the exercise of a Non-Qualified Share Option.

Section 7.6. **Stockholder Rights and Privileges**. The Holder of an Option shall be entitled to all the privileges and rights of a stockholder of the Company solely with respect to such Common Stock as have been purchased under the Option and for which share certificates have been registered in the Holder's name.

Section 7.7. **Options and Rights in Substitution for Stock or Share Options Granted by Other Corporations**. Options may be granted under the Plan from time to time in substitution for stock or share options held by individuals employed by entities who become Employees as a result of a merger or consolidation of the employing entity with the Company or any Affiliate, or the acquisition by the Company or an Affiliate of the assets of the employing entity or the acquisition by the Company or an Affiliate of stock or shares of the employing entity with the result that such employing entity becomes an Affiliate. Notwithstanding Section 7.5, the Committee may designate a purchase price below Fair Market Value on the date of grant if the Option is granted in substitution for a stock option previously granted by an entity that is acquired by or merged with the Company or an Affiliate.

Section 7.8. **Prohibition Against Repricing**. Except to the extent (i) approved in advance by holders of a majority of the shares of the Company entitled to vote generally in the election of directors, or (ii) as a result of any Change of Control or any adjustment as provided in Article XIV, the Committee shall not have the power or authority to reduce, whether through amendment or otherwise, the exercise price under any outstanding Option or Share Appreciation Right, or to grant any new Award or make any payment of cash in substitution for or upon the cancellation of Options and/or Share Appreciation Rights previously granted.

**ARTICLE VIII <br> RESTRICTED SHARE AWARDS**

Section 8.1. **Restriction Period**. At the time a Restricted Share Award is made, the Committee shall establish the Restriction Period applicable to such Award. Each Restricted Share Award may have a different Restriction Period, in the discretion of the Committee, but not to exceed 90 calendar days. The Restriction Period applicable to a particular Restricted Share Award shall not be changed except as permitted by Section 8.2.

Section 8.2. **Other Terms and Conditions**. Common Stock awarded pursuant to a Restricted Share Award shall be represented by a share certificate registered in the name of the Holder of such Restricted Share Award. If provided for under the Restricted Share Award Agreement, the Holder shall have the right to vote Common Stock subject thereto and to enjoy all other stockholder rights, including the entitlement to receive dividends on the Common Stock during the Restriction Period, except that (i) the Holder shall not be entitled to delivery of the share certificate until the Restriction Period shall have expired, (ii) the Company shall retain custody of the share certificate during the Restriction Period (with a share power endorsed by the Holder in blank), (iii) the Holder may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the Common Stock during the Restriction Period, and (iv) a breach of the terms and conditions established by the Committee pursuant to the Restricted Share Award Agreement shall cause a forfeiture of the Restricted Share Award. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Restricted Share Awards, including, but not limited to, rules pertaining to the effect of termination of employment, Director status or Consultant status prior to expiration of the Restriction Period. Such additional terms, conditions or restrictions shall be set forth in a Restricted Share Award Agreement made in conjunction with the Award. Such Restricted Share Award Agreement may also include provisions relating to (i) subject to the provisions hereof, accelerated vesting of Awards, including, but not limited to, accelerated vesting upon the occurrence of a Change of Control, (ii) tax matters (including provisions covering any applicable Employee wage withholding requirements), and (iii) any other matters not inconsistent with the terms and provisions of the Plan that the Committee shall, in its sole discretion, determine. The terms and conditions of the respective Restricted Share Agreements need not be identical.

Section 8.3. **Payment for Restricted Shares**. The Committee shall determine the amount and form of any payment from a Holder for Common Stock received pursuant to a Restricted Share Award, if any, provided that in the absence of such a determination, a Holder shall not be required to make any payment for Common Stock received pursuant to a Restricted Share Award, except to the extent otherwise required by law.

Section 8.4. **Restricted Share Award Agreements**. At the time any Award is made under this Article VIII, the Company and the Holder shall enter into a Restricted Share Award Agreement setting forth each of the matters contemplated hereby and such other matters as the Committee may determine to be appropriate.

**ARTICLE IX <br> UNRESTRICTED SHARE AWARDS**

Pursuant to the terms of the applicable Unrestricted Share Award Agreement, a Holder may be awarded (or sold) Common Stock which are not subject to Restrictions, in consideration for past services rendered thereby to the Company or an Affiliate or for other valid consideration.

**ARTICLE X <br> RESTRICTED SHARE UNIT AWARDS**

Section 10.1. **Terms and Conditions**. The Committee shall set forth in the applicable Restricted Share Unit Award Agreement the individual service-based vesting requirement which the Holder would be required to satisfy before the Holder would become entitled to payment pursuant to Section 10.2 and the number of Units awarded to the Holder. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Restricted Share Unit Awards, including, but not limited to, rules pertaining to the effect of termination of employment, Director status or Consultant status prior to expiration of the applicable vesting period. The terms and conditions of the respective Restricted Share Unit Award Agreements need not be identical.

Section 10.2. **Payments**. The Holder of a Restricted Share Unit shall be entitled to receive a cash payment equal to the Fair Market Value of an Common Share, or one (1) Common Share, as determined, in the sole discretion, of the Committee and as set forth in the Restricted Share Unit Award Agreement, for each Restricted Share Unit subject to such Restricted Share Unit Award, if the Holder satisfies the applicable vesting requirement.

**ARTICLE XI <br> PERFORMANCE UNIT AWARDS**

Section 11.1. **Terms and Conditions**. The Committee shall set forth in the applicable Performance Unit Award Agreement the performance goals and objectives (and the period of time to which such goals and objectives shall apply) which the Holder and/or the Company would be required to satisfy before the Holder would become entitled to payment pursuant to Section 11.2, the number of Units awarded to the Holder and the dollar value assigned to each such Unit. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions relating to Performance Unit Awards, including, but not limited to, rules pertaining to the effect of termination of employment, Director status or Consultant status prior to expiration of the applicable performance period. The terms and conditions of the respective Performance Unit Award Agreements need not be identical.

Section 11.2. **Payments**. The Holder of a Performance Unit shall be entitled to receive a cash payment equal to the dollar value or number of Common Shares assigned to such Unit under the applicable Performance Unit Award Agreement if the Holder and/or the Company satisfy (or partially satisfy, if applicable under the applicable Performance Unit Award Agreement) the performance goals and objectives set forth in such Performance Unit Award Agreement.

**ARTICLE XII <br> DISTRIBUTION EQUIVALENT RIGHTS**

Section 12.1. **Terms and Conditions**. The Committee shall set forth in the applicable Distribution Equivalent Rights Award Agreement the terms and conditions applicable to such Award, including whether the Holder is to receive credits currently in cash, is to have such credits reinvested (at Fair Market Value determined as of the date of reinvestment) in additional Common Stock or is to be entitled to choose among such alternatives. Distribution Equivalent Rights Awards may be settled in cash or in Common Stock, as set forth in the applicable Distribution Equivalent Rights Award Agreement. A Distribution Equivalent Rights Award may, but need not, be awarded in tandem with another Award, whereby, if so awarded, such Distribution Equivalent Rights Award shall expire, terminate or be forfeited by the Holder, as applicable, under the same conditions as under such other Award.

Section 12.2. **Interest Equivalents**. The Distribution Equivalent Rights Award Agreement for a Distribution Equivalent Rights Award may provide for the crediting of interest on a Distribution Rights Award to be settled in cash at a future date, at a rate set forth in the applicable Distribution Equivalent Rights Award Agreement, on the amount of cash payable thereunder.

**ARTICLE XIII**

 **SHARE APPRECIATION RIGHTS**

Section 13.1. **Terms and Conditions**. The Committee shall set forth in the applicable Share Appreciation Right Award Agreement the terms and conditions of the Share Appreciation Right, including (i) the base value (the "Base Value") for the Share Appreciation Right, which for purposes of a Share Appreciation Right which is not a Tandem Share Appreciation Right, shall be not less than the Fair Market Value of a Common Share on the date of grant of the Share Appreciation Right (unless granted in substitution for an appreciation right previously granted by an entity that is acquired by or merged with the Company or an Affiliate), (ii) the number of Common Stock subject to the Share Appreciation Right, (iii) the period during which the Share Appreciation Right may be exercised; provided, however, that no Share Appreciation Right shall be exercisable after the expiration of ten (10) years from the date of its grant, and (iv) any other special rules and/or requirements which the Committee imposes upon the Share Appreciation Right. Upon the exercise of some or all of the portion of a Share Appreciation Right, the Holder shall receive a payment from the Company, in cash or in the form of Common Stock having an equivalent Fair Market Value or in a combination of both, as determined, in the sole discretion of the Committee, equal to the product of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The excess of (i) the Fair Market Value of a Common Share on the date of exercise, over (ii) the Base Value, multiplied by;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) The number of Common Stock with respect to which the Share Appreciation Right is exercised.

Section 13.2. **Tandem Share Appreciation Rights**. If the Committee grants a Share Appreciation Right which is intended to be a Tandem Share Appreciation Right, the Tandem Share Appreciation Right shall be granted at the same time as the related Option, and the following special rules shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Base Value shall be equal to or greater than the per Common Share exercise price under the related Option;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Tandem Share Appreciation Right may be exercised for all or part of the Common Stock which are subject to the related Option, but solely upon the surrender by the Holder of the Holder's right to exercise the equivalent portion of the related Option (and when an Common Share is purchased under the related Option, an equivalent portion of the related Tandem Share Appreciation Right shall be cancelled);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Tandem Share Appreciation Right shall expire no later than the date of the expiration of the related Option;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The value of the payment with respect to the Tandem Share Appreciation Right may be no more than one hundred percent (100%) of the difference between the per Common Share exercise price under the related Option and the Fair Market Value of the Common Stock subject to the related Option at the time the Tandem Share Appreciation Right is exercised, multiplied by the number of the Common Stock with respect to which the Tandem Share Appreciation Right is exercised; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Tandem Share Appreciation Right may be exercised solely when the Fair Market Value of the Common Stock subject to the related Option exceeds the per Common Share exercise price under the related Option.

**ARTICLE XIV<br> RECAPITALIZATION OR REORGANIZATION**

Section 14.1. **Adjustments to Common Stock**. The shares with respect to which Awards may be granted under the Plan are Common Stock as presently constituted; provided, however, that if, and whenever, prior to the expiration or distribution to the Holder of Common Stock underlying an Award theretofore granted, the Company shall effect a subdivision or consolidation of the Common Stock or the payment of a Common Share dividend on Common Stock without receipt of consideration by the Company, the number of Common Stock with respect to which such Award may thereafter be exercised or satisfied, as applicable, (i) in the event of an increase in the number of outstanding Common Stock, shall be proportionately increased, and the purchase price per Common Share shall be proportionately reduced, and (ii) in the event of a reduction in the number of outstanding Common Stock, shall be proportionately reduced, and the purchase price per Common Share shall be proportionately increased. Notwithstanding the foregoing or any other provision of this Article XIV, any adjustment made with respect to an Award (x) which is an Incentive Share Option, shall comply with the requirements of Section 424(a) of the Code, and in no event shall any adjustment be made which would render any Incentive Share Option granted under the Plan to be other than an "incentive stock option" for purposes of Section 422 of the Code, and (y) which is a Non-Qualified Share Option, shall comply with the requirements of Section 409A of the Code, and in no event shall any adjustment be made which would render any Non-Qualified Share Option granted under the Plan to become subject to Section 409A of the Code.

Section 14.2. **Recapitalization**. If the Company recapitalizes or otherwise changes its capital structure (for the purposes of clarity, excluding any public offering of shares), thereafter upon any exercise or satisfaction, as applicable, of a previously granted Award, the Holder shall be entitled to receive (or entitled to purchase, if applicable) under such Award, in lieu of the number of Common Stock then covered by such Award, the number and class of shares and securities to which the Holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior to such recapitalization, the Holder had been the holder of record of the number of Common Stock then covered by such Award.

Section 14.3. **Other Events**. In the event of changes to the outstanding Common Stock by reason of extraordinary cash dividend, reorganization, mergers, consolidations, combinations, split-ups, spin-offs, exchanges, stock split, reverse stock split or other relevant changes in capitalization occurring after the date of the grant of any Award and not otherwise provided for under this Article XIV, any outstanding Awards and any Award Agreements evidencing such Awards shall be adjusted by the Committee, in such manner as the Committee shall deem equitable or appropriate taking into consideration the applicable accounting and tax consequences, as to the number and price of Common Stock or other consideration subject to such Awards. In the event of any adjustment pursuant to Sections 14.1, 14.2 or this Section 14.3, the aggregate number of Common Stock available under the Plan pursuant to Section 5.1 may be appropriately adjusted by the Committee, the determination of which shall be conclusive. In addition, the Committee may make provision for a cash payment to a Holder or a person who has an outstanding Award. The number of Common Stock subject to any Award shall be rounded to the nearest whole number.

Section 14.4. **Powers Not Affected**. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or of the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change of the Company's capital structure or business, any merger or consolidation of the Company, any issue of debt or equity securities ahead of or affecting Common Stock or the rights thereof, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding.

Section 14.5. **No Adjustment for Certain Awards**. Except as hereinabove expressly provided, the issuance by the Company of shares of any class or securities convertible into shares of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect previously granted Awards, and no adjustment by reason thereof shall be made with respect to the number of Common Stock subject to Awards theretofore granted or the purchase price per Common Share, if applicable.

**ARTICLE XV**

 **AMENDMENT AND TERMINATION OF PLAN**

The Plan shall continue in effect, unless sooner terminated pursuant to this Article XV, until the tenth (10th) anniversary of the date on which it is adopted by the Board (except as to Awards outstanding on that date). The Board, in its discretion, may terminate the Plan at any time with respect to any shares for which Awards have not theretofore been granted; provided, however, that the Plan's termination shall not materially and adversely impair the rights of a Holder with respect to any Award theretofore granted without the consent of the Holder. The Board shall have the right to alter or amend the Plan or any part hereof from time to time; provided, however, stockholder approval shall be required for ay modification of the Plan that (i) requires stockholder approval under the rules or regulations of the Securities and Exchange Commission or any securities exchange applicable to the Company, (ii) increases the number of shares authorized under the Plan as specified in Section 5.1, (iii) increases the dollar limitation specified in Section 5.4, or (iv) amends, modifies or suspends Section 7.8 (repricing prohibitions) or this Article XV. In addition, unless otherwise permitted under the Award Agreement, no change in any Award theretofore granted may be made which would materially and adversely impair the rights of a Holder with respect to such Award without the consent of the Holder.

**ARTICLE XVI MISCELLANEOUS**

Section 16.1. **No Right to Award**. Neither the adoption of the Plan by the Company nor any action of the Board or the Committee shall be deemed to give an Employee, Director or Consultant any right to an Award except as may be evidenced by an Award Agreement duly executed on behalf of the Company, and then solely to the extent and on the terms and conditions expressly set forth therein.

Section 16.2. **No Rights Conferred**. Nothing contained in the Plan shall (i) confer upon any Employee any right with respect to continuation of employment with the Company or any Affiliate, (ii) interfere in any way with any right of the Company or any Affiliate to terminate the employment of an Employee at any time, (iii) confer upon any Director any right with respect to continuation of such Director's membership on the Board, (iv) interfere in any way with any right of the Company or an Affiliate to terminate a Director's membership on the Board at any time, (v) confer upon any Consultant any right with respect to continuation of such Consultant's consulting engagement with the Company or any Affiliate, or (vi) interfere in any way with any right of the Company or an Affiliate to terminate a Consultant's consulting engagement with the Company or an Affiliate at any time.

Section 16.3. **Other Laws; No Fractional Shares; Withholding**. The Company shall not be obligated by virtue of any provision of the Plan to recognize the exercise of any Award or to otherwise sell or issue Common Stock in violation of any laws, rules or regulations, and any postponement of the exercise or settlement of any Award under this provision shall not extend the term of such Award. Neither the Company nor its directors or officers shall have any obligation or liability to a Holder with respect to any Award (or Common Stock issuable thereunder) (i) that shall lapse because of such postponement, or (ii) for any failure to comply with the requirements of any applicable law, rules or regulations, including, but not limited to, any failure to comply with the requirements of Section 409A of this Code. No fractional Common Stock shall be delivered, nor shall any cash in lieu of fractional Common Stock be paid. The Company shall have the right to deduct in cash (whether under this Plan or otherwise) in connection with all Awards any taxes required by law to be withheld and to require any payments required to enable it to satisfy its withholding obligations. In the case of any Award satisfied in the form of Common Stock, no Common Stock shall be issued unless and until arrangements satisfactory to the Company shall have been made to satisfy any tax withholding obligations applicable with respect to such Award. Subject to such terms and conditions as the Committee may impose, the Company shall have the right to retain, or the Committee may, subject to such terms and conditions as it may establish from time to time, permit Holders to elect to tender, Common Stock (including Common Stock issuable in respect of an Award) to satisfy, in whole or in part, the amount required to be withheld.

Section 16.4. **No Restriction on Corporate Action**. Nothing contained in the Plan shall be construed to prevent the Company or any Affiliate from taking any corporate action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Employee, Director, Consultant, beneficiary or other person shall have any claim against the Company or any Affiliate as a result of any such action.

Section 16.5. **Restrictions on Transfer**. No Award under the Plan or any Award Agreement and no rights or interests herein or therein, shall or may be assigned, transferred, sold, exchanged, encumbered, pledged or otherwise hypothecated or disposed of by a Holder except (i) by will or by the laws of descent and distribution, or (ii) except for an Incentive Share Option, by gift to any Family Member of the Holder. An Award may be exercisable during the lifetime of the Holder only by such Holder or by the Holder's guardian or legal representative unless it has been transferred by gift to a Family Member of the Holder, in which case it shall be exercisable solely by such transferee. Notwithstanding any such transfer, the Holder shall continue to be subject to the withholding requirements provided for under Section 16.3 hereof.

Section 16.6. **Beneficiary Designations**. The Committee may also establish procedures as it deems appropriate for a Holder to designate a person or persons, as beneficiary or beneficiaries, to exercise the rights of the Holder and receive any property distributable with respect to any Award in the event of the Holder's death. In the absence of any such written beneficiary designation, for purposes of the Plan, a Holder's beneficiary shall be the Holder's estate.

Section 16.7. **Rule 16b-3**. It is intended that the Plan and any Award made to a person subject to Section 16 of the Exchange Act shall meet all of the requirements of Rule 16b-3. If any provision of the Plan or of any such Award would disqualify the Plan or such Award under, or would otherwise not comply with the requirements of, Rule 16b-3, such provision or Award shall be construed or deemed to have been amended as necessary to conform to the requirements of Rule 16b-3.

Section 16.8. **Section 409A**. Notwithstanding anything in the Plan or any Award to the contrary, to the extent that any amount or benefit that constitutes "deferred compensation" to a Holder under Section 409A of the Code and applicable guidance thereunder is otherwise payable or distributable to a Holder under the Plan or any Award solely by reason of the occurrence of a change in control event or due to the Holder's disability or "separation from service" (as such term is defined under Section 409A of the Code), such amount or benefit will not be payable or distributable to the Holder by reason of such circumstance unless the Committee determines in good faith that (i) the circumstances giving rise to such change in control event, disability or separation from service meet the definition of a change in control event, disability or separation from service, as the case may be, in Section 409A of the Code and applicable proposed or final regulations, or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise. Any payment or distribution that otherwise would be made to a Holder who is a "specified employee" (as defined under Section 409A of the Code) on account of separation from service may not be made before the date which is six (6) months after the date of the specified employee's separation from service (or if earlier, upon the specified employee's death) unless the payment or distribution is exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise.

Section 16.9. **Indemnification**. Each person who is or shall have been a member of the Board or of the Committee shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred thereby in connection with or resulting from any claim, action, suit or proceeding to which such person may be made a party or may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid thereby in settlement thereof, with the Company's approval, or paid thereby in satisfaction of any judgment in any such action, suit or proceeding against such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive and shall be independent of any other rights of indemnification to which such persons may be entitled under the Company's Articles of Incorporation or By-laws, by contract, as a matter of law, or otherwise.

Section 16.10. **Other Plans**. No Award, payment or amount received hereunder shall be taken into account in computing an Employee's salary or compensation for the purposes of determining any benefits under any pension, retirement, life insurance or other benefit plan of the Company or any Affiliate, unless such other plan specifically provides for the inclusion of such Award, payment or amount received. Nothing in the Plan shall be construed to limit the right of the Company to establish other plans or to pay compensation to its employees, directors and other service providers, in cash or property, in a manner which is not expressly authorized under the Plan.

Section 16.11. **Limits of Liability**. Any liability of the Company with respect to an Award shall be based solely upon the contractual obligations created under the Plan and the Award Agreement. None of the Company, any member of the Board nor any member of the Committee shall have any liability to any party for any action taken or not taken, in good faith, in connection with or under the Plan.

Section 16.12. **Governing Law**. Except as otherwise provided herein, the Plan shall be construed in accordance with Delaware law, without regard to principles of conflicts of law.

Section 16.13. **Severability of Provisions**. If any provision of the Plan is held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of the Plan, and the Plan shall be construed and enforced as if such invalid or unenforceable provision had not been included in the Plan.

Section 16.14. **No Funding**. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of funds or assets to ensure the payment of any Award.

Section 16.15. **Headings**. Headings used throughout the Plan are for convenience only and shall not be given legal significance.

Section 16.16. **Terms of Award Agreements**. Each Award shall be evidenced by an Award Agreement. The terms of the Award Agreements utilized under the Plan need not be the same.

## Exhibit 10.7

**Exhibit 10.7**

**SECURITIES PURCHASE AGREEMENT**

This Securities Purchase Agreement (this "**Agreement**") is dated as of April 24, 2026 among First Breach Inc., a corporation incorporated under the laws of the state of Delaware ("**Company**"), and each purchaser identified on the <u>Annex A</u> hereto (each, including its successors and assigns, an "**Investor**" and collectively, the "**Investors**").

**WHEREAS,** the Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, senior secured convertible promissory notes in the form set forth in <u>Appendix B</u> hereto (each, a "**Note**" and collectively, the "**Notes**") and equity warrants in the form set forth on Appendix C hereto (each, a "**Warrant**" and collectively, the "**Warrants**") contemplated by this Agreement ("**Offering**"); and

**WHEREAS**, the Company and Investors are executing and delivering this Agreement in reliance upon an exemption from securities registration requirements of the Securities Act afforded by the provisions of Section 4(a)(2) and/or Rule 506(b) of Regulation D promulgated thereunder by the U.S. Securities and Exchange Commission.

**NOW, THEREFORE**, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Investor agree as follows:

**ARTICLE I.**

**DEFINITIONS**

Section 1.01. <u>Definitions</u>. In addition to the terms defined elsewhere in this Agreement:

&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) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Notes (as defined herein), 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) the following terms have the meanings set forth in this Agreement:

"<u>$</u>" or "<u>USD</u>" means United States Dollars.

"<u>Action</u>" shall have the meaning ascribed to such term in Section 3.01(h).

"<u>Affiliate</u>" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

"<u>Business Day</u>" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"<u>Change of Control</u>" means (a) any "person" or "group" (within the meaning of Section 13(d) and 14(d) of the Exchange Act), other than the Company or any employee benefit plan of the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then-outstanding securities; (b) the consummation of a merger, consolidation or similar transaction involving the Company if, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction; (c) a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company; or (d) a liquidation or dissolution of the Company.

***SECURITIES PURCHASE AGREEMENT***

"<u>Closing</u>" means the closing of the purchase and sale of the Securities pursuant to section 2.01.

"<u>Closing Date</u>" means for any Securities, the Business Day when: (i) all of the Transaction Documents for such Securities have been executed and delivered by the applicable parties thereto, and conditions precedent to the applicable Investors' obligations to pay the Subscription Amount; and (ii) the Company's obligations to deliver such Securities have been satisfied or waived.

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Confidential Investor Questionnaire</u>" means the Confidential Investor Questionnaire attached as <u>Appendix A</u> hereto.

"<u>Exempt Issuance</u>" means the issuance of Common Stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by the Company*.*

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>GAAP</u>" means generally accepted accounting principles in the United States in effect from time to time.

"<u>Intellectual Property Rights</u>" shall have the meaning ascribed to such term in Section 3.01(l).

"<u>Common Stock</u>" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Liens</u>" shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

"<u>Liquidity Event</u>" has the meaning ascribed to it the Notes.

"<u>Material Adverse Effect</u>" shall have the meaning ascribed to such term in Section 3.01(b).

"<u>Material Permits</u>" shall have the meaning ascribed to such term in Section 3.01(j).

"<u>Maximum Offering Amount</u>" means an aggregate Subscription Amount of up to Ten Million One Hundred Fifty Thousand U.S. Dollars ($10,150,000).

"<u>National Securities Exchange</u>" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"<u>Notes</u>" means the senior secured convertible promissory notes issued by the Company to the Investors hereunder, in the form of <u>Appendix B</u> attached hereto.

"<u>New Securities</u>" means any shares of Common Stock, Preferred Stock, or other equity securities of the Company, or any securities convertible into or exchangeable for, or options, warrants or other rights to acquire, any shares of Common Stock or other equity securities of the Company, other than (i) securities issued upon conversion or exercise of the Notes or Warrants, (ii) securities issued pursuant to any equity incentive plan or similar compensatory arrangement approved by the Board of Directors, (iii) securities issued upon conversion, exercise or exchange of any convertible securities, options or warrants outstanding as of the date hereof, (iv) securities issued in connection with any stock split, stock dividend, combination or recapitalization, and (v) securities issued in connection with a bona fide strategic transaction approved by the Board of Directors, provided such issuance is not primarily for capital raising purposes.

***SECURITIES PURCHASE AGREEMENT***

"<u>Offering Period</u>" means the period commencing on the date hereof and ending on the Termination Date.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Preferred Stock</u>" means the preferred stock of the Company, par value $0.0001 per share, and any other class of preferred securities into which such securities may hereafter be reclassified or changed.

"<u>Proceeding</u>" means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

"<u>Purchasers</u>" means the Investors.

"<u>Required Approvals</u>" shall have the meaning ascribed to such term in section 3.01(e).

"<u>Securities</u>" means the Notes and Underlying Securities.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Security Agreement</u>" means the Security Agreement between the Company and Secured Parties (as defined therein), in the form of <u>Appendix D</u> attached hereto.

"<u>State Securities Laws</u>" means the securities (or "blue sky") rules, regulations, or other similar laws of a particular state.

"<u>Termination Date</u>" means May 30, 2026, or such other date as mutually agreed by the parties.

"<u>Subscription Amount</u>" means, as to each Investor, the aggregate amount to be paid for the Securities purchased hereunder as specified below such Investor's name on <u>Annex A</u> of this Agreement and next to the heading "Aggregate Subscription Amount," in United States dollars and in immediately available funds.

"<u>Subsidiary</u>" means any subsidiary of the Company as set forth in section 3.01(a) and shall, where applicable, include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

"<u>Transaction Documents</u>" means this Agreement, the Notes, the Warrant, the Security Agreement, and all appendices, exhibits and schedules hereto and thereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

"<u>Underlying Securities</u>" means the Conversion Shares (as defined in the Note) and the Warrant Shares.

"<u>Warrants</u>" means the equity warrants, issued by the Company to the Investors hereunder, in the form of <u>Appendix C</u> attached hereto.

"<u>Warrant Shares</u>" means the shares of Common Stock issuable upon exercise of the Warrants.

***SECURITIES PURCHASE AGREEMENT***

**ARTICLE II.**

**PURCHASE AND SALE**

Section 2.01 <u>Closing</u>. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Investors, severally and not jointly, agree to purchase, the Securities up to the Maximum Offering Amount. At the Closing, each Investor shall deliver to the Company, via wire transfer, immediately available funds equal to the Investor's aggregate Subscription Amounts and the Company shall deliver to each Investor (i) a Note and (ii) 50,000 Warrant Shares for every One Million Dollars ($1,000,000) of the Subscription Amount paid to the Company hereunder. For the avoidance of doubt, the Warrants may be substituted for an equivalent economic instrument. The Company and each Investor shall deliver the other items set forth in section 2.02 deliverable at the Closing. Upon satisfaction of the conditions set forth in section 2.02 and section 2.03, the Closing shall occur at the offices of Company's counsel, or such other location as the parties shall mutually agree or may be closed remotely by electronic delivery of documents. The Company may conduct multiple closings for the sale of the Securities until it has received the Maximum Offering Amount. The Closing Date for any Securities shall be the date indicated on the applicable Investor signature pages attached hereto and the final Closing Date shall be no later than the Termination Date. No minimum amount of Securities need be sold by the Company to complete and close the Offering.

Section 2.01(a) <u>Additional Closings</u>. Following the initial Closing, the Company and the Investors may, upon mutual written consent, conduct one or more additional closings (each, an "**Additional Closing**") for the purchase and sale of additional Notes and Warrants on the same terms and conditions set forth in this Agreement, , in an aggregate principal amount of up to Five Million U.S. Dollars ($5,000,000) in addition to the Maximum Offering Amount (the "Additional Closing Amount"). Any such Additional Closing shall be subject to: (a) the mutual agreement of the Company and the participating Investors as to the aggregate principal amount of additional Notes to be issued at such Additional Closing and the corresponding number of Warrants; (b) the satisfaction or waiver of the conditions set forth in Section 2.03, mutatis mutandis, as of the date of such Additional Closing; (c) the execution and delivery of such additional signature pages, Notes, Warrants, and other documents as may be reasonably required to effect such Additional Closing. For the avoidance of doubt, any additional Notes and Warrants issued at an Additional Closing shall be deemed "Securities" for all purposes under this Agreement and the other Transaction Documents, and any Investor participating in an Additional Closing shall be bound by all terms and conditions of this Agreement.

Section 2.02 <u>Closing Deliverables</u>.

&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) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Investors the following:

&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) this
 Agreement executed by 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;(ii) a
 Note with a principal amount equal to such Investor's Subscription Amount, registered
 in the name of such Investor;

&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) the
 Warrants, in an amount equal to 50,000 shares of common stock for every $1,000,000 of the
 Subscription Amount paid to the Company hereunder; 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;(iv) the
 Security Agreement executed by the Company.

***SECURITIES PURCHASE AGREEMENT***

&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) On or prior to the Closing Date, each Investor shall deliver or cause to be delivered to the Company the following:

&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) this
 Agreement executed by such Investor;

&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) such
 Investor's Subscription Amount by wire transfer to the Company pursuant
 to the wiring instructions set forth in Section 2.03(c).; 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;(iii) a
 duly completed and signed Confidential Investor Questionnaire along with such other duly
 completed and signed questionnaires as may be requested by the Company.

Section 2.03 <u>Closing Conditions</u>.

&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) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

&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) the
 accuracy in all material respects on the Closing Date of the representations and warranties
 of the Investors contained herein;

&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) all
 obligations, covenants and agreements of each Investor required to be performed at or prior
 to the Closing Date shall have been performed; 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;(iii) the
 delivery by each Investor of the items set forth in section 2.02(b) of this Agreement.

&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) The respective obligations of the Investors hereunder in connection with the Closing are subject to the following conditions being met:

&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) the
 accuracy in all material respects (or, to the extent representations or warranties are qualified
 by materiality or Material Adverse Effect, in all respects) when made and on the Closing
 Date of the representations and warranties of the Company contained herein (unless as of
 a specific date therein in which case they shall be accurate as of such 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;(ii) all
 obligations, covenants and agreements of the Company required to be performed at or prior
 to the Closing Date shall have been performed;

&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) the
 delivery by the Company of the items set forth in section 2.02(a) of this Agreement; 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;(iv) there
 shall have been no Material Adverse Effect with respect to the Company since the date hereof.

The wiring instructions for counsel of the Company shall be as set forth on Appendix "E" attached hereto.

**ARTICLE III.**

**REPRESENTATIONS AND WARRANTIES**

Section 3.01 <u>Representations and Warranties of the Company</u>. The Company hereby makes the following representations and warranties to each Investor as of the date hereof:

&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) <u>Subsidiaries</u>. The Company does not have any Subsidiaries.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Organization and Qualification</u>. The Company is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its articles of formation or other organizational or charter documents. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document; (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, taken as a whole; or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "**Material Adverse Effect**") and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification; provided, however, that "Material Adverse Effect" shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions, (ii) conditions generally affecting the industry in which the Company or any Subsidiary operates, (iii) any changes in financial or securities markets in general, (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof, (v) any pandemic, epidemics or human health crises (including COVID-19), (vi) any changes in applicable laws or accounting rules (including GAAP), (vii) the announcement, pendency or completion of the transactions contemplated by the Transaction Documents, or (viii) any action required or permitted by the Transaction Documents or any action taken (or omitted to be taken) with the written consent of or at the written request of the Investors holding a majority in principal amount outstanding of the Notes).

&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) <u>Authorization; Enforcement</u>. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the manager(s) or the Company's shareholders in connection therewith other than in connection with the Required Approvals. Each Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited 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;(d) <u>No Conflicts</u>. The execution, delivery and performance by the Company of the Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the other transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company's organizational or charter documents; (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected; or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and State Securities Laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Filings, Consents and Approvals</u>. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) such consents, waivers, or authorizations as have been obtained before the Closing; and (ii) the filing of Form D with the Commission and such filings as are required to be made under applicable State Securities Laws (collectively, the "**Required Approvals**").

&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) <u>Issuance of the Securities</u>. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer provided for in the Transaction Documents. The Underlying Securities, when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer provided for herein or therein. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance upon Note conversions and Warrant exercises at least equal to the minimum number of shares of Common Stock issuable on the date hereof upon the full conversion of the Maximum Offering Amount of Notes and exercise of Warrants.

&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) <u>Capitalization</u>. The Company has authorized 500,000,000 shares of Common Stock and 1,000,000 shares of preferred stock. As of the date of this Agreement, 45,034,282 shares of Common Stock are issued and outstanding and 0 shares of preferred stock are issued and outstanding. There are no outstanding options (other than pursuant to the Company's equity incentive plan), warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock other than the existing convertible instruments (if any). Except as set forth in Section 4.09, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents except for such, if any, as will have been validly waived before the Closing. The issuance and sale of the Securities and Underlying Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and State Securities Laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the board of directors or others is required for the issuance and sale of the Securities, except for such approvals as have been obtained prior to Closing. There are no stockholders' agreements, voting agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders.

&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) <u>Litigation</u>. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "**Action**") which: (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities; or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or State Securities Laws or a claim of breach of fiduciary duty.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Compliance</u>. The Company is unaware of, and to its knowledge: (i) is neither in default under nor in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived); (ii) is not in violation of any order of any court, arbitrator or governmental body; nor (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each of the foregoing cases as could not have or reasonably be expected to result in a Material Adverse Effect.

&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) <u>Regulatory Permits</u>. The Company, to its knowledge, possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its business, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect ("**Material Permits**"), and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit.

&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) <u>Title to Assets</u>. The Company has good and marketable title in fee simple to all real property and good and marketable title in all personal property owned by it that, in each case, is material to the business of the Company, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties in any material respect. Any real property and facilities held under lease by the Company is held by it under valid, subsisting and enforceable leases with which the Company are in compliance.

&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) <u>Patents and Trademarks</u>. (i) The Company, to its knowledge, has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as necessary or material for use in connection with its business and which the failure to so have could reasonably be expected to have a Material Adverse Effect (collectively, the "**Intellectual Property Rights**"); (ii) the Company has not received a notice (written or otherwise) that any of the Intellectual Property Rights violates or infringes upon the intellectual property rights of any Person; (iii) to the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights, except where the failure to be so enforceable or for such infringements as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (iv) the Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of its intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&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) <u>Certain Fees</u>. [Except for commissions owed in connection with the RBW Engagement Agreement in an amount estimated as set forth on Appendix F,]no brokerage or finder's fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Investors shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.01(m) that may be due in connection with the transactions contemplated by the Transaction Documents.

&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) <u>Private Placement</u>. Assuming the accuracy of the Investors' representations and warranties set forth in section 3.02, no registration under the Securities Act is required for the offer and sale of the Securities and Underlying Securities by the Company to the Investors as contemplated hereby.

&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) <u>No General Solicitation</u>. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities or Underlying Securities by any form of general solicitation or general advertising. The Company has offered the Securities and Underlying Securities for sale only to the Investors and certain other "accredited investors" within the meaning of Rule 501 under the Securities Act.

***SECURITIES PURCHASE AGREEMENT***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Acknowledgment Regarding Investors' Purchase of Securities</u>. The Company acknowledges and agrees that each of the Investors is acting solely in the capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Investor or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Investors' purchase of the Securities. The Company further represents to each Investor that the Company's decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Foreign Corrupt Practices</u>. The Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law; or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Office of Foreign Assets Control</u>. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("**OFAC**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Money Laundering</u>. The operations of the Company are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "**Money Laundering Laws**"), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

Section 3.02 <u>Representations and Warranties of the Investors</u>.

Each Investor, for itself and for no other Investor, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such 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;(a) <u>Authority; Organization</u>. Such Investor has full power and authority (and, if such Investor is an individual, the capacity) to enter into this Agreement and to perform all obligations required to be performed by it hereunder. If an entity, such Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate, limited liability company or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Investor of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate or similar action on the part of such Investor. Each Transaction Document to which it is a party has been duly executed by such Investor, and when delivered by such Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Investor, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Own Account</u>. Such Investor understands that the Securities are and Underlying Securities will be 'restricted securities' and have not been registered under the Securities Act or any applicable State Securities Law and is acquiring the Securities and any Underlying Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable State Securities Law, has no present intention of distributing any of such Securities or Underlying Securities in violation of the Securities Act or any applicable State Securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution the same (this representation and warranty not limiting such Investor's right to sell the Securities and Underlying Securities in compliance with applicable federal and State Securities Laws) in violation of the Securities Act or any applicable State Securities Law. Such Investor is acquiring the Securities and any Underlying Securities in the ordinary course of its investment 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;(c) <u>Non-Transferrable</u>. Such Investor agrees: (i) that the Investor will not sell, assign, pledge, give, transfer or otherwise dispose of the Securities or Underlying Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable State Securities Laws; (ii) that the certificates representing the Securities and Underlying Securities will bear a legend making reference to the foregoing restrictions; and (iii) that the Company and its Affiliates shall not be required to give effect to any purported transfer of such Securities and Underlying Securities except upon compliance with the foregoing restrictions.

&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) <u>Investor Status</u>. Such Investor is an "accredited investor" as defined in Rule 501(a) under the Securities Act. The undersigned agrees to furnish any additional information requested by the Company or any of its Affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the purchase and sale of the Securities. The undersigned has completed the Confidential Investor Questionnaire contained in <u>Appendix A</u> and the information contained therein is complete and accurate as of the date thereof and is hereby affirmed as of the Closing Date. Any information that has been furnished or that will be furnished by the undersigned to evidence its status as an accredited investor is accurate and complete, and does not contain any misrepresentation or material omission.

&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) <u>Experience of Such Investor</u>. Such Investor, either alone or together with its representatives, has such knowledge, sophistication, and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities and Underlying Securities, and has so evaluated the merits and risks of such investment. Such Investor is able to bear the economic risk of an investment in the Securities and Underlying Securities and, at the present time, is able to afford a complete loss of such investment.

&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) <u>No Trading Market</u>. Such Investor acknowledges that there is currently no trading or public market for the Securities and Underlying Securities and that none is expected to develop for the Securities unless a Liquidity Event occurs.

&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) <u>General Solicitation</u>. Such Investor undersigned acknowledges that neither the Company nor any other person offered to sell the Securities to it by means of any form of general solicitation or advertising, including but not limited to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio; or (ii) any seminar or meeting whose attendees were invited by any general solicitation or general advertising.

&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) <u>Confidentiality</u>. Other than to other Persons party to this Agreement and its advisors who have agreed to keep information confidential or have a fiduciary obligation to keep such information confidential, such Investor has maintained the confidentiality of all disclosures made to it in connection with the transaction (including the existence and terms of this transaction).

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Foreign Investor</u>. If such Investor is not a United States person, such Investor represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities and Underlying Securities or any use of this Agreement, including: (i) the legal requirements within its jurisdiction for the purchase of the Securities and any Underlying Securities; (ii) any foreign exchange restrictions applicable to such purchase; (iii) any governmental or other consents that may need to be obtained; and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities or Underlying Securities. The Investor further represents that its payment for, and its continued beneficial ownership of the Securities and any Underlying Securities, will not violate any applicable securities or other laws of its jurisdiction.

&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) <u>Information from Company</u>. Such Investor and its purchaser representatives or investment managers, if any, have been afforded the opportunity to obtain any information necessary to verify the accuracy of any representations or information presented by the Company in this Agreement and have had all inquiries to the Company answered, and have been furnished all requested materials, relating to the Company and the Offering and sale of the Securities and anything set forth in the Transaction Documents. Neither the Investor nor the Investor's purchaser's representatives or investment managers, if any, have been furnished any offering literature by the Company or any of its Affiliates, associates or agents other than the Transaction Documents, and the agreements referenced therein.

&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) <u>Speculative Nature of Investment; Risk Factors</u>. **SUCH INVESTOR UNDERSTANDS THAT AN INVESTMENT IN THE SECURITIES AND UNDERLYING SECURITIES INVOLVES A HIGH DEGREE OF RISK.** Such Investor acknowledges that: (i) any projections, forecasts or estimates as may have been provided to the Investor are purely speculative and cannot be relied upon to indicate actual results that may be obtained through this investment; any such projections, forecasts and estimates are based upon assumptions which are subject to change and which are beyond the control of the Company or its management; (ii) the tax effects which may be expected by this investment are not susceptible to absolute prediction, and new developments and rules of the Internal Revenue Service, audit adjustment, court decisions or legislative changes may have an adverse effect on one or more of the tax consequences of this investment; and (iii) the Investor has been advised to consult with his own advisor regarding legal matters and tax consequences involving this investment. The Investor represents that the Investor's investment objective is speculative in that the Investor seeks the maximum total return through an investment in a broad spectrum of securities, which involves a higher degree of risk than other investment styles and therefore the Investor's risk exposure is also speculative. The Securities offered hereby are highly speculative and involve a high degree of risk and Investor should only purchase these securities if Investor can afford to lose their entire investment.

&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) <u>Money Laundering</u>. If an entity, the operations of such Investor are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Money Laundering Laws, and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

**ARTICLE IV.**

**OTHER AGREEMENTS OF THE PARTIES**

Section 4.01 <u>Transfer Restrictions</u>.

&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) The Securities and Underlying Securities may only be disposed of in compliance with state and federal securities laws. The Securities and Underlying Securities may not be sold or transferred by the Investors without the written consent of the Company, which shall not be unreasonably withheld. As a condition of such sale or transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of an Investor under this Agreement.

***SECURITIES PURCHASE AGREEMENT***

&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) The Investors agree to the imprinting, so long as is required by this Section 4.01, of a legend on any of the Securities and Underlying Securities in the following form:

[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO 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;(c) Each Investor, severally and not jointly with the other Investors, agrees that such Investor will sell any Securities and Underlying Securities only pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities or Underlying Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.01 is predicated upon the Company's reliance upon this understanding.

&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) Each Investor understands that upon conversion of a Note, it will acquire shares of Common Stock in and become a shareholder of the Company.

Section 4.02 <u>Acknowledgment of Dilution</u>. The Company acknowledges that the issuance of the Underlying Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Securities pursuant to the Securities, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Investor and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

Section 4.03 <u>Integration</u>. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities or Underlying Securities to the Investors in a manner that would require the registration under the Securities Act of the sale of the Securities to the Investors.

Section 4.04 <u>Publicity</u>. The Company and each Investor shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Investor shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company with respect to any press release of any Investor, or without the prior consent of each Investor with respect to any press release of the Company mentioning such Investor, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.

***SECURITIES PURCHASE AGREEMENT***

Section 4.05 <u>Indemnification of Investors</u>. The Company shall indemnify, reimburse and hold harmless the Investors and their respective partners, members, shareholders, officers, directors, employees and agents (and any other persons with other titles that have similar functions) (collectively, "**Indemnitees**") from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses, of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from: (i) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents; and (ii) any action instituted against such Indemnitee in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Indemnitee, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Indemnitee's representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Indemnitee may have with any such stockholder or any violations by such Indemnitee of state or federal securities laws or any conduct by such Indemnitee which results from the gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable decision of a court of competent jurisdiction).

Section 4.06 <u>Equal Treatment of Investors</u>. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. Further, the Company shall not make any payment of principal or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Investor by the Company and negotiated separately by each Investor, and is intended for the Company to treat the Investors as a class and shall not in any way be construed as the Investors acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

Section 4.07 <u>Form D; Blue Sky Filings</u>. The Company agrees to timely file a Form D with respect to the Securities and Underlying Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Investor. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities and Underlying Securities for, sale to the Investors under applicable State Securities Laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Investor.

Section 4.08 <u>Use of Proceeds</u>. The Company shall use the net proceeds received from the sale of the Securities at the Closing Date for general corporate purposes and general working capital requirements, including the payment of transaction-related fees and expenses.

Section 4.09 <u>Preemptive Rights.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Preemptive Rights. Subject to the exceptions set forth in subsection (c) below, if the Company proposes to issue any New Securities, the Company shall deliver written notice (an "Issuance Notice") to each Purchaser at least thirty (30) days prior to the proposed issuance date, which notice shall set forth the material terms and conditions of such issuance, including (i) the type and number of New Securities to be issued, (ii) the purchase price and payment terms, and (iii) the proposed issuance date. Each Purchaser shall have the right, exercisable by written notice to the Company within twenty (20) days after receipt of the Issuance Notice, to purchase up to such Purchaser's Pro Rata Share of the New Securities at the same price and on the same terms as set forth in the Issuance Notice. For purposes of this Section, "Pro Rata Share" means, with respect to each Purchaser, a fraction, the numerator of which is the number of shares of Common Stock held by such Purchaser immediately prior to the proposed issuance (calculated on a fully-diluted, as-converted basis), and the denominator of which is the total number of shares of Common Stock outstanding immediately prior to the proposed issuance (calculated on a fully-diluted, as-converted basis).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Individual Preemptive Rights. In addition to the rights set forth in Section 4.09(a) above, Bradford Johnsonand Bert Bersolis (each, a "**Specified Holder**") shall each have the right to purchase New Securities in an amount sufficient to maintain such Specified Holder's percentage ownership of the Company (on a fully-diluted, as-converted basis) as of immediately prior to such issuance. This right shall be in addition to, and not in lieu of, any rights such Specified Holder may have under Section 4.09(a) as a Purchaser. (c) Excluded Issuances. The preemptive rights set forth in Sections 4.09(a) and (b) shall not apply to any issuance of: (i) shares of Common Stock or options to purchase Common Stock issued to employees, officers, directors, or consultants of the Company pursuant to any equity incentive plan approved by the Board of Directors; (ii) securities issued upon the conversion or exercise of any convertible securities, options, or warrants outstanding as of the date hereof; (iii) securities issued as consideration in connection with a bona fide acquisition or strategic transaction approved by the Board of Directors; (iv) securities issued in connection with any stock split, stock dividend, or recapitalization; or (v) securities issued in an underwritten public offering registered under the Securities Act.

***SECURITIES PURCHASE AGREEMENT***

Section 4.10 <u>Lock-Up Provisions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Purchasers
 Lock-Up Exemption. Notwithstanding any other provision of this Agreement or any other agreement
 to which the Company is a party, the Purchasers shall not be subject to any lock-up provision
 and shall be permitted to sell the Securities immediately upon the listing of the Common
 Stock on a National Securities Exchange. The Purchasers may provide liquidity for the Company's
 stock in the public market through sales of the Securities.

Section 4.11. <u>Tag-Along and Drag-Along Rights</u>. The Purchasers shall have tag-along and drag-along rights with respect to all of the Purchasers' stock positions in the Company, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Tag-Along Rights</u>. If Jeffrey Low, Jordan Low, and any other stockholder holding at least five percent
 (5%) of the outstanding Common Stock (collectively, the "Selling Stockholders")
 propose to sell, in the aggregate, shares of Common Stock to a third party in a single transaction
 or series of related transactions representing more than [10%] of the outstanding Common
 Stock (excluding (i) any public offering, (ii) sales pursuant to Rule 144 or other routine
 market transactions, (iii) transfers to affiliates or for estate planning purposes, (iv)
 sales to the Company or its designees, and (v) transfers in connection with a Change of Control
 subject to Section 4.11(b) below), the Selling Stockholders shall give the Purchasers written
 notice at least ten (10) days prior to the proposed closing. The Purchasers shall have the
 right, exercisable by written notice within five (5) business days of receipt, to participate
 in such sale on the same terms and conditions, pro rata based on the Purchasers' percentage
 ownership relative to the Selling Stockholders' aggregate ownership. The Purchasers'
 participation shall be subject to the Purchasers executing the same transaction documents
 and making the same representations, warranties, and indemnities as the Selling Stockholders
 (on a several and not joint basis, and capped at the net proceeds received).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Drag-Along Rights</u>. If the Selling Stockholders, who in the aggregate hold a majority of the outstanding
 Common Stock, together with the approval of the Board of Directors, approve a bona fide Change
 of Control transaction with an unaffiliated third party, the Selling Stockholders may require
 the Purchasers to (i) sell all of the Purchasers' shares on the same terms and conditions
 as the Selling Stockholders, (ii) vote all shares in favor of the transaction, (iii) waive
 any dissenters' or appraisal rights, and (iv) execute all customary transaction documents,
 including representations, warranties, and indemnities (provided that the Purchasers'
 indemnification obligations shall be several and not joint, limited to breaches of the Purchasers'
 individual representations and a pro rata share of general indemnities, and capped at the
 net proceeds received by the Purchasers). The consideration per share received by the Purchasers
 shall be the same form and amount as received by the Selling Stockholders for shares of the
 same class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Board Representation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Board Seat</u>. Effective as of the Closing, the Company shall appoint Bert Basolis to serve as
 a member <u>of the Board of Directors</u>. Mr. Basolis shall serve as a director for a term
 of five (5) years from the Closing Date, or until his earlier voluntary resignation or removal
 by the stockholders of the Company. The Company shall not remove Mr. Basolis from the Board
 of Directors without his consent during such five-year term, except for cause <u>.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Board Observer Rights</u>. Bradford Johnson shall have the right to attend all meetings of the
 Board of Directors in a non-voting observer capacity for so long as Mr. Johnson remains a
 shareholder of the Company. The Company shall provide Mr. Johnson with copies of all notices,
 minutes, consents, and other materials provided to directors at the same time such materials
 are provided to directors. Mr. Johnson shall be entitled to participate in discussions at
 Board meetings but shall not be entitled to vote on any matter.

Section 4.12 <u>Stock Price Support</u>. The Company shall use its best efforts to support the stock price of the Common Stock following any listing on a National Securities Exchange, including but not limited to timely disclosure of material information, maintenance of good corporate governance practices, and such other reasonable measures as may be appropriate under the circumstances.

***SECURITIES PURCHASE AGREEMENT***

Section 4.13 <u>Most Favored Nations</u>. If the Company issues any equity securities to any other investor on terms more favorable than those provided to the Purchasers hereunder (including, without limitation, with respect to price, anti-dilution protections, board rights, information rights, or other investor protections), the Company shall promptly notify the Purchasers and, at the Purchasers' election, amend this Agreement and the other Transaction Documents to provide the Purchasers with such more favorable terms.

**ARTICLE V.**

**MISCELLANEOUS**

Section 5.01 <u>Fees and Expenses</u>. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Investors.

Section 5.02 <u>Entire Agreement</u>. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

Section 5.03 <u>Notices</u>. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (i) one Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Business Day, with written confirmation of successful transmission; (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day; (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service; or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

Section 5.04 <u>Amendments; Waivers</u>. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Investors holding at least a majority in principal amount of the Notes then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

Section 5.05 <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Investor (other than by merger). Any Investor may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns or transfers any Securities, provided that such transfer complies with the terms of this Agreement and all applicable federal and State Securities Laws and that such transferee agrees in writing with the Company to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the 'Investors'.

Section 5.06 <u>No Third-Party Beneficiaries</u>. Except for the Indemnitees named herein, who are intended third-party beneficiaries of this Agreement, including the representations and warranties made by the Company hereunder, this Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

***SECURITIES PURCHASE AGREEMENT***

Section 5.07 <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, members, managers, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to the Transaction Documents or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred in the investigation, preparation and prosecution of such Action or Proceeding.

Section 5.08 <u>Survival</u>. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities and issuance of Underlying Securities.

Section 5.09 <u>Execution</u>. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page was an original thereof.

Section 5.10 <u>Severability</u>. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

Section 5.11 <u>Rescission and Withdrawal Right</u>. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Investor may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of a conversion of a Note, the Investor shall be required to return any shares of Common Stock subject to any such rescinded conversion or exercise notice.

***SECURITIES PURCHASE AGREEMENT***

Section 5.12 <u>Replacement of Securities</u>. If any certificate or instrument evidencing any Securities or Underlying Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities or Underlying Securities.

Section 5.13 <u>Remedies</u>. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investors and the Company will be entitled to seek specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

Section 5.14 <u>Payment Set Aside</u>. To the extent that the Company makes a payment or payments to any Investor pursuant to any Transaction Document or an Investor enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

Section 5.15 <u>Independent Nature of Investors' Obligations and Rights</u>. The obligations of each Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance or non-performance of the obligations of any other Investor under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. Each Investor has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents. The Company has elected to provide all Investors with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Investors.

Section 5.16 <u>Reserved</u>.

Section 5.17 <u>Construction</u>. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the shares of Common Stock that occur after the date of this Agreement.

Section 5.18 <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

Section 5.19 <u>WAIVER OF JURY TRIAL</u>. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

[*SIGNATURE PAGES FOLLOW*]

***SECURITIES PURCHASE AGREEMENT***

**IN WITNESS WHEREOF**, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date below.

---

| | |
|:---|:---|
| **First Breach Inc.** | **First Breach Inc.** |
| By: | */s/ Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | CEO |
| **INVESTORS:** | **INVESTORS:** |
| The Investors executing the Signature Page in the form attached hereto as <u>Annex A</u> and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof. | The Investors executing the Signature Page in the form attached hereto as <u>Annex A</u> and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof. |

---

[Signature Page to Securities Purchase Agreement]

***SECURITIES PURCHASE AGREEMENT***

**Annex A**

**Securities Purchase Agreement Investor Counterpart Signature Page**

The undersigned, desiring to: (i) enter into this Securities Purchase Agreement dated as of April __, 2026 ("**Agreement**"), with First Breach Inc. ("**Company**"), in the form furnished to the undersigned; and (ii) purchase the Securities as set forth below, hereby agrees to purchase such Securities from the Company as of the Closing and further agrees to join the Agreement as a party thereto, with all the rights and privileges appertaining thereto, and to be bound in all respects by the terms and conditions thereof. The undersigned specifically acknowledges having read the representations in the Agreement section entitled '<u>Representations and Warranties of the Investors,</u>' and hereby represents that the statements contained therein are complete and accurate with respect to the undersigned as an Investor.

---

| | | |
|:---|:---|:---|
| **PURCHASER** (if an individual): | **PURCHASER** (if an individual): | **PURCHASER** (if an entity): |
| By | */s/ Elbert Basolis* |  |
|  |  | (Legal Name of Entity) |
| Name: | Elbert Basolis  |  |
| Date: | April 24, 2026 |  |
| **PUCHASER** (if investing jointly) | **PUCHASER** (if investing jointly) | By |
| By |  | Name: |
| Name: |  | Title: |
| Date: |  | Date: |
| Fax No. ________________________ | Fax No. ________________________ | Fax No.: ________________________ |

---

State/Country of Domicile or Formation: _____________________________Aggregate Subscription Amount: $7,692,307.70 ________________________ SS/EIN/TIN: _______________

Address: ________________________________________________

Telephone: ______________________________________________

E-Mail: _________________________________________________

[Investor Counter Signature Page to Securities Purchase Agreement]

**<u>APPENDIX A</u>**

**<u>CONFIDENTIAL INVESTOR QUESTIONNAIRE</u>**

**<u>APPENDIX B</u>**

**<u>FORM OF SENIOR SECURED PROMISSORY NOTE</u>**

**<u>APPENDIX C</u>**

**<u>FORM OF WARRANT</u>**

**<u>APPENDIX D</u>**

**<u>FORM OF SECURITY AGREEMENT</u>**

**<u>APPENDIX E</u>**

**<u>WIRING INSTRUCTIONS</u>**

**<u>(see attached)</u>**

**<u>APPENDIX F</u>**

**<u>RBW ENGAGEMENT AGREEMENT COMMISSION SCHEDULE</u>**

**<u>(see attached)</u>**

## Exhibit 10.8

**Exhibit 10.8**

**SECURITIES PURCHASE AGREEMENT**

This Securities Purchase Agreement (this "**Agreement**") is dated as of April 24, 2026 among First Breach Inc., a corporation incorporated under the laws of the state of Delaware ("**Company**"), and each purchaser identified on the <u>Annex A</u> hereto (each, including its successors and assigns, an "**Investor**" and collectively, the "**Investors**").

**WHEREAS,** the Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, senior secured convertible promissory notes in the form set forth in <u>Appendix B</u> hereto (each, a "**Note**" and collectively, the "**Notes**") and equity warrants in the form set forth on Appendix C hereto (each, a "**Warrant**" and collectively, the "**Warrants**") contemplated by this Agreement ("**Offering**"); and

**WHEREAS**, the Company and Investors are executing and delivering this Agreement in reliance upon an exemption from securities registration requirements of the Securities Act afforded by the provisions of Section 4(a)(2) and/or Rule 506(b) of Regulation D promulgated thereunder by the U.S. Securities and Exchange Commission.

**NOW, THEREFORE**, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Investor agree as follows:

**ARTICLE I.**

**DEFINITIONS**

Section 1.01. <u>Definitions</u>. In addition to the terms defined elsewhere in this Agreement:

&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) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Notes (as defined herein), 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) the following terms have the meanings set forth in this Agreement:

"<u>$</u>" or "<u>USD</u>" means United States Dollars.

"<u>Action</u>" shall have the meaning ascribed to such term in Section 3.01(h).

"<u>Affiliate</u>" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

"<u>Business Day</u>" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"<u>Change of Control</u>" means (a) any "person" or "group" (within the meaning of Section 13(d) and 14(d) of the Exchange Act), other than the Company or any employee benefit plan of the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then-outstanding securities; (b) the consummation of a merger, consolidation or similar transaction involving the Company if, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction; (c) a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company; or (d) a liquidation or dissolution of the Company.

***SECURITIES PURCHASE AGREEMENT***

"<u>Closing</u>" means the closing of the purchase and sale of the Securities pursuant to section 2.01.

"<u>Closing Date</u>" means for any Securities, the Business Day when: (i) all of the Transaction Documents for such Securities have been executed and delivered by the applicable parties thereto, and conditions precedent to the applicable Investors' obligations to pay the Subscription Amount; and (ii) the Company's obligations to deliver such Securities have been satisfied or waived.

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Confidential Investor Questionnaire</u>" means the Confidential Investor Questionnaire attached as <u>Appendix A</u> hereto.

"<u>Exempt Issuance</u>" means the issuance of Common Stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by the Company*.*

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>GAAP</u>" means generally accepted accounting principles in the United States in effect from time to time.

"<u>Intellectual Property Rights</u>" shall have the meaning ascribed to such term in Section 3.01(l).

"<u>Common Stock</u>" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Liens</u>" shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

"<u>Liquidity Event</u>" has the meaning ascribed to it the Notes.

"<u>Material Adverse Effect</u>" shall have the meaning ascribed to such term in Section 3.01(b).

"<u>Material Permits</u>" shall have the meaning ascribed to such term in Section 3.01(j).

"<u>Maximum Offering Amount</u>" means an aggregate Subscription Amount of up to Ten Million One Hundred Fifty Thousand U.S. Dollars ($10,150,000).

"<u>National Securities Exchange</u>" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"<u>Notes</u>" means the senior secured convertible promissory notes issued by the Company to the Investors hereunder, in the form of <u>Appendix B</u> attached hereto.

"<u>New Securities</u>" means any shares of Common Stock, Preferred Stock, or other equity securities of the Company, or any securities convertible into or exchangeable for, or options, warrants or other rights to acquire, any shares of Common Stock or other equity securities of the Company, other than (i) securities issued upon conversion or exercise of the Notes or Warrants, (ii) securities issued pursuant to any equity incentive plan or similar compensatory arrangement approved by the Board of Directors, (iii) securities issued upon conversion, exercise or exchange of any convertible securities, options or warrants outstanding as of the date hereof, (iv) securities issued in connection with any stock split, stock dividend, combination or recapitalization, and (v) securities issued in connection with a bona fide strategic transaction approved by the Board of Directors, provided such issuance is not primarily for capital raising purposes.

***SECURITIES PURCHASE AGREEMENT***

"<u>Offering Period</u>" means the period commencing on the date hereof and ending on the Termination Date.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Preferred Stock</u>" means the preferred stock of the Company, par value $0.0001 per share, and any other class of preferred securities into which such securities may hereafter be reclassified or changed.

"<u>Proceeding</u>" means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

"<u>Purchasers</u>" means the Investors.

"<u>Required Approvals</u>" shall have the meaning ascribed to such term in section 3.01(e).

"<u>Securities</u>" means the Notes and Underlying Securities.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Security Agreement</u>" means the Security Agreement between the Company and Secured Parties (as defined therein), in the form of <u>Appendix D</u> attached hereto.

"<u>State Securities Laws</u>" means the securities (or "blue sky") rules, regulations, or other similar laws of a particular state.

"<u>Termination Date</u>" means May 30, 2026, or such other date as mutually agreed by the parties.

"<u>Subscription Amount</u>" means, as to each Investor, the aggregate amount to be paid for the Securities purchased hereunder as specified below such Investor's name on <u>Annex A</u> of this Agreement and next to the heading "Aggregate Subscription Amount," in United States dollars and in immediately available funds.

"<u>Subsidiary</u>" means any subsidiary of the Company as set forth in section 3.01(a) and shall, where applicable, include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

"<u>Transaction Documents</u>" means this Agreement, the Notes, the Warrant, the Security Agreement, and all appendices, exhibits and schedules hereto and thereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

"<u>Underlying Securities</u>" means the Conversion Shares (as defined in the Note) and the Warrant Shares.

"<u>Warrants</u>" means the equity warrants, issued by the Company to the Investors hereunder, in the form of <u>Appendix C</u> attached hereto.

"<u>Warrant Shares</u>" means the shares of Common Stock issuable upon exercise of the Warrants.

***SECURITIES PURCHASE AGREEMENT***

**ARTICLE II.**

**PURCHASE AND SALE**

Section 2.01 <u>Closing</u>. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Investors, severally and not jointly, agree to purchase, the Securities up to the Maximum Offering Amount. At the Closing, each Investor shall deliver to the Company, via wire transfer, immediately available funds equal to the Investor's aggregate Subscription Amounts and the Company shall deliver to each Investor (i) a Note and (ii) 50,000 Warrant Shares for every One Million Dollars ($1,000,000) of the Subscription Amount paid to the Company hereunder. For the avoidance of doubt, the Warrants may be substituted for an equivalent economic instrument. The Company and each Investor shall deliver the other items set forth in section 2.02 deliverable at the Closing. Upon satisfaction of the conditions set forth in section 2.02 and section 2.03, the Closing shall occur at the offices of Company's counsel, or such other location as the parties shall mutually agree or may be closed remotely by electronic delivery of documents. The Company may conduct multiple closings for the sale of the Securities until it has received the Maximum Offering Amount. The Closing Date for any Securities shall be the date indicated on the applicable Investor signature pages attached hereto and the final Closing Date shall be no later than the Termination Date. No minimum amount of Securities need be sold by the Company to complete and close the Offering.

Section 2.01(a) <u>Additional Closings</u>. Following the initial Closing, the Company and the Investors may, upon mutual written consent, conduct one or more additional closings (each, an "**Additional Closing**") for the purchase and sale of additional Notes and Warrants on the same terms and conditions set forth in this Agreement, , in an aggregate principal amount of up to Five Million U.S. Dollars ($5,000,000) in addition to the Maximum Offering Amount (the "Additional Closing Amount"). Any such Additional Closing shall be subject to: (a) the mutual agreement of the Company and the participating Investors as to the aggregate principal amount of additional Notes to be issued at such Additional Closing and the corresponding number of Warrants; (b) the satisfaction or waiver of the conditions set forth in Section 2.03, mutatis mutandis, as of the date of such Additional Closing; (c) the execution and delivery of such additional signature pages, Notes, Warrants, and other documents as may be reasonably required to effect such Additional Closing. For the avoidance of doubt, any additional Notes and Warrants issued at an Additional Closing shall be deemed "Securities" for all purposes under this Agreement and the other Transaction Documents, and any Investor participating in an Additional Closing shall be bound by all terms and conditions of this Agreement.

Section 2.02 <u>Closing Deliverables</u>.

&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) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Investors the following:

&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) this
 Agreement executed by 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;(ii) a
 Note with a principal amount equal to such Investor's Subscription Amount, registered
 in the name of such Investor;

&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) the
 Warrants, in an amount equal to 50,000 shares of common stock for every $1,000,000 of the
 Subscription Amount paid to the Company hereunder; 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;(iv) the
 Security Agreement executed by the Company.

***SECURITIES PURCHASE AGREEMENT***

&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) On or prior to the Closing Date, each Investor shall deliver or cause to be delivered to the Company the following:

&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) this
 Agreement executed by such Investor;

&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) such
 Investor's Subscription Amount by wire transfer to counsel of the Company pursuant
 to the wiring instructions set forth in Section 2.03(c).; 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;(iii) a
 duly completed and signed Confidential Investor Questionnaire along with such other duly
 completed and signed questionnaires as may be requested by the Company.

Section 2.03 <u>Closing Conditions</u>.

&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) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

&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) the
 accuracy in all material respects on the Closing Date of the representations and warranties
 of the Investors contained herein;

&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) all
 obligations, covenants and agreements of each Investor required to be performed at or prior
 to the Closing Date shall have been performed; 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;(iii) the
 delivery by each Investor of the items set forth in section 2.02(b) of this Agreement.

&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) The respective obligations of the Investors hereunder in connection with the Closing are subject to the following conditions being met:

&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) the
 accuracy in all material respects (or, to the extent representations or warranties are qualified
 by materiality or Material Adverse Effect, in all respects) when made and on the Closing
 Date of the representations and warranties of the Company contained herein (unless as of
 a specific date therein in which case they shall be accurate as of such 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;(ii) all
 obligations, covenants and agreements of the Company required to be performed at or prior
 to the Closing Date shall have been performed;

&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) the
 delivery by the Company of the items set forth in section 2.02(a) of this Agreement; 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;(iv) there
 shall have been no Material Adverse Effect with respect to the Company since the date hereof.

The wiring instructions for counsel of the Company shall be as set forth on Appendix "E" attached hereto.

**ARTICLE III.**

**REPRESENTATIONS AND WARRANTIES**

Section 3.01 <u>Representations and Warranties of the Company</u>. The Company hereby makes the following representations and warranties to each Investor as of the date hereof:

&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) <u>Subsidiaries</u>. The Company does not have any Subsidiaries.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Organization and Qualification</u>. The Company is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its articles of formation or other organizational or charter documents. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document; (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, taken as a whole; or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "**Material Adverse Effect**") and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification; provided, however, that "Material Adverse Effect" shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions, (ii) conditions generally affecting the industry in which the Company or any Subsidiary operates, (iii) any changes in financial or securities markets in general, (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof, (v) any pandemic, epidemics or human health crises (including COVID-19), (vi) any changes in applicable laws or accounting rules (including GAAP), (vii) the announcement, pendency or completion of the transactions contemplated by the Transaction Documents, or (viii) any action required or permitted by the Transaction Documents or any action taken (or omitted to be taken) with the written consent of or at the written request of the Investors holding a majority in principal amount outstanding of the Notes).

&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) <u>Authorization; Enforcement</u>. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the manager(s) or the Company's shareholders in connection therewith other than in connection with the Required Approvals. Each Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited 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;(d) <u>No Conflicts</u>. The execution, delivery and performance by the Company of the Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the other transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company's organizational or charter documents; (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected; or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and State Securities Laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Filings, Consents and Approvals</u>. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) such consents, waivers, or authorizations as have been obtained before the Closing; and (ii) the filing of Form D with the Commission and such filings as are required to be made under applicable State Securities Laws (collectively, the "**Required Approvals**").

&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) <u>Issuance of the Securities</u>. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer provided for in the Transaction Documents. The Underlying Securities, when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer provided for herein or therein. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance upon Note conversions and Warrant exercises at least equal to the minimum number of shares of Common Stock issuable on the date hereof upon the full conversion of the Maximum Offering Amount of Notes and exercise of Warrants.

&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) <u>Capitalization</u>. The Company has authorized 500,000,000 shares of Common Stock and 1,000,000 shares of preferred stock. As of the date of this Agreement, 45,034,282 shares of Common Stock are issued and outstanding and 0 shares of preferred stock are issued and outstanding. There are no outstanding options (other than pursuant to the Company's equity incentive plan), warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock other than the existing convertible instruments (if any). Except as set forth in Section 4.09, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents except for such, if any, as will have been validly waived before the Closing. The issuance and sale of the Securities and Underlying Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and State Securities Laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the board of directors or others is required for the issuance and sale of the Securities, except for such approvals as have been obtained prior to Closing. There are no stockholders' agreements, voting agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders.

&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) <u>Litigation</u>. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "**Action**") which: (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities; or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or State Securities Laws or a claim of breach of fiduciary duty.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Compliance</u>. The Company is unaware of, and to its knowledge: (i) is neither in default under nor in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived); (ii) is not in violation of any order of any court, arbitrator or governmental body; nor (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each of the foregoing cases as could not have or reasonably be expected to result in a Material Adverse Effect.

&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) <u>Regulatory Permits</u>. The Company, to its knowledge, possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its business, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect ("**Material Permits**"), and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit.

&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) <u>Title to Assets</u>. The Company has good and marketable title in fee simple to all real property and good and marketable title in all personal property owned by it that, in each case, is material to the business of the Company, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties in any material respect. Any real property and facilities held under lease by the Company is held by it under valid, subsisting and enforceable leases with which the Company are in compliance.

&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) <u>Patents and Trademarks</u>. (i) The Company, to its knowledge, has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as necessary or material for use in connection with its business and which the failure to so have could reasonably be expected to have a Material Adverse Effect (collectively, the "**Intellectual Property Rights**"); (ii) the Company has not received a notice (written or otherwise) that any of the Intellectual Property Rights violates or infringes upon the intellectual property rights of any Person; (iii) to the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights, except where the failure to be so enforceable or for such infringements as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (iv) the Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of its intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&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) <u>Certain Fees</u>. [Except for commissions owed in connection with the RBW Engagement Agreement in an amount estimated as set forth on Appendix F,]no brokerage or finder's fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Investors shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.01(m) that may be due in connection with the transactions contemplated by the Transaction Documents.

&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) <u>Private Placement</u>. Assuming the accuracy of the Investors' representations and warranties set forth in section 3.02, no registration under the Securities Act is required for the offer and sale of the Securities and Underlying Securities by the Company to the Investors as contemplated hereby.

&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) <u>No General Solicitation</u>. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities or Underlying Securities by any form of general solicitation or general advertising. The Company has offered the Securities and Underlying Securities for sale only to the Investors and certain other "accredited investors" within the meaning of Rule 501 under the Securities Act.

***SECURITIES PURCHASE AGREEMENT***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Acknowledgment Regarding Investors' Purchase of Securities</u>. The Company acknowledges and agrees that each of the Investors is acting solely in the capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Investor or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Investors' purchase of the Securities. The Company further represents to each Investor that the Company's decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Foreign Corrupt Practices</u>. The Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law; or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Office of Foreign Assets Control</u>. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("**OFAC**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Money Laundering</u>. The operations of the Company are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "**Money Laundering Laws**"), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

Section 3.02 <u>Representations and Warranties of the Investors</u>.

Each Investor, for itself and for no other Investor, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such 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;(a) <u>Authority; Organization</u>. Such Investor has full power and authority (and, if such Investor is an individual, the capacity) to enter into this Agreement and to perform all obligations required to be performed by it hereunder. If an entity, such Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate, limited liability company or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Investor of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate or similar action on the part of such Investor. Each Transaction Document to which it is a party has been duly executed by such Investor, and when delivered by such Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Investor, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Own Account</u>. Such Investor understands that the Securities are and Underlying Securities will be 'restricted securities' and have not been registered under the Securities Act or any applicable State Securities Law and is acquiring the Securities and any Underlying Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable State Securities Law, has no present intention of distributing any of such Securities or Underlying Securities in violation of the Securities Act or any applicable State Securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution the same (this representation and warranty not limiting such Investor's right to sell the Securities and Underlying Securities in compliance with applicable federal and State Securities Laws) in violation of the Securities Act or any applicable State Securities Law. Such Investor is acquiring the Securities and any Underlying Securities in the ordinary course of its investment 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;(c) <u>Non-Transferrable</u>. Such Investor agrees: (i) that the Investor will not sell, assign, pledge, give, transfer or otherwise dispose of the Securities or Underlying Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable State Securities Laws; (ii) that the certificates representing the Securities and Underlying Securities will bear a legend making reference to the foregoing restrictions; and (iii) that the Company and its Affiliates shall not be required to give effect to any purported transfer of such Securities and Underlying Securities except upon compliance with the foregoing restrictions.

&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) <u>Investor Status</u>. Such Investor is an "accredited investor" as defined in Rule 501(a) under the Securities Act. The undersigned agrees to furnish any additional information requested by the Company or any of its Affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the purchase and sale of the Securities. The undersigned has completed the Confidential Investor Questionnaire contained in <u>Appendix A</u> and the information contained therein is complete and accurate as of the date thereof and is hereby affirmed as of the Closing Date. Any information that has been furnished or that will be furnished by the undersigned to evidence its status as an accredited investor is accurate and complete, and does not contain any misrepresentation or material omission.

&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) <u>Experience of Such Investor</u>. Such Investor, either alone or together with its representatives, has such knowledge, sophistication, and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities and Underlying Securities, and has so evaluated the merits and risks of such investment. Such Investor is able to bear the economic risk of an investment in the Securities and Underlying Securities and, at the present time, is able to afford a complete loss of such investment.

&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) <u>No Trading Market</u>. Such Investor acknowledges that there is currently no trading or public market for the Securities and Underlying Securities and that none is expected to develop for the Securities unless a Liquidity Event occurs.

&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) <u>General Solicitation</u>. Such Investor undersigned acknowledges that neither the Company nor any other person offered to sell the Securities to it by means of any form of general solicitation or advertising, including but not limited to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio; or (ii) any seminar or meeting whose attendees were invited by any general solicitation or general advertising.

&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) <u>Confidentiality</u>. Other than to other Persons party to this Agreement and its advisors who have agreed to keep information confidential or have a fiduciary obligation to keep such information confidential, such Investor has maintained the confidentiality of all disclosures made to it in connection with the transaction (including the existence and terms of this transaction).

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Foreign Investor</u>. If such Investor is not a United States person, such Investor represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities and Underlying Securities or any use of this Agreement, including: (i) the legal requirements within its jurisdiction for the purchase of the Securities and any Underlying Securities; (ii) any foreign exchange restrictions applicable to such purchase; (iii) any governmental or other consents that may need to be obtained; and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities or Underlying Securities. The Investor further represents that its payment for, and its continued beneficial ownership of the Securities and any Underlying Securities, will not violate any applicable securities or other laws of its jurisdiction.

&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) <u>Information from Company</u>. Such Investor and its purchaser representatives or investment managers, if any, have been afforded the opportunity to obtain any information necessary to verify the accuracy of any representations or information presented by the Company in this Agreement and have had all inquiries to the Company answered, and have been furnished all requested materials, relating to the Company and the Offering and sale of the Securities and anything set forth in the Transaction Documents. Neither the Investor nor the Investor's purchaser's representatives or investment managers, if any, have been furnished any offering literature by the Company or any of its Affiliates, associates or agents other than the Transaction Documents, and the agreements referenced therein.

&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) <u>Speculative Nature of Investment; Risk Factors</u>. **SUCH INVESTOR UNDERSTANDS THAT AN INVESTMENT IN THE SECURITIES AND UNDERLYING SECURITIES INVOLVES A HIGH DEGREE OF RISK.** Such Investor acknowledges that: (i) any projections, forecasts or estimates as may have been provided to the Investor are purely speculative and cannot be relied upon to indicate actual results that may be obtained through this investment; any such projections, forecasts and estimates are based upon assumptions which are subject to change and which are beyond the control of the Company or its management; (ii) the tax effects which may be expected by this investment are not susceptible to absolute prediction, and new developments and rules of the Internal Revenue Service, audit adjustment, court decisions or legislative changes may have an adverse effect on one or more of the tax consequences of this investment; and (iii) the Investor has been advised to consult with his own advisor regarding legal matters and tax consequences involving this investment. The Investor represents that the Investor's investment objective is speculative in that the Investor seeks the maximum total return through an investment in a broad spectrum of securities, which involves a higher degree of risk than other investment styles and therefore the Investor's risk exposure is also speculative. The Securities offered hereby are highly speculative and involve a high degree of risk and Investor should only purchase these securities if Investor can afford to lose their entire investment.

&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) <u>Money Laundering</u>. If an entity, the operations of such Investor are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Money Laundering Laws, and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

**ARTICLE IV.**

**OTHER AGREEMENTS OF THE PARTIES**

Section 4.01 <u>Transfer Restrictions</u>.

&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) The Securities and Underlying Securities may only be disposed of in compliance with state and federal securities laws. The Securities and Underlying Securities may not be sold or transferred by the Investors without the written consent of the Company, which shall not be unreasonably withheld. As a condition of such sale or transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of an Investor under this Agreement.

***SECURITIES PURCHASE AGREEMENT***

&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) The Investors agree to the imprinting, so long as is required by this Section 4.01, of a legend on any of the Securities and Underlying Securities in the following form:

[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO 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;(c) Each Investor, severally and not jointly with the other Investors, agrees that such Investor will sell any Securities and Underlying Securities only pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities or Underlying Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.01 is predicated upon the Company's reliance upon this understanding.

&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) Each Investor understands that upon conversion of a Note, it will acquire shares of Common Stock in and become a shareholder of the Company.

Section 4.02 <u>Acknowledgment of Dilution</u>. The Company acknowledges that the issuance of the Underlying Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Securities pursuant to the Securities, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Investor and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

Section 4.03 <u>Integration</u>. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities or Underlying Securities to the Investors in a manner that would require the registration under the Securities Act of the sale of the Securities to the Investors.

Section 4.04 <u>Publicity</u>. The Company and each Investor shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Investor shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company with respect to any press release of any Investor, or without the prior consent of each Investor with respect to any press release of the Company mentioning such Investor, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.

***SECURITIES PURCHASE AGREEMENT***

Section 4.05 <u>Indemnification of Investors</u>. The Company shall indemnify, reimburse and hold harmless the Investors and their respective partners, members, shareholders, officers, directors, employees and agents (and any other persons with other titles that have similar functions) (collectively, "**Indemnitees**") from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses, of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from: (i) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents; and (ii) any action instituted against such Indemnitee in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Indemnitee, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Indemnitee's representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Indemnitee may have with any such stockholder or any violations by such Indemnitee of state or federal securities laws or any conduct by such Indemnitee which results from the gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable decision of a court of competent jurisdiction).

Section 4.06 <u>Equal Treatment of Investors</u>. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. Further, the Company shall not make any payment of principal or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Investor by the Company and negotiated separately by each Investor, and is intended for the Company to treat the Investors as a class and shall not in any way be construed as the Investors acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

Section 4.07 <u>Form D; Blue Sky Filings</u>. The Company agrees to timely file a Form D with respect to the Securities and Underlying Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Investor. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities and Underlying Securities for, sale to the Investors under applicable State Securities Laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Investor.

Section 4.08 <u>Use of Proceeds</u>. The Company shall use the net proceeds received from the sale of the Securities at the Closing Date for general corporate purposes and general working capital requirements, including the payment of transaction-related fees and expenses.

Section 4.09 <u>Preemptive Rights.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Preemptive Rights. Subject to the exceptions set forth in subsection (c) below, if the Company proposes to issue any New Securities, the Company shall deliver written notice (an "Issuance Notice") to each Purchaser at least thirty (30) days prior to the proposed issuance date, which notice shall set forth the material terms and conditions of such issuance, including (i) the type and number of New Securities to be issued, (ii) the purchase price and payment terms, and (iii) the proposed issuance date. Each Purchaser shall have the right, exercisable by written notice to the Company within twenty (20) days after receipt of the Issuance Notice, to purchase up to such Purchaser's Pro Rata Share of the New Securities at the same price and on the same terms as set forth in the Issuance Notice. For purposes of this Section, "Pro Rata Share" means, with respect to each Purchaser, a fraction, the numerator of which is the number of shares of Common Stock held by such Purchaser immediately prior to the proposed issuance (calculated on a fully-diluted, as-converted basis), and the denominator of which is the total number of shares of Common Stock outstanding immediately prior to the proposed issuance (calculated on a fully-diluted, as-converted basis).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Individual Preemptive Rights. In addition to the rights set forth in Section 4.09(a) above, Bradford Johnsonand Bert Bersolis (each, a "**Specified Holder**") shall each have the right to purchase New Securities in an amount sufficient to maintain such Specified Holder's percentage ownership of the Company (on a fully-diluted, as-converted basis) as of immediately prior to such issuance. This right shall be in addition to, and not in lieu of, any rights such Specified Holder may have under Section 4.09(a) as a Purchaser. (c) Excluded Issuances. The preemptive rights set forth in Sections 4.09(a) and (b) shall not apply to any issuance of: (i) shares of Common Stock or options to purchase Common Stock issued to employees, officers, directors, or consultants of the Company pursuant to any equity incentive plan approved by the Board of Directors; (ii) securities issued upon the conversion or exercise of any convertible securities, options, or warrants outstanding as of the date hereof; (iii) securities issued as consideration in connection with a bona fide acquisition or strategic transaction approved by the Board of Directors; (iv) securities issued in connection with any stock split, stock dividend, or recapitalization; or (v) securities issued in an underwritten public offering registered under the Securities Act.

***SECURITIES PURCHASE AGREEMENT***

Section 4.10 <u>Lock-Up Provisions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Purchasers
 Lock-Up Exemption. Notwithstanding any other provision of this Agreement or any other agreement
 to which the Company is a party, the Purchasers shall not be subject to any lock-up provision
 and shall be permitted to sell the Securities immediately upon the listing of the Common
 Stock on a National Securities Exchange. The Purchasers may provide liquidity for the Company's
 stock in the public market through sales of the Securities.

Section 4.11. <u>Tag-Along and Drag-Along Rights</u>. The Purchasers shall have tag-along and drag-along rights with respect to all of the Purchasers' stock positions in the Company, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Tag-Along Rights</u>. If Jeffrey Low, Jordan Low, and any other stockholder holding at least five percent
 (5%) of the outstanding Common Stock (collectively, the "Selling Stockholders")
 propose to sell, in the aggregate, shares of Common Stock to a third party in a single transaction
 or series of related transactions representing more than [10%] of the outstanding Common
 Stock (excluding (i) any public offering, (ii) sales pursuant to Rule 144 or other routine
 market transactions, (iii) transfers to affiliates or for estate planning purposes, (iv)
 sales to the Company or its designees, and (v) transfers in connection with a Change of Control
 subject to Section 4.11(b) below), the Selling Stockholders shall give the Purchasers written
 notice at least ten (10) days prior to the proposed closing. The Purchasers shall have the
 right, exercisable by written notice within five (5) business days of receipt, to participate
 in such sale on the same terms and conditions, pro rata based on the Purchasers' percentage
 ownership relative to the Selling Stockholders' aggregate ownership. The Purchasers'
 participation shall be subject to the Purchasers executing the same transaction documents
 and making the same representations, warranties, and indemnities as the Selling Stockholders
 (on a several and not joint basis, and capped at the net proceeds received).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Drag-Along Rights</u>. If the Selling Stockholders, who in the aggregate hold a majority of the outstanding
 Common Stock, together with the approval of the Board of Directors, approve a bona fide Change
 of Control transaction with an unaffiliated third party, the Selling Stockholders may require
 the Purchasers to (i) sell all of the Purchasers' shares on the same terms and conditions
 as the Selling Stockholders, (ii) vote all shares in favor of the transaction, (iii) waive
 any dissenters' or appraisal rights, and (iv) execute all customary transaction documents,
 including representations, warranties, and indemnities (provided that the Purchasers'
 indemnification obligations shall be several and not joint, limited to breaches of the Purchasers'
 individual representations and a pro rata share of general indemnities, and capped at the
 net proceeds received by the Purchasers). The consideration per share received by the Purchasers
 shall be the same form and amount as received by the Selling Stockholders for shares of the
 same class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Board Representation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Board Seat</u>. Effective as of the Closing, the Company shall appoint Bert Basolis to serve as
 a member <u>of the Board of Directors</u>. Mr. Basolis shall serve as a director for a term
 of five (5) years from the Closing Date, or until his earlier voluntary resignation or removal
 by the stockholders of the Company. The Company shall not remove Mr. Basolis from the Board
 of Directors without his consent during such five-year term, except for cause <u>.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Board Observer Rights</u>. Bradford Johnson shall have the right to attend all meetings of the
 Board of Directors in a non-voting observer capacity for so long as Mr. Johnson remains a
 shareholder of the Company. The Company shall provide Mr. Johnson with copies of all notices,
 minutes, consents, and other materials provided to directors at the same time such materials
 are provided to directors. Mr. Johnson shall be entitled to participate in discussions at
 Board meetings but shall not be entitled to vote on any matter.

Section 4.12 <u>Stock Price Support</u>. The Company shall use its best efforts to support the stock price of the Common Stock following any listing on a National Securities Exchange, including but not limited to timely disclosure of material information, maintenance of good corporate governance practices, and such other reasonable measures as may be appropriate under the circumstances.

***SECURITIES PURCHASE AGREEMENT***

Section 4.13 <u>Most Favored Nations</u>. If the Company issues any equity securities to any other investor on terms more favorable than those provided to the Purchasers hereunder (including, without limitation, with respect to price, anti-dilution protections, board rights, information rights, or other investor protections), the Company shall promptly notify the Purchasers and, at the Purchasers' election, amend this Agreement and the other Transaction Documents to provide the Purchasers with such more favorable terms.

**ARTICLE V.**

**MISCELLANEOUS**

Section 5.01 <u>Fees and Expenses</u>. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Investors.

Section 5.02 <u>Entire Agreement</u>. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

Section 5.03 <u>Notices</u>. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (i) one Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Business Day, with written confirmation of successful transmission; (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day; (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service; or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

Section 5.04 <u>Amendments; Waivers</u>. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Investors holding at least a majority in principal amount of the Notes then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

Section 5.05 <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Investor (other than by merger). Any Investor may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns or transfers any Securities, provided that such transfer complies with the terms of this Agreement and all applicable federal and State Securities Laws and that such transferee agrees in writing with the Company to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the 'Investors'.

Section 5.06 <u>No Third-Party Beneficiaries</u>. Except for the Indemnitees named herein, who are intended third-party beneficiaries of this Agreement, including the representations and warranties made by the Company hereunder, this Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

***SECURITIES PURCHASE AGREEMENT***

Section 5.07 <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, members, managers, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to the Transaction Documents or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred in the investigation, preparation and prosecution of such Action or Proceeding.

Section 5.08 <u>Survival</u>. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities and issuance of Underlying Securities.

Section 5.09 <u>Execution</u>. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page was an original thereof.

Section 5.10 <u>Severability</u>. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

Section 5.11 <u>Rescission and Withdrawal Right</u>. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Investor may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of a conversion of a Note, the Investor shall be required to return any shares of Common Stock subject to any such rescinded conversion or exercise notice.

***SECURITIES PURCHASE AGREEMENT***

Section 5.12 <u>Replacement of Securities</u>. If any certificate or instrument evidencing any Securities or Underlying Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities or Underlying Securities.

Section 5.13 <u>Remedies</u>. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investors and the Company will be entitled to seek specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

Section 5.14 <u>Payment Set Aside</u>. To the extent that the Company makes a payment or payments to any Investor pursuant to any Transaction Document or an Investor enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

Section 5.15 <u>Independent Nature of Investors' Obligations and Rights</u>. The obligations of each Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance or non-performance of the obligations of any other Investor under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. Each Investor has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents. The Company has elected to provide all Investors with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Investors.

Section 5.16 <u>Reserved</u>.

Section 5.17 <u>Construction</u>. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the shares of Common Stock that occur after the date of this Agreement.

Section 5.18 <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

Section 5.19 <u>WAIVER OF JURY TRIAL</u>. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

[*SIGNATURE PAGES FOLLOW*]

***SECURITIES PURCHASE AGREEMENT***

**IN WITNESS WHEREOF**, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date below.

---

| | |
|:---|:---|
| **First Breach Inc.** | **First Breach Inc.** |
| By: | /s/ Jeffrey Low |
| Name: | Jeffrey Low |
| Title: | CEO |
| **INVESTORS:** | **INVESTORS:** |
| The Investors executing the Signature Page in the form attached hereto as <u>Annex A</u> and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof. | The Investors executing the Signature Page in the form attached hereto as <u>Annex A</u> and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof. |

---

[Signature Page to Securities Purchase Agreement]

***SECURITIES PURCHASE AGREEMENT***

**Annex A**

**Securities Purchase Agreement Investor Counterpart Signature Page**

The undersigned, desiring to: (i) enter into this Securities Purchase Agreement dated as of April __, 2026 ("**Agreement**"), with First Breach Inc. ("**Company**"), in the form furnished to the undersigned; and (ii) purchase the Securities as set forth below, hereby agrees to purchase such Securities from the Company as of the Closing and further agrees to join the Agreement as a party thereto, with all the rights and privileges appertaining thereto, and to be bound in all respects by the terms and conditions thereof. The undersigned specifically acknowledges having read the representations in the Agreement section entitled '<u>Representations and Warranties of the Investors,</u>' and hereby represents that the statements contained therein are complete and accurate with respect to the undersigned as an Investor.

---

| | | |
|:---|:---|:---|
| **PURCHASER** (if an individual): | **PURCHASER** (if an individual): | **PURCHASER** (if an entity): |
| By | /s/ Bradford Johnson |  |
|  |  | (Legal Name of Entity) |
| Name: | Bradford Johnson |  |
| Date: | April 24, 2026 |  |
| **PUCHASER** (if investing jointly) | **PUCHASER** (if investing jointly) | By |
| By |  | Name: |
| Name: |  | Title: |
| Date: |  | Date: |
| Fax No. ________________________ | Fax No. ________________________ | Fax No.: ________________________ |

---

State/Country of Domicile or Formation: _____________________________

Aggregate Subscription Amount: <u>$5,000,000</u>

SS/EIN/TIN: __________________________________________________

Address: ____________________________________________________

Telephone: __________________________________________________

E-Mail: ______________________________________________________

[Investor Counter Signature Page to Securities Purchase Agreement]

**<u>APPENDIX A</u>**

**<u>CONFIDENTIAL INVESTOR QUESTIONNAIRE</u>**

**<u>APPENDIX B</u>**

**<u>FORM OF SENIOR SECURED PROMISSORY NOTE</u>**

**<u>APPENDIX C</u>**

**<u>FORM OF WARRANT</u>**

**<u>APPENDIX D</u>**

**<u>FORM OF SECURITY AGREEMENT</u>**

**<u>APPENDIX E</u>**

**<u>WIRING INSTRUCTIONS</u>**

**<u>(see attached)</u>**

**<u>APPENDIX F</u>**

**<u>RBW ENGAGEMENT AGREEMENT COMMISSION SCHEDULE</u>**

**<u>(see attached)</u>**

## Exhibit 10.9

**Exhibit 10.9**

**SECURITIES PURCHASE AGREEMENT**

This Securities Purchase Agreement (this "**Agreement**") is dated as of April 24, 2026 among First Breach Inc., a corporation incorporated under the laws of the state of Delaware ("**Company**"), and each purchaser identified on the <u>Annex A</u> hereto (each, including its successors and assigns, an "**Investor**" and collectively, the "**Investors**").

**WHEREAS,** the Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, senior secured convertible promissory notes in the form set forth in <u>Appendix B</u> hereto (each, a "**Note**" and collectively, the "**Notes**") and equity warrants in the form set forth on Appendix C hereto (each, a "**Warrant**" and collectively, the "**Warrants**") contemplated by this Agreement ("**Offering**"); and

**WHEREAS**, the Company and Investors are executing and delivering this Agreement in reliance upon an exemption from securities registration requirements of the Securities Act afforded by the provisions of Section 4(a)(2) and/or Rule 506(b) of Regulation D promulgated thereunder by the U.S. Securities and Exchange Commission.

**NOW, THEREFORE**, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Investor agree as follows:

**ARTICLE I.**

**DEFINITIONS**

Section 1.01. <u>Definitions</u>. In addition to the terms defined elsewhere in this Agreement:

&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) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Notes (as defined herein), 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) the following terms have the meanings set forth in this Agreement:

"<u>$</u>" or "<u>USD</u>" means United States Dollars.

"<u>Action</u>" shall have the meaning ascribed to such term in Section 3.01(h).

"<u>Affiliate</u>" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

"<u>Business Day</u>" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"<u>Change of Control</u>" means (a) any "person" or "group" (within the meaning of Section 13(d) and 14(d) of the Exchange Act), other than the Company or any employee benefit plan of the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then-outstanding securities; (b) the consummation of a merger, consolidation or similar transaction involving the Company if, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction; (c) a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company; or (d) a liquidation or dissolution of the Company.

***SECURITIES PURCHASE AGREEMENT***

"<u>Closing</u>" means the closing of the purchase and sale of the Securities pursuant to section 2.01.

"<u>Closing Date</u>" means for any Securities, the Business Day when: (i) all of the Transaction Documents for such Securities have been executed and delivered by the applicable parties thereto, and conditions precedent to the applicable Investors' obligations to pay the Subscription Amount; and (ii) the Company's obligations to deliver such Securities have been satisfied or waived.

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Confidential Investor Questionnaire</u>" means the Confidential Investor Questionnaire attached as <u>Appendix A</u> hereto.

"<u>Exempt Issuance</u>" means the issuance of Common Stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by the Company*.*

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>GAAP</u>" means generally accepted accounting principles in the United States in effect from time to time.

"<u>Intellectual Property Rights</u>" shall have the meaning ascribed to such term in Section 3.01(l).

"<u>Common Stock</u>" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Liens</u>" shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

"<u>Liquidity Event</u>" has the meaning ascribed to it the Notes.

"<u>Material Adverse Effect</u>" shall have the meaning ascribed to such term in Section 3.01(b).

"<u>Material Permits</u>" shall have the meaning ascribed to such term in Section 3.01(j).

"<u>Maximum Offering Amount</u>" means an aggregate Subscription Amount of up to Ten Million One Hundred Fifty Thousand U.S. Dollars ($10,150,000).

"<u>National Securities Exchange</u>" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"<u>Notes</u>" means the senior secured convertible promissory notes issued by the Company to the Investors hereunder, in the form of <u>Appendix B</u> attached hereto.

"<u>New Securities</u>" means any shares of Common Stock, Preferred Stock, or other equity securities of the Company, or any securities convertible into or exchangeable for, or options, warrants or other rights to acquire, any shares of Common Stock or other equity securities of the Company, other than (i) securities issued upon conversion or exercise of the Notes or Warrants, (ii) securities issued pursuant to any equity incentive plan or similar compensatory arrangement approved by the Board of Directors, (iii) securities issued upon conversion, exercise or exchange of any convertible securities, options or warrants outstanding as of the date hereof, (iv) securities issued in connection with any stock split, stock dividend, combination or recapitalization, and (v) securities issued in connection with a bona fide strategic transaction approved by the Board of Directors, provided such issuance is not primarily for capital raising purposes.

***SECURITIES PURCHASE AGREEMENT***

"<u>Offering Period</u>" means the period commencing on the date hereof and ending on the Termination Date.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Preferred Stock</u>" means the preferred stock of the Company, par value $0.0001 per share, and any other class of preferred securities into which such securities may hereafter be reclassified or changed.

"<u>Proceeding</u>" means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

"<u>Purchasers</u>" means the Investors.

"<u>Required Approvals</u>" shall have the meaning ascribed to such term in section 3.01(e).

"<u>Securities</u>" means the Notes and Underlying Securities.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Security Agreement</u>" means the Security Agreement between the Company and Secured Parties (as defined therein), in the form of <u>Appendix D</u> attached hereto.

"<u>State Securities Laws</u>" means the securities (or "blue sky") rules, regulations, or other similar laws of a particular state.

"<u>Termination Date</u>" means May 30, 2026, or such other date as mutually agreed by the parties.

"<u>Subscription Amount</u>" means, as to each Investor, the aggregate amount to be paid for the Securities purchased hereunder as specified below such Investor's name on <u>Annex A</u> of this Agreement and next to the heading "Aggregate Subscription Amount," in United States dollars and in immediately available funds.

"<u>Subsidiary</u>" means any subsidiary of the Company as set forth in section 3.01(a) and shall, where applicable, include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

"<u>Transaction Documents</u>" means this Agreement, the Notes, the Warrant, the Security Agreement, and all appendices, exhibits and schedules hereto and thereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

"<u>Underlying Securities</u>" means the Conversion Shares (as defined in the Note) and the Warrant Shares.

"<u>Warrants</u>" means the equity warrants, issued by the Company to the Investors hereunder, in the form of <u>Appendix C</u> attached hereto.

"<u>Warrant Shares</u>" means the shares of Common Stock issuable upon exercise of the Warrants.

***SECURITIES PURCHASE AGREEMENT***

**ARTICLE II.**

**PURCHASE AND SALE**

Section 2.01 <u>Closing</u>. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Investors, severally and not jointly, agree to purchase, the Securities up to the Maximum Offering Amount. At the Closing, each Investor shall deliver to the Company, via wire transfer, immediately available funds equal to the Investor's aggregate Subscription Amounts and the Company shall deliver to each Investor (i) a Note and (ii) 50,000 Warrant Shares for every One Million Dollars ($1,000,000) of the Subscription Amount paid to the Company hereunder. For the avoidance of doubt, the Warrants may be substituted for an equivalent economic instrument. The Company and each Investor shall deliver the other items set forth in section 2.02 deliverable at the Closing. Upon satisfaction of the conditions set forth in section 2.02 and section 2.03, the Closing shall occur at the offices of Company's counsel, or such other location as the parties shall mutually agree or may be closed remotely by electronic delivery of documents. The Company may conduct multiple closings for the sale of the Securities until it has received the Maximum Offering Amount. The Closing Date for any Securities shall be the date indicated on the applicable Investor signature pages attached hereto and the final Closing Date shall be no later than the Termination Date. No minimum amount of Securities need be sold by the Company to complete and close the Offering.

Section 2.01(a) <u>Additional Closings</u>. Following the initial Closing, the Company and the Investors may, upon mutual written consent, conduct one or more additional closings (each, an "**Additional Closing**") for the purchase and sale of additional Notes and Warrants on the same terms and conditions set forth in this Agreement, , in an aggregate principal amount of up to Five Million U.S. Dollars ($5,000,000) in addition to the Maximum Offering Amount (the "Additional Closing Amount"). Any such Additional Closing shall be subject to: (a) the mutual agreement of the Company and the participating Investors as to the aggregate principal amount of additional Notes to be issued at such Additional Closing and the corresponding number of Warrants; (b) the satisfaction or waiver of the conditions set forth in Section 2.03, mutatis mutandis, as of the date of such Additional Closing; (c) the execution and delivery of such additional signature pages, Notes, Warrants, and other documents as may be reasonably required to effect such Additional Closing. For the avoidance of doubt, any additional Notes and Warrants issued at an Additional Closing shall be deemed "Securities" for all purposes under this Agreement and the other Transaction Documents, and any Investor participating in an Additional Closing shall be bound by all terms and conditions of this Agreement.

Section 2.02 <u>Closing Deliverables</u>.

&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) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Investors the following:

&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) this
 Agreement executed by 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;(ii) a
 Note with a principal amount equal to such Investor's Subscription Amount, registered
 in the name of such Investor;

&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) the
 Warrants, in an amount equal to 50,000 shares of common stock for every $1,000,000 of the
 Subscription Amount paid to the Company hereunder; 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;(iv) the
 Security Agreement executed by the Company.

***SECURITIES PURCHASE AGREEMENT***

&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) On or prior to the Closing Date, each Investor shall deliver or cause to be delivered to the Company the following:

&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) this
 Agreement executed by such Investor;

&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) such
 Investor's Subscription Amount by wire transfer to counsel of the Company pursuant
 to the wiring instructions set forth in Section 2.03(c).; 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;(iii) a
 duly completed and signed Confidential Investor Questionnaire along with such other duly
 completed and signed questionnaires as may be requested by the Company.

Section 2.03 <u>Closing Conditions</u>.

&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) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

&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) the
 accuracy in all material respects on the Closing Date of the representations and warranties
 of the Investors contained herein;

&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) all
 obligations, covenants and agreements of each Investor required to be performed at or prior
 to the Closing Date shall have been performed; 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;(iii) the
 delivery by each Investor of the items set forth in section 2.02(b) of this Agreement.

&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) The respective obligations of the Investors hereunder in connection with the Closing are subject to the following conditions being met:

&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) the
 accuracy in all material respects (or, to the extent representations or warranties are qualified
 by materiality or Material Adverse Effect, in all respects) when made and on the Closing
 Date of the representations and warranties of the Company contained herein (unless as of
 a specific date therein in which case they shall be accurate as of such 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;(ii) all
 obligations, covenants and agreements of the Company required to be performed at or prior
 to the Closing Date shall have been performed;

&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) the
 delivery by the Company of the items set forth in section 2.02(a) of this Agreement; 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;(iv) there
 shall have been no Material Adverse Effect with respect to the Company since the date hereof.

The wiring instructions for counsel of the Company shall be as set forth on Appendix "E" attached hereto.

**ARTICLE III.**

**REPRESENTATIONS AND WARRANTIES**

Section 3.01 <u>Representations and Warranties of the Company</u>. The Company hereby makes the following representations and warranties to each Investor as of the date hereof:

&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) <u>Subsidiaries</u>. The Company does not have any Subsidiaries.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Organization and Qualification</u>. The Company is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its articles of formation or other organizational or charter documents. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document; (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, taken as a whole; or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "**Material Adverse Effect**") and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification; provided, however, that "Material Adverse Effect" shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions, (ii) conditions generally affecting the industry in which the Company or any Subsidiary operates, (iii) any changes in financial or securities markets in general, (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof, (v) any pandemic, epidemics or human health crises (including COVID-19), (vi) any changes in applicable laws or accounting rules (including GAAP), (vii) the announcement, pendency or completion of the transactions contemplated by the Transaction Documents, or (viii) any action required or permitted by the Transaction Documents or any action taken (or omitted to be taken) with the written consent of or at the written request of the Investors holding a majority in principal amount outstanding of the Notes).

&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) <u>Authorization; Enforcement</u>. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the manager(s) or the Company's shareholders in connection therewith other than in connection with the Required Approvals. Each Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited 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;(d) <u>No Conflicts</u>. The execution, delivery and performance by the Company of the Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the other transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company's organizational or charter documents; (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected; or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and State Securities Laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Filings, Consents and Approvals</u>. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) such consents, waivers, or authorizations as have been obtained before the Closing; and (ii) the filing of Form D with the Commission and such filings as are required to be made under applicable State Securities Laws (collectively, the "**Required Approvals**").

&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) <u>Issuance of the Securities</u>. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer provided for in the Transaction Documents. The Underlying Securities, when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer provided for herein or therein. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance upon Note conversions and Warrant exercises at least equal to the minimum number of shares of Common Stock issuable on the date hereof upon the full conversion of the Maximum Offering Amount of Notes and exercise of Warrants.

&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) <u>Capitalization</u>. The Company has authorized 500,000,000 shares of Common Stock and 1,000,000 shares of preferred stock. As of the date of this Agreement, 45,034,282 shares of Common Stock are issued and outstanding and 0 shares of preferred stock are issued and outstanding. There are no outstanding options (other than pursuant to the Company's equity incentive plan), warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock other than the existing convertible instruments (if any). Except as set forth in Section 4.09, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents except for such, if any, as will have been validly waived before the Closing. The issuance and sale of the Securities and Underlying Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and State Securities Laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the board of directors or others is required for the issuance and sale of the Securities, except for such approvals as have been obtained prior to Closing. There are no stockholders' agreements, voting agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders.

&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) <u>Litigation</u>. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "**Action**") which: (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities; or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or State Securities Laws or a claim of breach of fiduciary duty.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Compliance</u>. The Company is unaware of, and to its knowledge: (i) is neither in default under nor in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived); (ii) is not in violation of any order of any court, arbitrator or governmental body; nor (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each of the foregoing cases as could not have or reasonably be expected to result in a Material Adverse Effect.

&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) <u>Regulatory Permits</u>. The Company, to its knowledge, possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its business, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect ("**Material Permits**"), and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit.

&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) <u>Title to Assets</u>. The Company has good and marketable title in fee simple to all real property and good and marketable title in all personal property owned by it that, in each case, is material to the business of the Company, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties in any material respect. Any real property and facilities held under lease by the Company is held by it under valid, subsisting and enforceable leases with which the Company are in compliance.

&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) <u>Patents and Trademarks</u>. (i) The Company, to its knowledge, has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as necessary or material for use in connection with its business and which the failure to so have could reasonably be expected to have a Material Adverse Effect (collectively, the "**Intellectual Property Rights**"); (ii) the Company has not received a notice (written or otherwise) that any of the Intellectual Property Rights violates or infringes upon the intellectual property rights of any Person; (iii) to the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights, except where the failure to be so enforceable or for such infringements as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (iv) the Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of its intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&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) <u>Certain Fees</u>. [Except for commissions owed in connection with the RBW Engagement Agreement in an amount estimated as set forth on Appendix F,]no brokerage or finder's fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Investors shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.01(m) that may be due in connection with the transactions contemplated by the Transaction Documents.

&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) <u>Private Placement</u>. Assuming the accuracy of the Investors' representations and warranties set forth in section 3.02, no registration under the Securities Act is required for the offer and sale of the Securities and Underlying Securities by the Company to the Investors as contemplated hereby.

&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) <u>No General Solicitation</u>. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities or Underlying Securities by any form of general solicitation or general advertising. The Company has offered the Securities and Underlying Securities for sale only to the Investors and certain other "accredited investors" within the meaning of Rule 501 under the Securities Act.

***SECURITIES PURCHASE AGREEMENT***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Acknowledgment Regarding Investors' Purchase of Securities</u>. The Company acknowledges and agrees that each of the Investors is acting solely in the capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Investor or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Investors' purchase of the Securities. The Company further represents to each Investor that the Company's decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Foreign Corrupt Practices</u>. The Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law; or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Office of Foreign Assets Control</u>. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("**OFAC**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Money Laundering</u>. The operations of the Company are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "**Money Laundering Laws**"), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

Section 3.02 <u>Representations and Warranties of the Investors</u>.

Each Investor, for itself and for no other Investor, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such 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;(a) <u>Authority; Organization</u>. Such Investor has full power and authority (and, if such Investor is an individual, the capacity) to enter into this Agreement and to perform all obligations required to be performed by it hereunder. If an entity, such Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate, limited liability company or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Investor of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate or similar action on the part of such Investor. Each Transaction Document to which it is a party has been duly executed by such Investor, and when delivered by such Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Investor, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Own Account</u>. Such Investor understands that the Securities are and Underlying Securities will be 'restricted securities' and have not been registered under the Securities Act or any applicable State Securities Law and is acquiring the Securities and any Underlying Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable State Securities Law, has no present intention of distributing any of such Securities or Underlying Securities in violation of the Securities Act or any applicable State Securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution the same (this representation and warranty not limiting such Investor's right to sell the Securities and Underlying Securities in compliance with applicable federal and State Securities Laws) in violation of the Securities Act or any applicable State Securities Law. Such Investor is acquiring the Securities and any Underlying Securities in the ordinary course of its investment 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;(c) <u>Non-Transferrable</u>. Such Investor agrees: (i) that the Investor will not sell, assign, pledge, give, transfer or otherwise dispose of the Securities or Underlying Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable State Securities Laws; (ii) that the certificates representing the Securities and Underlying Securities will bear a legend making reference to the foregoing restrictions; and (iii) that the Company and its Affiliates shall not be required to give effect to any purported transfer of such Securities and Underlying Securities except upon compliance with the foregoing restrictions.

&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) <u>Investor Status</u>. Such Investor is an "accredited investor" as defined in Rule 501(a) under the Securities Act. The undersigned agrees to furnish any additional information requested by the Company or any of its Affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the purchase and sale of the Securities. The undersigned has completed the Confidential Investor Questionnaire contained in <u>Appendix A</u> and the information contained therein is complete and accurate as of the date thereof and is hereby affirmed as of the Closing Date. Any information that has been furnished or that will be furnished by the undersigned to evidence its status as an accredited investor is accurate and complete, and does not contain any misrepresentation or material omission.

&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) <u>Experience of Such Investor</u>. Such Investor, either alone or together with its representatives, has such knowledge, sophistication, and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities and Underlying Securities, and has so evaluated the merits and risks of such investment. Such Investor is able to bear the economic risk of an investment in the Securities and Underlying Securities and, at the present time, is able to afford a complete loss of such investment.

&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) <u>No Trading Market</u>. Such Investor acknowledges that there is currently no trading or public market for the Securities and Underlying Securities and that none is expected to develop for the Securities unless a Liquidity Event occurs.

&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) <u>General Solicitation</u>. Such Investor undersigned acknowledges that neither the Company nor any other person offered to sell the Securities to it by means of any form of general solicitation or advertising, including but not limited to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio; or (ii) any seminar or meeting whose attendees were invited by any general solicitation or general advertising.

&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) <u>Confidentiality</u>. Other than to other Persons party to this Agreement and its advisors who have agreed to keep information confidential or have a fiduciary obligation to keep such information confidential, such Investor has maintained the confidentiality of all disclosures made to it in connection with the transaction (including the existence and terms of this transaction).

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Foreign Investor</u>. If such Investor is not a United States person, such Investor represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities and Underlying Securities or any use of this Agreement, including: (i) the legal requirements within its jurisdiction for the purchase of the Securities and any Underlying Securities; (ii) any foreign exchange restrictions applicable to such purchase; (iii) any governmental or other consents that may need to be obtained; and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities or Underlying Securities. The Investor further represents that its payment for, and its continued beneficial ownership of the Securities and any Underlying Securities, will not violate any applicable securities or other laws of its jurisdiction.

&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) <u>Information from Company</u>. Such Investor and its purchaser representatives or investment managers, if any, have been afforded the opportunity to obtain any information necessary to verify the accuracy of any representations or information presented by the Company in this Agreement and have had all inquiries to the Company answered, and have been furnished all requested materials, relating to the Company and the Offering and sale of the Securities and anything set forth in the Transaction Documents. Neither the Investor nor the Investor's purchaser's representatives or investment managers, if any, have been furnished any offering literature by the Company or any of its Affiliates, associates or agents other than the Transaction Documents, and the agreements referenced therein.

&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) <u>Speculative Nature of Investment; Risk Factors</u>. **SUCH INVESTOR UNDERSTANDS THAT AN INVESTMENT IN THE SECURITIES AND UNDERLYING SECURITIES INVOLVES A HIGH DEGREE OF RISK.** Such Investor acknowledges that: (i) any projections, forecasts or estimates as may have been provided to the Investor are purely speculative and cannot be relied upon to indicate actual results that may be obtained through this investment; any such projections, forecasts and estimates are based upon assumptions which are subject to change and which are beyond the control of the Company or its management; (ii) the tax effects which may be expected by this investment are not susceptible to absolute prediction, and new developments and rules of the Internal Revenue Service, audit adjustment, court decisions or legislative changes may have an adverse effect on one or more of the tax consequences of this investment; and (iii) the Investor has been advised to consult with his own advisor regarding legal matters and tax consequences involving this investment. The Investor represents that the Investor's investment objective is speculative in that the Investor seeks the maximum total return through an investment in a broad spectrum of securities, which involves a higher degree of risk than other investment styles and therefore the Investor's risk exposure is also speculative. The Securities offered hereby are highly speculative and involve a high degree of risk and Investor should only purchase these securities if Investor can afford to lose their entire investment.

&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) <u>Money Laundering</u>. If an entity, the operations of such Investor are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Money Laundering Laws, and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

**ARTICLE IV.**

**OTHER AGREEMENTS OF THE PARTIES**

Section 4.01 <u>Transfer Restrictions</u>.

&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) The Securities and Underlying Securities may only be disposed of in compliance with state and federal securities laws. The Securities and Underlying Securities may not be sold or transferred by the Investors without the written consent of the Company, which shall not be unreasonably withheld. As a condition of such sale or transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of an Investor under this Agreement.

***SECURITIES PURCHASE AGREEMENT***

&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) The Investors agree to the imprinting, so long as is required by this Section 4.01, of a legend on any of the Securities and Underlying Securities in the following form:

[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO 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;(c) Each Investor, severally and not jointly with the other Investors, agrees that such Investor will sell any Securities and Underlying Securities only pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities or Underlying Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.01 is predicated upon the Company's reliance upon this understanding.

&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) Each Investor understands that upon conversion of a Note, it will acquire shares of Common Stock in and become a shareholder of the Company.

Section 4.02 <u>Acknowledgment of Dilution</u>. The Company acknowledges that the issuance of the Underlying Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Securities pursuant to the Securities, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Investor and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

Section 4.03 <u>Integration</u>. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities or Underlying Securities to the Investors in a manner that would require the registration under the Securities Act of the sale of the Securities to the Investors.

Section 4.04 <u>Publicity</u>. The Company and each Investor shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Investor shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company with respect to any press release of any Investor, or without the prior consent of each Investor with respect to any press release of the Company mentioning such Investor, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.

***SECURITIES PURCHASE AGREEMENT***

Section 4.05 <u>Indemnification of Investors</u>. The Company shall indemnify, reimburse and hold harmless the Investors and their respective partners, members, shareholders, officers, directors, employees and agents (and any other persons with other titles that have similar functions) (collectively, "**Indemnitees**") from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses, of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from: (i) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents; and (ii) any action instituted against such Indemnitee in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Indemnitee, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Indemnitee's representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Indemnitee may have with any such stockholder or any violations by such Indemnitee of state or federal securities laws or any conduct by such Indemnitee which results from the gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable decision of a court of competent jurisdiction).

Section 4.06 <u>Equal Treatment of Investors</u>. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. Further, the Company shall not make any payment of principal or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Investor by the Company and negotiated separately by each Investor, and is intended for the Company to treat the Investors as a class and shall not in any way be construed as the Investors acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

Section 4.07 <u>Form D; Blue Sky Filings</u>. The Company agrees to timely file a Form D with respect to the Securities and Underlying Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Investor. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities and Underlying Securities for, sale to the Investors under applicable State Securities Laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Investor.

Section 4.08 <u>Use of Proceeds</u>. The Company shall use the net proceeds received from the sale of the Securities at the Closing Date for general corporate purposes and general working capital requirements, including the payment of transaction-related fees and expenses.

Section 4.09 <u>Preemptive Rights.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Preemptive Rights. Subject to the exceptions set forth in subsection (c) below, if the Company proposes to issue any New Securities, the Company shall deliver written notice (an "Issuance Notice") to each Purchaser at least thirty (30) days prior to the proposed issuance date, which notice shall set forth the material terms and conditions of such issuance, including (i) the type and number of New Securities to be issued, (ii) the purchase price and payment terms, and (iii) the proposed issuance date. Each Purchaser shall have the right, exercisable by written notice to the Company within twenty (20) days after receipt of the Issuance Notice, to purchase up to such Purchaser's Pro Rata Share of the New Securities at the same price and on the same terms as set forth in the Issuance Notice. For purposes of this Section, "Pro Rata Share" means, with respect to each Purchaser, a fraction, the numerator of which is the number of shares of Common Stock held by such Purchaser immediately prior to the proposed issuance (calculated on a fully-diluted, as-converted basis), and the denominator of which is the total number of shares of Common Stock outstanding immediately prior to the proposed issuance (calculated on a fully-diluted, as-converted basis).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Individual Preemptive Rights. In addition to the rights set forth in Section 4.09(a) above, Bradford Johnsonand Bert Bersolis (each, a "**Specified Holder**") shall each have the right to purchase New Securities in an amount sufficient to maintain such Specified Holder's percentage ownership of the Company (on a fully-diluted, as-converted basis) as of immediately prior to such issuance. This right shall be in addition to, and not in lieu of, any rights such Specified Holder may have under Section 4.09(a) as a Purchaser. (c) Excluded Issuances. The preemptive rights set forth in Sections 4.09(a) and (b) shall not apply to any issuance of: (i) shares of Common Stock or options to purchase Common Stock issued to employees, officers, directors, or consultants of the Company pursuant to any equity incentive plan approved by the Board of Directors; (ii) securities issued upon the conversion or exercise of any convertible securities, options, or warrants outstanding as of the date hereof; (iii) securities issued as consideration in connection with a bona fide acquisition or strategic transaction approved by the Board of Directors; (iv) securities issued in connection with any stock split, stock dividend, or recapitalization; or (v) securities issued in an underwritten public offering registered under the Securities Act.

***SECURITIES PURCHASE AGREEMENT***

Section 4.10 <u>Lock-Up Provisions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Purchasers
 Lock-Up Exemption. Notwithstanding any other provision of this Agreement or any other agreement
 to which the Company is a party, the Purchasers shall not be subject to any lock-up provision
 and shall be permitted to sell the Securities immediately upon the listing of the Common
 Stock on a National Securities Exchange. The Purchasers may provide liquidity for the Company's
 stock in the public market through sales of the Securities.

Section 4.11. <u>Tag-Along and Drag-Along Rights</u>. The Purchasers shall have tag-along and drag-along rights with respect to all of the Purchasers' stock positions in the Company, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Tag-Along Rights</u>. If Jeffrey Low, Jordan Low, and any other stockholder holding at least five percent
 (5%) of the outstanding Common Stock (collectively, the "Selling Stockholders")
 propose to sell, in the aggregate, shares of Common Stock to a third party in a single transaction
 or series of related transactions representing more than [10%] of the outstanding Common
 Stock (excluding (i) any public offering, (ii) sales pursuant to Rule 144 or other routine
 market transactions, (iii) transfers to affiliates or for estate planning purposes, (iv)
 sales to the Company or its designees, and (v) transfers in connection with a Change of Control
 subject to Section 4.11(b) below), the Selling Stockholders shall give the Purchasers written
 notice at least ten (10) days prior to the proposed closing. The Purchasers shall have the
 right, exercisable by written notice within five (5) business days of receipt, to participate
 in such sale on the same terms and conditions, pro rata based on the Purchasers' percentage
 ownership relative to the Selling Stockholders' aggregate ownership. The Purchasers'
 participation shall be subject to the Purchasers executing the same transaction documents
 and making the same representations, warranties, and indemnities as the Selling Stockholders
 (on a several and not joint basis, and capped at the net proceeds received).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Drag-Along Rights</u>. If the Selling Stockholders, who in the aggregate hold a majority of the outstanding
 Common Stock, together with the approval of the Board of Directors, approve a bona fide Change
 of Control transaction with an unaffiliated third party, the Selling Stockholders may require
 the Purchasers to (i) sell all of the Purchasers' shares on the same terms and conditions
 as the Selling Stockholders, (ii) vote all shares in favor of the transaction, (iii) waive
 any dissenters' or appraisal rights, and (iv) execute all customary transaction documents,
 including representations, warranties, and indemnities (provided that the Purchasers'
 indemnification obligations shall be several and not joint, limited to breaches of the Purchasers'
 individual representations and a pro rata share of general indemnities, and capped at the
 net proceeds received by the Purchasers). The consideration per share received by the Purchasers
 shall be the same form and amount as received by the Selling Stockholders for shares of the
 same class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Board Representation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Board Seat</u>. Effective as of the Closing, the Company shall appoint Bert Basolis to serve as
 a member <u>of the Board of Directors</u>. Mr. Basolis shall serve as a director for a term
 of five (5) years from the Closing Date, or until his earlier voluntary resignation or removal
 by the stockholders of the Company. The Company shall not remove Mr. Basolis from the Board
 of Directors without his consent during such five-year term, except for cause <u>.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Board Observer Rights</u>. Bradford Johnson shall have the right to attend all meetings of the
 Board of Directors in a non-voting observer capacity for so long as Mr. Johnson remains a
 shareholder of the Company. The Company shall provide Mr. Johnson with copies of all notices,
 minutes, consents, and other materials provided to directors at the same time such materials
 are provided to directors. Mr. Johnson shall be entitled to participate in discussions at
 Board meetings but shall not be entitled to vote on any matter.

Section 4.12 <u>Stock Price Support</u>. The Company shall use its best efforts to support the stock price of the Common Stock following any listing on a National Securities Exchange, including but not limited to timely disclosure of material information, maintenance of good corporate governance practices, and such other reasonable measures as may be appropriate under the circumstances.

***SECURITIES PURCHASE AGREEMENT***

Section 4.13 <u>Most Favored Nations</u>. If the Company issues any equity securities to any other investor on terms more favorable than those provided to the Purchasers hereunder (including, without limitation, with respect to price, anti-dilution protections, board rights, information rights, or other investor protections), the Company shall promptly notify the Purchasers and, at the Purchasers' election, amend this Agreement and the other Transaction Documents to provide the Purchasers with such more favorable terms.

**ARTICLE V.**

**MISCELLANEOUS**

Section 5.01 <u>Fees and Expenses</u>. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Investors.

Section 5.02 <u>Entire Agreement</u>. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

Section 5.03 <u>Notices</u>. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (i) one Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Business Day, with written confirmation of successful transmission; (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day; (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service; or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

Section 5.04 <u>Amendments; Waivers</u>. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Investors holding at least a majority in principal amount of the Notes then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

Section 5.05 <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Investor (other than by merger). Any Investor may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns or transfers any Securities, provided that such transfer complies with the terms of this Agreement and all applicable federal and State Securities Laws and that such transferee agrees in writing with the Company to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the 'Investors'.

Section 5.06 <u>No Third-Party Beneficiaries</u>. Except for the Indemnitees named herein, who are intended third-party beneficiaries of this Agreement, including the representations and warranties made by the Company hereunder, this Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

***SECURITIES PURCHASE AGREEMENT***

Section 5.07 <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, members, managers, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to the Transaction Documents or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred in the investigation, preparation and prosecution of such Action or Proceeding.

Section 5.08 <u>Survival</u>. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities and issuance of Underlying Securities.

Section 5.09 <u>Execution</u>. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page was an original thereof.

Section 5.10 <u>Severability</u>. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

Section 5.11 <u>Rescission and Withdrawal Right</u>. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Investor may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of a conversion of a Note, the Investor shall be required to return any shares of Common Stock subject to any such rescinded conversion or exercise notice.

***SECURITIES PURCHASE AGREEMENT***

Section 5.12 <u>Replacement of Securities</u>. If any certificate or instrument evidencing any Securities or Underlying Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities or Underlying Securities.

Section 5.13 <u>Remedies</u>. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investors and the Company will be entitled to seek specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

Section 5.14 <u>Payment Set Aside</u>. To the extent that the Company makes a payment or payments to any Investor pursuant to any Transaction Document or an Investor enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

Section 5.15 <u>Independent Nature of Investors' Obligations and Rights</u>. The obligations of each Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance or non-performance of the obligations of any other Investor under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. Each Investor has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents. The Company has elected to provide all Investors with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Investors.

Section 5.16 <u>Reserved</u>.

Section 5.17 <u>Construction</u>. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the shares of Common Stock that occur after the date of this Agreement.

Section 5.18 <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

Section 5.19 <u>WAIVER OF JURY TRIAL</u>. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

[*SIGNATURE PAGES FOLLOW*]

***SECURITIES PURCHASE AGREEMENT***

**IN WITNESS WHEREOF**, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date below.

---

| | |
|:---|:---|
| **First Breach Inc.** | **First Breach Inc.** |
| By: | /s/ Jeffrey Low |
| Name: | Jeffrey Low |
| Title: | CEO |
| **INVESTORS:** | **INVESTORS:** |
| The Investors executing the Signature Page in the form attached hereto as <u>Annex A</u> and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof. | The Investors executing the Signature Page in the form attached hereto as <u>Annex A</u> and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof. |

---

[Signature Page to Securities Purchase Agreement]

***SECURITIES PURCHASE AGREEMENT***

**Annex A**

**Securities Purchase Agreement Investor Counterpart Signature Page**

The undersigned, desiring to: (i) enter into this Securities Purchase Agreement dated as of April __, 2026 ("**Agreement**"), with First Breach Inc. ("**Company**"), in the form furnished to the undersigned; and (ii) purchase the Securities as set forth below, hereby agrees to purchase such Securities from the Company as of the Closing and further agrees to join the Agreement as a party thereto, with all the rights and privileges appertaining thereto, and to be bound in all respects by the terms and conditions thereof. The undersigned specifically acknowledges having read the representations in the Agreement section entitled '<u>Representations and Warranties of the Investors,</u>' and hereby represents that the statements contained therein are complete and accurate with respect to the undersigned as an Investor.

---

| | | |
|:---|:---|:---|
| **PURCHASER** (if an individual): | **PURCHASER** (if an individual): | **PURCHASER** (if an entity): |
| By | */s/ C. Kenneth Leith* |  |
|  |  | (Legal Name of Entity) |
| Name: | C. Kenneth Leith |  |
| Date: | April 24, 2026 |  |
| **PUCHASER** (if investing jointly) | **PUCHASER** (if investing jointly) | By |
| By |  | Name: |
| Name: |  | Title: |
| Date: |  | Date: |
| Fax No. ________________________ | Fax No. ________________________ | Fax No.: ________________________ |

---

State/Country of Domicile or Formation: _____________________________

Aggregate Subscription Amount: <u>$150,000</u>

SS/EIN/TIN: __________________________________________________

Address: ____________________________________________________

Telephone: __________________________________________________

E-Mail: ______________________________________________________

[Investor Counter Signature Page to Securities Purchase Agreement]

**<u>APPENDIX A</u>**

**<u>CONFIDENTIAL INVESTOR QUESTIONNAIRE</u>**

**<u>APPENDIX B</u>**

**<u>FORM OF SENIOR SECURED PROMISSORY NOTE</u>**

**<u>APPENDIX C</u>**

**<u>FORM OF WARRANT</u>**

**<u>APPENDIX D</u>**

**<u>FORM OF SECURITY AGREEMENT</u>**

**<u>APPENDIX E</u>**

**<u>WIRING INSTRUCTIONS</u>**

**<u>(see attached)</u>**

**<u>APPENDIX F</u>**

**<u>RBW ENGAGEMENT AGREEMENT COMMISSION SCHEDULE</u>**

**<u>(see attached)</u>**

## Exhibit 10.10

**Exhibit 10.10** 

 

<u>SENIOR SECURED CONVERTIBLE PROMISSORY NOTE</u>

 

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

---

| | |
|:---|:---|
| Original Issue Date: April 24, 2026 | $7692307.70 |

---

**FIRST BREACH INC.**

<u>SENIOR SECURED CONVERTIBLE PROMISSORY NOTE</u>

THIS SENIOR SECURED CONVERTIBLE PROMISSORY NOTE (this <u>"Note</u>") is one of a series of duly authorized and validly issued Senior Secured Convertible Promissory Notes of First Breach Inc., a Delaware corporation (the "<u>Company</u>"), designated as such by the Company (collectively with this Note, the "<u>Notes</u>").

FOR VALUE RECEIVED, the Company promises to pay to [_______________], or its registered assigns ("<u>Holder</u>"), the principal sum of Seven Million Six Hundred Ninety-Two Thousand Three Hundred Seven and 70/100 U.S. Dollars ($7,692,307.70) (the "<u>Principal Amount</u>"), which Principal Amount reflects an original issue discount of thirty-five percent (35%) (the "<u>Original Issue Discount</u>" or "<u>OID</u>") from the purchase price paid by the Holder (the "<u>Purchase Price</u>"), on the date which is twelve (12) months from the Original Issue Date (the "<u>Maturity Date</u>"). For the avoidance of doubt and the purposes of clarity, the Principal Amount of this Note (inclusive of the Original Issue Discount) shall be determined by dividing the Purchase Price by 0.65 (by way of example, for each $1,000,000 of Purchase Price, the Principal Amount would equal $1,538,461.54). The Company further promises to pay interest to the Holder on the aggregate then outstanding Principal Amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

Section 1. <u>Definitions</u>. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

"<u>Bankruptcy Event</u>" means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 75 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 75 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due, or (h) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

"<u>Business Day</u>" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"<u>Conversion</u>" means a conversion of this Note pursuant to Section 4.

"<u>Conversion Amount</u>" means the sum of (a) the outstanding Principal Amount of this Note, plus (b) all accrued and unpaid interest, costs, expenses and liquidated damages due in respect of this Note.

"<u>Conversion Date</u>" means the date of any Conversion in accordance with the terms of this Note.

"<u>Conversion Price</u>" means $8.00 per share, subject to adjustment as provided herein; provided, however, that in no event shall the Conversion Price be less than $5.60 per share (the "<u>Floor Price</u>").

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Conversion Shares</u>" means the shares of Common Stock issuable upon conversion of this Note.

"<u>Common Stock</u>" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Event of Default</u>" shall have the meaning set forth in Section 6(a).

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Indebtedness</u>" means any liabilities of the Company for borrowed money or amounts owed and all guaranties made by the Company of borrowed money or amounts owed by others.

"<u>Lead Investors</u>" means persons holding a majority in principal amount of the Notes.

"<u>Liquidity Event</u>" means the date on which the Company completes a direct listing of its Common Stock on a National Securities Exchange.

"<u>National Securities Exchange</u>" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"<u>Note Register</u>" shall have the meaning set forth in Section 2(b).

<u>"Original Issue Date</u>" means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Notes.

"<u>Original Issue Discount</u>" or "<u>OID</u>" means the difference between the Principal Amount and the Purchase Price, which equals thirty-five percent (35%) of the Principal Amount.

"<u>Purchase Price</u>" means the amount paid by the Holder to acquire this Note.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Prepayment Amount</u>" means the sum of (a) the outstanding Principal Amount of this Note, plus (b) any accrued and unpaid interest hereon.

"<u>Purchase Agreement</u>" means the Securities Purchase Agreement, dated as of April 24, 2026 by and among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Capitalized terms not otherwise defined herein are defined as set forth in the Purchase Agreement.

Section 2. <u>Interest; and Prepayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Interest Calculations</u>. Interest shall accrue on the outstanding Principal Amount of this Note from and including the Original Issue Date at the rate of six percent (6%) per annum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Prepayment</u>. The Company shall have the option to prepay this Note without premium or penalty at any time after the Original Issue Date at an amount equal to the Prepayment Amount in cash at the option of the Lead Investors.

Section 3. <u>Registration of Transfers and Exchanges</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Different Denominations</u>. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Investment Representations</u>. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Reliance on Note Register</u>. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

Section 4. <u>Conversion</u>**.**

&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) <u>Conversion</u>. This Note shall be convertible as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Mandatory Conversion</u>. On the date of a Liquidity Event, the Holder shall convert the Conversion Amount into Conversion Shares at the Conversion Price by following the mechanics of conversion set forth in Section 4(b). The number of Conversion Shares issuable upon conversion shall be determined by dividing the Conversion Amount by the Conversion Price.

&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) <u>Mechanics of Conversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Conversion Notices</u>. At least seven (7) calendar days prior to the consummation of a Liquidity Event the Company will provide the Holder with written notice, which includes notice via email, of the Liquidity Event (the "**Liquidity Event Notice**"). On the date of the Liquidity Event, Holder shall be deemed to have converted all of the Conversion Amount of this Note into Conversion Shares at the Conversion Price, and shall deliver to the Company the original Note instrument (or a notice to the effect that such original Note has been lost, stolen or destroyed). Holder's failure to timely deliver Holder's Note shall not delay the effective date of conversion or the date of Note termination, both of which shall be the date of the Liquidity Event. For the purposes of clarity hereunder and illustrating the foregoing, if on the date of the Liquidity Event the Principal Amount of this Note is $7,692,308, then the number of Conversion Shares issuable upon a Liquidity Event shall be 961,538 (i.e., the result obtained by dividing (x) $7,692,308, by (y) $8.00 [the Conversion Price]).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Delivery of Conversion Shares Upon Conversion</u>. Not later than three (3) Business Days after the Conversion Date (the "**Delivery Date**"), the Company shall deliver, or cause to be delivered, to the Holder the Conversion 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;(iii) <u>Failure to Deliver Conversion Shares</u>. If, in the case of any voluntary Conversion, the Conversion Shares are not delivered to or as directed by the applicable Holder by the Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such Conversion Shares to rescind the Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Conversion Shares (if any) issued to such Holder pursuant to the rescinded Conversion 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;(iv) <u>Obligation Absolute; Partial Liquidated Damages</u>. The Company's obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any set off, counter claim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person (unless the Conversion would violate any law applicable to the Company), and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; *provided, however,* that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the Conversion Amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the Payment Amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such Conversion Shares pursuant to Section 4(b)(ii) by the Delivery Date, the Holder may seek to enforce damages pursuant to any other section hereof or under 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;(v) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Transfer Taxes and Expenses</u>. The issuance of Conversion Shares on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance 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. The Company shall pay all attorney fees required for the issuance of attorney legal opinions for removal of restrictive legends on Conversion Shares.

Section 5. <u>Certain Adjustments</u>**.**

&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) <u>Dividends and Splits</u>. If the Company, at any time while this Note is outstanding: (i) pays a dividend or otherwise makes a distribution or distributions payable in Company ownership interests (which, for avoidance of doubt, shall not include any Conversion Shares issued by the Company upon conversion of, or payment of interest on, the Notes), (ii) subdivides outstanding Company ownership interests into a larger number of ownership interests , (iii) combines (including by way of a reverse split) outstanding Company ownership interests into a smaller number of ownership interests or (iv) issues, in the event of a reclassification of Company ownership interests, any ownership interests of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of Company ownership interests outstanding immediately before such event, and of which the denominator shall be the number of Company ownership interests outstanding immediately after such event. Any adjustment made pursuant to this Section 5 shall become effective immediately after the record date for the determination of ownership entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re classification.

&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) <u>Pro Rata Distributions</u>. During such time as this Note is outstanding, if the Company shall declare or <u>make</u> any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Company ownership interests, by way of return of capital or otherwise (including, without limitation, any distribution of cash, membership interests or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Company ownership interests acquirable upon complete conversion of this Note immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such 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;(c) <u>Fundamental Transaction</u>. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Company ownership interests are permitted to sell, tender or exchange their membership interests for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Company ownership interests, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Company ownership interests or any compulsory ownership interest exchange pursuant to which the Company ownership interests is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding Company ownership interests (not including any Company ownership interests held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such purchase agreement or other business combination) (each a "Fundamental Transaction"), then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Shares that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "**Alternate Consideration**") receivable as a result of such Fundamental Transaction by a holder of the number of Company ownership interests for which this Note is convertible immediately prior to such Fundamental Transaction. For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) Company ownership interests in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Company ownership interests are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the "**Successor Entity**") to assume in writing all of the obligations of the Company under this Note and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(c) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note which is convertible for a corresponding number of securities of such Successor Entity (or its parent entity) equivalent to the Company ownership interests acquirable and receivable upon conversion of this Note prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such securities (but taking into account the relative value of Company ownership interests pursuant to such Fundamental Transaction and the value of such securities, such number of securities and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. For the purposes of this Note a Liquidity Event shall not constitute a Fundamental 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;(d) <u>Calculations</u>. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock <u>deemed</u> to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

&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) <u>Adjustment to Conversion Price</u>. Whenever the Conversion Price is adjusted pursuant to any <u>provision</u> of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

Section 6. <u>Certain Other Agreements</u>.

&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) <u>Security</u>. This Note and the other Notes are secured to the extent and in the manner set forth in the Security Agreement (as defined in the Securities Purchase Agreement).

Section 7. <u>Negative Covenants</u>. As long as any portion of this Note remains outstanding, without the prior written consent of the Lead Investors, the Company shall not, directly or indirectly:

&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) amend its charter documents, including, without limitation, its articles of formation or other formation documents and bylaws, in any manner that materially and adversely affects any rights of the Holder unless consented to by the Holders;

&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) enter into any material transaction with any Affiliate of the Company, unless such transaction is made on an arm's-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); 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;(c) enter into any agreement with respect to any of the foregoing.

Section 8. <u>Events of Default</u>.

&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) "<u>Event of Default</u>" means, wherever used herein, the occurrence and continuance of any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) any default in the payment of (A) the principal amount of any Note, or (B) interest, liquidated damages and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on the Maturity Date, by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within five (5) Business Days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) the Company shall fail to observe or perform any other covenant or agreement contained in the Notes or in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur of (A) seven (7) Business Days after notice of such failure sent by the Holder or by any other Holder is received by the Company, and (B) ten (10) Business Days after the Company has become or should have become aware of such failure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company is obligated (and not covered by clause (vi) 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;(iv) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) the Company shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $1,000,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; 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;(vi) a final non-appealable judgment by any competent court in Canada or the United States for the payment of money in an amount of at least $1,000,000 is rendered against the Company, and the same remains undischarged and unpaid for a period of 90 days during which execution of such judgment is not effectively stayed.

&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) <u>Remedies Upon Event of Default</u>. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder's election, immediately due and payable in cash. Commencing upon the occurrence of any Event of Default, the interest rate on this Note shall accrue at an interest rate equal to 10% per annum.(the "Default Rate"). Upon the payment in full of this Note and all accrued by unpaid interest hereunder (including such interest), the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 9. <u>Reserved</u>.

Section 10. <u>Miscellaneous</u>.

&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) <u>Notices</u>. Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 8(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, email address or address of the Holder appearing on the books of the Company, or if no such facsimile number or email attachment or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of: (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (Eastern time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (Pacific time) on any Business Day, (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

&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) <u>Absolute Obligation</u>. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. The Notes are a senior obligation of the Company, and this Note ranks *pari passu* with all other Notes now or hereafter issued under the terms set forth in the Purchase Agreement.

&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) <u>Lost or Mutilated Note</u>. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to 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;(d) <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in New York, New York (the "<u>New York Courts</u>"). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Waiver</u>. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Severability</u>. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief</u>. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder's right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is reasonably requested by the Holder to enable the Holder to confirm the Company's compliance with the terms and conditions of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Next Business Day</u>. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Amendments; Waivers</u>. Any modifications, amendments or waivers of the provisions hereof shall be subject to Section 5.05 of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Equal Treatment of Holder</u>. No consideration (including any modification of this Note) shall be offered or paid to any Person (as such term is defined in the Purchase Agreement) to amend or consent to a waiver or modification of any provision hereof unless the same consideration is also offered to all of the parties to the Purchase Agreement. Further, the Company shall not make any payment of principal or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Holder by the Company and negotiated separately by each Holder, and is intended for the Company to treat the Holders as a class and shall not in any way be construed as the Holders acting in concert or as a group with respect to the purchase or disposition of the Notes or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Usury</u>. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any Action or Proceeding that may be brought by any Holder in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the "<u>Maximum Rate</u>"), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Holder with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Holder to the unpaid principal amount of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Holder's election.

*(Signature Page Follows)*

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

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| | |
|:---|:---|
| **FIRST BREACH INC.** | **FIRST BREACH INC.** |
| By: | */s/ Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | CEO |

---

## Exhibit 10.11

**Exhibit 10.11**

 

<u>SENIOR SECURED CONVERTIBLE PROMISSORY NOTE</u>

 

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

---

| | |
|:---|:---|
| Original Issue Date: April 24, 2026 | $7692307.70 |

---

**FIRST BREACH INC.**

<u>SENIOR SECURED CONVERTIBLE PROMISSORY NOTE</u>

THIS SENIOR SECURED CONVERTIBLE PROMISSORY NOTE (this <u>"Note</u>") is one of a series of duly authorized and validly issued Senior Secured Convertible Promissory Notes of First Breach Inc., a Delaware corporation (the "<u>Company</u>"), designated as such by the Company (collectively with this Note, the "<u>Notes</u>").

FOR VALUE RECEIVED, the Company promises to pay to Bradford Johnson, or its registered assigns ("<u>Holder</u>"), the principal sum of Seven Million Six Hundred Ninety-Two Thousand Three Hundred Seven and 70/100 Dollars ($7,692,307.70) (the "<u>Principal Amount</u>"), which Principal Amount reflects an original issue discount of thirty-five percent (35%) (the "<u>Original Issue Discount</u>" or "<u>OID</u>") from the purchase price paid by the Holder (the "<u>Purchase Price</u>"), on the date which is twelve (12) months from the Original Issue Date (the "<u>Maturity Date</u>"). For the avoidance of doubt and the purposes of clarity, the Principal Amount of this Note (inclusive of the Original Issue Discount) shall be determined by dividing the Purchase Price by 0.65 (by way of example, for each $1,000,000 of Purchase Price, the Principal Amount would equal $1,538,461.54). The Company further promises to pay interest to the Holder on the aggregate then outstanding Principal Amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

Section 1. <u>Definitions</u>. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

"<u>Bankruptcy Event</u>" means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 75 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 75 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due, or (h) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

"<u>Business Day</u>" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"<u>Conversion</u>" means a conversion of this Note pursuant to Section 4.

"<u>Conversion Amount</u>" means the sum of (a) the outstanding Principal Amount of this Note, plus (b) all accrued and unpaid interest, costs, expenses and liquidated damages due in respect of this Note.

"<u>Conversion Date</u>" means the date of any Conversion in accordance with the terms of this Note.

"<u>Conversion Price</u>" means $8.00 per share, subject to adjustment as provided herein; provided, however, that in no event shall the Conversion Price be less than $5.20 per share (the "<u>Floor Price</u>").

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Conversion Shares</u>" means the shares of Common Stock issuable upon conversion of this Note.

"<u>Common Stock</u>" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Event of Default</u>" shall have the meaning set forth in Section 6(a).

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Indebtedness</u>" means any liabilities of the Company for borrowed money or amounts owed and all guaranties made by the Company of borrowed money or amounts owed by others.

"<u>Lead Investors</u>" means persons holding a majority in principal amount of the Notes.

"<u>Liquidity Event</u>" means the date on which the Company completes a direct listing of its Common Stock on a National Securities Exchange.

"<u>National Securities Exchange</u>" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"<u>Note Register</u>" shall have the meaning set forth in Section 2(b).

<u>"Original Issue Date</u>" means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Notes.

"<u>Original Issue Discount</u>" or "<u>OID</u>" means the difference between the Principal Amount and the Purchase Price, which equals thirty-five percent (35%) of the Principal Amount.

"<u>Purchase Price</u>" means the amount paid by the Holder to acquire this Note.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Prepayment Amount</u>" means the sum of (a) the outstanding Principal Amount of this Note, plus (b) any accrued and unpaid interest hereon.

"<u>Purchase Agreement</u>" means the Securities Purchase Agreement, dated as of April 24, 2026 by and among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Capitalized terms not otherwise defined herein are defined as set forth in the Purchase Agreement.

Section 2. <u>Interest; and Prepayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Interest Calculations</u>. Interest shall accrue on the outstanding Principal Amount of this Note from and including the Original Issue Date at the rate of six percent (6%) per annum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Prepayment</u>. The Company shall have the option to prepay this Note without premium or penalty at any time after the Original Issue Date at an amount equal to the Prepayment Amount in cash at the option of the Lead Investors.

Section 3. <u>Registration of Transfers and Exchanges</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Different Denominations</u>. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Investment Representations</u>. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Reliance on Note Register</u>. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

**Section 4.** <u>Conversion</u>.

&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) <u>Conversion</u>. This Note shall be convertible as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Mandatory Conversion</u>. On the date of a Liquidity Event, the Holder shall convert the Conversion Amount into Conversion Shares at the Conversion Price by following the mechanics of conversion set forth in Section 4(b). The number of Conversion Shares issuable upon conversion shall be determined by dividing the Conversion Amount by the Conversion Price.

&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) <u>Mechanics of Conversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Conversion Notices</u>. At least seven (7) calendar days prior to the consummation of a Liquidity Event the Company will provide the Holder with written notice, which includes notice via email, of the Liquidity Event (the "**Liquidity Event Notice**"). On the date of the Liquidity Event, Holder shall be deemed to have converted all of the Conversion Amount of this Note into Conversion Shares at the Conversion Price, and shall deliver to the Company the original Note instrument (or a notice to the effect that such original Note has been lost, stolen or destroyed). Holder's failure to timely deliver Holder's Note shall not delay the effective date of conversion or the date of Note termination, both of which shall be the date of the Liquidity Event. For the purposes of clarity hereunder and illustrating the foregoing, if on the date of the Liquidity Event the Principal Amount of this Note is $7,692,308, then the number of Conversion Shares issuable upon a Liquidity Event shall be 961,538 (i.e., the result obtained by dividing (x) $7,692,308, by (y) $8.00 [the Conversion Price]).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Delivery of Conversion Shares Upon Conversion</u>. Not later than three (3) Business Days after the Conversion Date (the "**Delivery Date**"), the Company shall deliver, or cause to be delivered, to the Holder the Conversion 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;(iii) <u>Failure to Deliver Conversion Shares</u>. If, in the case of any voluntary Conversion, the Conversion Shares are not delivered to or as directed by the applicable Holder by the Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such Conversion Shares to rescind the Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Conversion Shares (if any) issued to such Holder pursuant to the rescinded Conversion 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;(iv) <u>Obligation Absolute; Partial Liquidated Damages</u>. The Company's obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any set off, counter claim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person (unless the Conversion would violate any law applicable to the Company), and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; *provided, however,* that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the Conversion Amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the Payment Amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such Conversion Shares pursuant to Section 4(b)(ii) by the Delivery Date, the Holder may seek to enforce damages pursuant to any other section hereof or under 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;(v) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Transfer Taxes and Expenses</u>. The issuance of Conversion Shares on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance 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. The Company shall pay all attorney fees required for the issuance of attorney legal opinions for removal of restrictive legends on Conversion Shares.

**Section 5.** <u>Certain Adjustments</u>.

&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) <u>Dividends and Splits</u>. If the Company, at any time while this Note is outstanding: (i) pays a dividend or otherwise makes a distribution or distributions payable in Company ownership interests (which, for avoidance of doubt, shall not include any Conversion Shares issued by the Company upon conversion of, or payment of interest on, the Notes), (ii) subdivides outstanding Company ownership interests into a larger number of ownership interests , (iii) combines (including by way of a reverse split) outstanding Company ownership interests into a smaller number of ownership interests or (iv) issues, in the event of a reclassification of Company ownership interests, any ownership interests of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of Company ownership interests outstanding immediately before such event, and of which the denominator shall be the number of Company ownership interests outstanding immediately after such event. Any adjustment made pursuant to this Section 5 shall become effective immediately after the record date for the determination of ownership entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re classification.

&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) <u>Pro Rata Distributions</u>. During such time as this Note is outstanding, if the Company shall declare or <u>make</u> any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Company ownership interests, by way of return of capital or otherwise (including, without limitation, any distribution of cash, membership interests or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Company ownership interests acquirable upon complete conversion of this Note immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such 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;(c) <u>Fundamental Transaction</u>. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Company ownership interests are permitted to sell, tender or exchange their membership interests for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Company ownership interests, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Company ownership interests or any compulsory ownership interest exchange pursuant to which the Company ownership interests is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding Company ownership interests (not including any Company ownership interests held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such purchase agreement or other business combination) (each a "Fundamental Transaction"), then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Shares that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "**Alternate Consideration**") receivable as a result of such Fundamental Transaction by a holder of the number of Company ownership interests for which this Note is convertible immediately prior to such Fundamental Transaction. For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) Company ownership interests in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Company ownership interests are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the "**Successor Entity**") to assume in writing all of the obligations of the Company under this Note and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(c) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note which is convertible for a corresponding number of securities of such Successor Entity (or its parent entity) equivalent to the Company ownership interests acquirable and receivable upon conversion of this Note prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such securities (but taking into account the relative value of Company ownership interests pursuant to such Fundamental Transaction and the value of such securities, such number of securities and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. For the purposes of this Note a Liquidity Event shall not constitute a Fundamental 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;(d) <u>Calculations</u>. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock <u>deemed</u> to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

&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) <u>Adjustment to Conversion Price</u>. Whenever the Conversion Price is adjusted pursuant to any <u>provision</u> of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

Section 6. <u>Certain Other Agreements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Security</u>. This Note and the other Notes are secured to the extent and in the manner set forth in the Security Agreement (as defined in the Securities Purchase Agreement).

Section 7. <u>Negative Covenants</u>. As long as any portion of this Note remains outstanding, without the prior written consent of the Lead Investors, the Company shall not, directly or indirectly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) amend its charter documents, including, without limitation, its articles of formation or other formation documents and bylaws, in any manner that materially and adversely affects any rights of the Holder unless consented to by the Holders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) enter into any material transaction with any Affiliate of the Company, unless such transaction is made on an arm's-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) enter into any agreement with respect to any of the foregoing.

Section 8. <u>Events of Default</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "<u>Event of Default</u>" means, wherever used herein, the occurrence and continuance of any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

&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) any default in the payment of (A) the principal amount of any Note, or (B) interest, liquidated damages and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on the Maturity Date, by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within five (5) Business Days;

&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) the Company shall fail to observe or perform any other covenant or agreement contained in the Notes or in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur of (A) seven (7) Business Days after notice of such failure sent by the Holder or by any other Holder is received by the Company, and (B) ten (10) Business Days after the Company has become or should have become aware of such failure;

&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) a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company is obligated (and not covered by clause (vi) 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;(iv) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

&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) the Company shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $1,000,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; 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;(vi) a final non-appealable judgment by any competent court in Canada or the United States for the payment of money in an amount of at least $1,000,000 is rendered against the Company, and the same remains undischarged and unpaid for a period of 90 days during which execution of such judgment is not effectively stayed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Remedies Upon Event of Default</u>. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder's election, immediately due and payable in cash. Commencing upon the occurrence of any Event of Default, the interest rate on this Note shall accrue at an interest rate equal to 10% per annum.(the "Default Rate"). Upon the payment in full of this Note and all accrued by unpaid interest hereunder (including such interest), the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 9. <u>Reserved</u>.

Section 10. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Notices</u>. Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 8(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, email address or address of the Holder appearing on the books of the Company, or if no such facsimile number or email attachment or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of: (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (Eastern time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (Pacific time) on any Business Day, (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Absolute Obligation</u>. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. The Notes are a senior obligation of the Company, and this Note ranks *pari passu* with all other Notes now or hereafter issued under the terms set forth in the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Lost or Mutilated Note</u>. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in New York, New York (the "<u>New York Courts</u>"). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Waiver</u>. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Severability</u>. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief</u>. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder's right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is reasonably requested by the Holder to enable the Holder to confirm the Company's compliance with the terms and conditions of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Next Business Day</u>. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Amendments; Waivers</u>. Any modifications, amendments or waivers of the provisions hereof shall be subject to Section 5.05 of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Equal Treatment of Holder</u>. No consideration (including any modification of this Note) shall be offered or paid to any Person (as such term is defined in the Purchase Agreement) to amend or consent to a waiver or modification of any provision hereof unless the same consideration is also offered to all of the parties to the Purchase Agreement. Further, the Company shall not make any payment of principal or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Holder by the Company and negotiated separately by each Holder, and is intended for the Company to treat the Holders as a class and shall not in any way be construed as the Holders acting in concert or as a group with respect to the purchase or disposition of the Notes or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Usury</u>. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any Action or Proceeding that may be brought by any Holder in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the "<u>Maximum Rate</u>"), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Holder with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Holder to the unpaid principal amount of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Holder's election.

*(Signature Page Follows)*

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

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| | |
|:---|:---|
| **FIRST BREACH INC.** | **FIRST BREACH INC.** |
| By: | /s/ *Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | CEO |

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## Exhibit 10.12

**Exhibit 10.12**

 

<u>SENIOR SECURED CONVERTIBLE PROMISSORY NOTE</u>

 

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

---

| | |
|:---|:---|
| Original Issue Date: April 24, 2026 | $230769.24 |

---

**FIRST BREACH INC.**

<u>SENIOR SECURED CONVERTIBLE PROMISSORY NOTE</u>

THIS SENIOR SECURED CONVERTIBLE PROMISSORY NOTE (this <u>"Note</u>") is one of a series of duly authorized and validly issued Senior Secured Convertible Promissory Notes of First Breach Inc., a Delaware corporation (the "<u>Company</u>"), designated as such by the Company (collectively with this Note, the "<u>Notes</u>").

FOR VALUE RECEIVED, the Company promises to pay to Bradford Johnson, or its registered assigns ("<u>Holder</u>"), the principal sum of Two Hundred Thirty Thousand Seven Hundred Sixty-Nine and 24/100 U.S. Dollars (US$230,769.24) (the "<u>Principal Amount</u>"), which Principal Amount reflects an original issue discount of thirty-five percent (35%) (the "<u>Original Issue Discount</u>" or "<u>OID</u>") from the purchase price paid by the Holder (the "<u>Purchase Price</u>"), on the date which is twelve (12) months from the Original Issue Date (the "<u>Maturity Date</u>"). For the avoidance of doubt and the purposes of clarity, the Principal Amount of this Note (inclusive of the Original Issue Discount) shall be determined by dividing the Purchase Price by 0.65 (by way of example, for each $1,000,000 of Purchase Price, the Principal Amount would equal $1,538,461.54). The Company further promises to pay interest to the Holder on the aggregate then outstanding Principal Amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

Section 1. <u>Definitions</u>. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

"<u>Bankruptcy Event</u>" means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 75 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 75 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due, or (h) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

"<u>Business Day</u>" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"<u>Conversion</u>" means a conversion of this Note pursuant to Section 4.

"<u>Conversion Amount</u>" means the sum of (a) the outstanding Principal Amount of this Note, plus (b) all accrued and unpaid interest, costs, expenses and liquidated damages due in respect of this Note.

"<u>Conversion Date</u>" means the date of any Conversion in accordance with the terms of this Note.

"<u>Conversion Price</u>" means $8.00 per share, subject to adjustment as provided herein; provided, however, that in no event shall the Conversion Price be less than $5.20 per share (the "<u>Floor Price</u>").

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Conversion Shares</u>" means the shares of Common Stock issuable upon conversion of this Note.

"<u>Common Stock</u>" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Event of Default</u>" shall have the meaning set forth in Section 6(a).

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Indebtedness</u>" means any liabilities of the Company for borrowed money or amounts owed and all guaranties made by the Company of borrowed money or amounts owed by others.

"<u>Lead Investors</u>" means persons holding a majority in principal amount of the Notes.

"<u>Liquidity Event</u>" means the date on which the Company completes a direct listing of its Common Stock on a National Securities Exchange.

"<u>National Securities Exchange</u>" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"<u>Note Register</u>" shall have the meaning set forth in Section 2(b).

<u>"Original Issue Date</u>" means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Notes.

"<u>Original Issue Discount</u>" or "<u>OID</u>" means the difference between the Principal Amount and the Purchase Price, which equals thirty-five percent (35%) of the Principal Amount.

"<u>Purchase Price</u>" means the amount paid by the Holder to acquire this Note.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Prepayment Amount</u>" means the sum of (a) the outstanding Principal Amount of this Note, plus (b) any accrued and unpaid interest hereon.

"<u>Purchase Agreement</u>" means the Securities Purchase Agreement, dated as of April 24, 2026 by and among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Capitalized terms not otherwise defined herein are defined as set forth in the Purchase Agreement.

Section 2. <u>Interest; and Prepayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Interest Calculations</u>. Interest shall accrue on the outstanding Principal Amount of this Note from and including the Original Issue Date at the rate of six percent (6%) per annum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Prepayment</u>. The Company shall have the option to prepay this Note without premium or penalty at any time after the Original Issue Date at an amount equal to the Prepayment Amount in cash at the option of the Lead Investors.

Section 3. <u>Registration of Transfers and Exchanges</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Different Denominations</u>. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Investment Representations</u>. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Reliance on Note Register</u>. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

**Section 4.** <u>Conversion</u>.

&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) <u>Conversion</u>. This Note shall be convertible as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Mandatory Conversion</u>. On the date of a Liquidity Event, the Holder shall convert the Conversion Amount into Conversion Shares at the Conversion Price by following the mechanics of conversion set forth in Section 4(b). The number of Conversion Shares issuable upon conversion shall be determined by dividing the Conversion Amount by the Conversion Price.

&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) <u>Mechanics of Conversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Conversion Notices</u>. At least seven (7) calendar days prior to the consummation of a Liquidity Event the Company will provide the Holder with written notice, which includes notice via email, of the Liquidity Event (the "**Liquidity Event Notice**"). On the date of the Liquidity Event, Holder shall be deemed to have converted all of the Conversion Amount of this Note into Conversion Shares at the Conversion Price, and shall deliver to the Company the original Note instrument (or a notice to the effect that such original Note has been lost, stolen or destroyed). Holder's failure to timely deliver Holder's Note shall not delay the effective date of conversion or the date of Note termination, both of which shall be the date of the Liquidity Event. For the purposes of clarity hereunder and illustrating the foregoing, if on the date of the Liquidity Event the Principal Amount of this Note is $7,692,308, then the number of Conversion Shares issuable upon a Liquidity Event shall be 961,538 (i.e., the result obtained by dividing (x) $7,692,308, by (y) $8.00 [the Conversion Price]).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Delivery of Conversion Shares Upon Conversion</u>. Not later than three (3) Business Days after the Conversion Date (the "**Delivery Date**"), the Company shall deliver, or cause to be delivered, to the Holder the Conversion 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;(iii) <u>Failure to Deliver Conversion Shares</u>. If, in the case of any voluntary Conversion, the Conversion Shares are not delivered to or as directed by the applicable Holder by the Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such Conversion Shares to rescind the Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Conversion Shares (if any) issued to such Holder pursuant to the rescinded Conversion 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;(iv) <u>Obligation Absolute; Partial Liquidated Damages</u>. The Company's obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any set off, counter claim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person (unless the Conversion would violate any law applicable to the Company), and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; *provided, however,* that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the Conversion Amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the Payment Amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such Conversion Shares pursuant to Section 4(b)(ii) by the Delivery Date, the Holder may seek to enforce damages pursuant to any other section hereof or under 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;(v) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Transfer Taxes and Expenses</u>. The issuance of Conversion Shares on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance 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. The Company shall pay all attorney fees required for the issuance of attorney legal opinions for removal of restrictive legends on Conversion Shares.

**Section 5.** <u>Certain Adjustments</u>.

&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) <u>Dividends and Splits</u>. If the Company, at any time while this Note is outstanding: (i) pays a dividend or otherwise makes a distribution or distributions payable in Company ownership interests (which, for avoidance of doubt, shall not include any Conversion Shares issued by the Company upon conversion of, or payment of interest on, the Notes), (ii) subdivides outstanding Company ownership interests into a larger number of ownership interests , (iii) combines (including by way of a reverse split) outstanding Company ownership interests into a smaller number of ownership interests or (iv) issues, in the event of a reclassification of Company ownership interests, any ownership interests of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of Company ownership interests outstanding immediately before such event, and of which the denominator shall be the number of Company ownership interests outstanding immediately after such event. Any adjustment made pursuant to this Section 5 shall become effective immediately after the record date for the determination of ownership entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re classification.

&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) <u>Pro Rata Distributions</u>. During such time as this Note is outstanding, if the Company shall declare or <u>make</u> any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Company ownership interests, by way of return of capital or otherwise (including, without limitation, any distribution of cash, membership interests or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Company ownership interests acquirable upon complete conversion of this Note immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such 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;(c) <u>Fundamental Transaction</u>. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Company ownership interests are permitted to sell, tender or exchange their membership interests for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Company ownership interests, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Company ownership interests or any compulsory ownership interest exchange pursuant to which the Company ownership interests is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding Company ownership interests (not including any Company ownership interests held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such purchase agreement or other business combination) (each a "Fundamental Transaction"), then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Shares that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "**Alternate Consideration**") receivable as a result of such Fundamental Transaction by a holder of the number of Company ownership interests for which this Note is convertible immediately prior to such Fundamental Transaction. For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) Company ownership interests in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Company ownership interests are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the "**Successor Entity**") to assume in writing all of the obligations of the Company under this Note and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(c) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note which is convertible for a corresponding number of securities of such Successor Entity (or its parent entity) equivalent to the Company ownership interests acquirable and receivable upon conversion of this Note prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such securities (but taking into account the relative value of Company ownership interests pursuant to such Fundamental Transaction and the value of such securities, such number of securities and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. For the purposes of this Note a Liquidity Event shall not constitute a Fundamental 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;(d) <u>Calculations</u>. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock <u>deemed</u> to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

&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) <u>Adjustment to Conversion Price</u>. Whenever the Conversion Price is adjusted pursuant to any <u>provision</u> of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

Section 6. <u>Certain Other Agreements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Security</u>. This Note and the other Notes are secured to the extent and in the manner set forth in the Security Agreement (as defined in the Securities Purchase Agreement).

Section 7. <u>Negative Covenants</u>. As long as any portion of this Note remains outstanding, without the prior written consent of the Lead Investors, the Company shall not, directly or indirectly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) amend its charter documents, including, without limitation, its articles of formation or other formation documents and bylaws, in any manner that materially and adversely affects any rights of the Holder unless consented to by the Holders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) enter into any material transaction with any Affiliate of the Company, unless such transaction is made on an arm's-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) enter into any agreement with respect to any of the foregoing.

Section 8. <u>Events of Default</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "<u>Event of Default</u>" means, wherever used herein, the occurrence and continuance of any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

&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) any default in the payment of (A) the principal amount of any Note, or (B) interest, liquidated damages and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on the Maturity Date, by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within five (5) Business Days;

&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) the Company shall fail to observe or perform any other covenant or agreement contained in the Notes or in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur of (A) seven (7) Business Days after notice of such failure sent by the Holder or by any other Holder is received by the Company, and (B) ten (10) Business Days after the Company has become or should have become aware of such failure;

&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) a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company is obligated (and not covered by clause (vi) 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;(iv) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

&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) the Company shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $1,000,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; 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;(vi) a final non-appealable judgment by any competent court in Canada or the United States for the payment of money in an amount of at least $1,000,000 is rendered against the Company, and the same remains undischarged and unpaid for a period of 90 days during which execution of such judgment is not effectively stayed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Remedies Upon Event of Default</u>. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder's election, immediately due and payable in cash. Commencing upon the occurrence of any Event of Default, the interest rate on this Note shall accrue at an interest rate equal to 10% per annum.(the "Default Rate"). Upon the payment in full of this Note and all accrued by unpaid interest hereunder (including such interest), the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 9. <u>Reserved</u>.

Section 10. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Notices</u>. Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 8(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, email address or address of the Holder appearing on the books of the Company, or if no such facsimile number or email attachment or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of: (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (Eastern time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (Pacific time) on any Business Day, (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Absolute Obligation</u>. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. The Notes are a senior obligation of the Company, and this Note ranks *pari passu* with all other Notes now or hereafter issued under the terms set forth in the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Lost or Mutilated Note</u>. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in New York, New York (the "<u>New York Courts</u>"). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Waiver</u>. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Severability</u>. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief</u>. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder's right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is reasonably requested by the Holder to enable the Holder to confirm the Company's compliance with the terms and conditions of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Next Business Day</u>. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Amendments; Waivers</u>. Any modifications, amendments or waivers of the provisions hereof shall be subject to Section 5.05 of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Equal Treatment of Holder</u>. No consideration (including any modification of this Note) shall be offered or paid to any Person (as such term is defined in the Purchase Agreement) to amend or consent to a waiver or modification of any provision hereof unless the same consideration is also offered to all of the parties to the Purchase Agreement. Further, the Company shall not make any payment of principal or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Holder by the Company and negotiated separately by each Holder, and is intended for the Company to treat the Holders as a class and shall not in any way be construed as the Holders acting in concert or as a group with respect to the purchase or disposition of the Notes or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Usury</u>. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any Action or Proceeding that may be brought by any Holder in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the "<u>Maximum Rate</u>"), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Holder with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Holder to the unpaid principal amount of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Holder's election.

*(Signature Page Follows)*

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

---

| | |
|:---|:---|
| **FIRST BREACH INC.** | **FIRST BREACH INC.** |
| By: | /s/ *Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | CEO |

---

## Exhibit 10.13

**Exhibit 10.13** 

**SECURITY AGREEMENT**

This Security Agreement (the "<u>Agreement</u>") is made as of April 24, 2026 by and between First Breach Inc., a Delaware corporation (the "<u>Debtor</u>"), in favor of each of the parties listed on <u>Exhibit A</u> hereto, which may be added to from time to time (each a "<u>Secured Party</u>" and collectively the "<u>Secured Parties</u>").

**RECITALS**

The Debtor and the Secured Parties are parties to a Securities Purchase Agreement of even date with this Agreement (the "<u>Purchase Agreement</u>") pursuant to which the Secured Parties shall purchase, among other things, Notes (as defined in the Purchase Agreement) from the Debtor. The parties intend that the Debtor's obligations to repay the Notes be secured by Collateral (as defined below).

**AGREEMENT**

In consideration of the purchase of the Notes by the Secured Parties and for other good and valuable consideration, the Debtor hereby agrees with the Secured Parties as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Grant of Security Interest</u>**.** To secure the Debtor's full and timely performance of all of the Debtor's obligations and liabilities to the Secured Parties pursuant to the Notes (including, without limitation, Debtor's obligation to timely pay the principal amount of, and interest on, the Notes) (the "<u>Obligations</u>"), the Debtor hereby grants to the Secured Parties a continuing security interest (the "<u>Security Interest</u>") in and to all of the property described on <u>Exhibit B</u> to this Agreement (the "<u>Collateral</u>"). The Security Interest shall be a first and prior interest in all of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Agreement Among the Secured Parties</u>.

&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) <u>Payment Pro Rata</u>**.** Payment to the Secured Parties under the Notes shall be made in proportion to the principal and accrued interest then outstanding on any such date of payment to each, until such obligations are paid or retired in full.

&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) <u>Sharing of Payments</u>. If any Secured Party shall at any time receive any payment of principal, interest or other charge arising under a Note, or upon any other obligation of Debtor or any sums by virtue of counterclaim, offset, or other lien that may be exercised, or from any security, other than payments made on the same date to all Secured Parties, such Secured Party shall share such payment or payments ratably with the other Secured Parties as to maintain as near as possible the unpaid balance of the loans pro rata according to the Secured Parties' aggregate proportionate interests.

&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) <u>Sharing of Collateral</u>. For purposes of this Agreement, "<u>Event of Default</u>" shall have the meaning ascribed to such term in the Notes. Upon the occurrence and continuance of any Event of Default, and if the Secured Parties proceed to exercise any rights with respect to the Collateral, the Secured Parties shall share the Collateral and the proceeds of such Collateral ratably, without priority of one over the other.

&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) <u>Appointment of Agent</u>. The Secured Parties agree that Secured Parties holding a majority in interest of the principal amount of Notes outstanding may act together as the agent of all Secured Parties to execute and deliver in their names such instruments, documents, statements and amendments thereto as may be necessary or appropriate to perfect or continue the perfection of the security interest granted in this Agreement.

&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) <u>Enforcement</u>. Enforcement of the Secured Parties' rights hereunder shall be taken by Secured Parties holding a majority in interest of the principal amount of Notes outstanding acting together as the agent for all of the Secured Parties. The action of such percentage taken in accordance with the preceding sentence, shall in each case bind all the Secured Parties. Each of the Secured Parties agrees that any Secured Parties acting under Sections 2(d) and 2(e) shall not be liable for any acts taken in good faith in enforcing the rights of the Secured Parties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Covenants</u>. The Debtor covenants and agrees with the Secured Parties that, from and after the date of this Agreement until the Obligations are paid or otherwise discharged in full (including, without limitation, pursuant to a conversion of the Notes in accordance with the terms thereof):

&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) <u>Other Liens</u>**.** Except for the Security Interest, the Debtor is the owner of the Collateral and will be the owner of the Collateral hereafter acquired free from any adverse lien, security interest or encumbrance (other than purchase money security interests that will be discharged upon Debtor's payment of the purchase price for the applicable property), and the Debtor will defend the Collateral against the claims and demands of all persons at any time claiming the same or any interest therein. No financing statements covering any Collateral or any proceeds thereof are on file in any public office.

&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) <u>Further Documentation</u>**.** At any time and from time to time, upon the written request of the Secured Parties, and at the sole expense of the Debtor, the Debtor will promptly and duly execute and deliver such further instruments and documents and take such further action as the Secured Parties may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, filing any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the liens created hereby. The Debtor also hereby authorizes the Secured Parties to file any such financing or continuation statement without the signature of the Debtor to the extent permitted by applicable law. A reproduction of this Agreement shall be sufficient as a financing statement (or as exhibit to a financing statement on form UCC-1 for filing in any jurisdiction.

&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) <u>Indemnification</u>. The Debtor agrees to defend, indemnify and hold harmless the Secured Parties against any and all liabilities, costs and expenses (including, without limitation, legal fees and expenses): (i) with respect to, or resulting from, any delay in paying, any and all excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral, (ii) with respect to, or resulting from, any delay in complying with any law, rule, regulation or order of any governmental authority applicable to any of the Collateral or (iii) in connection with any of the transactions contemplated by this Agreement.

&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) <u>Maintenance of Records</u>. The Debtor will keep and maintain at its own cost and expense satisfactory and complete records of 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;(e) <u>Inspection Rights</u>. The Secured Parties shall have full access during normal business hours, and upon reasonable prior notice, to all the books, correspondence and other records of the Debtor relating to the Collateral, and the Secured Parties or their representatives may examine such records and make photocopies or otherwise take extracts from such records. The Debtor agrees to render to the Secured Parties, at the Debtor's expense, such clerical and other assistance as may be reasonably requested with regard to the exercise of its rights pursuant to this paragraph.

&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) <u>Compliance with Laws, etc</u>. The Debtor will comply in all material respects with all laws, rules, regulations and orders of any governmental authority applicable to any part of the Collateral or to the operation of the Debtor's business; provided, however, that the Debtor may contest any such law, rule, regulation or order in any reasonable manner which does not, in the reasonable opinion of the Debtor, adversely affect the Secured Parties' rights or the priority of their liens on 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;(g) <u>Payment of Obligations</u>. The Debtor will pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the Collateral or with respect to any of its income or profits derived from the Collateral, as well as all claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if (i) the validity of such charge is being contested in good faith by appropriate proceedings, (ii) such proceedings do not involve any material danger of the sale, forfeiture or loss of any of the Collateral or any interest in the Collateral and (iii) such charge is adequately reserved against on the Debtor's books in accordance with generally accepted accounting principles.

&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) <u>Limitation on Liens on Collateral</u>. The Debtor will not create, incur or permit to exist, will defend the Collateral against, and will take such other action as is necessary to remove, any lien or claim on or to the Collateral, other than the Security Interest and Permitted Liens (as defined in the Purchase Agreement), and will defend the right, title and interest of the Secured Parties in and to any of the Collateral against the claims and demands of all other persons.

&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) <u>Limitations on Dispositions of Collateral</u>. The Debtor will not sell, transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer or contract to do so, provided however that Debtor will be allowed to grant licenses to its products and related documentation in the ordinary course of business and to establish or provide for escrows of related intellectual property in connection therewith.

&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) <u>Further Identification of Collateral</u>. The Debtor will furnish to the Secured Parties from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Secured Parties may reasonably request, all in reasonable detail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Secured Parties' Appointment as Attorney-in-Fact</u>.

&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) <u>Powers</u>. The Debtor hereby appoints the Secured Parties, and any officer or agent of the Secured Parties, with full power of substitution, as its attorney-in-fact with full irrevocable power and authority in the place of the Debtor and in the name of the Debtor or in their own name, from time to time in the Secured Parties' discretion only for so long as an Event of Default has occurred and is continuing, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any instrument which may be necessary or desirable to accomplish the purposes of this Agreement. Without limiting the foregoing, so long as an Event of Default has occurred and is continuing, the Secured Parties shall have the right, without notice to, or the consent of, the Debtor, to do any of the following on the Debtor's behalf:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to pay or discharge any taxes or liens levied or placed on or threatened against 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;(ii) to direct any party liable for any payment under any of the Collateral to make payment of any and all amounts due or to become due thereunder directly to the Secured Parties or as the Secured Parties directs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to ask for or demand, collect, and receive payment of and receipt for, any payments due or to become due at any time in respect of or arising out of any 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;(iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to enforce any right in respect of any 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;(v) to defend any suit, action or proceeding brought against the Debtor with respect to any 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;(vi) to settle, compromise or adjust any suit, action or proceeding described in subsection (v) above and, to give such discharges or releases in connection therewith as the Secured Parties may deem appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to assign any patent right included in the Collateral of Debtor (along with the goodwill of the business to which any such patent right pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Secured Parties shall in their sole discretion determine; 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;(viii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral, and to take, at the Secured Parties' option and the Debtor's expense, any actions which the Secured Parties deem necessary to protect, preserve or realize upon the Collateral and the Secured Parties' liens on the Collateral and to carry out the intent of this Agreement, in each case to the same extent as if the Secured Parties were the absolute owner of the Collateral for all purposes.

The Debtor hereby ratifies whatever actions the Secured Parties shall lawfully do or cause to be done in accordance with this Section 4. This power of attorney shall be a power coupled with an interest and shall be irrevocable.

&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) <u>No Duty on Secured Parties' Part</u>. The powers conferred on the Secured Parties by this Section 4 are solely to protect the Secured Parties' interests in the Collateral and shall not impose any duty upon them to exercise any such powers. Each Secured Party shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Secured Parties nor any of their officers, directors, employees or agents shall, in the absence of willful misconduct or gross negligence, be responsible to the Debtor for any act or failure to act pursuant to this Section 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Performance by Secured Parties of Debtor's Obligations</u>. If the Debtor fails to perform or comply with any of its agreements or covenants contained in this Agreement and the Secured Parties perform or comply, or otherwise cause performance or compliance, with such agreement or covenant in accordance with the terms of this Agreement, then the reasonable expenses of the Secured Parties incurred in connection with such performance or compliance shall be payable by the Debtor to the Secured Parties on demand and shall constitute Obligations secured by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Remedies</u>. If an Event of Default has occurred and is continuing, the Secured Parties may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement relating to the Obligations, all rights and remedies of a secured party under the Delaware Uniform Commercial Code, as amended from time to time (the "<u>Code</u>"). Without limiting the foregoing, the Secured Parties, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon the Debtor or any other person (all of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances collect, receive, appropriate and realize upon any or all of the Collateral, and/or may sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver any or all of the Collateral (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of a Secured Party or elsewhere upon such terms and conditions as the Secured Parties may deem advisable, for cash or on credit or for future delivery without assumption of any credit risk. The Secured Parties shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase all or any part of the Collateral so sold, free of any right or equity of redemption in the Debtor, which right or equity is hereby waived or released. The Secured Parties shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable expenses incurred therein or in connection with the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Secured Parties under this Agreement (including, without limitation, reasonable attorneys' fees and expenses) to the payment in whole or in part of the Obligations, in such order as the Secured Parties may elect, and only after such application and after the payment by the Secured Parties of any other amount required by any provision of law, need the Secured Parties account for the surplus, if any, to the Debtor. To the extent permitted by applicable law, the Debtor waives all claims, damages and demands it may acquire against the Secured Parties arising out of the exercise by the Secured Parties of any of their rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least five (5) days before such sale or other disposition. The Debtor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay the Obligations and the fees and disbursements of any attorneys employed by the Secured Parties to collect such deficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Limitation on Duties Regarding Preservation of Collateral</u>. The sole duty of a Secured Party with respect to the custody, safekeeping and preservation of the Collateral, under Section 9-207 of Title 6 of the Delaware Code or otherwise, shall be to deal with it in the same manner as such Secured Party deals with similar property for its own account. Neither the Secured Parties nor any of their directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Debtor or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Powers Coupled with an Interest</u>. All authorizations and agencies contained in this Agreement with respect the Collateral are irrevocable and powers coupled with an interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>No Waiver; Cumulative Remedies</u>. The Secured Parties shall not by any act (except by a written instrument pursuant to Section 10(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default under the Notes or in any breach of any of the terms and conditions of this Agreement. No failure to exercise, nor any delay in exercising, on the part of the Secured Parties, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Secured Parties of any right or remedy under this Agreement on any one occasion shall not be construed as a bar to any right or remedy which the Secured Parties would otherwise have on any subsequent occasion. The rights and remedies provided in this Agreement are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Miscellaneous</u>.

&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) <u>Amendments and Waivers</u>. Any term of this Agreement may be amended with the written consent of the Debtor and of Secured Parties holding a majority in interest of the principal amount of Notes outstanding. Notwithstanding the foregoing or any other provision of this Agreement, no amendment or waiver that adversely affects a Secured Party in a manner different from all of the Secured Parties may be effected without the written consent of such Secured Party. Any amendment or waiver effected in accordance with this Section 10(a) shall be binding upon the parties and their respective successors and assigns.

&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) <u>Transfer; Successors and Assigns</u>. The terms and conditions of this Agreement shall be binding upon the Debtor and its successors and assigns and inure to the benefit of the each Secured Party and its successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

&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) <u>Governing Law</u>. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of 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;(d) <u>Counterparts</u>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

&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) <u>Titles and Subtitles</u>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

&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) <u>Notices</u>. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed email, or forty-eight (48) hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party's address or email as set forth below or on <u>Exhibit A</u> hereto, or as subsequently modified by 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;(g) <u>Severability</u>. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

&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) <u>Entire Agreement</u>. This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto concerning such subject matter are expressly canceled.

The Debtor and Secured Parties have caused this Security Agreement to be duly executed and delivered as of the date first above written.

---

| | |
|:---|:---|
| **<u>DEBTOR</u>:** | **<u>DEBTOR</u>:** |
| **FIRST BREACH INC.** | **FIRST BREACH INC.** |
| By: | */s/ Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | CEO |
| Address: |  |
| Facsimile Number: ________________________________ | Facsimile Number: ________________________________ |
| **<u>SECURED PARTIES</u>:** | **<u>SECURED PARTIES</u>:** |
| **SECURED PARTY** | **SECURED PARTY** |
| By: | */s/ Elbert Basolis* |
| Name: | Elbert Basolis |
| Title: |  |

---

**<u>EXHIBIT A</u>**

**SCHEDULE OF SECURED PARTIES**

---

| | |
|:---|:---|
| **Name/Address/Email** | **Principal Amount of Note** |
| [Name] | $_______________ |
| [Address] |  |
| Email |  |
| [Name] | $_______________ |
| [Address] |  |

---

**<u>Email</u>**

**<u>EXHIBIT B</u>**

**DESCRIPTION OF COLLATERAL**

The Collateral shall consist of all right, title and interest of Debtor in and to the following, whether now owned or hereafter acquired, wherever located:

The Collateral shall consist of all right, title and interest of Debtor in and to all assets and personal property of Debtor, of every kind and description, whether now owned or hereafter acquired, wherever located, together with all Proceeds and products thereof, including, without limitation, all insurance proceeds and all claims against third parties for loss or damage to or destruction of any of the foregoing.

## Exhibit 10.14

**Exhibit 10.14**

**<u>SECURITY AGREEMENT</u>**

This Security Agreement (the "<u>Agreement</u>") is made as of April 24, 2026 by and between First Breach Inc., a Delaware corporation (the "<u>Debtor</u>"), in favor of each of the parties listed on <u>Exhibit A</u> hereto, which may be added to from time to time (each a "<u>Secured Party</u>" and collectively the "<u>Secured Parties</u>").

**<u>RECITALS</u>**

The Debtor and the Secured Parties are parties to a Securities Purchase Agreement of even date with this Agreement (the "<u>Purchase Agreement</u>") pursuant to which the Secured Parties shall purchase, among other things, Notes (as defined in the Purchase Agreement) from the Debtor. The parties intend that the Debtor's obligations to repay the Notes be secured by Collateral (as defined below).

**<u>AGREEMENT</u>**

In consideration of the purchase of the Notes by the Secured Parties and for other good and valuable consideration, the Debtor hereby agrees with the Secured Parties as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Grant of Security Interest</u>**.** To secure the Debtor's full and timely performance of all of the Debtor's obligations and liabilities to the Secured Parties pursuant to the Notes (including, without limitation, Debtor's obligation to timely pay the principal amount of, and interest on, the Notes) (the "<u>Obligations</u>"), the Debtor hereby grants to the Secured Parties a continuing security interest (the "<u>Security Interest</u>") in and to all of the property described on <u>Exhibit B</u> to this Agreement (the "<u>Collateral</u>"). The Security Interest shall be a first and prior interest in all of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Agreement Among the Secured Parties</u>.

&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) <u>Payment Pro Rata</u>**.** Payment to the Secured Parties under the Notes shall be made in proportion to the principal and accrued interest then outstanding on any such date of payment to each, until such obligations are paid or retired in full.

&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) <u>Sharing of Payments</u>. If any Secured Party shall at any time receive any payment of principal, interest or other charge arising under a Note, or upon any other obligation of Debtor or any sums by virtue of counterclaim, offset, or other lien that may be exercised, or from any security, other than payments made on the same date to all Secured Parties, such Secured Party shall share such payment or payments ratably with the other Secured Parties as to maintain as near as possible the unpaid balance of the loans pro rata according to the Secured Parties' aggregate proportionate interests.

&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) <u>Sharing of Collateral</u>. For purposes of this Agreement, "<u>Event of Default</u>" shall have the meaning ascribed to such term in the Notes. Upon the occurrence and continuance of any Event of Default, and if the Secured Parties proceed to exercise any rights with respect to the Collateral, the Secured Parties shall share the Collateral and the proceeds of such Collateral ratably, without priority of one over the other.

&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) <u>Appointment of Agent</u>. The Secured Parties agree that Secured Parties holding a majority in interest of the principal amount of Notes outstanding may act together as the agent of all Secured Parties to execute and deliver in their names such instruments, documents, statements and amendments thereto as may be necessary or appropriate to perfect or continue the perfection of the security interest granted in this Agreement.

&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) <u>Enforcement</u>. Enforcement of the Secured Parties' rights hereunder shall be taken by Secured Parties holding a majority in interest of the principal amount of Notes outstanding acting together as the agent for all of the Secured Parties. The action of such percentage taken in accordance with the preceding sentence, shall in each case bind all the Secured Parties. Each of the Secured Parties agrees that any Secured Parties acting under Sections 2(d) and 2(e) shall not be liable for any acts taken in good faith in enforcing the rights of the Secured Parties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Covenants</u>. The Debtor covenants and agrees with the Secured Parties that, from and after the date of this Agreement until the Obligations are paid or otherwise discharged in full (including, without limitation, pursuant to a conversion of the Notes in accordance with the terms thereof):

&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) <u>Other Liens</u>**.** Except for the Security Interest, the Debtor is the owner of the Collateral and will be the owner of the Collateral hereafter acquired free from any adverse lien, security interest or encumbrance (other than purchase money security interests that will be discharged upon Debtor's payment of the purchase price for the applicable property), and the Debtor will defend the Collateral against the claims and demands of all persons at any time claiming the same or any interest therein. No financing statements covering any Collateral or any proceeds thereof are on file in any public office.

&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) <u>Further Documentation</u>**.** At any time and from time to time, upon the written request of the Secured Parties, and at the sole expense of the Debtor, the Debtor will promptly and duly execute and deliver such further instruments and documents and take such further action as the Secured Parties may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, filing any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the liens created hereby. The Debtor also hereby authorizes the Secured Parties to file any such financing or continuation statement without the signature of the Debtor to the extent permitted by applicable law. A reproduction of this Agreement shall be sufficient as a financing statement (or as exhibit to a financing statement on form UCC-1 for filing in any jurisdiction.

&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) <u>Indemnification</u>. The Debtor agrees to defend, indemnify and hold harmless the Secured Parties against any and all liabilities, costs and expenses (including, without limitation, legal fees and expenses): (i) with respect to, or resulting from, any delay in paying, any and all excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral, (ii) with respect to, or resulting from, any delay in complying with any law, rule, regulation or order of any governmental authority applicable to any of the Collateral or (iii) in connection with any of the transactions contemplated by this Agreement.

&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) <u>Maintenance of Records</u>. The Debtor will keep and maintain at its own cost and expense satisfactory and complete records of 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;(e) <u>Inspection Rights</u>. The Secured Parties shall have full access during normal business hours, and upon reasonable prior notice, to all the books, correspondence and other records of the Debtor relating to the Collateral, and the Secured Parties or their representatives may examine such records and make photocopies or otherwise take extracts from such records. The Debtor agrees to render to the Secured Parties, at the Debtor's expense, such clerical and other assistance as may be reasonably requested with regard to the exercise of its rights pursuant to this paragraph.

&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) <u>Compliance with Laws, etc.</u> The Debtor will comply in all material respects with all laws, rules, regulations and orders of any governmental authority applicable to any part of the Collateral or to the operation of the Debtor's business; provided, however, that the Debtor may contest any such law, rule, regulation or order in any reasonable manner which does not, in the reasonable opinion of the Debtor, adversely affect the Secured Parties' rights or the priority of their liens on 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;(g) <u>Payment of Obligations</u>. The Debtor will pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the Collateral or with respect to any of its income or profits derived from the Collateral, as well as all claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if (i) the validity of such charge is being contested in good faith by appropriate proceedings, (ii) such proceedings do not involve any material danger of the sale, forfeiture or loss of any of the Collateral or any interest in the Collateral and (iii) such charge is adequately reserved against on the Debtor's books in accordance with generally accepted accounting principles.

&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) <u>Limitation on Liens on Collateral</u>. The Debtor will not create, incur or permit to exist, will defend the Collateral against, and will take such other action as is necessary to remove, any lien or claim on or to the Collateral, other than the Security Interest and Permitted Liens (as defined in the Purchase Agreement), and will defend the right, title and interest of the Secured Parties in and to any of the Collateral against the claims and demands of all other persons.

&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) <u>Limitations on Dispositions of Collateral</u>. The Debtor will not sell, transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer or contract to do so, provided however that Debtor will be allowed to grant licenses to its products and related documentation in the ordinary course of business and to establish or provide for escrows of related intellectual property in connection therewith.

&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) <u>Further Identification of Collateral</u>. The Debtor will furnish to the Secured Parties from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Secured Parties may reasonably request, all in reasonable detail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Secured Parties' Appointment as Attorney-in-Fact</u>.

&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) <u>Powers</u>. The Debtor hereby appoints the Secured Parties, and any officer or agent of the Secured Parties, with full power of substitution, as its attorney-in-fact with full irrevocable power and authority in the place of the Debtor and in the name of the Debtor or in their own name, from time to time in the Secured Parties' discretion only for so long as an Event of Default has occurred and is continuing, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any instrument which may be necessary or desirable to accomplish the purposes of this Agreement. Without limiting the foregoing, so long as an Event of Default has occurred and is continuing, the Secured Parties shall have the right, without notice to, or the consent of, the Debtor, to do any of the following on the Debtor's behalf:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to pay or discharge any taxes or liens levied or placed on or threatened against 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;(ii) to direct any party liable for any payment under any of the Collateral to make payment of any and all amounts due or to become due thereunder directly to the Secured Parties or as the Secured Parties directs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to ask for or demand, collect, and receive payment of and receipt for, any payments due or to become due at any time in respect of or arising out of any 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;(iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to enforce any right in respect of any 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;(v) to defend any suit, action or proceeding brought against the Debtor with respect to any 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;(vi) to settle, compromise or adjust any suit, action or proceeding described in subsection (v) above and, to give such discharges or releases in connection therewith as the Secured Parties may deem appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to assign any patent right included in the Collateral of Debtor (along with the goodwill of the business to which any such patent right pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Secured Parties shall in their sole discretion determine; 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;(viii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral, and to take, at the Secured Parties' option and the Debtor's expense, any actions which the Secured Parties deem necessary to protect, preserve or realize upon the Collateral and the Secured Parties' liens on the Collateral and to carry out the intent of this Agreement, in each case to the same extent as if the Secured Parties were the absolute owner of the Collateral for all purposes.

The Debtor hereby ratifies whatever actions the Secured Parties shall lawfully do or cause to be done in accordance with this Section 4. This power of attorney shall be a power coupled with an interest and shall be irrevocable.

&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) <u>No Duty on Secured Parties' Part</u>. The powers conferred on the Secured Parties by this Section 4 are solely to protect the Secured Parties' interests in the Collateral and shall not impose any duty upon them to exercise any such powers. Each Secured Party shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Secured Parties nor any of their officers, directors, employees or agents shall, in the absence of willful misconduct or gross negligence, be responsible to the Debtor for any act or failure to act pursuant to this Section 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Performance by Secured Parties of Debtor's Obligations</u>. If the Debtor fails to perform or comply with any of its agreements or covenants contained in this Agreement and the Secured Parties perform or comply, or otherwise cause performance or compliance, with such agreement or covenant in accordance with the terms of this Agreement, then the reasonable expenses of the Secured Parties incurred in connection with such performance or compliance shall be payable by the Debtor to the Secured Parties on demand and shall constitute Obligations secured by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Remedies</u>. If an Event of Default has occurred and is continuing, the Secured Parties may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement relating to the Obligations, all rights and remedies of a secured party under the Delaware Uniform Commercial Code, as amended from time to time (the "<u>Code</u>"). Without limiting the foregoing, the Secured Parties, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon the Debtor or any other person (all of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances collect, receive, appropriate and realize upon any or all of the Collateral, and/or may sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver any or all of the Collateral (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of a Secured Party or elsewhere upon such terms and conditions as the Secured Parties may deem advisable, for cash or on credit or for future delivery without assumption of any credit risk. The Secured Parties shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase all or any part of the Collateral so sold, free of any right or equity of redemption in the Debtor, which right or equity is hereby waived or released. The Secured Parties shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable expenses incurred therein or in connection with the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Secured Parties under this Agreement (including, without limitation, reasonable attorneys' fees and expenses) to the payment in whole or in part of the Obligations, in such order as the Secured Parties may elect, and only after such application and after the payment by the Secured Parties of any other amount required by any provision of law, need the Secured Parties account for the surplus, if any, to the Debtor. To the extent permitted by applicable law, the Debtor waives all claims, damages and demands it may acquire against the Secured Parties arising out of the exercise by the Secured Parties of any of their rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least five (5) days before such sale or other disposition. The Debtor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay the Obligations and the fees and disbursements of any attorneys employed by the Secured Parties to collect such deficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Limitation on Duties Regarding Preservation of Collateral</u>. The sole duty of a Secured Party with respect to the custody, safekeeping and preservation of the Collateral, under Section 9-207 of Title 6 of the Delaware Code or otherwise, shall be to deal with it in the same manner as such Secured Party deals with similar property for its own account. Neither the Secured Parties nor any of their directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Debtor or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Powers Coupled with an Interest</u>. All authorizations and agencies contained in this Agreement with respect the Collateral are irrevocable and powers coupled with an interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>No Waiver; Cumulative Remedies</u>. The Secured Parties shall not by any act (except by a written instrument pursuant to Section 10(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default under the Notes or in any breach of any of the terms and conditions of this Agreement. No failure to exercise, nor any delay in exercising, on the part of the Secured Parties, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Secured Parties of any right or remedy under this Agreement on any one occasion shall not be construed as a bar to any right or remedy which the Secured Parties would otherwise have on any subsequent occasion. The rights and remedies provided in this Agreement are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Miscellaneous</u>.

&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) <u>Amendments and Waivers</u>. Any term of this Agreement may be amended with the written consent of the Debtor and of Secured Parties holding a majority in interest of the principal amount of Notes outstanding. Notwithstanding the foregoing or any other provision of this Agreement, no amendment or waiver that adversely affects a Secured Party in a manner different from all of the Secured Parties may be effected without the written consent of such Secured Party. Any amendment or waiver effected in accordance with this Section 10(a) shall be binding upon the parties and their respective successors and assigns.

&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) <u>Transfer; Successors and Assigns</u>. The terms and conditions of this Agreement shall be binding upon the Debtor and its successors and assigns and inure to the benefit of the each Secured Party and its successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

&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) <u>Governing Law</u>. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of 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;(d) <u>Counterparts</u>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

&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) <u>Titles and Subtitles</u>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

&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) <u>Notices</u>. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed email, or forty-eight (48) hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party's address or email as set forth below or on <u>Exhibit A</u> hereto, or as subsequently modified by 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;(g) <u>Severability</u>. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

&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) <u>Entire Agreement</u>. This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto concerning such subject matter are expressly canceled.The Debtor and Secured Parties have caused this Security Agreement to be duly executed and delivered as of the date first above written.

---

| | |
|:---|:---|
| **<u>DEBTOR</u>:** | **<u>DEBTOR</u>:** |
| **FIRST BREACH INC.** | **FIRST BREACH INC.** |
| By: | */s/ Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | CEO |
| Address: |  |
| Facsimile Number:_________________ | Facsimile Number:_________________ |
| **<u>SECURED PARTIES</u>:** | **<u>SECURED PARTIES</u>:** |
| **SECURED PARTY** | **SECURED PARTY** |
| By: | */s/ Bradford Johnson* |
| Name: | Bradford Johnson |

---

**<u>EXHIBIT A</u>**

**SCHEDULE OF SECURED PARTIES**

---

| | |
|:---|:---|
| **Name/Address/Email** | **Principal Amount of Note** |
| [Name] | $|
| [Address] |  |
| Email |  |
| [Name] | **$** |
| [Address] |  |

---

**<u>Email</u>**

**<u>EXHIBIT B</u>**

**DESCRIPTION OF COLLATERAL**

The Collateral shall consist of all right, title and interest of Debtor in and to the following, whether now owned or hereafter acquired, wherever located:

The Collateral shall consist of all right, title and interest of Debtor in and to all assets and personal property of Debtor, of every kind and description, whether now owned or hereafter acquired, wherever located, together with all Proceeds and products thereof, including, without limitation, all insurance proceeds and all claims against third parties for loss or damage to or destruction of any of the foregoing.

## Exhibit 10.15

**Exhibit 10.15**

**<u>SECURITY AGREEMENT</u>**

This Security Agreement (the "<u>Agreement</u>") is made as of April 24, 2026 by and between First Breach Inc., a Delaware corporation (the "<u>Debtor</u>"), in favor of each of the parties listed on <u>Exhibit A</u> hereto, which may be added to from time to time (each a "<u>Secured Party</u>" and collectively the "<u>Secured Parties</u>").

**<u>RECITALS</u>**

The Debtor and the Secured Parties are parties to a Securities Purchase Agreement of even date with this Agreement (the "<u>Purchase Agreement</u>") pursuant to which the Secured Parties shall purchase, among other things, Notes (as defined in the Purchase Agreement) from the Debtor. The parties intend that the Debtor's obligations to repay the Notes be secured by Collateral (as defined below).

**<u>AGREEMENT</u>**

In consideration of the purchase of the Notes by the Secured Parties and for other good and valuable consideration, the Debtor hereby agrees with the Secured Parties as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Grant of Security Interest</u>**.** To secure the Debtor's full and timely performance of all of the Debtor's obligations and liabilities to the Secured Parties pursuant to the Notes (including, without limitation, Debtor's obligation to timely pay the principal amount of, and interest on, the Notes) (the "<u>Obligations</u>"), the Debtor hereby grants to the Secured Parties a continuing security interest (the "<u>Security Interest</u>") in and to all of the property described on <u>Exhibit B</u> to this Agreement (the "<u>Collateral</u>"). The Security Interest shall be a first and prior interest in all of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Agreement Among the Secured Parties</u>.

&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) <u>Payment Pro Rata</u>**.** Payment to the Secured Parties under the Notes shall be made in proportion to the principal and accrued interest then outstanding on any such date of payment to each, until such obligations are paid or retired in full.

&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) <u>Sharing of Payments</u>. If any Secured Party shall at any time receive any payment of principal, interest or other charge arising under a Note, or upon any other obligation of Debtor or any sums by virtue of counterclaim, offset, or other lien that may be exercised, or from any security, other than payments made on the same date to all Secured Parties, such Secured Party shall share such payment or payments ratably with the other Secured Parties as to maintain as near as possible the unpaid balance of the loans pro rata according to the Secured Parties' aggregate proportionate interests.

&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) <u>Sharing of Collateral</u>. For purposes of this Agreement, "<u>Event of Default</u>" shall have the meaning ascribed to such term in the Notes. Upon the occurrence and continuance of any Event of Default, and if the Secured Parties proceed to exercise any rights with respect to the Collateral, the Secured Parties shall share the Collateral and the proceeds of such Collateral ratably, without priority of one over the other.

&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) <u>Appointment of Agent</u>. The Secured Parties agree that Secured Parties holding a majority in interest of the principal amount of Notes outstanding may act together as the agent of all Secured Parties to execute and deliver in their names such instruments, documents, statements and amendments thereto as may be necessary or appropriate to perfect or continue the perfection of the security interest granted in this Agreement.

&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) <u>Enforcement</u>. Enforcement of the Secured Parties' rights hereunder shall be taken by Secured Parties holding a majority in interest of the principal amount of Notes outstanding acting together as the agent for all of the Secured Parties. The action of such percentage taken in accordance with the preceding sentence, shall in each case bind all the Secured Parties. Each of the Secured Parties agrees that any Secured Parties acting under Sections 2(d) and 2(e) shall not be liable for any acts taken in good faith in enforcing the rights of the Secured Parties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Covenants</u>. The Debtor covenants and agrees with the Secured Parties that, from and after the date of this Agreement until the Obligations are paid or otherwise discharged in full (including, without limitation, pursuant to a conversion of the Notes in accordance with the terms thereof):

&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) <u>Other Liens</u>**.** Except for the Security Interest, the Debtor is the owner of the Collateral and will be the owner of the Collateral hereafter acquired free from any adverse lien, security interest or encumbrance (other than purchase money security interests that will be discharged upon Debtor's payment of the purchase price for the applicable property), and the Debtor will defend the Collateral against the claims and demands of all persons at any time claiming the same or any interest therein. No financing statements covering any Collateral or any proceeds thereof are on file in any public office.

&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) <u>Further Documentation</u>**.** At any time and from time to time, upon the written request of the Secured Parties, and at the sole expense of the Debtor, the Debtor will promptly and duly execute and deliver such further instruments and documents and take such further action as the Secured Parties may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, filing any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the liens created hereby. The Debtor also hereby authorizes the Secured Parties to file any such financing or continuation statement without the signature of the Debtor to the extent permitted by applicable law. A reproduction of this Agreement shall be sufficient as a financing statement (or as exhibit to a financing statement on form UCC-1 for filing in any jurisdiction.

&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) <u>Indemnification</u>. The Debtor agrees to defend, indemnify and hold harmless the Secured Parties against any and all liabilities, costs and expenses (including, without limitation, legal fees and expenses): (i) with respect to, or resulting from, any delay in paying, any and all excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral, (ii) with respect to, or resulting from, any delay in complying with any law, rule, regulation or order of any governmental authority applicable to any of the Collateral or (iii) in connection with any of the transactions contemplated by this Agreement.

&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) <u>Maintenance of Records</u>. The Debtor will keep and maintain at its own cost and expense satisfactory and complete records of 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;(e) <u>Inspection Rights</u>. The Secured Parties shall have full access during normal business hours, and upon reasonable prior notice, to all the books, correspondence and other records of the Debtor relating to the Collateral, and the Secured Parties or their representatives may examine such records and make photocopies or otherwise take extracts from such records. The Debtor agrees to render to the Secured Parties, at the Debtor's expense, such clerical and other assistance as may be reasonably requested with regard to the exercise of its rights pursuant to this paragraph.

&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) <u>Compliance with Laws, etc.</u> The Debtor will comply in all material respects with all laws, rules, regulations and orders of any governmental authority applicable to any part of the Collateral or to the operation of the Debtor's business; provided, however, that the Debtor may contest any such law, rule, regulation or order in any reasonable manner which does not, in the reasonable opinion of the Debtor, adversely affect the Secured Parties' rights or the priority of their liens on 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;(g) <u>Payment of Obligations</u>. The Debtor will pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the Collateral or with respect to any of its income or profits derived from the Collateral, as well as all claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if (i) the validity of such charge is being contested in good faith by appropriate proceedings, (ii) such proceedings do not involve any material danger of the sale, forfeiture or loss of any of the Collateral or any interest in the Collateral and (iii) such charge is adequately reserved against on the Debtor's books in accordance with generally accepted accounting principles.

&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) <u>Limitation on Liens on Collateral</u>. The Debtor will not create, incur or permit to exist, will defend the Collateral against, and will take such other action as is necessary to remove, any lien or claim on or to the Collateral, other than the Security Interest and Permitted Liens (as defined in the Purchase Agreement), and will defend the right, title and interest of the Secured Parties in and to any of the Collateral against the claims and demands of all other persons.

&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) <u>Limitations on Dispositions of Collateral</u>. The Debtor will not sell, transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer or contract to do so, provided however that Debtor will be allowed to grant licenses to its products and related documentation in the ordinary course of business and to establish or provide for escrows of related intellectual property in connection therewith.

&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) <u>Further Identification of Collateral</u>. The Debtor will furnish to the Secured Parties from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Secured Parties may reasonably request, all in reasonable detail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Secured Parties' Appointment as Attorney-in-Fact</u>.

&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) <u>Powers</u>. The Debtor hereby appoints the Secured Parties, and any officer or agent of the Secured Parties, with full power of substitution, as its attorney-in-fact with full irrevocable power and authority in the place of the Debtor and in the name of the Debtor or in their own name, from time to time in the Secured Parties' discretion only for so long as an Event of Default has occurred and is continuing, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any instrument which may be necessary or desirable to accomplish the purposes of this Agreement. Without limiting the foregoing, so long as an Event of Default has occurred and is continuing, the Secured Parties shall have the right, without notice to, or the consent of, the Debtor, to do any of the following on the Debtor's behalf:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to pay or discharge any taxes or liens levied or placed on or threatened against 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;(ii) to direct any party liable for any payment under any of the Collateral to make payment of any and all amounts due or to become due thereunder directly to the Secured Parties or as the Secured Parties directs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to ask for or demand, collect, and receive payment of and receipt for, any payments due or to become due at any time in respect of or arising out of any 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;(iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to enforce any right in respect of any 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;(v) to defend any suit, action or proceeding brought against the Debtor with respect to any 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;(vi) to settle, compromise or adjust any suit, action or proceeding described in subsection (v) above and, to give such discharges or releases in connection therewith as the Secured Parties may deem appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to assign any patent right included in the Collateral of Debtor (along with the goodwill of the business to which any such patent right pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Secured Parties shall in their sole discretion determine; 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;(viii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral, and to take, at the Secured Parties' option and the Debtor's expense, any actions which the Secured Parties deem necessary to protect, preserve or realize upon the Collateral and the Secured Parties' liens on the Collateral and to carry out the intent of this Agreement, in each case to the same extent as if the Secured Parties were the absolute owner of the Collateral for all purposes.

The Debtor hereby ratifies whatever actions the Secured Parties shall lawfully do or cause to be done in accordance with this Section 4. This power of attorney shall be a power coupled with an interest and shall be irrevocable.

&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) <u>No Duty on Secured Parties' Part</u>. The powers conferred on the Secured Parties by this Section 4 are solely to protect the Secured Parties' interests in the Collateral and shall not impose any duty upon them to exercise any such powers. Each Secured Party shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Secured Parties nor any of their officers, directors, employees or agents shall, in the absence of willful misconduct or gross negligence, be responsible to the Debtor for any act or failure to act pursuant to this Section 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Performance by Secured Parties of Debtor's Obligations</u>. If the Debtor fails to perform or comply with any of its agreements or covenants contained in this Agreement and the Secured Parties perform or comply, or otherwise cause performance or compliance, with such agreement or covenant in accordance with the terms of this Agreement, then the reasonable expenses of the Secured Parties incurred in connection with such performance or compliance shall be payable by the Debtor to the Secured Parties on demand and shall constitute Obligations secured by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Remedies</u>. If an Event of Default has occurred and is continuing, the Secured Parties may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement relating to the Obligations, all rights and remedies of a secured party under the Delaware Uniform Commercial Code, as amended from time to time (the "<u>Code</u>"). Without limiting the foregoing, the Secured Parties, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon the Debtor or any other person (all of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances collect, receive, appropriate and realize upon any or all of the Collateral, and/or may sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver any or all of the Collateral (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of a Secured Party or elsewhere upon such terms and conditions as the Secured Parties may deem advisable, for cash or on credit or for future delivery without assumption of any credit risk. The Secured Parties shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase all or any part of the Collateral so sold, free of any right or equity of redemption in the Debtor, which right or equity is hereby waived or released. The Secured Parties shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable expenses incurred therein or in connection with the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Secured Parties under this Agreement (including, without limitation, reasonable attorneys' fees and expenses) to the payment in whole or in part of the Obligations, in such order as the Secured Parties may elect, and only after such application and after the payment by the Secured Parties of any other amount required by any provision of law, need the Secured Parties account for the surplus, if any, to the Debtor. To the extent permitted by applicable law, the Debtor waives all claims, damages and demands it may acquire against the Secured Parties arising out of the exercise by the Secured Parties of any of their rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least five (5) days before such sale or other disposition. The Debtor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay the Obligations and the fees and disbursements of any attorneys employed by the Secured Parties to collect such deficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Limitation on Duties Regarding Preservation of Collateral</u>. The sole duty of a Secured Party with respect to the custody, safekeeping and preservation of the Collateral, under Section 9-207 of Title 6 of the Delaware Code or otherwise, shall be to deal with it in the same manner as such Secured Party deals with similar property for its own account. Neither the Secured Parties nor any of their directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Debtor or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Powers Coupled with an Interest</u>. All authorizations and agencies contained in this Agreement with respect the Collateral are irrevocable and powers coupled with an interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>No Waiver; Cumulative Remedies</u>. The Secured Parties shall not by any act (except by a written instrument pursuant to Section 10(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default under the Notes or in any breach of any of the terms and conditions of this Agreement. No failure to exercise, nor any delay in exercising, on the part of the Secured Parties, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Secured Parties of any right or remedy under this Agreement on any one occasion shall not be construed as a bar to any right or remedy which the Secured Parties would otherwise have on any subsequent occasion. The rights and remedies provided in this Agreement are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Miscellaneous</u>.

&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) <u>Amendments and Waivers</u>. Any term of this Agreement may be amended with the written consent of the Debtor and of Secured Parties holding a majority in interest of the principal amount of Notes outstanding. Notwithstanding the foregoing or any other provision of this Agreement, no amendment or waiver that adversely affects a Secured Party in a manner different from all of the Secured Parties may be effected without the written consent of such Secured Party. Any amendment or waiver effected in accordance with this Section 10(a) shall be binding upon the parties and their respective successors and assigns.

&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) <u>Transfer; Successors and Assigns</u>. The terms and conditions of this Agreement shall be binding upon the Debtor and its successors and assigns and inure to the benefit of the each Secured Party and its successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

&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) <u>Governing Law</u>. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of 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;(d) <u>Counterparts</u>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

&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) <u>Titles and Subtitles</u>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

&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) <u>Notices</u>. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed email, or forty-eight (48) hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party's address or email as set forth below or on <u>Exhibit A</u> hereto, or as subsequently modified by 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;(g) <u>Severability</u>. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

&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) <u>Entire Agreement</u>. This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto concerning such subject matter are expressly canceled.

The Debtor and Secured Parties have caused this Security Agreement to be duly executed and delivered as of the date first above written.

---

| | |
|:---|:---|
| **<u>DEBTOR</u>:** | **<u>DEBTOR</u>:** |
| **FIRST BREACH INC.** | **FIRST BREACH INC.** |
| By: | */s/ Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | CEO |
| Address: |  |
| Facsimile Number:_________________ | Facsimile Number:_________________ |
| **<u>SECURED PARTIES</u>:** | **<u>SECURED PARTIES</u>:** |
| **SECURED PARTY** | **SECURED PARTY** |
| By: | */s/ C. Kenneth Leith* |
| Name: | C. Kenneth Leith |

---

**<u>EXHIBIT A</u>**

**SCHEDULE OF SECURED PARTIES**

---

| | |
|:---|:---|
| **Name/Address/Email** | **Principal Amount of Note** |
| [Name] | $|
| [Address] |  |
| Email |  |
| [Name] | **$** |
| [Address] |  |

---

**<u>Email</u>**

**<u>EXHIBIT B</u>**

**DESCRIPTION OF COLLATERAL**

The Collateral shall consist of all right, title and interest of Debtor in and to the following, whether now owned or hereafter acquired, wherever located:

The Collateral shall consist of all right, title and interest of Debtor in and to all assets and personal property of Debtor, of every kind and description, whether now owned or hereafter acquired, wherever located, together with all Proceeds and products thereof, including, without limitation, all insurance proceeds and all claims against third parties for loss or damage to or destruction of any of the foregoing.

## Exhibit 10.16

**Exhibit 10.16** 

**<u>WARRANT</u>**

**NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BYA LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.**

**FIRST BREACH INC.**

**<u>COMMON STOCK PURCHASE WARRANT</u>**

Original Issue Date: April 24, 2026

THIS COMMON STOCK PURCHASE WARRANT (this "**Warrant**") certifies that, for value received, Elbert Basolis, or its assigns ("**<u>Holder</u>**") is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of the consummation the earlier to occur of (i) October 24, 2026 or (ii) the first Liquidity Event occurring after the Original Issue Date of this Warrant ("**Initial Exercise Date**") and on or prior to 5:00 p.m. (New York City time) on fifth anniversary of the Initial Exercise Date ("**Termination Date**") but not thereafter, to subscribe for and purchase from First Breach Inc., a Delaware corporation ("**Company**"), up to 250,000 shares of Common Stock (as subject to adjustment hereunder, "**Warrant Shares**"). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

Notwithstanding the foregoing, in the event that in the event that in such Liquidity Event the Company issues units comprising shares of Common Stock and additional warrants and/or any other securities convertible into or exercisable for shares of Common Stock (such additional warrants and/or other securities, as the case may be, "<u>Other Unit Securities</u>") then this Warrant shall be exercisable for, in addition to the Warrant Shares, such number of such Other Unit Securities that, if they had been included in the Liquidity Event, equals the aggregate number that would have been required to create a number of units proportional to the number of Warrant Shares specified hereinabove. The Warrant Shares and Other Unit Securities purchasable pursuant to this Warrant and such Other Unit Securities in accordance with the foregoing shall be collectively referred to herein as ("**Warrant Securities**").

**Section 1 <u>Definitions</u>.**

Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement ("**Purchase Agreement**"), dated as of April 24, 2026 by and among the Company and the Investors signatory thereto.

"**Business Day**" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"**Commission**" means the United States Securities and Exchange Commission.

"**Common Stock**" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"**Exempt Issuance**" means the issuance of Common Stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by the Company.

"**Liquidity Event**" means the date on which the Company completes a direct listing of its Common Stock on a National Securities Exchange.

"**National Securities Exchange**" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"**Person**" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"**Securities Act**" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"**Trading Day**" means a day on which the principal Trading Market is open for trading.

"**Trading Market**" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB, OTCQX, or the OTC Pink Marketplace (or any successors to any of the foregoing).

"**Transfer Agent**" means the Company's transfer agent for the Common Stock, and any successor transfer agent of the Company.

"**Variable Rate Transaction**" means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.

**Section 2 Exercise.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Exercise of Warrant</u>. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto ("**Notice of Exercise**"). Within the earlier of: (i) two (2) Business Days; and (ii) the number of Business Days comprising the Standard Settlement Period (as defined in section 2(d)(i)) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier's check drawn on a United States bank. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Securities available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Business Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Securities available hereunder shall have the effect of lowering the outstanding number of Warrant Securities purchasable hereunder in an amount equal to the applicable number of Warrant Securities purchased. The Holder and the Company shall maintain records showing the number of Warrant Securities purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Securities available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Exercise Price</u>. The exercise price per share of Common Stock under this Warrant shall be equal to $8.00 per share, subject to adjustment hereunder ("**Exercise Price**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Mechanics of Exercise</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Delivery of Warrant Securities Upon Exercise</u>. The Company shall cause the Warrant Securities purchased
 hereunder to be transmitted by its transfer agent to the Holder by crediting the account
 of the Holder's or its designee's balance account with The Depository Trust Company
 through its Deposit or Withdrawal at Custodian system ()"**DWAC**") if, following
 the consummation of a Liquidity Event, the Company is then a participant in such system and
 either: (A) there is an effective registration statement permitting the issuance of the Warrant
 Securities to or resale of the Warrant Securities by the Holder; or (B) the Warrant Securities
 are eligible for resale by the Holder without volume or manner- of-sale limitations pursuant
 to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company's
 share register in the name of the Holder or its designee, for the number of Warrant Securities
 to which the Holder is entitled pursuant to such exercise to the address specified by the
 Holder in the Notice of Exercise by the date that is the earliest of: (i) two (2) Business
 Days after the delivery to the Company of the Notice of Exercise; (ii) one (1) trading day
 after delivery of the aggregate Exercise Price to the Company; and (iii) the number of Trading
 days comprising the Standard Settlement Period after the delivery to the Company of the Notice
 of Exercise (such date, the "**Warrant Share Delivery Date** "). Upon delivery
 of the Notice of Exercise, the Holder shall be deemed for all corporate (but not Rule 144)
 purposes to have become the holder of record of the Warrant Securities with respect to which
 this Warrant has been exercised, irrespective of the date of delivery of the Warrant Securities,
 provided that payment of the aggregate Exercise Price is received within the earlier of:
 (i) two (2) Business Days; and (ii) the number of trading days comprising the Standard Settlement
 Period following delivery of the Notice of Exercise. If the Company fails for any reason
 to deliver to the Holder the Warrant Securities subject to a Notice of Exercise by the Warrant
 Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages
 and not as a penalty, for each $1,000 of Warrant Securities subject to such exercise (based
 on the volume weighted average price of the Common Stock on the date of the applicable Notice
 of Exercise), $10 per Business Day (increasing to $20 per Trading Day on the fifth (5<sup>th</sup>)
 Business Day after such liquidated damages begin to accrue) for each Business Day after such
 Warrant Share Delivery Date until such Warrant Securities are delivered or the Holder rescinds
 such exercise. Following consummation of a Liquidity Event, the Company agrees to maintain
 a transfer agent that is a participant in the FAST program so long as this Warrant remains
 outstanding and exercisable. As used herein, "**Standard Settlement Period** "
 means the standard settlement period, expressed in a number of trading days, on the Company's
 primary Trading Market with respect to the Common Stock as in effect on the date of delivery
 of the Notice of Exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Delivery of New Warrants Upon Exercise</u>. If this Warrant shall have been exercised in part, the
 Company shall, at the request of a Holder and upon surrender of this Warrant certificate,
 at the time of delivery of the Warrant Securities, deliver to the Holder a new Warrant evidencing
 the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant,
 which new Warrant shall in all other respects be identical with this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. <u>Rescission Rights</u>. If the Company fails to cause the Transfer Agent to transmit to the Holder the
 Warrant Securities pursuant to section 2(d)(i) by the Warrant Share Delivery Date, then the
 Holder will have the right to rescind such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. <u>Compensation for Buy-In on Failure to Timely Deliver Warrant Securities Upon Exercise</u>. In addition
 to any other rights available to the Holder, if, following a Liquidity Event, the Company
 fails to cause its transfer agent to transmit to the Holder the Warrant Securities in accordance
 with the provisions of section 2(d)(i) above pursuant to an exercise on or before the Warrant
 Share Delivery Date, and if after such date the Holder is required by its broker to purchase
 (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise
 purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
 Warrant Securities which the Holder anticipated receiving upon such exercise ()"**Buy-In** "),
 then the Company shall: (A) pay in cash to the Holder the amount, if any, by which (x) the
 Holder's total purchase price (including brokerage commissions, if any) for the shares
 of Common Stock so purchased exceeds (y) the product of (1) the number of Warrant Securities
 that the Company was required to deliver to the Holder in connection with the exercise at
 issue times (2) the price at which the sell order giving rise to such purchase obligation
 was executed; and (B) at the option of the Holder, either reinstate the portion of the Warrant
 and equivalent number of Warrant Securities for which such exercise was not honored (in which
 case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares
 of Common Stock that would have been issued had the Company timely complied with its exercise
 and delivery obligations hereunder. For example, if the Holder purchases Common Stock having
 a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise
 of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation
 of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required
 to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
 the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company,
 evidence of the amount of such loss. Nothing herein shall limit a Holder's right to
 pursue any other remedies available to it hereunder, at law or in equity including, without
 limitation, a decree of specific performance and/or injunctive relief with respect to the
 Company's failure to timely deliver shares of Common Stock upon exercise of the Warrant
 as required pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. <u>No Fractional Shares or Scrip</u>. No fractional shares or scrip representing fractional shares
 shall be issued upon the exercise of this Warrant. As to any fraction of a share which the
 Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at
 its election, either pay a cash adjustment in respect of such final fraction in an amount
 equal to such fraction multiplied by the Exercise Price or roundup to the next whole share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. <u>Charges, Taxes and Expenses</u>. Issuance of Warrant Securities shall be made without charge to the
 Holder for any issue or transfer tax or other incidental expense in respect of the issuance
 of such Warrant Securities, all of which taxes and expenses shall be paid by the Company,
 and such Warrant Securities shall be issued in the name of the Holder or in such name or
 names as may be directed by the Holder; *provided, however,* that in the event that
 Warrant Securities are to be issued in a name other than the name of the Holder, this Warrant
 when surrendered for exercise shall be accompanied by the Assignment Form attached hereto
 duly executed by the Holder and the Company may require, as a condition thereto, the payment
 of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
 shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise
 and all fees to the Depository Trust Company (or another established clearing corporation
 performing similar functions) required for same-day electronic delivery of the Warrant Securities.
 The Company shall pay all attorney fees required for the issuance of attorney legal opinions
 for removal of restrictive legends on Warrant Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. <u>Closing of Books</u>. The Company will not close its stockholder books or records in any manner which
 prevents the timely exercise of this Warrant, pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Holder's Exercise Limitations</u>. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder's Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder's Affiliates (such Persons, "**Attribution Parties**")), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon: (i) exercise of the remaining, non- exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties; and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder ("**Exchange Act**"), it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder's determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in: (A) the Company's most recent periodic or annual report filed with the Commission, as the case may be; (B) a more recent public announcement by the Company; or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one trading day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The "**Beneficial Ownership Limitation**" shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61<sup>st</sup> day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

**Section 3 Certain Adjustments.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Stock Dividends and Splits</u>. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant); (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Subsequent Equity Sales</u>. If and whenever, at any time while this Warrant is outstanding, the Company issues or sells, announces any offer, sale, or other disposition of, or in accordance with this section 3 is deemed to have issued, sold or granted (or makes an announcement regarding the same), any shares of Common Stock and/or Common Stock equivalents (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any securities issued or sold or deemed to have been issued or sold solely in connection with an Exempt Issuance) for a consideration per share ("**New Issuance Price**") less than a price equal to the Exercise Price in effect immediately prior to such issuance or sale or deemed issuance or sale (such Exercise Price then in effect is referred to herein as the "**Applicable Price**") (the foregoing a "**Dilutive Issuance**"), then immediately after such Dilutive Issuance the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and the New Issuance Price under this section 3(b)), the following shall be applicable:

&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. <u>Issuance of Options</u>. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell) any Options (as defined below) and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Option (as defined below) or upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of any such Option (as defined below) or otherwise pursuant to the terms thereof is less than the Applicable Price, then such Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option (as defined below) for such price per share. For purposes of this section 3(b)(i), the 'lowest price per share for which one Common Stock is at any time issuable upon the exercise of any such Options (as defined below) or upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of any such Option (as defined below) or otherwise pursuant to the terms thereof' shall be equal to: (A) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting, issuance or sale of such Option (as defined below), upon exercise of such Option (as defined below) and upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of such Option (as defined below) or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option (as defined below) for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any such Options (as defined below) or upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of any such Option (as defined below) or otherwise pursuant to the terms thereof minus; (B) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting, issuance or sale of such Option (as defined below), upon exercise of such Option (as defined below) and upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of such Option (as defined below) or otherwise pursuant to the terms thereof plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Option (as defined below) (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock or of such Common Stock equivalents upon the exercise of such Options (as defined below) or otherwise pursuant to the terms of or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Common Stock equivalents. "**Option**" means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities, other than option issued in an Exempt Issuance. "**Convertible Securities**" means any shares or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.

&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. <u>Issuance of Convertible Securities</u>. If the Company in any manner issues or sells (or enters into any agreement to issue or sell) any Common Stock equivalents and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such shares of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Common Stock equivalents for such price per share. For the purposes of this section 3(b)(ii), the 'lowest price per share for which one Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof' shall be equal to: (A) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Common Stock equivalents and upon conversion, exercise or exchange of such Common Stock equivalents or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Common Stock equivalents for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus; (B) the sum of all amounts paid or payable to the holder of such Common Stock equivalents (or any other Person) upon the issuance or sale of such Common Stock equivalents plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Common Stock equivalents (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Common Stock equivalents or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Common Stock equivalents is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this section 3(b), except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.

&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. <u>Change in Option Price or Rate of Conversion</u>. If the purchase or exercise price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Common Stock equivalents, or the rate at which any Common Stock equivalents are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in section 3(a)), the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in effect at such time had such Options or Common Stock equivalents provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this section 3(b)(iii), if the terms of any Option or Common Stock equivalents that was outstanding as of the date this Warrant was issued are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Common Stock equivalents and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this section 3(b) shall be made if such adjustment would result in an increase of the Exercise Price, then in effect.

&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. <u>Change in Option Price or Rate of Conversion</u>. If any Option and/or Common Stock equivalents and/or Adjustment Right (as defined below) is issued in connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the "**Primary Security,**" and such Option <u>and</u>/or Common Stock equivalents and/or Adjustment Right (as defined below), the "**Secondary Securities**"), together comprising one integrated transaction, (or one or more transactions if such issuances or sales or deemed issuances or sales of securities of the Company either:

&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) have at least one investor or purchaser in common; (B) are consummated in reasonable proximity to each other; and/or (C) are consummated under the same plan of financing) the aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of Common Stock was issued (or was deemed to be issued pursuant to section 3(b)(i) or 3(b)(ii) above, as applicable) in such integrated transaction solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the fair market value (as determined by the Holder in good faith), as applicable, of such Adjustment Right (as defined below), if any, and (II) the fair market value (as determined by the Holder) of such Common Stock equivalents, if any, in each case, as determined on a per share basis in accordance with this section 3(b)(iv). If any shares of Common Stock, Options or Common Stock equivalents are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Common Stock equivalents, will be deemed to be the net amount of consideration received by the Company therefor. If any shares of Common Stock, Options or Common Stock equivalents are issued or sold for a consideration other than cash, the amount of such consideration received by the Company (for the purpose of determining the consideration paid for such Common Stock, Option or Common Stock equivalents, will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic average of the volume weighted average prices of such security for each of the five (5) Trading days immediately preceding the date of receipt. If any shares of Common Stock, Options or Common Stock equivalents are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor (for the purpose of determining the consideration paid for such shares of Common Stock, Option or Common Stock equivalents, will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Common Stock equivalents (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation ("**Valuation Event**"), the fair value of such consideration will be determined within five (5) Trading days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company). "**Adjustment Right**" means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or sale (or deemed issuance or sale hereunder) of Common Stock (other than rights of the type described in sections 3(c) and 3(d) hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).

&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. <u>Change in Option Price or Rate of Conversion</u>. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them: (A) to receive a dividend or other distribution payable in shares of Common Stock, <u>Options</u> or in Common Stock equivalents; or (B) to subscribe for or purchase shares of Common Stock, Options or Common Stock equivalents, then such record date will be deemed to be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

&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. If the Company enters into a Variable Rate Transaction, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible price, conversion price or exercise price at which such securities may be issued, converted or exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Subsequent Rights Offerings</u>. In addition to any adjustments pursuant to section 3(a) above, if at any time the Company grants, issues or sells any Common Stock equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "**Purchase Rights**"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (*provided, however*, that, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Pro Rata Distributions</u>. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of <u>Common</u> Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "**Distribution**"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Fundamental Transaction</u>. If, at any time while this Warrant is outstanding: (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person; (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions; (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of fifty percent (50%) or more of the outstanding Common Stock; (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property; or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme or arrangement) with another Person or group of Persons whereby such other Person or group acquires more than fifty percent (50%) of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "**Fundamental Transaction**"), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in section 2(d) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration ("**Alternate Consideration**") receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in section 2(d) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor ("**Successor Entity**") to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory inform and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the 'Company' shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. A Liquidity Event shall not be deemed to be a Fundamental Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Calculations</u>. All calculations under this section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this section 3, the number of shares of Common Stock <u>deemed</u> to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Adjustment to Exercise Price</u>. Whenever the Exercise Price is adjusted pursuant to any provision of this section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Securities and setting forth a brief statement of the facts requiring such adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Notice to Allow Exercise by Holder</u>. If: (i) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock; (ii) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (iii) the Company shall authorize the granting to all holders of the <u>Common</u> Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (iv) the approval of any stockholders of the Company shall be required in connection with any re-classification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or (v) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least twenty (20) calendar days prior to the applicable record or effective date herein after specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

**Section 4 <u>Transfer of Warrant</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Transferability</u>. Subject to compliance with any applicable securities laws and the conditions set forth in section 4(d) hereof and to the provisions of section 4.01 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Business Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Securities without having a new Warrant issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>New Warrants</u>. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Securities issuable pursuant thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Warrant Register</u>. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose ("**Warrant Register**"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Transfer Restrictions</u>. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either: (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws; or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of section 4.01 of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Representation by the Holder</u>. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Securities issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Securities or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

**Section 5 Miscellaneous.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>No Rights as Stockholder Until Exercise</u>. This Warrant does not entitle the Holder to any voting rights, dividends, or other rights as a stockholder of the Company prior to the exercise hereof as set forth in section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Loss, Theft, Destruction or Mutilation of Warrant</u>. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Securities, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Saturdays, Sundays, Holidays, etc</u>. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will: (i) not increase the par value of any Warrant Securities above the amount payable therefor upon such exercise immediately prior to such increase in par value; (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Securities upon the exercise of this Warrant; and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Securities for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Jurisdiction</u>. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Restrictions</u>. The Holder acknowledges that the Warrant Securities acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Nonwaiver and Expenses</u>. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice the Holder's rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Notices</u>. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) <u>Limitation of Liability</u>. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Securities, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j) <u>Remedies</u>. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k) <u>Successors and Assigns</u>. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l) <u>Amendment; Waivers</u>. This Warrant may be modified or amended, or the provisions hereof waived with the written consent of the Company and the Holder. Further, any modifications, amendments or waivers of the provisions hereof shall be subject to section 5.05 of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m) <u>Severability</u>. Wherever possible, each provision of this Warrant shall be interpreted in such <u>manner</u> as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n) <u>Headings</u>. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o) <u>Equal Treatment of Holders</u>. No consideration (including any modification of this Warrant) shall be offered or paid to any Person (as such term is defined in the Purchase Agreement) to amend or consent to a waiver or modification of any provision hereof unless the same consideration is also offered to all of the <u>Holders</u>. For clarification purposes, this provision constitutes a separate right granted to each Holder by the Company and negotiated separately by each Holder and is intended for the Company to treat the Holders as a class and shall not in any way be construed as the Holders acting in concert or as a group with respect to the Warrants or the shares of Common Stock issuable upon exercise of the Warrants.

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

[*Signature Page to Follow*]

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a duly authorized officer as of the date first above indicated.

---

| | |
|:---|:---|
| **FIRST BREACH INC.** | **FIRST BREACH INC.** |
| By: | */s/ Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | CEO |

---

**NOTICE OF EXERCISE**

TO:<u> </u>

(1) The
 undersigned hereby elects to purchase <u> </u>________________________ Warrant Securities of the Company pursuant
 to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment
 of the exercise price in full, together with all applicable transfer taxes, if any. Payment
 shall take the form of lawful money of the United States.

(2) Payment
 shall take the form of lawful money of the United States; or

(3) Please
 issue said Warrant Securities in the name of the undersigned or in such other name as is
 specified below:

___________________________________

(4) The
 Warrant Securities shall be delivered to the following DWAC Account Number:

___________________________________

___________________________________

___________________________________

(5) <u>Accredited Investor</u>. The undersigned is an "accredited investor" as defined in Regulation
 D promulgated under the Securities Act of 1933, as amended.

  <br> [SIGNATURE OF HOLDER]

Name of Investing Entity: _______________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________<u> </u>

Name of Authorized Signatory: __________________________________________________________________<u> </u>

Title of Authorized Signatory: ___________________________________________________________________

Date: ______________<u> </u>

**ASSIGNMENT FORM**

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this Form to purchase shares.)

**FOR VALUE RECEIVED**, the foregoing Warrant and all rights evidenced thereby are hereby assigned to:

---

| | |
|:---|:---|
| Name: | |
|  | (Please Print) |
| Address: | |
|  | (Please Print) |
| <br> Phone Number: | |
| Email Address: | |
| Dated:_______,___ |  |

---

Holder's Signature:____________________

Holder's Address:   <br>

## Exhibit 10.17

**Exhibit 10.17**

**<u>WARRANT</u>**

**NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BYA LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.**

**FIRST BREACH INC.**

**<u>COMMON STOCK PURCHASE WARRANT</u>**

Original Issue Date: April 24, 2026

THIS COMMON STOCK PURCHASE WARRANT (this "**Warrant**") certifies that, for value received, Bradford Johnson or its assigns ("**<u>Holder</u>**") is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of the consummation the earlier to occur of (i) October 24, 2026 or (ii) the first Liquidity Event occurring after the Original Issue Date of this Warrant ("**Initial Exercise Date**") and on or prior to 5:00 p.m. (New York City time) on fifth anniversary of the Initial Exercise Date ("**Termination Date**") but not thereafter, to subscribe for and purchase from First Breach Inc., a Delaware corporation ("**Company**"), up to 250,000 shares of Common Stock (as subject to adjustment hereunder, "**Warrant Shares**"). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

Notwithstanding the foregoing, in the event that in the event that in such Liquidity Event the Company issues units comprising shares of Common Stock and additional warrants and/or any other securities convertible into or exercisable for shares of Common Stock (such additional warrants and/or other securities, as the case may be, "<u>Other Unit Securities</u>") then this Warrant shall be exercisable for, in addition to the Warrant Shares, such number of such Other Unit Securities that, if they had been included in the Liquidity Event, equals the aggregate number that would have been required to create a number of units proportional to the number of Warrant Shares specified hereinabove. The Warrant Shares and Other Unit Securities purchasable pursuant to this Warrant and such Other Unit Securities in accordance with the foregoing shall be collectively referred to herein as ("**Warrant Securities**").

**Section 1 <u>Definitions</u>.**

Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement ("**Purchase Agreement**"), dated as of April 24, 2026 by and among the Company and the Investors signatory thereto.

"**Business Day**" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"**Commission**" means the United States Securities and Exchange Commission.

"**Common Stock**" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"**Exempt Issuance**" means the issuance of Common Stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by the Company.

"**Liquidity Event**" means the date on which the Company completes a direct listing of its Common Stock on a National Securities Exchange.

"**National Securities Exchange**" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"**Person**" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"**Securities Act**" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"**Trading Day**" means a day on which the principal Trading Market is open for trading.

"**Trading Market**" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB, OTCQX, or the OTC Pink Marketplace (or any successors to any of the foregoing).

"**Transfer Agent**" means the Company's transfer agent for the Common Stock, and any successor transfer agent of the Company.

"**Variable Rate Transaction**" means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.

**Section 2 Exercise.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Exercise of Warrant</u>. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto ("**Notice of Exercise**"). Within the earlier of: (i) two (2) Business Days; and (ii) the number of Business Days comprising the Standard Settlement Period (as defined in section 2(d)(i)) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier's check drawn on a United States bank. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Securities available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Business Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Securities available hereunder shall have the effect of lowering the outstanding number of Warrant Securities purchasable hereunder in an amount equal to the applicable number of Warrant Securities purchased. The Holder and the Company shall maintain records showing the number of Warrant Securities purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Securities available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Exercise Price</u>. The exercise price per share of Common Stock under this Warrant shall be equal to $8.00 per share, subject to adjustment hereunder ("**Exercise Price**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Mechanics of Exercise</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Delivery of Warrant Securities Upon Exercise</u>. The Company shall cause the Warrant Securities purchased
 hereunder to be transmitted by its transfer agent to the Holder by crediting the account
 of the Holder's or its designee's balance account with The Depository Trust Company
 through its Deposit or Withdrawal at Custodian system ()"**DWAC**") if, following
 the consummation of a Liquidity Event, the Company is then a participant in such system and
 either: (A) there is an effective registration statement permitting the issuance of the Warrant
 Securities to or resale of the Warrant Securities by the Holder; or (B) the Warrant Securities
 are eligible for resale by the Holder without volume or manner- of-sale limitations pursuant
 to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company's
 share register in the name of the Holder or its designee, for the number of Warrant Securities
 to which the Holder is entitled pursuant to such exercise to the address specified by the
 Holder in the Notice of Exercise by the date that is the earliest of: (i) two (2) Business
 Days after the delivery to the Company of the Notice of Exercise; (ii) one (1) trading day
 after delivery of the aggregate Exercise Price to the Company; and (iii) the number of Trading
 days comprising the Standard Settlement Period after the delivery to the Company of the Notice
 of Exercise (such date, the "**Warrant Share Delivery Date** "). Upon delivery
 of the Notice of Exercise, the Holder shall be deemed for all corporate (but not Rule 144)
 purposes to have become the holder of record of the Warrant Securities with respect to which
 this Warrant has been exercised, irrespective of the date of delivery of the Warrant Securities,
 provided that payment of the aggregate Exercise Price is received within the earlier of:
 (i) two (2) Business Days; and (ii) the number of trading days comprising the Standard Settlement
 Period following delivery of the Notice of Exercise. If the Company fails for any reason
 to deliver to the Holder the Warrant Securities subject to a Notice of Exercise by the Warrant
 Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages
 and not as a penalty, for each $1,000 of Warrant Securities subject to such exercise (based
 on the volume weighted average price of the Common Stock on the date of the applicable Notice
 of Exercise), $10 per Business Day (increasing to $20 per Trading Day on the fifth (5<sup>th</sup>)
 Business Day after such liquidated damages begin to accrue) for each Business Day after such
 Warrant Share Delivery Date until such Warrant Securities are delivered or the Holder rescinds
 such exercise. Following consummation of a Liquidity Event, the Company agrees to maintain
 a transfer agent that is a participant in the FAST program so long as this Warrant remains
 outstanding and exercisable. As used herein, "**Standard Settlement Period** "
 means the standard settlement period, expressed in a number of trading days, on the Company's
 primary Trading Market with respect to the Common Stock as in effect on the date of delivery
 of the Notice of Exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Delivery of New Warrants Upon Exercise</u>. If this Warrant shall have been exercised in part, the
 Company shall, at the request of a Holder and upon surrender of this Warrant certificate,
 at the time of delivery of the Warrant Securities, deliver to the Holder a new Warrant evidencing
 the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant,
 which new Warrant shall in all other respects be identical with this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. <u>Rescission Rights</u>. If the Company fails to cause the Transfer Agent to transmit to the Holder the
 Warrant Securities pursuant to section 2(d)(i) by the Warrant Share Delivery Date, then the
 Holder will have the right to rescind such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. <u>Compensation for Buy-In on Failure to Timely Deliver Warrant Securities Upon Exercise</u>. In addition
 to any other rights available to the Holder, if, following a Liquidity Event, the Company
 fails to cause its transfer agent to transmit to the Holder the Warrant Securities in accordance
 with the provisions of section 2(d)(i) above pursuant to an exercise on or before the Warrant
 Share Delivery Date, and if after such date the Holder is required by its broker to purchase
 (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise
 purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
 Warrant Securities which the Holder anticipated receiving upon such exercise ()"**Buy-In** "),
 then the Company shall: (A) pay in cash to the Holder the amount, if any, by which (x) the
 Holder's total purchase price (including brokerage commissions, if any) for the shares
 of Common Stock so purchased exceeds (y) the product of (1) the number of Warrant Securities
 that the Company was required to deliver to the Holder in connection with the exercise at
 issue times (2) the price at which the sell order giving rise to such purchase obligation
 was executed; and (B) at the option of the Holder, either reinstate the portion of the Warrant
 and equivalent number of Warrant Securities for which such exercise was not honored (in which
 case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares
 of Common Stock that would have been issued had the Company timely complied with its exercise
 and delivery obligations hereunder. For example, if the Holder purchases Common Stock having
 a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise
 of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation
 of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required
 to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
 the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company,
 evidence of the amount of such loss. Nothing herein shall limit a Holder's right to
 pursue any other remedies available to it hereunder, at law or in equity including, without
 limitation, a decree of specific performance and/or injunctive relief with respect to the
 Company's failure to timely deliver shares of Common Stock upon exercise of the Warrant
 as required pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. <u>No Fractional Shares or Scrip</u>. No fractional shares or scrip representing fractional shares
 shall be issued upon the exercise of this Warrant. As to any fraction of a share which the
 Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at
 its election, either pay a cash adjustment in respect of such final fraction in an amount
 equal to such fraction multiplied by the Exercise Price or roundup to the next whole share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. <u>Charges, Taxes and Expenses</u>. Issuance of Warrant Securities shall be made without charge to the
 Holder for any issue or transfer tax or other incidental expense in respect of the issuance
 of such Warrant Securities, all of which taxes and expenses shall be paid by the Company,
 and such Warrant Securities shall be issued in the name of the Holder or in such name or
 names as may be directed by the Holder; *provided, however,* that in the event that
 Warrant Securities are to be issued in a name other than the name of the Holder, this Warrant
 when surrendered for exercise shall be accompanied by the Assignment Form attached hereto
 duly executed by the Holder and the Company may require, as a condition thereto, the payment
 of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
 shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise
 and all fees to the Depository Trust Company (or another established clearing corporation
 performing similar functions) required for same-day electronic delivery of the Warrant Securities.
 The Company shall pay all attorney fees required for the issuance of attorney legal opinions
 for removal of restrictive legends on Warrant Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. <u>Closing of Books</u>. The Company will not close its stockholder books or records in any manner which
 prevents the timely exercise of this Warrant, pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Holder's Exercise Limitations</u>. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder's Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder's Affiliates (such Persons, "**Attribution Parties**")), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon: (i) exercise of the remaining, non- exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties; and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder ("**Exchange Act**"), it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder's determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in: (A) the Company's most recent periodic or annual report filed with the Commission, as the case may be; (B) a more recent public announcement by the Company; or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one trading day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The "**Beneficial Ownership Limitation**" shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61<sup>st</sup> day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

**Section 3 Certain Adjustments.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Stock Dividends and Splits</u>. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant); (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Subsequent Equity Sales</u>. If and whenever, at any time while this Warrant is outstanding, the Company issues or sells, announces any offer, sale, or other disposition of, or in accordance with this section 3 is deemed to have issued, sold or granted (or makes an announcement regarding the same), any shares of Common Stock and/or Common Stock equivalents (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any securities issued or sold or deemed to have been issued or sold solely in connection with an Exempt Issuance) for a consideration per share ("**New Issuance Price**") less than a price equal to the Exercise Price in effect immediately prior to such issuance or sale or deemed issuance or sale (such Exercise Price then in effect is referred to herein as the "**Applicable Price**") (the foregoing a "**Dilutive Issuance**"), then immediately after such Dilutive Issuance the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and the New Issuance Price under this section 3(b)), the following shall be applicable:

&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. <u>Issuance of Options</u>. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell) any Options (as defined below) and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Option (as defined below) or upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of any such Option (as defined below) or otherwise pursuant to the terms thereof is less than the Applicable Price, then such Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option (as defined below) for such price per share. For purposes of this section 3(b)(i), the 'lowest price per share for which one Common Stock is at any time issuable upon the exercise of any such Options (as defined below) or upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of any such Option (as defined below) or otherwise pursuant to the terms thereof' shall be equal to: (A) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting, issuance or sale of such Option (as defined below), upon exercise of such Option (as defined below) and upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of such Option (as defined below) or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option (as defined below) for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any such Options (as defined below) or upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of any such Option (as defined below) or otherwise pursuant to the terms thereof minus; (B) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting, issuance or sale of such Option (as defined below), upon exercise of such Option (as defined below) and upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of such Option (as defined below) or otherwise pursuant to the terms thereof plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Option (as defined below) (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock or of such Common Stock equivalents upon the exercise of such Options (as defined below) or otherwise pursuant to the terms of or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Common Stock equivalents. "**Option**" means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities, other than option issued in an Exempt Issuance. "**Convertible Securities**" means any shares or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.

&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. <u>Issuance of Convertible Securities</u>. If the Company in any manner issues or sells (or enters into any agreement to issue or sell) any Common Stock equivalents and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such shares of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Common Stock equivalents for such price per share. For the purposes of this section 3(b)(ii), the 'lowest price per share for which one Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof' shall be equal to: (A) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Common Stock equivalents and upon conversion, exercise or exchange of such Common Stock equivalents or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Common Stock equivalents for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus; (B) the sum of all amounts paid or payable to the holder of such Common Stock equivalents (or any other Person) upon the issuance or sale of such Common Stock equivalents plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Common Stock equivalents (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Common Stock equivalents or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Common Stock equivalents is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this section 3(b), except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.

&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. <u>Change in Option Price or Rate of Conversion</u>. If the purchase or exercise price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Common Stock equivalents, or the rate at which any Common Stock equivalents are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in section 3(a)), the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in effect at such time had such Options or Common Stock equivalents provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this section 3(b)(iii), if the terms of any Option or Common Stock equivalents that was outstanding as of the date this Warrant was issued are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Common Stock equivalents and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this section 3(b) shall be made if such adjustment would result in an increase of the Exercise Price, then in effect.

&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. <u>Change in Option Price or Rate of Conversion</u>. If any Option and/or Common Stock equivalents and/or Adjustment Right (as defined below) is issued in connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the "**Primary Security,**" and such Option <u>and</u>/or Common Stock equivalents and/or Adjustment Right (as defined below), the "**Secondary Securities**"), together comprising one integrated transaction, (or one or more transactions if such issuances or sales or deemed issuances or sales of securities of the Company either:

&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) have at least one investor or purchaser in common; (B) are consummated in reasonable proximity to each other; and/or (C) are consummated under the same plan of financing) the aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of Common Stock was issued (or was deemed to be issued pursuant to section 3(b)(i) or 3(b)(ii) above, as applicable) in such integrated transaction solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the fair market value (as determined by the Holder in good faith), as applicable, of such Adjustment Right (as defined below), if any, and (II) the fair market value (as determined by the Holder) of such Common Stock equivalents, if any, in each case, as determined on a per share basis in accordance with this section 3(b)(iv). If any shares of Common Stock, Options or Common Stock equivalents are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Common Stock equivalents, will be deemed to be the net amount of consideration received by the Company therefor. If any shares of Common Stock, Options or Common Stock equivalents are issued or sold for a consideration other than cash, the amount of such consideration received by the Company (for the purpose of determining the consideration paid for such Common Stock, Option or Common Stock equivalents, will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic average of the volume weighted average prices of such security for each of the five (5) Trading days immediately preceding the date of receipt. If any shares of Common Stock, Options or Common Stock equivalents are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor (for the purpose of determining the consideration paid for such shares of Common Stock, Option or Common Stock equivalents, will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Common Stock equivalents (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation ("**Valuation Event**"), the fair value of such consideration will be determined within five (5) Trading days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company). "**Adjustment Right**" means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or sale (or deemed issuance or sale hereunder) of Common Stock (other than rights of the type described in sections 3(c) and 3(d) hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).

&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. <u>Change in Option Price or Rate of Conversion</u>. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them: (A) to receive a dividend or other distribution payable in shares of Common Stock, <u>Options</u> or in Common Stock equivalents; or (B) to subscribe for or purchase shares of Common Stock, Options or Common Stock equivalents, then such record date will be deemed to be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

&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. If the Company enters into a Variable Rate Transaction, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible price, conversion price or exercise price at which such securities may be issued, converted or exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Subsequent Rights Offerings</u>. In addition to any adjustments pursuant to section 3(a) above, if at any time the Company grants, issues or sells any Common Stock equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "**Purchase Rights**"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (*provided, however*, that, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Pro Rata Distributions</u>. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of <u>Common</u> Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "**Distribution**"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Fundamental Transaction</u>. If, at any time while this Warrant is outstanding: (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person; (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions; (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of fifty percent (50%) or more of the outstanding Common Stock; (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property; or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme or arrangement) with another Person or group of Persons whereby such other Person or group acquires more than fifty percent (50%) of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "**Fundamental Transaction**"), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in section 2(d) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration ("**Alternate Consideration**") receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in section 2(d) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor ("**Successor Entity**") to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory inform and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the 'Company' shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. A Liquidity Event shall not be deemed to be a Fundamental Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Calculations</u>. All calculations under this section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this section 3, the number of shares of Common Stock <u>deemed</u> to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Adjustment to Exercise Price</u>. Whenever the Exercise Price is adjusted pursuant to any provision of this section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Securities and setting forth a brief statement of the facts requiring such adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Notice to Allow Exercise by Holder</u>. If: (i) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock; (ii) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (iii) the Company shall authorize the granting to all holders of the <u>Common</u> Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (iv) the approval of any stockholders of the Company shall be required in connection with any re-classification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or (v) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least twenty (20) calendar days prior to the applicable record or effective date herein after specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

**Section 4 <u>Transfer of Warrant</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Transferability</u>.
 Subject to compliance with any applicable securities laws and the conditions set forth in
 section 4(d) hereof and to the provisions of section 4.01 of the Purchase Agreement, this
 Warrant and all rights hereunder (including, without limitation, any registration rights)
 are transferable, in whole or in part, upon surrender of this Warrant at the principal office
 of the Company or its designated agent, together with a written assignment of this Warrant
 substantially in the form attached hereto duly executed by the Holder or its agent or attorney
 and funds sufficient to pay any transfer taxes payable upon the making of such transfer.
 Upon such surrender and, if required, such payment, the Company shall execute and deliver
 a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in
 the denomination or denominations specified in such instrument of assignment, and shall issue
 to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and
 this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
 the Holder shall not be required to physically surrender this Warrant to the Company unless
 the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this
 Warrant to the Company within three (3) Business Days of the date on which the Holder delivers
 an assignment form to the Company assigning this Warrant in full. The Warrant, if properly
 assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant
 Securities without having a new Warrant issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>New Warrants</u>. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Securities issuable pursuant thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Warrant Register</u>. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose ("**Warrant Register**"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Transfer Restrictions</u>. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either: (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws; or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of section 4.01 of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Representation by the Holder</u>. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Securities issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Securities or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

**Section 5 Miscellaneous.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>No Rights as Stockholder Until Exercise</u>. This Warrant does not entitle the Holder to any voting rights, dividends, or other rights as a stockholder of the Company prior to the exercise hereof as set forth in section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Loss, Theft, Destruction or Mutilation of Warrant</u>. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Securities, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Saturdays, Sundays, Holidays, etc</u>. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will: (i) not increase the par value of any Warrant Securities above the amount payable therefor upon such exercise immediately prior to such increase in par value; (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Securities upon the exercise of this Warrant; and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Securities for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Jurisdiction</u>. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Restrictions</u>. The Holder acknowledges that the Warrant Securities acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Nonwaiver and Expenses</u>. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice the Holder's rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Notices</u>. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) <u>Limitation of Liability</u>. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Securities, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j) <u>Remedies</u>. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k) <u>Successors and Assigns</u>. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l) <u>Amendment; Waivers</u>. This Warrant may be modified or amended, or the provisions hereof waived with the written consent of the Company and the Holder. Further, any modifications, amendments or waivers of the provisions hereof shall be subject to section 5.05 of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m) <u>Severability</u>. Wherever possible, each provision of this Warrant shall be interpreted in such <u>manner</u> as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n) <u>Headings</u>. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o) <u>Equal Treatment of Holders</u>. No consideration (including any modification of this Warrant) shall be offered or paid to any Person (as such term is defined in the Purchase Agreement) to amend or consent to a waiver or modification of any provision hereof unless the same consideration is also offered to all of the <u>Holders</u>. For clarification purposes, this provision constitutes a separate right granted to each Holder by the Company and negotiated separately by each Holder and is intended for the Company to treat the Holders as a class and shall not in any way be construed as the Holders acting in concert or as a group with respect to the Warrants or the shares of Common Stock issuable upon exercise of the Warrants.

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

[*Signature Page to Follow*]

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a duly authorized officer as of the date first above indicated.

---

| | |
|:---|:---|
| **FIRST BREACH INC.** | **FIRST BREACH INC.** |
| By: | */s/ Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | CEO |

---

**NOTICE OF EXERCISE**

TO: _____________________________

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 undersigned hereby elects to purchase___________________________________Warrant Securities
 of the Company pursuant to the terms of the attached Warrant (only if exercised in full),
 and tenders herewith payment of the exercise price in full, together with all applicable
 transfer taxes, if any. Payment shall take the form of lawful money of the United States.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Payment
 shall take the form of lawful money of the United States; or

&nbsp;&nbsp;&nbsp;&nbsp;(3) Please
 issue said Warrant Securities in the name of the undersigned or in such other name as is
 specified below:

&nbsp;&nbsp;&nbsp;&nbsp;(4) The
 Warrant Securities shall be delivered to the following DWAC Account Number:

_________________________________________

&nbsp;&nbsp;&nbsp;&nbsp;(5) Accredited <u>Investor</u>. The undersigned is an "accredited investor" as defined in Regulation
 D promulgated under the Securities Act of 1933, as amended.

_________________________________________

_________________________________________

_________________________________________

<br> [SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: ___________________________________________________

Name of Authorized Signatory: _____________________________________________________________________

Title of Authorized Signatory: ______________________________________________________________________

Date: ______________

**ASSIGNMENT FORM**

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this Form to purchase shares.)

**FOR VALUE RECEIVED**, the foregoing Warrant and all rights evidenced thereby are hereby assigned to:

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| | |
|:---|:---|
| Name: | |
|  | (Please Print) |
| Address: | |
|  | (Please Print) |
| Phone Number: | |
| Email Address: |  |
| Dated:___________________________, ______________ |  |
| Holder's Signature: ___________________ |  |

---

Holder's Address: _______________________________________________________________________

__________________________________________________________________

## Exhibit 10.18

**Exhibit 10.18**

**<u>WARRANT</u>**

**NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BYA LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.**

**FIRST BREACH INC.**

**<u>COMMON STOCK PURCHASE WARRANT</u>**

Original Issue Date: April 24, 2026

THIS COMMON STOCK PURCHASE WARRANT (this "**Warrant**") certifies that, for value received, C. Kenneth Leith or its assigns ("**<u>Holder</u>**") is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of the consummation the earlier to occur of (i) October 24, 2026 or (ii) the first Liquidity Event occurring after the Original Issue Date of this Warrant ("**Initial Exercise Date**") and on or prior to 5:00 p.m. (New York City time) on fifth anniversary of the Initial Exercise Date ("**Termination Date**") but not thereafter, to subscribe for and purchase from First Breach Inc., a Delaware corporation ("**Company**"), up to 7,500 shares of Common Stock (as subject to adjustment hereunder, "**Warrant Shares**"). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

Notwithstanding the foregoing, in the event that in the event that in such Liquidity Event the Company issues units comprising shares of Common Stock and additional warrants and/or any other securities convertible into or exercisable for shares of Common Stock (such additional warrants and/or other securities, as the case may be, "<u>Other Unit Securities</u>") then this Warrant shall be exercisable for, in addition to the Warrant Shares, such number of such Other Unit Securities that, if they had been included in the Liquidity Event, equals the aggregate number that would have been required to create a number of units proportional to the number of Warrant Shares specified hereinabove. The Warrant Shares and Other Unit Securities purchasable pursuant to this Warrant and such Other Unit Securities in accordance with the foregoing shall be collectively referred to herein as ("**Warrant Securities**").

**Section 1 <u>Definitions</u>.**

Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement ("**Purchase Agreement**"), dated as of April 24, 2026 by and among the Company and the Investors signatory thereto.

"**Business Day**" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"**Commission**" means the United States Securities and Exchange Commission.

"**Common Stock**" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"**Exempt Issuance**" means the issuance of Common Stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by the Company.

"**Liquidity Event**" means the date on which the Company completes a direct listing of its Common Stock on a National Securities Exchange.

"**National Securities Exchange**" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"**Person**" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"**Securities Act**" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"**Trading Day**" means a day on which the principal Trading Market is open for trading.

"**Trading Market**" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, OTCQB, OTCQX, or the OTC Pink Marketplace (or any successors to any of the foregoing).

"**Transfer Agent**" means the Company's transfer agent for the Common Stock, and any successor transfer agent of the Company.

"**Variable Rate Transaction**" means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.

**Section 2 Exercise.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Exercise of Warrant</u>. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto ("**Notice of Exercise**"). Within the earlier of: (i) two (2) Business Days; and (ii) the number of Business Days comprising the Standard Settlement Period (as defined in section 2(d)(i)) following the date of exercise as aforesaid, the Holder shall deliver to the Company the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier's check drawn on a United States bank. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Securities available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Business Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Securities available hereunder shall have the effect of lowering the outstanding number of Warrant Securities purchasable hereunder in an amount equal to the applicable number of Warrant Securities purchased. The Holder and the Company shall maintain records showing the number of Warrant Securities purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Securities available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Exercise Price</u>. The exercise price per share of Common Stock under this Warrant shall be equal to $8.00 per share, subject to adjustment hereunder ("**Exercise Price**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Mechanics of Exercise</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Delivery of Warrant Securities Upon Exercise</u>. The Company shall cause the Warrant Securities purchased
 hereunder to be transmitted by its transfer agent to the Holder by crediting the account
 of the Holder's or its designee's balance account with The Depository Trust Company
 through its Deposit or Withdrawal at Custodian system ()"**DWAC**") if, following
 the consummation of a Liquidity Event, the Company is then a participant in such system and
 either: (A) there is an effective registration statement permitting the issuance of the Warrant
 Securities to or resale of the Warrant Securities by the Holder; or (B) the Warrant Securities
 are eligible for resale by the Holder without volume or manner- of-sale limitations pursuant
 to Rule 144, and otherwise by physical delivery of a certificate, registered in the Company's
 share register in the name of the Holder or its designee, for the number of Warrant Securities
 to which the Holder is entitled pursuant to such exercise to the address specified by the
 Holder in the Notice of Exercise by the date that is the earliest of: (i) two (2) Business
 Days after the delivery to the Company of the Notice of Exercise; (ii) one (1) trading day
 after delivery of the aggregate Exercise Price to the Company; and (iii) the number of Trading
 days comprising the Standard Settlement Period after the delivery to the Company of the Notice
 of Exercise (such date, the "**Warrant Share Delivery Date** "). Upon delivery
 of the Notice of Exercise, the Holder shall be deemed for all corporate (but not Rule 144)
 purposes to have become the holder of record of the Warrant Securities with respect to which
 this Warrant has been exercised, irrespective of the date of delivery of the Warrant Securities,
 provided that payment of the aggregate Exercise Price is received within the earlier of:
 (i) two (2) Business Days; and (ii) the number of trading days comprising the Standard Settlement
 Period following delivery of the Notice of Exercise. If the Company fails for any reason
 to deliver to the Holder the Warrant Securities subject to a Notice of Exercise by the Warrant
 Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages
 and not as a penalty, for each $1,000 of Warrant Securities subject to such exercise (based
 on the volume weighted average price of the Common Stock on the date of the applicable Notice
 of Exercise), $10 per Business Day (increasing to $20 per Trading Day on the fifth (5<sup>th</sup>)
 Business Day after such liquidated damages begin to accrue) for each Business Day after such
 Warrant Share Delivery Date until such Warrant Securities are delivered or the Holder rescinds
 such exercise. Following consummation of a Liquidity Event, the Company agrees to maintain
 a transfer agent that is a participant in the FAST program so long as this Warrant remains
 outstanding and exercisable. As used herein, "**Standard Settlement Period** "
 means the standard settlement period, expressed in a number of trading days, on the Company's
 primary Trading Market with respect to the Common Stock as in effect on the date of delivery
 of the Notice of Exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Delivery of New Warrants Upon Exercise</u>. If this Warrant shall have been exercised in part, the
 Company shall, at the request of a Holder and upon surrender of this Warrant certificate,
 at the time of delivery of the Warrant Securities, deliver to the Holder a new Warrant evidencing
 the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant,
 which new Warrant shall in all other respects be identical with this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. <u>Rescission Rights</u>. If the Company fails to cause the Transfer Agent to transmit to the Holder the
 Warrant Securities pursuant to section 2(d)(i) by the Warrant Share Delivery Date, then the
 Holder will have the right to rescind such exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. <u>Compensation for Buy-In on Failure to Timely Deliver Warrant Securities Upon Exercise</u>. In addition
 to any other rights available to the Holder, if, following a Liquidity Event, the Company
 fails to cause its transfer agent to transmit to the Holder the Warrant Securities in accordance
 with the provisions of section 2(d)(i) above pursuant to an exercise on or before the Warrant
 Share Delivery Date, and if after such date the Holder is required by its broker to purchase
 (in an open market transaction or otherwise) or the Holder's brokerage firm otherwise
 purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
 Warrant Securities which the Holder anticipated receiving upon such exercise ()"**Buy-In** "),
 then the Company shall: (A) pay in cash to the Holder the amount, if any, by which (x) the
 Holder's total purchase price (including brokerage commissions, if any) for the shares
 of Common Stock so purchased exceeds (y) the product of (1) the number of Warrant Securities
 that the Company was required to deliver to the Holder in connection with the exercise at
 issue times (2) the price at which the sell order giving rise to such purchase obligation
 was executed; and (B) at the option of the Holder, either reinstate the portion of the Warrant
 and equivalent number of Warrant Securities for which such exercise was not honored (in which
 case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares
 of Common Stock that would have been issued had the Company timely complied with its exercise
 and delivery obligations hereunder. For example, if the Holder purchases Common Stock having
 a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise
 of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation
 of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required
 to pay the Holder $1,000. The Holder shall provide the Company written notice indicating
 the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company,
 evidence of the amount of such loss. Nothing herein shall limit a Holder's right to
 pursue any other remedies available to it hereunder, at law or in equity including, without
 limitation, a decree of specific performance and/or injunctive relief with respect to the
 Company's failure to timely deliver shares of Common Stock upon exercise of the Warrant
 as required pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. <u>No Fractional Shares or Scrip</u>. No fractional shares or scrip representing fractional shares
 shall be issued upon the exercise of this Warrant. As to any fraction of a share which the
 Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at
 its election, either pay a cash adjustment in respect of such final fraction in an amount
 equal to such fraction multiplied by the Exercise Price or roundup to the next whole share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. <u>Charges, Taxes and Expenses</u>. Issuance of Warrant Securities shall be made without charge to the
 Holder for any issue or transfer tax or other incidental expense in respect of the issuance
 of such Warrant Securities, all of which taxes and expenses shall be paid by the Company,
 and such Warrant Securities shall be issued in the name of the Holder or in such name or
 names as may be directed by the Holder; *provided, however,* that in the event that
 Warrant Securities are to be issued in a name other than the name of the Holder, this Warrant
 when surrendered for exercise shall be accompanied by the Assignment Form attached hereto
 duly executed by the Holder and the Company may require, as a condition thereto, the payment
 of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
 shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise
 and all fees to the Depository Trust Company (or another established clearing corporation
 performing similar functions) required for same-day electronic delivery of the Warrant Securities.
 The Company shall pay all attorney fees required for the issuance of attorney legal opinions
 for removal of restrictive legends on Warrant Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. <u>Closing of Books</u>. The Company will not close its stockholder books or records in any manner which
 prevents the timely exercise of this Warrant, pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Holder's Exercise Limitations</u>. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder's Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder's Affiliates (such Persons, "**Attribution Parties**")), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon: (i) exercise of the remaining, non- exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties; and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder ("**Exchange Act**"), it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder's determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in: (A) the Company's most recent periodic or annual report filed with the Commission, as the case may be; (B) a more recent public announcement by the Company; or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within one trading day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The "**Beneficial Ownership Limitation**" shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61<sup>st</sup> day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

**Section 3 Certain Adjustments.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Stock Dividends and Splits</u>. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant); (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Subsequent Equity Sales</u>. If and whenever, at any time while this Warrant is outstanding, the Company issues or sells, announces any offer, sale, or other disposition of, or in accordance with this section 3 is deemed to have issued, sold or granted (or makes an announcement regarding the same), any shares of Common Stock and/or Common Stock equivalents (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any securities issued or sold or deemed to have been issued or sold solely in connection with an Exempt Issuance) for a consideration per share ("**New Issuance Price**") less than a price equal to the Exercise Price in effect immediately prior to such issuance or sale or deemed issuance or sale (such Exercise Price then in effect is referred to herein as the "**Applicable Price**") (the foregoing a "**Dilutive Issuance**"), then immediately after such Dilutive Issuance the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and the New Issuance Price under this section 3(b)), the following shall be applicable:

&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. <u>Issuance of Options</u>. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell) any Options (as defined below) and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Option (as defined below) or upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of any such Option (as defined below) or otherwise pursuant to the terms thereof is less than the Applicable Price, then such Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option (as defined below) for such price per share. For purposes of this section 3(b)(i), the 'lowest price per share for which one Common Stock is at any time issuable upon the exercise of any such Options (as defined below) or upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of any such Option (as defined below) or otherwise pursuant to the terms thereof' shall be equal to: (A) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting, issuance or sale of such Option (as defined below), upon exercise of such Option (as defined below) and upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of such Option (as defined below) or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option (as defined below) for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any such Options (as defined below) or upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of any such Option (as defined below) or otherwise pursuant to the terms thereof minus; (B) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting, issuance or sale of such Option (as defined below), upon exercise of such Option (as defined below) and upon conversion, exercise or exchange of any Common Stock equivalents issuable upon exercise of such Option (as defined below) or otherwise pursuant to the terms thereof plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Option (as defined below) (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock or of such Common Stock equivalents upon the exercise of such Options (as defined below) or otherwise pursuant to the terms of or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Common Stock equivalents. "**Option**" means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities, other than option issued in an Exempt Issuance. "**Convertible Securities**" means any shares or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.

&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. <u>Issuance of Convertible Securities</u>. If the Company in any manner issues or sells (or enters into any agreement to issue or sell) any Common Stock equivalents and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such shares of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Common Stock equivalents for such price per share. For the purposes of this section 3(b)(ii), the 'lowest price per share for which one Common Stock is at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof' shall be equal to: (A) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Common Stock equivalents and upon conversion, exercise or exchange of such Common Stock equivalents or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Common Stock equivalents for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus; (B) the sum of all amounts paid or payable to the holder of such Common Stock equivalents (or any other Person) upon the issuance or sale of such Common Stock equivalents plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Common Stock equivalents (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Common Stock equivalents or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Common Stock equivalents is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this section 3(b), except as contemplated below, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.

&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. <u>Change in Option Price or Rate of Conversion</u>. If the purchase or exercise price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Common Stock equivalents, or the rate at which any Common Stock equivalents are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in section 3(a)), the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in effect at such time had such Options or Common Stock equivalents provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this section 3(b)(iii), if the terms of any Option or Common Stock equivalents that was outstanding as of the date this Warrant was issued are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Common Stock equivalents and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this section 3(b) shall be made if such adjustment would result in an increase of the Exercise Price, then in effect.

&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. <u>Change in Option Price or Rate of Conversion</u>. If any Option and/or Common Stock equivalents and/or Adjustment Right (as defined below) is issued in connection with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the "**Primary Security,**" and such Option <u>and</u>/or Common Stock equivalents and/or Adjustment Right (as defined below), the "**Secondary Securities**"), together comprising one integrated transaction, (or one or more transactions if such issuances or sales or deemed issuances or sales of securities of the Company either:

&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) have at least one investor or purchaser in common; (B) are consummated in reasonable proximity to each other; and/or (C) are consummated under the same plan of financing) the aggregate consideration per share of Common Stock with respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of Common Stock was issued (or was deemed to be issued pursuant to section 3(b)(i) or 3(b)(ii) above, as applicable) in such integrated transaction solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the fair market value (as determined by the Holder in good faith), as applicable, of such Adjustment Right (as defined below), if any, and (II) the fair market value (as determined by the Holder) of such Common Stock equivalents, if any, in each case, as determined on a per share basis in accordance with this section 3(b)(iv). If any shares of Common Stock, Options or Common Stock equivalents are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Common Stock equivalents, will be deemed to be the net amount of consideration received by the Company therefor. If any shares of Common Stock, Options or Common Stock equivalents are issued or sold for a consideration other than cash, the amount of such consideration received by the Company (for the purpose of determining the consideration paid for such Common Stock, Option or Common Stock equivalents, will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic average of the volume weighted average prices of such security for each of the five (5) Trading days immediately preceding the date of receipt. If any shares of Common Stock, Options or Common Stock equivalents are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor (for the purpose of determining the consideration paid for such shares of Common Stock, Option or Common Stock equivalents, will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Common Stock equivalents (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation ("**Valuation Event**"), the fair value of such consideration will be determined within five (5) Trading days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company). "**Adjustment Right**" means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or sale (or deemed issuance or sale hereunder) of Common Stock (other than rights of the type described in sections 3(c) and 3(d) hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).

&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. <u>Change in Option Price or Rate of Conversion</u>. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them: (A) to receive a dividend or other distribution payable in shares of Common Stock, <u>Options</u> or in Common Stock equivalents; or (B) to subscribe for or purchase shares of Common Stock, Options or Common Stock equivalents, then such record date will be deemed to be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

&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. If the Company enters into a Variable Rate Transaction, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible price, conversion price or exercise price at which such securities may be issued, converted or exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Subsequent Rights Offerings</u>. In addition to any adjustments pursuant to section 3(a) above, if at any time the Company grants, issues or sells any Common Stock equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "**Purchase Rights**"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (*provided, however*, that, to the extent that the Holder's right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Pro Rata Distributions</u>. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of <u>Common</u> Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "**Distribution**"), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Fundamental Transaction</u>. If, at any time while this Warrant is outstanding: (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person; (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions; (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of fifty percent (50%) or more of the outstanding Common Stock; (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property; or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme or arrangement) with another Person or group of Persons whereby such other Person or group acquires more than fifty percent (50%) of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a "**Fundamental Transaction**"), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in section 2(d) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration ("**Alternate Consideration**") receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in section 2(d) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor ("**Successor Entity**") to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory inform and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the 'Company' shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. A Liquidity Event shall not be deemed to be a Fundamental Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Calculations</u>. All calculations under this section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this section 3, the number of shares of Common Stock <u>deemed</u> to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Adjustment to Exercise Price</u>. Whenever the Exercise Price is adjusted pursuant to any provision of this section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Securities and setting forth a brief statement of the facts requiring such adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Notice to Allow Exercise by Holder</u>. If: (i) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock; (ii) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (iii) the Company shall authorize the granting to all holders of the <u>Common</u> Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (iv) the approval of any stockholders of the Company shall be required in connection with any re-classification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or (v) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least twenty (20) calendar days prior to the applicable record or effective date herein after specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

**Section 4 <u>Transfer of Warrant</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Transferability</u>. Subject to compliance with any applicable securities laws and the conditions set forth in section 4(d) hereof and to the provisions of section 4.01 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Business Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Securities without having a new Warrant issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>New Warrants</u>. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Securities issuable pursuant thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Warrant Register</u>. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose ("**Warrant Register**"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Transfer Restrictions</u>. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either: (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws; or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of section 4.01 of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Representation by the Holder</u>. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Securities issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Securities or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

**Section 5 Miscellaneous.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>No Rights as Stockholder Until Exercise</u>. This Warrant does not entitle the Holder to any voting rights, dividends, or other rights as a stockholder of the Company prior to the exercise hereof as set forth in section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Loss, Theft, Destruction or Mutilation of Warrant</u>. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Securities, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Saturdays, Sundays, Holidays, etc</u>. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will: (i) not increase the par value of any Warrant Securities above the amount payable therefor upon such exercise immediately prior to such increase in par value; (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Securities upon the exercise of this Warrant; and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Securities for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Jurisdiction</u>. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Restrictions</u>. The Holder acknowledges that the Warrant Securities acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Nonwaiver and Expenses</u>. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice the Holder's rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Notices</u>. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) <u>Limitation of Liability</u>. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Securities, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j) <u>Remedies</u>. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k) <u>Successors and Assigns</u>. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l) <u>Amendment; Waivers</u>. This Warrant may be modified or amended, or the provisions hereof waived with the written consent of the Company and the Holder. Further, any modifications, amendments or waivers of the provisions hereof shall be subject to section 5.05 of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m) <u>Severability</u>. Wherever possible, each provision of this Warrant shall be interpreted in such <u>manner</u> as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n) <u>Headings</u>. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o) <u>Equal Treatment of Holders</u>. No consideration (including any modification of this Warrant) shall be offered or paid to any Person (as such term is defined in the Purchase Agreement) to amend or consent to a waiver or modification of any provision hereof unless the same consideration is also offered to all of the <u>Holders</u>. For clarification purposes, this provision constitutes a separate right granted to each Holder by the Company and negotiated separately by each Holder and is intended for the Company to treat the Holders as a class and shall not in any way be construed as the Holders acting in concert or as a group with respect to the Warrants or the shares of Common Stock issuable upon exercise of the Warrants.

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

[*Signature Page to Follow*]

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a duly authorized officer as of the date first above indicated.

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| | |
|:---|:---|
| **FIRST BREACH INC.** | **FIRST BREACH INC.** |
| By: | */s/ Jeffrey Low* |
| Name: | Jeffrey Low |
| Title: | CEO |

---

**NOTICE OF EXERCISE**

TO: __________________________

(1) The
undersigned hereby elects to purchase_____________________ Warrant Securities of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any. Payment shall take the form of lawful money of the United States.

(2) Payment
 shall take the form of lawful money of the United States; or

(3) Please
 issue said Warrant Securities in the name of the undersigned or in such other name as is
 specified below:

__________________________________________

(4) The
 Warrant Securities shall be delivered to the following DWAC Account Number:

__________________________________________

__________________________________________

__________________________________________

(5) Accredited <u>Investor</u>. The undersigned is an "accredited investor" as defined in Regulation
 D promulgated under the Securities Act of 1933, as amended.

  <br> [SIGNATURE OF HOLDER]

Name of Investing Entity: _________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: __________________________________________________<u> </u>

Name of Authorized Signatory: ____________________________________________________________________<u> </u>

Title of Authorized Signatory: ____________________________________________________________________

Date:<u> </u>_________________

**ASSIGNMENT FORM**

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this Form to purchase shares.)

**FOR VALUE RECEIVED**, the foregoing Warrant and all rights evidenced thereby are hereby assigned to:

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| | |
|:---|:---|
| Name: | |
|  | (Please Print) |
| Address: | |
|  | (Please Print) |
| Phone Number: | |
| Email Address: | |

---

Dated: ___________________, __________

Holder's Signature:_______________________________<u> </u>

Holder's Address:____________________________________________________________________

___________________________________________________________________<u> </u>

## Exhibit 10.19

**Exhibit 10.19**![](ex10-19_001.jpg)

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## Exhibit 10.20

**Exhibit 10.20**![](ex10-20_001.jpg)

![](ex10-20_002.jpg)

![](ex10-20_003.jpg)

![](ex10-20_004.jpg)

![](ex10-20_005.jpg)

![](ex10-20_006.jpg)

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## Exhibit 10.21

**Exhibit 10.21** 

 

<u>FORM OF SECURED CONVERTIBLE PROMISSORY NOTE</u>

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

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| | |
|:---|:---|
| Original Issue Date: [ ], 2026 | [$] |

---

**FIRST BREACH, INC.**

<u>SECURED CONVERTIBLE PROMISSORY NOTE</u>

THIS CONVERTIBLE PROMISSORY NOTE (this <u>"Note</u>") is one of a series of duly authorized and validly issued Secured Convertible Promissory Notes of First Breach, Inc., a Delaware corporation (the "<u>Company</u>"), designated as such by the Company (collectively with this Note, the "<u>Notes</u>").

FOR VALUE RECEIVED, the Company promises to pay to [_______________], or its registered assigns ("<u>Holder</u>"), the principal sum of [_______________] U.S. DOLLARS ($___________) (the "<u>Principal Amount</u>") which Principal Amount reflects an original issue discount of thirty-five percent (35%) (the "<u>Original Issue Discount</u>" or "<u>OID</u>") from the purchase price paid by the Holder (the "<u>Purchase Price</u>"), on the date which is twelve (12) months from the Original Issue Date (the "<u>Maturity Date</u>"). For the avoidance of doubt and the purposes of clarity, the Principal Amount of this Note (inclusive of the Original Issue Discount) shall be determined by dividing the Purchase Price by 0.65 (by way of example, for each $1,000,000 of Purchase Price, the Principal Amount would equal $1,538,461.54). The Company further promises to pay interest to the Holder on the aggregate then outstanding Principal Amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

Section 1. <u>Definitions</u>. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

"<u>Bankruptcy Event</u>" means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 75 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 75 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts, (g) the Company or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due, or (h) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

"<u>Business Day</u>" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"<u>Closing Date</u>" has the meaning ascribed to it in the Purchase Agreement.

"<u>Conversion</u>" means a conversion of this Note pursuant to Section 4.

"<u>Conversion Amount</u>" means the sum of (a) the outstanding Principal Amount of this Note, plus (b) all accrued and unpaid interest, costs, expenses and liquidated damages due in respect of this Note.

"<u>Conversion Date</u>" means the date of any Conversion in accordance with the terms of this Note.

"<u>Conversion Notice</u>" means a written notice of conversion delivered by the Holder to the Company in accordance with Section 4(b)(i).

"<u>Conversion Price</u>" means $8.00 per share, subject to adjustment as provided herein.

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Conversion Shares</u>" means the shares of Common Stock issuable upon conversion of this Note.

"<u>Common Stock</u>" means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Event of Default</u>" shall have the meaning set forth in Section 6(a).

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Indebtedness</u>" means any liabilities of the Company for borrowed money or amounts owed and all guaranties made by the Company of borrowed money or amounts owed by others.

"<u>Lead Investors</u>" means persons holding a majority in principal amount of the Notes.

"<u>Liquidity Event</u>" means the date on which the Company completes a direct listing of its Common Stock on a National Securities Exchange.

"<u>National Securities Exchange</u>" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"<u>Note Register</u>" shall have the meaning set forth in Section 2(b).

<u>"Original Issue Date</u>" means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Notes.

"<u>Original Issue Discount</u>" or "<u>OID</u>" means the difference between the Principal Amount and the Purchase Price, which equals thirty-five percent (35%) of the Principal Amount.

"<u>Purchase Price</u>" means the amount paid by the Holder to acquire this Note.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Prepayment Amount</u>" means the sum of (a) the outstanding Principal Amount of this Note, plus (b) any accrued and unpaid interest hereon.

"<u>Principal Market</u>" means the Nasdaq Capital Market; provided, however, that in the event the Common Stock is ever listed or traded on any other National Securities Exchange, then the "Principal Market" shall mean such other exchange to the extent it is the principal trading market or exchange for the Common Stock.

"<u>Purchase Agreement</u>" means the Securities Purchase Agreement, dated as of May 21, 2026, by and among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Trading Day</u>" means a day on which the Principal Market is open for trading.

Capitalized terms not otherwise defined herein are defined as set forth in the Purchase Agreement.

Section 2. <u>Interest; and Prepayment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Interest Calculations</u>. Interest shall not accrue on the outstanding Principal Amount of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Prepayment</u>. The Company shall have the option to prepay this Note without premium or penalty at any time after the Original Issue Date at an amount equal to the Prepayment Amount in cash at the option of the Lead Investors; provided, however, that the Company shall provide the Holder with no less than five (5) Trading Days' prior written notice of any such prepayment (the "Prepayment Notice"). During the period from the date of the Prepayment Notice through the date of prepayment, the Holder shall have the sole and exclusive right to convert all or any portion of the Conversion Amount into Conversion Shares at the Conversion Price in accordance with Section 4, and any such conversion shall take priority over the prepayment to the extent of the Conversion Amount so converted.

Section 3. <u>Registration of Transfers and Exchanges</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Different Denominations</u>. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Investment Representations</u>. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Reliance on Note Register</u>. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

**Section 4.** <u>Conversion</u>.

&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) <u>Conversion</u>. This Note shall be convertible, in whole or in part, at the option of the Holder, at any time following the Original Issue 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;(i) <u>Voluntary Conversion</u>. At any time following the Original Issue Date, the Holder may elect to convert all or any portion of the Conversion Amount into Conversion Shares at the Conversion Price by following the mechanics of conversion set forth in Section 4(b). The number of Conversion Shares issuable upon conversion shall be determined by dividing the Conversion Amount (or the portion thereof being converted) by the Conversion Price.

&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) <u>Mechanics of Conversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Conversion Notices</u>. To convert all or any portion of this Note, the Holder shall deliver to the Company a written notice of conversion in the form attached hereto (the "Conversion Notice"), specifying the Conversion Amount to be converted and the date on which such conversion is to be effected (which date may not be prior to the date the Holder delivers such Conversion Notice to the Company) (the "Conversion Date"). Upon delivery of a Conversion Notice, the Holder shall be deemed to have converted the applicable Conversion Amount into Conversion Shares at the Conversion Price as of the Conversion Date. The Holder shall deliver to the Company the original Note instrument (or a notice to the effect that such original Note has been lost, stolen or destroyed) at such time as the entire Conversion Amount of this Note has been converted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Delivery of Conversion Shares Upon Conversion</u>. Not later than one (1) Business Day after the Conversion Date (the "Delivery Date"), the Company shall deliver, or cause to be delivered, to the Holder the Conversion 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;(iii) <u>Failure to Deliver Conversion Shares</u>. If, in the case of any voluntary Conversion, the Conversion Shares are not delivered to or as directed by the applicable Holder by the Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such Conversion Shares to rescind the Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Conversion Shares (if any) issued to such Holder pursuant to the rescinded Conversion 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;(iv) <u>Obligation Absolute; Partial Liquidated Damages</u>. The Company's obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any set off, counter claim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person (unless the Conversion would violate any law applicable to the Company), and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; *provided, however,* that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the Conversion Amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the Payment Amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such Conversion Shares pursuant to Section 4(b)(ii) by the Delivery Date, the Holder may seek to enforce damages pursuant to any other section hereof or under 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;(v) <u>Transfer Agent</u>. As of the date hereof, the Company shall appoint a transfer agent reasonably acceptable to the Holder (to the extent no transfer agent is currently appointed by the Company) and shall deliver to the transfer agent an irrevocable transfer agent letter, in form and substance reasonably satisfactory to the Holder, instructing the transfer agent to issue Conversion Shares to the Holder upon any conversion of this Note. The Company shall not amend, rescind, revoke, or otherwise modify such instructions without the prior written consent of the Holder, and the Company shall cause any successor transfer agent to be bound by such irrevocable instructions. The Company shall, at its expense, cause its counsel to issue any legal opinion required by the Company's transfer agent to effect the removal of any restrictive legend from the Conversion 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;(vi) <u>Reserved</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) <u>Transfer Taxes and Expenses</u>. The issuance of Conversion Shares on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance 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. The Company shall pay all attorney fees required for the issuance of attorney legal opinions for removal of restrictive legends on Conversion Shares.

**Section 5.** <u>Certain Adjustments</u>.

&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) <u>Dividends and Splits</u>. If the Company, at any time while this Note is outstanding: (i) pays a dividend or otherwise makes a distribution or distributions payable in Company ownership interests (which, for avoidance of doubt, shall not include any Conversion Shares issued by the Company upon conversion of, or payment of interest on, the Notes), (ii) subdivides outstanding Company ownership interests into a larger number of ownership interests, (iii) combines (including by way of a reverse split) outstanding Company ownership interests into a smaller number of ownership interests or (iv) issues, in the event of a reclassification of Company ownership interests, any ownership interests of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of Company ownership interests outstanding immediately before such event, and of which the denominator shall be the number of Company ownership interests outstanding immediately after such event. Any adjustment made pursuant to this Section 5 shall become effective immediately after the record date for the determination of ownership entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re classification.

&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) <u>Pro Rata Distributions</u>. During such time as this Note is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Company ownership interests, by way of return of capital or otherwise (including, without limitation, any distribution of cash, membership interests or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Company ownership interests acquirable upon complete conversion of this Note immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such 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;(c) <u>Fundamental Transaction</u>. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Company ownership interests are permitted to sell, tender or exchange their membership interests for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Company ownership interests, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Company ownership interests or any compulsory ownership interest exchange pursuant to which the Company ownership interests is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding Company ownership interests (not including any Company ownership interests held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such purchase agreement or other business combination) (each a "Fundamental Transaction"), then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Shares that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the "Alternate Consideration") receivable as a result of such Fundamental Transaction by a holder of the number of Company ownership interests for which this Note is convertible immediately prior to such Fundamental Transaction. For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) Company ownership interests in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Company ownership interests are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the "Successor Entity") to assume in writing all of the obligations of the Company under this Note and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(c) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note which is convertible for a corresponding number of securities of such Successor Entity (or its parent entity) equivalent to the Company ownership interests acquirable and receivable upon conversion of this Note prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such securities (but taking into account the relative value of Company ownership interests pursuant to such Fundamental Transaction and the value of such securities, such number of securities and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the "Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. For the purposes of this Note a Liquidity Event shall not constitute a Fundamental 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;(d) <u>Calculations</u>. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock <u>deemed</u> to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

&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) <u>Adjustment to Conversion Price</u>. Whenever the Conversion Price is adjusted pursuant to any <u>provision</u> of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

Section 6. <u>Certain Other Agreements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Secured Obligation</u>. This Note is a secured obligation of the Company to the extent and in the manner set forth in the Security Agreement (as defined in the Securities Purchase Agreement). Notwithstanding anything to the contrary contained herein or in any other Transaction Document, any Lien securing the obligations of the Company under this Note shall be subordinate and junior in priority to any and all Liens securing the obligations of the Company owing to the those certain holders of the Note of the Company dated April 24, 2026 (the "**Existing Investors**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Beneficial Ownership Limitations</u>. Notwithstanding anything to the contrary contained herein, during any time at which the common stock or share capital of the Company (or any successor entity thereto) is listed on a public exchange or marketplace, the Company shall not effect the issuance of any Common Stock upon conversion of this Note, to the extent that after giving effect to such conversion, the Holder (together with the Holder's Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act and the applicable regulations of the Commission, including any "group" of which the Holder is a member (the foregoing, "Attribution Parties")) collectively would beneficially own in the aggregate in excess of 4.99% (the "Maximum Percentage") of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Conversion Shares issuable upon such conversion. For purposes of this section, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable regulations of the Commission. In determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (a) a more recent public filing or announcement by the Company, (b) a more recent notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding, or (c) any other written notification by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written request of the Holder, the Company shall, within two (2) Business Days, confirm in writing to the Huolder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Attribution Parties since the date as of which such number of outstanding shares of Common Stock was last publicly reported. The Holder shall, upon delivering a Conversion Notice, be deemed to represent that the Holder and its Attribution Parties do not beneficially own shares of Common Stock in excess of the Maximum Percentage. The provisions of this section shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this section to correct any provision hereof which may be defective or inconsistent with the intended beneficial ownership limitation contained herein, or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this section shall apply to a successor Holder of this Note.

Section 7. <u>Negative Covenants</u>. As long as any portion of this Note remains outstanding, without the prior written consent of the Lead Investors, the Company shall not, directly or indirectly:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) amend its charter documents, including, without limitation, its articles of formation or other formation documents and bylaws, in any manner that materially and adversely affects any rights of the Holder unless consented to by the Holders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) enter into any material transaction with any Affiliate of the Company, unless such transaction is made on an arm's-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) enter into any agreement with respect to any of the foregoing.

Section 8. <u>Events of Default</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "<u>Event of Default</u>" means, wherever used herein, the occurrence and continuance of any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

&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) any default in the payment of (A) the principal amount of any Note, or (B) interest, liquidated damages and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on the Maturity Date, by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within five (5) Business Days;

&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) the Company shall fail to observe or perform any other covenant or agreement contained in the Notes or in any Transaction Document, which failure is not cured, if possible to cure, within the earlier to occur of (A) seven (7) Business Days after notice of such failure sent by the Holder or by any other Holder is received by the Company, and (B) ten (10) Business Days after the Company has become or should have become aware of such failure;

&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) a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company is obligated (and not covered by clause (vi) 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;(iv) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

&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) the Company shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $1,000,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; 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;(vi) a final non-appealable judgment by any competent court in Canada or the United States for the payment of money in an amount of at least $1,000,000 is rendered against the Company, and the same remains undischarged and unpaid for a period of 90 days during which execution of such judgment is not effectively stayed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Remedies Upon Event of Default</u>. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder's election, immediately due and payable in cash. Commencing upon the occurrence of any Event of Default, the interest rate on this Note shall accrue at an interest rate equal to 10% per annum (the "Default Rate"). Upon the payment in full of this Note and all accrued by unpaid interest hereunder (including such interest), the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

Section 9. <u>Reserved</u>.

Section 10. <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Notices</u>. Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number, email address, or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 8(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, email address or address of the Holder appearing on the books of the Company, or if no such facsimile number or email attachment or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of: (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (Eastern time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment to the email address set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (Pacific time) on any Business Day, (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Absolute Obligation</u>. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. The Notes are a senior obligation of the Company, and this Note ranks *pari passu* with all other Notes now or hereafter issued under the terms set forth in the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Lost or Mutilated Note</u>. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in New York, New York (the "<u>New York Courts</u>"). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Waiver</u>. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Severability</u>. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief</u>. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder's right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is reasonably requested by the Holder to enable the Holder to confirm the Company's compliance with the terms and conditions of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Next Business Day</u>. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Amendments; Waivers</u>. Any modifications, amendments or waivers of the provisions hereof shall be subject to Section 5.05 of the Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Equal Treatment of Holder</u>. No consideration (including any modification of this Note) shall be offered or paid to any Person (as such term is defined in the Purchase Agreement) to amend or consent to a waiver or modification of any provision hereof unless the same consideration is also offered to all of the parties to the Purchase Agreement. Further, the Company shall not make any payment of principal or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Holder by the Company and negotiated separately by each Holder, and is intended for the Company to treat the Holders as a class and shall not in any way be construed as the Holders acting in concert or as a group with respect to the purchase or disposition of the Notes or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Usury</u>. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any Action or Proceeding that may be brought by any Holder in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the "<u>Maximum Rate</u>"), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Holder with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Holder to the unpaid principal amount of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Holder's election.

*(Signature Page Follows)*

 

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

---

| |
|:---|
| **FIRST BREACH, INC.** |
| By: |
| Name: |
| Title: |

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## Exhibit 10.22

**Exhibit 10.22** 

**SECURITIES PURCHASE AGREEMENT**

This Securities Purchase Agreement (this "**Agreement**") is dated as of May 21, 2026 among First Breach, Inc., a corporation incorporated under the laws of the state of Delaware ("**Company**"), and each purchaser identified on the <u>Annex A</u> hereto (each, including its successors and assigns, an "**Investor**" and collectively, the "**Investors**").

**WHEREAS,** the Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, secured convertible promissory notes in the form set forth in <u>Appendix A</u> hereto (each, a "**Note**" and collectively, the "**Notes**") contemplated by this Agreement ("**Offering**"); and

**WHEREAS**, the Company and Investors are executing and delivering this Agreement in reliance upon an exemption from securities registration requirements of the Securities Act afforded by the provisions of Section 4(a)(2) and/or Rule 506(b) of Regulation D promulgated thereunder by the U.S. Securities and Exchange Commission.

**NOW, THEREFORE**, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Investor agree as follows:

**ARTICLE I.**

**DEFINITIONS**

Section 1.01. <u>Definitions</u>. In addition to the terms defined elsewhere in this Agreement:

&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) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Notes (as defined herein), 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) the following terms have the meanings set forth in this Agreement:

"<u>$</u>" or "<u>USD</u>" means United States Dollars.

"<u>Action</u>" shall have the meaning ascribed to such term in Section 3.01(h).

"<u>Affiliate</u>" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

"<u>Business Day</u>" means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

"<u>Change of Control</u>" means (a) any "person" or "group" (within the meaning of Section 13(d) and 14(d) of the Exchange Act), other than the Company or any employee benefit plan of the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then-outstanding securities; (b) the consummation of a merger, consolidation or similar transaction involving the Company if, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction; (c) a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company; or (d) a liquidation or dissolution of the Company.

***SECURITIES PURCHASE AGREEMENT***

"<u>Closing</u>" means the closing of the purchase and sale of the Securities pursuant to section 2.01.

"<u>Closing Date</u>" means the date on which all of the conditions set forth in Section 2.03 have either been satisfied or waived.

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Common Stock</u>" means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>ELOC Agreement</u>" means that certain Share Purchase Agreement, dated as of the date hereof, among the Company, RK Capital Management LLC, North Commerce Parkway Capital LP, and TQP Holdings LLC.

<u>"Exempt Issuance</u>" means the issuance of Common Stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by the Company*.*

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>GAAP</u>" means generally accepted accounting principles in the United States in effect from time to time.

"<u>Intellectual Property Rights</u>" shall have the meaning ascribed to such term in Section 3.01(l).

"<u>Liens</u>" shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

"<u>Liquidity Event</u>" has the meaning ascribed to it the Notes.

"<u>Material Adverse Effect</u>" shall have the meaning ascribed to such term in Section 3.01(b).

"<u>Material Permits</u>" shall have the meaning ascribed to such term in Section 3.01(j).

"<u>Maximum Offering Amount</u>" means an aggregate Subscription Amount of up to Five Million U.S. Dollars ($5,000,000).

"<u>National Securities Exchange</u>" means the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE American, or any other national securities exchange registered with the Commission under the Exchange Act.

"<u>Net Proceeds</u>" means the gross proceeds received by the Company from a drawdown under the Offering, less documented and reasonable commissions, placement fees, and transaction costs actually paid by the Company to unaffiliated third parties in connection with the Offering.

"<u>Notes</u>" means the secured convertible promissory notes issued by the Company to the Investors hereunder, in the form of <u>Appendix A</u> attached hereto.

***SECURITIES PURCHASE AGREEMENT***

"<u>New Securities</u>" means any shares of Common Stock, Preferred Stock, or other equity securities of the Company, or any securities convertible into or exchangeable for, or options, warrants or other rights to acquire, any shares of Common Stock or other equity securities of the Company, other than (i) securities issued upon conversion of the Notes, (ii) securities issued pursuant to any equity incentive plan or similar compensatory arrangement approved by the Board of Directors, (iii) securities issued upon conversion, exercise or exchange of any convertible securities, options or warrants outstanding as of the date hereof, (iv) securities issued in connection with any stock split, stock dividend, combination or recapitalization, (v) securities issued in connection with a bona fide strategic transaction approved by the Board of Directors, provided such issuance is not primarily for capital raising purposes, and (vi) securities issued pursuant to the ELOC Agreement.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

**"**<u>Preferred Stock</u>" means the preferred stock of the Company, par value $0.0001 per share, and any other class of preferred securities into which such securities may hereafter be reclassified or changed.

"<u>Proceeding</u>" means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

"<u>Purchasers</u>" means the Investors.

"<u>Required Approvals</u>" shall have the meaning ascribed to such term in section 3.01(e).

"<u>Securities</u>" means the Notes and Underlying Securities.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Security Agreement</u>" means the Security Agreement between the Company and Secured Parties (as defined therein), dated as of the Closing Date the form of which is attached hereto as Appendix D.

"<u>State Securities Laws</u>" means the securities (or "blue sky") rules, regulations, or other similar laws of a particular state.

"<u>Subscription Amount</u>" means, as to each Investor, the aggregate amount to be paid for the Securities purchased hereunder as specified below such Investor's name on <u>Annex A</u> of this Agreement and next to the heading "Aggregate Subscription Amount," in United States dollars and in immediately available funds.

"<u>Subsidiary</u>" means any subsidiary of the Company as set forth in section 3.01(a) and shall, where applicable, include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

"<u>Transaction Documents</u>" means this Agreement, the Notes, the Security Agreement and all appendices, exhibits and schedules hereto and thereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

"<u>Underlying Securities</u>" means the Conversion Shares (as defined in the Note).

***SECURITIES PURCHASE AGREEMENT***

**ARTICLE II.**

**PURCHASE AND SALE**

Section 2.01 <u>Closing</u>. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Investors, severally and not jointly, agree to purchase, the Securities up to the Maximum Offering Amount. At the Closing, each Investor shall deliver to the Company, via wire transfer, immediately available funds equal to such Investor's aggregate Subscription Amount, and the Company shall deliver to each Investor a Note with a principal amount equal to such Investor's Subscription Amount, registered in the name of such Investor. The Company and each Investor shall deliver the other items set forth in Section 2.02 deliverable at the Closing. Upon satisfaction of the conditions set forth in Section 2.02 and Section 2.03, the Closing shall occur at the offices of the Company's counsel, or such other location as the parties shall mutually agree, or may be closed remotely by electronic delivery of documents. The Company may conduct multiple closings for the sale of the Securities until it has received the Maximum Offering Amount. The Closing Date for any Securities shall be the date indicated on the applicable Investor's signature page attached hereto. No minimum amount of Securities need be sold by the Company to complete and close the Offering.

Section 2.02 <u>Closing Deliverables</u>.

&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) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Investors the following:

&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) this
 Agreement executed by the Company; 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;(ii) a
 Note with a principal amount equal to such Investor's Subscription Amount, registered
 in the name of such Investor; 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;(iii) the
 Security Agreement executed by 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;(b) On or prior to the Closing Date, each Investor shall deliver or cause to be delivered to the Company the following:

&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) this
 Agreement executed by such Investor; 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;(ii) such
 Investor's Subscription Amount by wire transfer to the Company pursuant
 to the wiring instructions set forth in Section 2.03(c).

Section 2.03 <u>Closing Conditions</u>.

&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) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

&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) the
 accuracy in all material respects on the Closing Date of the representations and warranties
 of the Investors contained herein;

&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) all
 obligations, covenants and agreements of each Investor required to be performed at or prior
 to the Closing Date shall have been performed; 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;(iii) the
 delivery by each Investor of the items set forth in section 2.02(b) of this Agreement.

***SECURITIES PURCHASE AGREEMENT***

&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) The respective obligations of the Investors hereunder in connection with the Closing are subject to the following conditions being met:

&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) the
 accuracy in all material respects (or, to the extent representations or warranties are qualified
 by materiality or Material Adverse Effect, in all respects) when made and on the Closing
 Date of the representations and warranties of the Company contained herein (unless as of
 a specific date therein in which case they shall be accurate as of such 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;(ii) all
 obligations, covenants and agreements of the Company required to be performed at or prior
 to the Closing Date shall have been performed;

&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) the
 delivery by the Company of the items set forth in section 2.02(a) of this Agreement;

&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) there
 shall have been no Material Adverse Effect with respect to the Company since the date hereof;

&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) the
 Company shall have filed a request for acceleration of effectiveness of the Direct Listing
 Registration Statement (as defined below) with the Commission pursuant to Rule 461 under
 the Securities Act; and the Principal Market shall have approved the listing of the Common
 Stock in connection with such direct listing; 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;(vi) the
 Company shall have provided to the Investors evidence of consent of the Holders of the April
 24, 2026 Senior Secured Promissory Notes to the grant of security as provided in the Security
 Agreement.

The wiring instructions of the Company shall be as set forth on Appendix "B" attached hereto.

**ARTICLE III.**

**REPRESENTATIONS AND WARRANTIES**

Section 3.01 <u>Representations and Warranties of the Company</u>. The Company hereby makes the following representations and warranties to each Investor as of the date hereof:

&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) <u>Subsidiaries</u>. The Company does not have any Subsidiaries.

&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) <u>Organization and Qualification</u>. The Company is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its articles of formation or other organizational or charter documents. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document; (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, taken as a whole; or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "**Material Adverse Effect**") and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification; provided, however, that "Material Adverse Effect" shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions, (ii) conditions generally affecting the industry in which the Company or any Subsidiary operates, (iii) any changes in financial or securities markets in general, (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof, (v) any pandemic, epidemics or human health crises (including COVID-19), (vi) any changes in applicable laws or accounting rules (including GAAP), (vii) the announcement, pendency or completion of the transactions contemplated by the Transaction Documents, or (viii) any action required or permitted by the Transaction Documents or any action taken (or omitted to be taken) with the written consent of or at the written request of the Investors holding a majority in principal amount outstanding of the Notes).

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Authorization; Enforcement</u>. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the manager(s) or the Company's shareholders in connection therewith other than in connection with the Required Approvals. Each Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited 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;(d) <u>No Conflicts</u>. The execution, delivery and performance by the Company of the Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the other transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company's organizational or charter documents; (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected; or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and State Securities Laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

&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) <u>Filings, Consents and Approvals</u>. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) such consents, waivers, or authorizations as have been obtained before the Closing; and (ii) the filing of Form D with the Commission and such filings as are required to be made under applicable State Securities Laws (collectively, the "**Required Approvals**").

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Issuance of the Securities</u>. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer provided for in the Transaction Documents. The Underlying Securities, when issued in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer provided for herein or therein. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance upon Note conversions at least equal to the minimum number of shares of Common Stock issuable on the date hereof upon the full conversion of the Maximum Offering Amount of Notes.

&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) <u>Capitalization</u>. The Company has authorized 500,000,000 shares of Common Stock and 1,000,000 shares of preferred stock. As of the date of this Agreement, 45,034,282 shares of Common Stock are issued and outstanding and 0 shares of preferred stock are issued and outstanding. There are no outstanding options (other than pursuant to the Company's equity incentive plan), warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock other than the existing convertible instruments (if any). Except as set forth in Section 4.09, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents except for such, if any, as will have been validly waived before the Closing. The issuance and sale of the Securities and Underlying Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and State Securities Laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the board of directors or others is required for the issuance and sale of the Securities, except for such approvals as have been obtained prior to Closing. There are no stockholders' agreements, voting agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders.

&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) <u>Litigation</u>. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "**Action**") which: (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities; or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or State Securities Laws or a claim of breach of fiduciary duty.

&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) <u>Compliance</u>. The Company is unaware of, and to its knowledge: (i) is neither in default under nor in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived); (ii) is not in violation of any order of any court, arbitrator or governmental body; nor (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each of the foregoing cases as could not have or reasonably be expected to result in a Material Adverse Effect.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Regulatory Permits</u>. The Company, to its knowledge, possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its business, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect ("**Material Permits**"), and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit.

&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) <u>Title to Assets</u>. The Company has good and marketable title in fee simple to all real property and good and marketable title in all personal property owned by it that, in each case, is material to the business of the Company, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties in any material respect. Any real property and facilities held under lease by the Company is held by it under valid, subsisting and enforceable leases with which the Company are in compliance.

&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) <u>Patents and Trademarks</u>. (i) The Company, to its knowledge, has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as necessary or material for use in connection with its business and which the failure to so have could reasonably be expected to have a Material Adverse Effect (collectively, the "**Intellectual Property Rights**"); (ii) the Company has not received a notice (written or otherwise) that any of the Intellectual Property Rights violates or infringes upon the intellectual property rights of any Person; (iii) to the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights, except where the failure to be so enforceable or for such infringements as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (iv) the Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of its intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&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) <u>Certain Fees</u>. Except for commissions owed in connection with the RBW Engagement Agreement in an amount estimated as set forth on Appendix C, no brokerage or finder's fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Investors shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.01(m) that may be due in connection with the transactions contemplated by the Transaction Documents.

&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) <u>Private Placement</u>. Assuming the accuracy of the Investors' representations and warranties set forth in section 3.02, no registration under the Securities Act is required for the offer and sale of the Securities and Underlying Securities by the Company to the Investors as contemplated hereby.

&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) <u>No General Solicitation</u>. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities or Underlying Securities by any form of general solicitation or general advertising. The Company has offered the Securities and Underlying Securities for sale only to the Investors and certain other "accredited investors" within the meaning of Rule 501 under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Acknowledgment Regarding Investors' Purchase of Securities</u>. The Company acknowledges and agrees that each of the Investors is acting solely in the capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Investor or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Investors' purchase of the Securities. The Company further represents to each Investor that the Company's decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

***SECURITIES PURCHASE AGREEMENT***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Foreign Corrupt Practices</u>. The Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law; or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Office of Foreign Assets Control</u>. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("**OFAC**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Money Laundering</u>. The operations of the Company are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "**Money Laundering Laws**"), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

Section 3.02 <u>Representations and Warranties of the Investors</u>.

Each Investor, for itself and for no other Investor, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such 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;(a) <u>Authority; Organization</u>. Such Investor has full power and authority (and, if such Investor is an individual, the capacity) to enter into this Agreement and to perform all obligations required to be performed by it hereunder. If an entity, such Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate, limited liability company or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Investor of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate or similar action on the part of such Investor. Each Transaction Document to which it is a party has been duly executed by such Investor, and when delivered by such Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Investor, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Own Account</u>. Such Investor understands that the Securities are and Underlying Securities will be 'restricted securities' and have not been registered under the Securities Act or any applicable State Securities Law and is acquiring the Securities and any Underlying Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable State Securities Law, has no present intention of distributing any of such Securities or Underlying Securities in violation of the Securities Act or any applicable State Securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution the same (this representation and warranty not limiting such Investor's right to sell the Securities and Underlying Securities in compliance with applicable federal and State Securities Laws) in violation of the Securities Act or any applicable State Securities Law. Such Investor is acquiring the Securities and any Underlying Securities in the ordinary course of its investment 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;(c) <u>Non-Transferrable</u>. Such Investor agrees: (i) that the Investor will not sell, assign, pledge, give, transfer or otherwise dispose of the Securities or Underlying Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration of the Securities under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the registration provisions of the Securities Act and all applicable State Securities Laws; (ii) that the certificates representing the Securities and Underlying Securities will bear a legend making reference to the foregoing restrictions; and (iii) that the Company and its Affiliates shall not be required to give effect to any purported transfer of such Securities and Underlying Securities except upon compliance with the foregoing restrictions.

&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) <u>Investor Status</u>. Such Investor is an "accredited investor" as defined in Rule 501(a) under the Securities Act. The undersigned agrees to furnish any additional information requested by the Company or any of its Affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the purchase and sale of the Securities. Any information that has been furnished or that will be furnished by the undersigned to evidence its status as an accredited investor is accurate and complete, and does not contain any misrepresentation or material omission.

&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) <u>Experience of Such Investor</u>. Such Investor, either alone or together with its representatives, has such knowledge, sophistication, and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities and Underlying Securities, and has so evaluated the merits and risks of such investment. Such Investor is able to bear the economic risk of an investment in the Securities and Underlying Securities and, at the present time, is able to afford a complete loss of such investment.

&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) <u>No Trading Market</u>. Such Investor acknowledges that there is currently no trading or public market for the Securities and Underlying Securities and that none is expected to develop for the Securities unless a Liquidity Event occurs.

&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) <u>General Solicitation</u>. Such Investor undersigned acknowledges that neither the Company nor any other person offered to sell the Securities to it by means of any form of general solicitation or advertising, including but not limited to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio; or (ii) any seminar or meeting whose attendees were invited by any general solicitation or general advertising.

&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) <u>Confidentiality</u>. Other than to other Persons party to this Agreement and its advisors who have agreed to keep information confidential or have a fiduciary obligation to keep such information confidential, such Investor has maintained the confidentiality of all disclosures made to it in connection with the transaction (including the existence and terms of this 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;(i) <u>Foreign Investor</u>. If such Investor is not a United States person, such Investor represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities and Underlying Securities or any use of this Agreement, including: (i) the legal requirements within its jurisdiction for the purchase of the Securities and any Underlying Securities; (ii) any foreign exchange restrictions applicable to such purchase; (iii) any governmental or other consents that may need to be obtained; and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities or Underlying Securities. The Investor further represents that its payment for, and its continued beneficial ownership of the Securities and any Underlying Securities, will not violate any applicable securities or other laws of its jurisdiction.

***SECURITIES PURCHASE AGREEMENT***

&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) <u>Information from Company</u>. Such Investor and its purchaser representatives or investment managers, if any, have been afforded the opportunity to obtain any information necessary to verify the accuracy of any representations or information presented by the Company in this Agreement and have had all inquiries to the Company answered, and have been furnished all requested materials, relating to the Company and the Offering and sale of the Securities and anything set forth in the Transaction Documents. Neither the Investor nor the Investor's purchaser's representatives or investment managers, if any, have been furnished any offering literature by the Company or any of its Affiliates, associates or agents other than the Transaction Documents, and the agreements referenced therein.

&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) <u>Speculative Nature of Investment; Risk Factors</u>. **SUCH INVESTOR UNDERSTANDS THAT AN INVESTMENT IN THE SECURITIES AND UNDERLYING SECURITIES INVOLVES A HIGH DEGREE OF RISK.** Such Investor acknowledges that: (i) any projections, forecasts or estimates as may have been provided to the Investor are purely speculative and cannot be relied upon to indicate actual results that may be obtained through this investment; any such projections, forecasts and estimates are based upon assumptions which are subject to change and which are beyond the control of the Company or its management; (ii) the tax effects which may be expected by this investment are not susceptible to absolute prediction, and new developments and rules of the Internal Revenue Service, audit adjustment, court decisions or legislative changes may have an adverse effect on one or more of the tax consequences of this investment; and (iii) the Investor has been advised to consult with his own advisor regarding legal matters and tax consequences involving this investment. The Investor represents that the Investor's investment objective is speculative in that the Investor seeks the maximum total return through an investment in a broad spectrum of securities, which involves a higher degree of risk than other investment styles and therefore the Investor's risk exposure is also speculative. The Securities offered hereby are highly speculative and involve a high degree of risk and Investor should only purchase these securities if Investor can afford to lose their entire investment.

&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) <u>Money Laundering</u>. If an entity, the operations of such Investor are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Money Laundering Laws, and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

**ARTICLE IV.**

**OTHER AGREEMENTS OF THE PARTIES**

Section 4.01 <u>Transfer Restrictions</u>.

&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) The Securities and Underlying Securities may only be disposed of in compliance with state and federal securities laws. The Securities and Underlying Securities may be sold or transferred by the Investors without the written consent of the Company, provided that as a condition of such sale or transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of an Investor under this Agreement.

&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) The Investors agree to the imprinting, so long as is required by this Section 4.01, of a legend on any of the Securities and Underlying Securities in the following form:

***SECURITIES PURCHASE AGREEMENT***

[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [CONVERTIBLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO 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;(c) Each Investor, severally and not jointly with the other Investors, agrees that such Investor will sell any Securities and Underlying Securities only pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities or Underlying Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.01 is predicated upon the Company's reliance upon this understanding.

&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) Each Investor understands that upon conversion of a Note, it will acquire shares of Common Stock in and become a shareholder of the Company.

Section 4.02 <u>Acknowledgment of Dilution</u>. The Company acknowledges that the issuance of the Underlying Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Securities pursuant to the Securities, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Investor and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

Section 4.03 <u>Integration</u>. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities or Underlying Securities to the Investors in a manner that would require the registration under the Securities Act of the sale of the Securities to the Investors.

Section 4.04 <u>Publicity</u>. The Company and each Investor shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Investor shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company with respect to any press release of any Investor, or without the prior consent of each Investor with respect to any press release of the Company mentioning such Investor, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.

Section 4.05 <u>Indemnification of Investors</u>. The Company shall indemnify, reimburse and hold harmless the Investors and their respective partners, members, shareholders, officers, directors, employees and agents (and any other persons with other titles that have similar functions) (collectively, "**Indemnitees**") from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses, of any kind or nature, (including fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee in any way related to or arising from or alleged to arise from: (i) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents; and (ii) any action instituted against such Indemnitee in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Indemnitee, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Indemnitee's representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Indemnitee may have with any such stockholder or any violations by such Indemnitee of state or federal securities laws or any conduct by such Indemnitee which results from the gross negligence or willful misconduct of the Indemnitee as determined by a final, nonappealable decision of a court of competent jurisdiction).

***SECURITIES PURCHASE AGREEMENT***

Section 4.06 <u>Equal Treatment of Investors</u>. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. Further, the Company shall not make any payment of principal or interest on the Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable time. For clarification purposes, this provision constitutes a separate right granted to each Investor by the Company and negotiated separately by each Investor, and is intended for the Company to treat the Investors as a class and shall not in any way be construed as the Investors acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

Section 4.07 <u>Form D; Blue Sky Filings</u>. The Company agrees to timely file a Form D with respect to the Securities and Underlying Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Investor. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities and Underlying Securities for, sale to the Investors under applicable State Securities Laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Investor.

Section 4.08 <u>Use of Proceeds</u>. The Company shall use the Net Proceeds received from the sale of the Securities at the Closing Date for general corporate purposes and general working capital requirements, including the payment of transaction-related fees and expenses.

Section 4.09 <u>Preemptive Rights.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a)</u> Preemptive Rights. Subject to the exceptions set forth in subsection (c) below, while the Notes are outstanding, if the Company proposes to issue any New Securities, the Company shall deliver written notice (an "Issuance Notice") to each Purchaser at least thirty (30) days prior to the proposed issuance date, which notice shall set forth the material terms and conditions of such issuance, including (i) the type and number of New Securities to be issued, (ii) the purchase price and payment terms, and (iii) the proposed issuance date. Each Purchaser shall have the right, exercisable by written notice to the Company within twenty (20) days after receipt of the Issuance Notice, to purchase up to such Purchaser's Pro Rata Share of the New Securities at the same price and on the same terms as set forth in the Issuance Notice. For purposes of this Section 4.09, "Pro Rata Share" means, with respect to each Purchaser, a fraction, the numerator of which is the number of shares of Common Stock held by such Purchaser immediately prior to the proposed issuance (calculated on a fully-diluted, as-converted basis), and the denominator of which is the total number of shares of Common Stock outstanding immediately prior to the proposed issuance (calculated on a fully-diluted, as-converted basis).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u> Reserved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u> Excluded Issuances. The preemptive rights set forth in Sections 4.09(a) shall not apply to any issuance of: (i) shares of Common Stock or options to purchase Common Stock issued to employees, officers, directors, or consultants of the Company pursuant to any equity incentive plan approved by the Board of Directors; (ii) securities issued upon the conversion or exercise of any convertible securities, options, or warrants outstanding as of the date hereof, including the Underlying Securities(iii) securities issued as consideration in connection with a bona fide acquisition or strategic transaction approved by the Board of Directors; (iv) securities issued in connection with any stock split, stock dividend, or recapitalization; (v) securities issued in an underwritten public offering registered under the Securities Act; or (vi) securities issued pursuant to the ELOC Agreement.

***SECURITIES PURCHASE AGREEMENT***

Section 4.10 <u>Lock-Up Provisions.</u> Notwithstanding any other provision of this Agreement or any other agreement to which the Company is a party, the Purchasers shall not be subject to any lock-up provision and shall be permitted to sell the Securities immediately upon the listing of the Common Stock on a National Securities Exchange. The Purchasers may provide liquidity for the Company's stock in the public market through sales of the Securities.

Section 4.11. Reserved.

Section 4.12 <u>Stock Price Support</u>. The Company shall use its best efforts to support the stock price of the Common Stock following any listing on a National Securities Exchange, including but not limited to timely disclosure of material information, maintenance of good corporate governance practices, and such other reasonable measures as may be appropriate under the circumstances.

Section 4.13 <u>Reserved.</u> 

Section 4.14 <u>Registration of Underlying Securities</u>. The Company covenants and agrees that it shall include the Underlying Securities in the registration statement on Form S-1 filed by the Company with the Commission in connection with the Company's direct listing on the Nasdaq Capital Market (the "**Direct Listing Registration Statement**"). The Company shall use its best efforts to cause the Direct Listing Registration Statement to be declared effective by the Commission and to maintain the effectiveness thereof for so long as any Notes remain outstanding and convertible into Underlying Securities. The Company shall not take any action that would have the effect of excluding the Underlying Securities from the Direct Listing Registration Statement or impairing the ability of the Holders to sell the Underlying Securities pursuant thereto.

**ARTICLE V.**

**MISCELLANEOUS**

Section 5.01 <u>Fees and Expenses</u>. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Investors.

Section 5.02 <u>Entire Agreement</u>. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

Section 5.03 <u>Notices</u>. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (i) one Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Business Day, with written confirmation of successful transmission; (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day; (iii) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service; or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

***SECURITIES PURCHASE AGREEMENT***

Section 5.04 <u>Amendments; Waivers</u>. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Investors holding at least a majority in principal amount of the Notes then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

Section 5.05 <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Investor (other than by merger). Any Investor may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns or transfers any Securities, provided that such transfer complies with the terms of this Agreement and all applicable federal and State Securities Laws and that such transferee agrees in writing with the Company to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the 'Investors'.

Section 5.06 <u>No Third-Party Beneficiaries</u>. Except for the Indemnitees named herein, who are intended third-party beneficiaries of this Agreement, including the representations and warranties made by the Company hereunder, this Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

Section 5.07 <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, members, managers, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to the Transaction Documents or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred in the investigation, preparation and prosecution of such Action or Proceeding.

Section 5.08 <u>Survival</u>. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities and issuance of Underlying Securities.

Section 5.09 <u>Execution</u>. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page was an original thereof.

***SECURITIES PURCHASE AGREEMENT***

Section 5.10 <u>Severability</u>. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

Section 5.11 <u>Rescission and Withdrawal Right</u>. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Investor may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of a conversion of a Note, the Investor shall be required to return any shares of Common Stock subject to any such rescinded conversion or exercise notice.

Section 5.12 <u>Replacement of Securities</u>. If any certificate or instrument evidencing any Securities or Underlying Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities or Underlying Securities.

Section 5.13 <u>Remedies</u>. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investors and the Company will be entitled to seek specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

Section 5.14 <u>Payment Set Aside</u>. To the extent that the Company makes a payment or payments to any Investor pursuant to any Transaction Document or an Investor enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

***SECURITIES PURCHASE AGREEMENT***

Section 5.15 <u>Independent Nature of Investors' Obligations and Rights</u>. The obligations of each Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance or non-performance of the obligations of any other Investor under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. Each Investor has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents. The Company has elected to provide all Investors with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Investors.

Section 5.16 <u>Termination</u>. In the event that the Closing shall not have occurred on or before June 15, 2026, then the Company shall have the right to terminate this Agreement at any time on or after the close of business on such date without liability to any other party. Nothing contained in this Section 5.16 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents.

Section 5.17 <u>Construction</u>. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the shares of Common Stock that occur after the date of this Agreement.

Section 5.18 <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

Section 5.19 <u>WAIVER OF JURY TRIAL</u>. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

[*SIGNATURE PAGES FOLLOW*]

***SECURITIES PURCHASE AGREEMENT***

**IN WITNESS WHEREOF**, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date below.

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| | |
|:---|:---|
| **First Breach, Inc.** | **First Breach, Inc.** |
| By: |  |
| Name: | Jeffrey Low |
| Title: |  |
| **INVESTORS:** | **INVESTORS:** |
| The Investors executing the Signature Page in the form attached hereto as <u>Annex A</u> and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof. | The Investors executing the Signature Page in the form attached hereto as <u>Annex A</u> and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof. |

---

**[**Signature Page to Securities Purchase Agreement**]**

***SECURITIES PURCHASE AGREEMENT***

**Annex A**

**Securities Purchase Agreement Investor Counterpart Signature Page**

The undersigned, desiring to: (i) enter into this Securities Purchase Agreement dated as of May __, 2026 ("**Agreement**"), with First Breach Inc. ("**Company**"), in the form furnished to the undersigned; and (ii) purchase the Securities as set forth below, hereby agrees to purchase such Securities from the Company as of the Closing and further agrees to join the Agreement as a party thereto, with all the rights and privileges appertaining thereto, and to be bound in all respects by the terms and conditions thereof. The undersigned specifically acknowledges having read the representations in the Agreement section entitled '<u>Representations and Warranties of the Investors,</u>' and hereby represents that the statements contained therein are complete and accurate with respect to the undersigned as an Investor.

---

| | |
|:---|:---|
| **PURCHASER** (if an individual): | **PURCHASER** (if an entity): |
| By | |
| Name: | (Legal Name of Entity) |
| Date: |  |
| **PUCHASER** (if investing jointly) | By |
| By | Name: |
| Name: | Title: |
| Date: | Date: |
| Fax No. | Fax No.: |

---

State/Country of Domicile or Formation: _____________________Aggregate Subscription Amount: $_____________________________________ SS/EIN/TIN: _________

Address: ________________________________________

Telephone: ______________________________________

E-Mail: _________________________________________

[Investor Counter Signature Page to Securities Purchase Agreement]

**<u>APPENDIX A</u>**

**<u>FORM OF CONVERTIBLE PROMISSORY NOTE</u>**

**<u>APPENDIX B</u>**

**<u>WIRING INSTRUCTIONS</u>**

**<u>(see attached)</u>**

**<u>APPENDIX C</u>**

**<u>RBW ENGAGEMENT AGREEMENT COMMISSION SCHEDULE</u>**

**<u>(see attached)</u>**

**<u>APPENDIX D</u>**

**<u>FORM OF SECURITY AGREEMENT</u>**

**<u>(see attached)</u>**

## Exhibit 10.23

**

**Exhibit 10.23** 

 

***Execution Version***

 ****

**<u>SHARE PURCHASE AGREEMENT</u>**

This Share Purchase Agreement (the "<u>Agreement</u>"), dated as of May 21, 2026, is made by and between RK Capital Management LLC, a Florida limited liability company, North Commerce Parkway Capital LP, a Delaware limited partnership, and TQP Holdings LLC, a Delaware limited liability company (each, the "<u>Investor</u>"), and First Breach Inc., a Delaware corporation (the "<u>Company</u>"). The Investor and the Company may be referred to herein individually as a "Party" and collectively as the "Parties."

**WHEREAS**, the Parties desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company, up to $50 million in aggregate gross purchase price of newly issued fully paid shares of the Company's common stock, par value 0.0001 per share (the "<u>Common Shares</u>");

**WHEREAS**, the Company intends to list the Common Shares for trading on the Nasdaq Capital Market under the symbol "FBDT" in connection with its direct listing, and the parties acknowledge that the obligations of the Investor to purchase common Shares hereunder shall be conditioned upon, among other things, the effectiveness of a registration statement registering the resale of the Common Shares and the listing of the Common Shares on the Nasdaq Capital Market.

**WHEREAS**, the offer and sale of the Common Shares issuable hereunder will be made in reliance upon Section 4(a)(2) and/or Rule 506(b) of Regulation D promulgated by the Securities and Exchange Commission ("<u>Regulation D</u>") under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the "<u>Securities Act</u>"), or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the transactions to be made hereunder; and

**WHEREAS**, the Parties are concurrently entering into a Registration Rights Agreement in the form attached as Exhibit A hereto (the "<u>Registration Rights Agreement</u>"), pursuant to which the Company shall register the resale of the Registrable Securities (as defined in the Registration Rights Agreement), upon the terms and subject to the conditions set forth therein.

**NOW, THEREFORE**, the Parties hereto agree as follows:

**Article I<br> CERTAIN DEFINITIONS**

Capitalized terms used in this Agreement shall have the meanings ascribed to such terms in Annex I hereto, and hereby made a part hereof, or as otherwise set forth in this Agreement.

**Article II<br> SHARE PURCHASES**

Section 2.01 <u>Share Purchases</u>. Upon the terms and subject to the conditions of this Agreement, during the Commitment Period, the Company, at its sole discretion, shall have the right, but not the obligation, to issue and sell to the Investor, and the Investor shall subscribe for and purchase from the Company, Shares by the delivery to the Investor of Purchase Notices on the following terms:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Purchase Notice</u>. At any time during the Commitment Period, subject to the satisfaction or waiver by the Investor of the conditions set forth in Annex II and following the receipt by the Investor of confirmation that the transfer agent of the Company has credited the Investor's account as set forth in <u>Section 2.01(b)</u> below, the Company may require the Investor to purchase Shares by delivering a Purchase Notice or Intraday Purchase Notice to the Investor. The Company shall, in its sole discretion, select the number of Common Shares to be sold, not to exceed the Maximum Purchase Amount (unless otherwise agreed to in writing by the Company and the Investor), it desires to issue and sell to the Investor in each Purchase Notice or Intraday Purchase Notice. Notwithstanding the foregoing, the Company shall not deliver any Purchase Notices or Intraday Purchase Notice during the PEA Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Date of Delivery of Purchase Notice</u>. Purchase Notices shall be delivered in accordance with the instructions set forth on the bottom of Exhibit B attached hereto. A Purchase Notice shall be deemed delivered on (i) the day upon which the Investor has received confirmation that the transfer agent of the Company has credited the Investor's account (or its designee's account) at the Depository Trust Company through its Deposit Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto with a number of Common Shares equal to the number of Common Shares set forth in the Purchase Notice, if such confirmation is received on or prior to 9:30 a.m. Eastern Time on a Trading Day, or (ii) the first Trading Day immediately following the date of the Investor's receipt of such confirmation if received after 9:30 a.m. Eastern Time on a Trading Day, or on any day that is not a Trading Day, *provided that* upon mutual consent of the Company and the Investor, a Purchase Notice that is delivered after 9:30 a.m. Eastern Time may be deemed to have been delivered prior to 9:30 a.m. Eastern Time of such day. Upon receipt of a Purchase Notice, the Investor shall promptly provide written confirmation (which may be by e-mail) of receipt of such Purchase Notice. The Investor shall have the right, in its sole discretion, to designate the account into which the Common Shares to be issued pursuant to any Purchase Notice shall be deposited. The designated account for settlement shall be specified in the applicable Settlement Document delivered by the Investor, or as otherwise instructed by the Investor via email, and shall govern the delivery of Shares related to the immediately following Purchase Notice. The Company shall comply with such instructions, provided they are received in a timely manner and the designated account is capable of receiving Shares through the Depository Trust Company or another mutually agreed-upon delivery method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Intraday Purchase Notice</u>. Notwithstanding <u>Section 2.01(b)</u> hereto, the Company may deliver a Purchase Notice to the Investor to purchase Shares on any Trading Day at or after 9:30 a.m. but prior to 4:00 p.m. Eastern Time (an "<u>Intraday Purchase Notice</u>"), and upon receipt of such notice, the Investor may, at its sole discretion, accept or reject such Intraday Purchase Notice. In the event that the Investor accepts an Intraday Purchase Notice, such Intraday Purchase Notice shall be deemed to be delivered at the Intraday Commencement Time, and any purchases made by the Investor pursuant to the Intraday Purchase Notice shall be made at the Intraday Purchase Price. For the avoidance of doubt, in the event the Investor accepts an Intraday Purchase Notice, the Company shall be required to comply with all obligations set forth in this Agreement as if a Purchase Notice is delivered, except for the obligation to confirm delivery of the Shares by the transfer agent prior to the commencement of the Pricing Period as set forth in <u>Section 2.01(b)</u> herein.

Section 2.02 <u>Purchase Notice Limitations</u>. Regardless of the number of Shares requested by the Company in a Purchase Notice or Intraday Purchase Notice, the final number of Shares to be issued and sold pursuant to such Purchase Notice or Intraday Purchase Notice shall be reduced (if at all) in accordance with each of the following limitations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Ownership Limitation; Commitment Amount</u>. At the request of the Company, the Investor will inform the Company in writing (which may be by e-mail) of the number of Common Shares the Investor currently beneficially owns. At the request of the Investor, the Company shall promptly confirm in writing (which may be by e-mail) to the Investor the number of Common Shares then outstanding. Notwithstanding anything to the contrary contained in this Agreement, the Investor shall not be obligated to purchase or acquire, and shall not purchase or acquire, any Shares under this Agreement which, when aggregated with all other Common Shares beneficially owned by the Investor and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Investor and its affiliates (on an aggregated basis) to exceed 4.99% of the then outstanding voting power or number of Common Shares (the "<u>Ownership Limitation</u>"). In connection with each Purchase Notice or Intraday Purchase Notice, any portion of Shares requested to be purchased in such Purchase Notice or Intraday Purchase Notice that would (i) cause the Investor to exceed the Ownership Limitation or (ii) cause the aggregate number of Shares issued and sold to the Investor hereunder to exceed the Commitment Amount shall automatically be withdrawn with no further action required by the Company or the Investor, and such Purchase Notice or Intraday Purchase Notice shall be deemed automatically modified to reduce the number of Shares requested to be purchased by an amount equal to such withdrawn portion; *provided*, that in the event of any such automatic withdrawal and automatic modification, the Investor will promptly notify the Company of such event, including the number of Shares affected by such withdrawal or modification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Registration Limitation</u>. In no event shall the number of Shares included in a Purchase Notice or Intraday Purchase Notice exceed the number of Common Shares registered in respect of the transactions contemplated hereby under the Registration Statement then in effect (the "<u>Registration Limitation</u>"). In connection with each Purchase Notice or Intraday Purchase Notice, any portion of the number of Shares requested to be purchased that would exceed the Registration Limitation shall automatically be withdrawn with no further action required by the Company or the Investor, and such Purchase Notice or Intraday Purchase Notice shall be deemed automatically modified to reduce the aggregate amount of Shares requested in such Purchase Notice or Intraday Purchase Notice by an amount equal to such withdrawn portion; *provided*, that in the event of any such automatic withdrawal and automatic modification, the Investor will promptly notify the Company of such event, including the number of Shares affected by such withdrawal or modification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Compliance with Rules of Principal Market</u>. Notwithstanding anything to the contrary herein, the Company shall not effect any sales under this Agreement and the Investor shall not have the obligation to purchase Common Shares under this Agreement to the extent (but only to the extent) that after giving effect to such purchase and sale the aggregate number of Common Shares issued under this Agreement would exceed 19.99% of the aggregate number of Common Shares issued and outstanding as of the Effective Date of this Agreement, which number shall be reduced, on a share-for-share basis, by the number of Common Shares issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by this Agreement under the applicable rules of the Principal Market (such maximum number of shares, the "<u>Exchange Cap</u>"); *provided, however*, that the Exchange Cap will not apply if (a) the Company's stockholders have approved the issuance of Common Shares pursuant to this Agreement in excess of the Exchange Cap in accordance with the applicable rules of the Principal Market or (b) the Average Price of all applicable sales of Common Shares hereunder (including any sales covered by a Purchase Notice that has been delivered prior to the determination of whether this clause (b) applies) equals or exceeds the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the Effective Date; or (ii) the average Nasdaq Official Closing Price for the five Trading Days immediately preceding the Effective Date. In connection with each Purchase Notice, any portion of the number of Shares requested to be purchased that would exceed the Exchange Cap shall automatically be withdrawn with no further action required by the Company or the Investor, and such Purchase Notice shall be deemed automatically modified to reduce the aggregate amount of Shares requested in such Purchase Notice by an amount equal to such withdrawn portion in respect of each Purchase Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Volume Limitation</u>. In connection with a Purchase Notice where the Company selects an Option 1 Pricing Period, if the total number of Common Shares traded on the Principal Market during the applicable Pricing Period is less than the Volume Threshold, then the number of Common Shares issued and sold pursuant to such Purchase Notice shall be reduced to the greater of (a) 20% of the trading volume of the Common Shares on the Principal Market during such Pricing Period as reported by Bloomberg L.P., or (b) the number of Common Shares sold by the Investor during such Pricing Period, but in each case not to exceed the amount requested in the Purchase Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) In the event that trading of Common Stock on the Principal Market is halted, suspended, or materially disrupted during the Pricing Period, the Investor may, at its sole discretion, adjust in good faith and with the consent of the Company, which consent shall not be unreasonably withheld, the Pricing Period or the number of Shares to be purchased herein as may be reasonably necessary to account for such event.

Section 2.03 <u>Unconditional Contract</u>. Notwithstanding any other provision in this Agreement, the Company and the Investor acknowledge and agree that upon the Investor's receipt of a valid Purchase Notice or Intraday Purchase Notice from the Company the Parties shall be deemed to have entered into an unconditional contract binding on both Parties for the purchase and sale of Shares pursuant to such Purchase Notice or Intraday Purchase Notice in accordance with the terms of this Agreement and (i) subject to Applicable Laws and (ii) subject to <u>Section 6.19</u>, the Investor may sell Common Shares after receipt of a Purchase Notice or Intraday Purchase Notice, including during a Pricing Period. The Parties acknowledge and agree that the Company's liability under this Section 2.03 shall be limited solely to damages caused by the Company's negligence or willful misconduct. For the avoidance of doubt, the Company shall not be liable for any damages, losses, or claims arising from (A) trading halts imposed by the Principal Market, the SEC or any regulatory authority or (B) the Investor's trading strategy or investment decisions; *provided*, for the avoidance of doubt, that clause (B) shall not apply to any buy-in, cover, fail-to-deliver, settlement or similar loss, cost or expense arising out of or resulting from the Company's failure to timely deliver Shares pursuant to a valid Purchase Notice or Intraday Purchase Notice in accordance with this Agreement

Section 2.04 <u>Closings</u>. The sale and purchase of Shares pursuant to a Purchase Notice or Intraday Purchase Notice (each, a "<u>Closing</u>") shall take place as soon as practicable on each applicable Purchase Date in accordance with the procedures set forth below. The Company acknowledges that the Purchase Price is not known at the time a Purchase Notice is delivered but shall be determined on each Closing based on the daily prices of the Common Shares that are the inputs to the determination of the Purchase Price. In connection with each Closing, the Company and the Investor shall fulfill each of its obligations as set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On the Purchase Date, the Investor shall deliver to the Company a written document, in the form attached hereto as Exhibit C (each a "<u>Settlement Document</u>"), setting forth the final number of Shares to be purchased by the Investor (taking into account any adjustments pursuant to the terms hereof), the Market Price, the Purchase Price, the aggregate proceeds to be paid by the Investor to the Company, and a report by Bloomberg, L.P. (or such other exchange data vendor authorized by the Principal Market to distribute official market data) indicating the VWAP for each of the Trading Days during the Pricing Period, in each case in accordance with the terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Promptly after receipt of the Settlement Document with respect to each Purchase Notice or Intraday Purchase Notice (and, in any event, not later than one Trading Day after such receipt), to the extent such Shares have not already been delivered to the Investor, the Company will, or will cause its transfer agent to, electronically transfer such number of Shares to be purchased by the Investor (as set forth in the Settlement Document) by crediting the Investor's account or its designee's account at the Depository Trust Company through its Deposit Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto, and transmit notification to the Investor that such share transfer has been requested. Promptly after delivery of the Settlement Document, or to the extent such Shares have not already been delivered to the Investor, promptly upon receipt of such Shares, the Investor shall pay to the Company the aggregate Purchase Price of the Shares (as set forth in the Settlement Document) in cash in immediately available funds to an account designated by the Company in writing and transmit notification to the Company that such funds transfer has been requested. No fractional shares shall be issued, and any fractional amounts shall be rounded to the next higher whole number of shares. To facilitate the transfer of the Common Shares by the Investor, the Common Shares will not bear any restrictive legends so long as there is an effective Registration Statement covering the resale of such Common Shares (it being understood and agreed by the Investor that notwithstanding the lack of restrictive legends, the Investor may only sell such Common Shares pursuant to the Plan of Distribution set forth in the Prospectus included in the Registration Statement and otherwise in compliance with the requirements of the Securities Act (including any applicable prospectus delivery requirements) or pursuant to an available exemption). To the extent that the number of Shares delivered to the Investor exceeds the number of shares to be purchased by the Investor in the Settlement Document (any such shares, the "<u>Excess Shares</u>"), the Investor will promptly instruct the Company's transfer agent to return any such Excess Shares to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) On or prior to the Purchase Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings expressly required to be delivered by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If on any day during the Pricing Period (i) the Company notifies Investor that a Material Outside Event has occurred, or (ii) the Company notifies the Investor of a Black Out Period, the parties agree that any pending sale of Shares pursuant to a Purchase Notice or Intraday Purchase Notice shall end and the final number of Shares to be purchased by the Investor at the Closing for such Purchase Notice or Intraday Purchase Notice shall be equal to the number of Common Shares sold by the Investor during the applicable Pricing Period prior to the notification from the Company of a Material Outside Event or Black Out Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any changes to settlement instructions previously provided by either Party shall (i) be made by written notice signed by an authorized signatory of the requesting Party (email alone shall not be sufficient), (ii) not be effective until the second Trading Day following receipt of such written notice by the other Party (no same-day changes to settlement instructions shall be permitted), and (iii) require the prior written approval of both Parties before becoming effective. Settlement instructions for each Purchase Notice or Intraday Purchase Notice shall be pre-approved in writing by both the Company and the Investor prior to the commencement of the applicable Pricing Period.

Section 2.05 <u>Hardship</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event the Investor sells Common Shares after receipt of a Purchase Notice or Intraday Purchase Notice and the Company fails to perform its obligations as mandated in this Agreement, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in this Agreement and in addition to any other remedy to which the Investor is entitled at law or in equity, including, without limitation, specific performance, it will hold the Investor harmless against any loss, claim, damage, or expense (including reasonable and documented legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject to Applicable Laws and the rules of the Principal Market), without the posting of a bond or other security, the terms and provisions of this Agreement.

**Article III<br> REPRESENTATIONS AND WARRANTIES OF THE INVESTOR**

The Investor hereby makes the following representations, warrants, and covenants to the Company:

Section 3.01 <u>Organization and Authorization</u>. Each Investor is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation and has the requisite limited liability company or equivalent power and authority to enter into and perform its obligations under the Transaction Documents to which it is a party and to purchase or acquire the Shares in accordance with the terms hereof. The decision to invest and the execution and delivery of the Transaction Documents to which it is a party by each Investor, the performance by each Investor of its obligations hereunder and the consummation by each Investor of the transactions contemplated hereby have been duly authorized and require no other proceedings on the part of each Investor. The undersigned has the right, power and authority to execute and deliver the Transaction Documents to which it is a party and all other instruments on behalf of each Investor or its respective shareholders. This Agreement and the Transaction Documents to which it is a party have been duly executed and delivered by each Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of each Investor, enforceable against each Investor in accordance with its terms.

Section 3.02 <u>Evaluation of Risks</u>. Each Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Shares and of protecting its interests in connection with the transactions contemplated hereby. Each Investor acknowledges and agrees that its investment in the Company involves a high degree of risk, and that the Investor may lose all or a part of its investment.

Section 3.03 <u>No Legal, Investment or Tax Advice from the Company</u>. Each Investor acknowledges that it had the opportunity to review the Transaction Documents and the transactions contemplated by the Transaction Documents with its own legal counsel and investment and tax advisors. Each Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of the Company's representatives or agents for legal, tax, investment or other advice with respect to the Investor's acquisition of Shares hereunder, the transactions contemplated by this Agreement or the laws of any jurisdiction, and each Investor acknowledges that it may lose all or a part of its investment.

Section 3.04 <u>Investment Purpose</u>. Each Investor is acquiring the Shares for its own account, for investment purposes and not with a view towards, or for resale in connection with, the public sale or distribution thereof, in violation of the Securities Act; *provided*, *however*, that by making the representations herein, each Investor does not agree, or make any representation or warranty, to hold any of the Shares for any minimum or other specific term and reserves the right to dispose of the Shares at any time in accordance with, or pursuant to, a registration statement filed pursuant to the Registration Rights Agreement or an applicable exemption under the Securities Act. No Investor presently has any agreement or understanding, directly or indirectly, with any Person to sell or distribute any of the Shares. Each Investor is acquiring the Shares hereunder in the ordinary course of its business. Each Investor acknowledges that it will be disclosed as an "underwriter" and a "selling stockholder" in each Registration Statement and in any prospectus contained therein to the extent required by applicable law and to the extent the prospectus is related to the resale of Registrable Securities.

Section 3.05 <u>Accredited Investor</u>. Each Investor is an "Accredited Investor" as that term is defined in Rule 501(a) of Regulation D.

Section 3.06 <u>Information</u>. Each Investor and its respective advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information that each Investor deemed material to making an informed investment decision. Each Investor and its advisors (and its counsel), if any, have been afforded the opportunity to ask questions of the Company and its management and have received answers to such questions to the Investor's satisfaction. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors (and its counsel), if any, or its representatives shall modify, amend or affect the Investor's right to rely on the Company's representations and warranties contained in this Agreement. The Investor acknowledges and agrees that the Company has not made to the Investor, and the Investor acknowledges and agrees it has not relied upon, any representations and warranties of the Company, its employees or any third party other than the representations and warranties of the Company contained in this Agreement. The Investor understands that its investment involves a high degree of risk. The Investor has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect to the transactions contemplated hereby.

Section 3.07 <u>Not an Affiliate</u>. The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any affiliate of the Company (as that term is defined in Rule 405 promulgated under the Securities Act).

Section 3.08 <u>General Solicitation</u>. The Investor is not purchasing or acquiring the shares as a result of any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Shares.

Section 3.09 <u>Reliance on Exemptions; Resale of Shares</u>. The Investor understands that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Investor's compliance with, the representations, warranties, agreements, acknowledgements and understandings of the Investor set forth herein in order to determine the availability of such exemptions and the eligibility of the Investor to acquire the Shares. The Investor represents, warrants and covenants that it will resell Shares purchased or acquired by the Investor from the Company pursuant to this Agreement only pursuant to the Registration Statement in which the resale of such Shares is registered under the Securities Act, in a manner described under the caption "Plan of Distribution" in such Registration Statement, and in a manner in compliance with all applicable U.S. federal and applicable state securities laws, rules and regulations. The Investor further acknowledges that the removal of the restrictive legend from certificate(s) or book-entry statement(s) representing the Shares is predicated, in part, upon the upon the truth and accuracy of, and the Investor's compliance with, the representations, warranties and covenants of the Investor set forth in this <u>Section 3.10</u>.

**Article IV<br> REPRESENTATIONS AND WARRANTIES OF THE COMPANY**

Except as set forth in the disclosure schedule delivered by the Company to the Investor concurrently with this Agreement (which is hereby incorporated by reference in, and constitutes an integral part of, this Agreement) (the "<u>Disclosure Schedule</u>"), or where specifically set forth below with respect to certain specified representations and warranties, the SEC Documents, the Company hereby makes the following representations, warranties and covenants to the Investor:

Section 4.01 <u>Organization and Qualification</u>. The Company and each of its Subsidiaries are entities duly formed, validly existing and in good standing under the laws of the jurisdiction in which they are formed and have the requisite power and authority to own their properties and to carry on their business as now being conducted. The Company and each of its Subsidiaries is duly qualified to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.

Section 4.02 <u>Authorization, Enforcement, Compliance with Other Instruments</u>. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Shares in accordance with the terms hereof and thereof. The execution and delivery by the Company of this Agreement and the other Transaction Documents, and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares) have been or (with respect to consummation) will be duly authorized by the Company's board of directors and no further consent or authorization will be required by the Company or its board of directors except for, if applicable, the approval of the Company's shareholders. This Agreement and the other Transaction Documents to which the Company is a party have been (or, when executed and delivered, will be) duly executed and delivered by the Company and, assuming the execution and delivery thereof and acceptance by the Investor, constitute (or, when duly executed and delivered, will be) the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law.

Section 4.03 <u>Authorization of the Shares</u>. The Shares to be issued under this Agreement have been, or with respect to Shares to be purchased by the Investor pursuant to a Purchase Notice or Intraday Purchase Notice, will be, when issued and delivered pursuant to the terms approved by the board of directors of the Company or a duly authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided herein, duly and validly authorized and issued and fully paid and nonassessable, free and clear of any pledge, lien, encumbrance, security interest or other claim, including any statutory or contractual preemptive rights, resale rights, rights of first refusal or other similar rights, and the resale of such Shares will be registered pursuant to Section 12(b) of the Exchange Act. The Shares, when issued, will conform to the description thereof set forth in or incorporated into the Prospectus.

Section 4.04 <u>No Conflict</u>. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Shares) will not (i) result in a violation of the certificate of incorporation or other organizational documents of the Company or its Subsidiaries (with respect to consummation, as the same may be amended prior to the date on which any of the transactions contemplated hereby are consummated), (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or its Subsidiaries or by which any property or asset of the Company or its Subsidiaries is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations that would not reasonably be expected to have a Material Adverse Effect.

Section 4.05 <u>SEC Documents; Financial Statements</u>. If and during the period that the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company has timely filed (giving effect to permissible extensions in accordance with Rule 12b-25 under the Exchange Act) all SEC Documents required to be filed for the twelve (12) months preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such SEC Documents). If and during the period that the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company has delivered or made available to the Investor through the SEC's website at true and complete copies of the SEC Documents, as applicable. If and during the period that the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, except as disclosed in amendments or subsequent filings to the SEC Documents, as of its filing date (or, if amended or superseded by a filing prior to the date hereof, on the date of such amended or superseded filing), each of the SEC Documents complied in all material respects with the requirements of the Exchange Act or the Securities Act, as applicable, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and did not contain any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

Section 4.06 <u>Financial Statements</u>. Complete copies of the Company's audited financial statements consisting of the balance sheet of the Company as of December 31 in each of the years 2025 and 2024 and the related statements of income and retained earnings, shareholders' equity, and cash flow for the years then ended (the "<u>Full Year Financial Statements"),</u> and interim financial statements consisting of the unaudited balance sheet of the Company as of March 31, 2026 and the related statements of income and retained earnings, shareholders' equity, and cash flow for the period then ended (the "<u>Interim Financial Statements</u>" and together with the Full Year Financial Statements, the "<u>Financial Statements</u>") have been delivered to the Investor. The Financial Statements, and if and during the period that the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the consolidated financial statements of the Company included or incorporated by reference in the SEC Documents, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of the Company and the Subsidiaries as of the dates indicated and the consolidated results of operations, cash flows and changes in stockholders' equity of the Company for the periods specified (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate) and have been prepared in compliance with the requirements of the Securities Act and Exchange Act, as applicable, and in conformity with generally accepted accounting principles as issued by the Financial Accounting Standards Board ("<u>GAAP</u>") applied on a consistent basis (except (i) for such adjustments to accounting standards and practices as are noted therein and (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) during the periods involved; the other financial and statistical data with respect to the Company and the Subsidiaries contained or incorporated by reference in the SEC Documents are accurately and fairly presented and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the SEC Documents that are not included or incorporated by reference as required; the Company and the Subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the SEC Documents (excluding the exhibits thereto) that are required to be described in the SEC Documents; and all disclosures contained or incorporated by reference in the SEC Documents regarding "non-GAAP financial measures" (as such term is defined by the rules and regulations of the SEC) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the SEC Documents fairly presents the information called for in all material respects and has been prepared in accordance with the SEC's rules and guidelines applicable thereto. Except as otherwise disclosed in the SEC Documents, the Company is in compliance with all applicable provisions of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder, which are applicable to it as of the date hereof. The Company's accountants are set forth in the SEC Documents and such accountants are an independent registered public accounting firm as required by the Securities Act.

Section 4.07 <u>Registration Statement and Prospectus</u>. The Company and the transactions contemplated by this Agreement meet the requirements for and comply with the conditions for the use of Form S-1 under the Securities Act. Each Registration Statement and the offer and sale of Shares as contemplated hereby, if and when filed, will meet the requirements of Rule 415 under the Securities Act and comply in all material respects with said rule. Any statutes, regulations, contracts or other documents that are required to be described in a Registration Statement or a Prospectus, or to be filed as exhibits to a Registration Statement have been so described or filed. Copies of each Registration Statement, any Prospectus, and any such amendments or supplements thereto and all documents incorporated by reference therein that were filed with the SEC on or prior to the date of this Agreement have been delivered, or are available through EDGAR, to each Investor and its counsel. The Company has not distributed and, prior to the later to occur of each Share Purchase Notice Date and completion of the distribution of the Shares, will not distribute any offering material in connection with the offering or sale of the Shares other than a Registration Statement and the Prospectus to which the Investor has consented.

Section 4.08 <u>No Misstatement or Omission</u>. Each Registration Statement, when it became or becomes effective, and any Prospectus, on the date of such Prospectus or amendment or supplement, conformed and will conform in all material respects with the requirements of the Securities Act. At each Share Purchase Notice Date, the Registration Statement, and the Prospectus, as of such date, will conform in all material respects with the requirements of the Securities Act. Each Registration Statement, when it became or becomes effective, did not, and will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Each Prospectus did not, or will not, include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The documents incorporated by reference in a Prospectus or any Prospectus Supplement did not, and any further documents filed and incorporated by reference therein will not, when filed with the SEC, contain an untrue statement of a material fact or omit to state a material fact required to be stated in such document or necessary to make the statements in such document, in light of the circumstances under which they were made, not misleading. The foregoing shall not apply to statements in, or omissions from, any such document made in reliance upon, and in conformity with, information furnished to the Company by the Investor specifically for use in the preparation thereof.

Section 4.09 <u>Conformity with Securities Act and Exchange Act</u>. Each Registration Statement, each Prospectus, or any amendment or supplement thereto, and the documents incorporated by reference in each Registration Statement, Prospectus or any amendment or supplement thereto, when such documents were or are filed with the SEC under the Securities Act or the Exchange Act or became or become effective under the Securities Act, as the case may be, conformed or will conform in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable.

Section 4.10 <u>Equity Capitalization</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Authorized and Outstanding Capital Stock</u>. As of the date hereof, the authorized capital stock of the Company consists of (i) 500,000,000 shares of Common Stock, $0.0001 par value per share, of which 45,034,282 shares of Common Stock are issued and outstanding and (ii) 1,000,000 shares of preferred stock, $0.0001 par value per share and of which 0 are issued and outstanding. The Common Shares will be registered pursuant to Section 12(b) of the Exchange Act and will be listed on a Principal Market under the trading symbol "FBDT." If and during the period that the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company has taken no action designed to, or likely to have the effect of, (i) terminating the registration of the Common Shares under the Exchange Act, (ii) delisting the Common Shares from the Principal Market, nor has the Company received any notification that the SEC or the Principal Market is contemplating terminating such registration or listing and the Company is in compliance with all applicable listing requirements of the Principal Market. The Company has filed a registration statement on Form S-1 with the SEC in connection with the direct listing of Common Shares (the "<u>Direct Listing Registration Statement</u>") and is diligently pursuing the effectiveness thereof and the listing of the Common Shares on the Nasdaq Capital Market. The Company has taken no action designed to, or likely to have the effect of, delaying, impairing, or terminating (a) the effectiveness of the Direct Listing Statement, (b) the registration of the Common Shares under the Exchange Act, or (c) the listing of the Common Shares on the Principal Market. The Company has not received any notification from the SEC or the Principal Market that it is declining, objecting to, or contemplating the denial of such registration or listing. To the Company's knowledge, no event has occurred that would reasonably be expected to result in the material delay of such listing or registration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Valid Issuance; Available Shares</u>. All of such issued and outstanding shares are duly authorized and have been validly issued and are fully paid and nonassessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Existing Securities; Obligations</u>. Except as disclosed on <u>Section 4.10(c)</u> of the Disclosure Schedules: (A) none of the Company's or any Subsidiary's shares, interests or capital stock is subject to preemptive rights or any other similar rights or liens suffered or permitted by the Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the Securities Act (except pursuant to this Agreement and the Registration Rights Agreement); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Shares; and (G) neither the Company nor any Subsidiary has entered into any Variable Rate Transaction (other than a transaction that is permitted under <u>Section 6.22</u> of this Agreement).

Section 4.11 <u>Intellectual Property Rights</u>. The Company and its Subsidiaries own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights, if any, necessary to conduct their respective businesses as now conducted, except as would not cause a Material Adverse Effect. The Company and its Subsidiaries have not received written notice of any infringement by the Company or its Subsidiaries of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, or trade secrets, except as would not cause a Material Adverse Effect. To the knowledge of the Company, there is no claim, action or proceeding being made or brought against, or to the Company's knowledge, being threatened against the Company or its Subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement; and, except as would not cause a Material Adverse Effect, the Company is not aware of any facts or circumstances which might give rise to any of the foregoing.

Section 4.12 <u>Employee Relations</u>. Neither the Company nor any of its Subsidiaries is involved in any labor dispute nor, to the knowledge of the Company or any of its Subsidiaries, is any such dispute threatened, in each case which is reasonably likely to cause a Material Adverse Effect.

Section 4.13 <u>Environmental Laws</u>. To the Company's knowledge, the Company and its Subsidiaries (i) have not received written notice alleging any failure to comply in all material respects with all Environmental Laws (as defined below), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) have not received written notice alleging any failure to comply with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term "<u>Environmental Laws</u>" means all applicable federal, state and local laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, "<u>Hazardous Materials</u>") into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

Section 4.14 <u>Title</u>. Except as would not cause a Material Adverse Effect, the Company (or its Subsidiaries) has indefeasible fee simple or leasehold title to its properties and material assets owned by it, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest other than such as are not material to the business of the Company. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

Section 4.15 <u>Insurance</u>. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be reasonable and customary in the businesses in which the Company and its Subsidiaries are engaged. To the Company's knowledge, there is no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

Section 4.16 <u>Regulatory Permits</u>. Except as would not cause a Material Adverse Effect, the Company and its Subsidiaries possess all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to own their respective businesses, and neither the Company nor any such Subsidiary has received any written notice of proceedings relating to the revocation or modification of any such certificate, authorization or permits.

Section 4.17 <u>Internal Accounting Controls</u>. The Company maintains a system of internal accounting controls sufficient to provide assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, and management is not aware of any material weaknesses.

Section 4.18 <u>Absence of Litigation</u>. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company, the Common Shares or any of the Company's Subsidiaries, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect.

Section 4.19 <u>Absence of Certain Changes</u>. Since the later of (x) the date of the Company's most recent audited financial statements delivered to the Investor and (y) if and during such period that the Company is subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act, the date of the Company's most recent audited financial statements contained in a Form 10-K (the later of (x) and (y), the "<u>Reference Date</u>"), there has been no Material Adverse Effect, nor any event or occurrence specifically affecting the Company or its Subsidiaries that would be reasonably expected to result in a Material Adverse Effect. Since the Reference Date, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any material assets, individually or in the aggregate, outside of the ordinary course of business, or (iii) made any material capital expenditures, individually or in the aggregate, outside of the ordinary course of business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings.

Section 4.20 <u>Subsidiaries</u>. Other than as set forth in the Disclosure Schedule, the Company does not own or control, directly or indirectly, any interest in any other corporation, partnership, association or other business entity.

Section 4.21 <u>Tax Status</u>. Each of the Company and its Subsidiaries (i) has timely made or filed all material foreign, federal and state income tax returns and all other material tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. The Company has not received written notification of any unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis for any such claim where failure to pay would cause a Material Adverse Effect.

Section 4.22 <u>Certain Transactions</u>. Except as not required to be disclosed pursuant to Applicable Laws, none of the officers or directors of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer or director, or to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer or director has a substantial interest or is an officer, director, trustee or partner.

Section 4.23 <u>Rights of First Refusal</u>. The Company is not obligated to offer the Common Shares offered hereunder on a right of first refusal basis to any third parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other third parties.

Section 4.24 <u>Dilution</u>. The Company is aware and acknowledges that issuance of Common Shares hereunder could cause dilution to existing shareholders and could significantly increase the outstanding number of Common Shares.

Section 4.25 <u>Acknowledgment Regarding Investor's Purchase of Shares</u>. The Company acknowledges and agrees that each Investor is acting solely in the capacity of an arm's length investor with respect to this Agreement and the transactions contemplated hereunder. The Company further acknowledges that each Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereunder and any advice given by any such Investor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder is merely incidental to such Investor's purchase of the Shares hereunder. The Company is aware and acknowledges that it shall not be able to submit a Purchase Notice or Intraday Purchase Notice under this Agreement if the Registration Statement is not effective or if any issuances of Common Shares pursuant to any Purchase Notice or Intraday Purchase Notice would violate any rules of the Principal Market. The Company acknowledges and agrees that it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement.

Section 4.26 <u>Finder's Fees</u>. Neither the Company nor any of the Subsidiaries has incurred any liability for any finder's fees, brokerage commissions or similar payments in connection with the transactions herein contemplated.

Section 4.27 <u>Relationship of the Parties</u>. Neither the Company, nor any of its subsidiaries, affiliates, nor, to the Company's knowledge, any person acting on its or their behalf is a client or customer of the Investor or any of its affiliates and, to the Company's knowledge, neither the Investor nor any of its affiliates has provided, or will provide, any services to the Company or any of its affiliates, its subsidiaries, or any person acting on its or their behalf. The Investor's relationship to Company is solely as investor as provided for in the Transaction Documents.

Section 4.28 <u>Operations</u>. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with the Applicable Laws and neither the Company nor the Subsidiaries, nor any director, officer, or employee of the Company or any Subsidiary nor, to the Company's knowledge, any agent, affiliate or other person acting on behalf of the Company or any Subsidiary has, not complied with Applicable Law; and no action, suit or proceeding by or before any governmental authority involving the Company or any of its Subsidiaries with respect to Applicable Laws is pending or, to the knowledge of the Company, threatened.

Section 4.29 <u>Forward-Looking Statements</u>. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement or a Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

Section 4.30 <u>Compliance with Laws</u>. The Company and each of its Subsidiaries are in compliance in all material respects with Applicable Laws; the Company has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that any director, officer, or employee of the Company or any Subsidiary nor, to the Company's knowledge, any agent, affiliate or other person acting on behalf of the Company or any Subsidiary has, has not complied with Applicable Laws, or could give rise to a notice of non-compliance with Applicable Laws, and is not aware of any pending change or contemplated change to any applicable law or regulation or governmental position; in each case that would have a Material Adverse Effect.

Section 4.31 <u>Sanctions Matters</u>. Neither the Company nor any of its Subsidiaries or, to the knowledge of the Company, any director, officer or controlled affiliate of the Company or any director or officer of any Subsidiary, is a Person that is, or is owned or controlled by a Person that is (i) the subject of any sanctions administered or enforced by the U.S. Department of Treasury's Office of Foreign Asset Control ("<u>OFAC</u>"), the United Nations Security Council, the European Union, His Majesty's Treasury, or other relevant sanctions authorities, including, without limitation, designation on OFAC's Specially Designated Nationals and Blocked Persons List or OFAC's Foreign Sanctions Evaders List or other relevant sanctions authority (collectively, "<u>Sanctions</u>"), or (ii) located, organized or resident in a country or territory that is the subject of Sanctions that broadly prohibit dealings with that country or territory (including, without limitation, the Crimea, Zaporizhzhia and Kherson regions, the Donetsk People's Republic and Luhansk People's Republic in Ukraine, Cuba, Iran, North Korea, Russia, Sudan and Syria (the "<u>Sanctioned Countries</u>")). Neither the Company nor any of its Subsidiaries will, directly or indirectly, use the proceeds from the sale of Shares, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person (a) for the purpose of funding or facilitating any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions or is a Sanctioned Country, or (b) in any other manner that will result in a violation of Sanctions or Applicable Laws by any Person (including any Person participating in the transactions contemplated by this Agreement, whether as underwriter, advisor, investor or otherwise). For the past five years, neither the Company nor any of its Subsidiaries has engaged in, and is now not engaged in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions or was a Sanctioned Country. Neither the Company nor any of its Subsidiaries nor any director, officer or controlled affiliate of the Company or any of its Subsidiaries, has ever had funds blocked by a United States bank or financial institution, temporarily or otherwise, as a result of OFAC concerns.

**Article V<br> INDEMNIFICATION**

The Investor and the Company represent to the other the following with respect to itself:

Section 5.01 <u>Indemnification by the Company</u>. In consideration of each of the Investor's execution and delivery of this Agreement and acquiring the Shares hereunder, and in addition to all of the Company's other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless each Investor and its officers, directors, managers, members, partners, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) and each person who controls each such Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the "<u>Investor Indemnitees</u>") from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable and documented expenses in connection therewith (irrespective of whether any such Investor Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable and documented attorneys' fees and disbursements (the "<u>Indemnified Liabilities</u>"), incurred by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; *provided, however*, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of an Investor specifically for inclusion therein; (b) any material misrepresentation or breach of any material representation or material warranty made by the Company in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; or (c) any material breach of any material covenant, material agreement or material obligation of the Company contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; *provided*, *however*, that the foregoing indemnity shall not apply to any Indemnified Liabilities to the extent, but only to the extent, that such Indemnified Liabilities resulted directly and primarily from any acts or failures to act, undertaken or omitted to be taken by the Investor Indemnitee through its fraud, bad faith, gross negligence, or willful or reckless misconduct. To the extent that the foregoing undertaking by the Company may be unenforceable under Applicable Law, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under Applicable Law.

Section 5.02 <u>Indemnification by the Investor</u>. In consideration of the Company's execution and delivery of this Agreement, and in addition to all of the Investor's other obligations under this Agreement, each Investor shall, on a several basis, defend, protect, indemnify and hold harmless the Company, its Subsidiaries and all of its and their officers, directors, shareholders, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) and each person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the "<u>Company Indemnitees</u>") from and against any and all Indemnified Liabilities incurred by the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; *provided*, *however*, that the Investor will only be liable for written information relating to the Investor furnished to the Company by or on behalf of the Investor specifically for inclusion in the documents referred to in the foregoing indemnity, and will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Investor by or on behalf of the Company specifically for inclusion therein; (b) any misrepresentation or breach of any representation or warranty made by the Investor in this Agreement or any instrument or document contemplated hereby or thereby executed by the Investor; or (c) any breach of any covenant, agreement or obligation of the Investor contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby executed by the Investor; *provided*, *however*, that the foregoing indemnity shall not apply to any Indemnified Liabilities to the extent, but only to the extent, that such Indemnified Liabilities resulted directly and primarily from any acts or failures to act, undertaken or omitted to be taken by the Company Indemnitee through its fraud, bad faith, gross negligence, or willful or reckless misconduct. To the extent that the foregoing undertaking by the Investor may be unenforceable under Applicable Laws, the Investor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under Applicable Laws.

Section 5.03 <u>Notice of Claim</u>. Promptly after receipt by an Investor Indemnitee or Company Indemnitee of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Investor Indemnitee or Company Indemnitee, as applicable, shall, if a claim for an Indemnified Liability in respect thereof is to be made against any indemnifying party under this <u>Article V</u>, deliver to the indemnifying party a written notice of the commencement thereof; but the failure to so notify the indemnifying party will not relieve it of liability under this <u>Article V</u> except to the extent the indemnifying party is prejudiced by such failure. The indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually reasonably satisfactory to the indemnifying party and the Investor Indemnitee or Company Indemnitee, as the case may be; provided, however, that an Investor Indemnitee or Company Indemnitee shall have the right to retain its own counsel with the actual and reasonable third party fees and expenses of not more than one counsel for such Investor Indemnitee or Company Indemnitee to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Investor Indemnitee or Company Indemnitee and the indemnifying party would be inappropriate due to actual or potential differing interests between such Investor Indemnitee or Company Indemnitee and any other party represented by such counsel in such proceeding. The Investor Indemnitee or Company Indemnitee shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Investor Indemnitee or Company Indemnitee which relates to such action or claim. The indemnifying party shall keep the Investor Indemnitee or Company Indemnitee reasonably apprised as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Investor Indemnitee or Company Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Investor Indemnitee or Company Indemnitee of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Investor Indemnitee or Company Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The indemnification required by this <u>Article V</u> shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received and payment therefor is due.

Section 5.04 <u>Remedies</u>. The remedies provided for in this <u>Article V</u> are not exclusive and shall not limit any right or remedy which may be available to any indemnified person at law or equity. The obligations of the parties to indemnify or make contribution under this <u>Article V</u> shall survive expiration or termination of this Agreement.

Section 5.05 <u>Limitation of liability</u>. Notwithstanding the foregoing, no party shall seek, nor shall any party be entitled to recover from the other party or be liable for, special, incidental, indirect, consequential, punitive or exemplary damages.

**Article VI<br> COVENANTS**

The Company covenants with each Investor, and each Investor covenants with the Company, as follows, which covenants of one party are for the benefit of the other party, during the Commitment Period:

Section 6.01 <u>Effective Registration Statement</u>. During the Commitment Period, the Company shall use its best efforts to maintain the continuous effectiveness of each Registration Statement filed with the SEC under the Securities Act pursuant to and in accordance with the Registration Rights Agreement.

Section 6.02 <u>Registration and Listing</u>. The Company shall use its best efforts to cause the Common Shares to continue to be registered as a class of securities under Section 12(b) of the Exchange Act, and to comply with its reporting and filing obligations under the Exchange Act, and shall not take any action or file any document (whether or not permitted by the Securities Act or the Exchange Act) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act or Securities Act, except as permitted herein. The Company shall use its reasonable best efforts to continue the listing and trading of its Common Shares and the listing of the Shares purchased by the Investor hereunder on the Principal Market and to comply with the Company's reporting, filing and other obligations under the rules and regulations of the Principal Market. If the Company receives any final and non-appealable notice that the listing or quotation of the Common Shares on the Principal Market shall be terminated on a date certain, the Company shall promptly (and in any case within 24 hours) notify the Investor of such fact in writing and shall use its reasonable best efforts to cause the Common Shares to be listed or quoted on another Principal Market.

Section 6.03 <u>Blue Sky</u>. The Company shall take such action, if any, as is necessary by the Company in order to obtain an exemption for or to qualify the Shares for sale by the Company to the Investor pursuant to the Transaction Documents, and at the request of the Investor, the subsequent resale of Registrable Securities by the Investor, in each case, under applicable state securities or "Blue Sky" laws and shall provide evidence of any such action so taken to the Investor from time to time during the Commitment Period; *provided*, *however*, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify, (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.

Section 6.04 <u>Suspension of Registration Statement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Establishment of a Black Out Period</u>. During the Commitment Period, the Company from time to time may suspend the use of a Registration Statement by written notice to the Investor in the event that the Company determines in its sole discretion in good faith and after consultation with legal counsel that such suspension is necessary to (A) delay the disclosure of material nonpublic information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (B) amend or supplement the Registration Statement or Prospectus so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (a "<u>Black Out Period</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>No Sales by Investor During the Black Out Period</u>. During such Black Out Period, the Investor agrees not to sell any Common Shares of the Company pursuant to such Registration Statement, but may sell shares pursuant to an exemption from registration, if available, subject to the Investor's compliance with Applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Limitations on the Black Out Period</u>. The Company shall not impose any Black Out Period that is longer than 15 calendar days or in a manner that is more restrictive (including, without limitation, as to duration) than the comparable restrictions that the Company may impose on transfers of the Company's equity securities by its directors and senior executive officers. In addition, the Company shall not deliver any Purchase Notice or Intraday Purchase Notice during any Black Out Period. If the public announcement of such material, nonpublic information is made during a Black Out Period, the Black Out Period shall terminate immediately after such announcement, and the Company shall immediately notify the Investor of the termination of the Black Out Period.

Section 6.05 <u>Listing of Common Shares</u>. As of each Share Purchase Date, the Shares to be sold by the Company from time to time hereunder will have been registered for resale under Section 12(b) of the Exchange Act and approved for listing on the Principal Market, subject to official notice of issuance.

Section 6.06 <u>Opinion of Counsel</u>. Prior to the date of the delivery by the Company of the first Purchase Notice or Intraday Purchase Notice, the Investor shall have received an opinion letter from counsel to the Company in form and substance satisfactory to the Investor.

Section 6.07 <u>Exchange Act Registration</u>. The Company will file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act and, during the Commitment Period, will not take any action or file any document (whether or not permitted by Exchange Act or the rules thereunder) to terminate or suspend its reporting and filing obligations under the Exchange Act.

Section 6.08 <u>Transfer Agent Instructions</u>. For any time while there is a Registration Statement in effect for this transaction, the Company shall (if required by the transfer agent for the Common Shares) deliver to the transfer agent for the Common Shares (with a copy to the Investor) instructions to issue Common Shares to the Investor free of restrictive legends upon each issuance of Shares pursuant to a Purchase Notice or Intraday Purchase Notice if the delivery of such instructions are consistent with Applicable Law, in each case supported as needed by an opinion from legal counsel for the Company.

Section 6.09 <u>Corporate Existence</u>. The Company will use commercially reasonable efforts to preserve and continue the corporate existence of the Company during the Commitment Period.

Section 6.10 <u>Notice of Certain Events Affecting Registration; Suspension of Right to Submit a Purchase Notice</u>. The Company will promptly notify the Investor, and confirm in writing, upon its becoming aware of the occurrence of any of the following events in respect of a Registration Statement or related Prospectus: (i) receipt of any request for amendments or supplements to the Registration Statement or related Prospectus; (ii) the issuance by the SEC or any other Federal governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Common Shares for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in the Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (v) of the necessity to amend the Registration Statement or supplement a related Prospectus to comply with the Securities Act or any other law (and the Company will promptly make available to the Investor any such supplement or amendment to the related Prospectus). The Company shall not deliver to the Investor any Purchase Notice or Intraday Purchase Notice, and the Company shall not sell any Shares pursuant to any pending Purchase Notice or Intraday Purchase Notice (other than as required pursuant to <u>Section 2.04(d)</u>), during the continuation of any of the foregoing events (each of the events described in the immediately preceding clauses (i) through (iv), inclusive, a "<u>Material Outside Event</u>").

Section 6.11 <u>Consolidation</u>. If a Purchase Notice or Intraday Purchase Notice has been delivered to the Investor in accordance with Section 2.02 hereof, then the Company shall not effect any consolidation of the Company with or into, or a transfer of all or substantially all the assets of the Company to another entity before the transaction contemplated in such Purchase Notice or Intraday Purchase Notice has been closed in accordance with <u>Section 2.04</u>, and all Shares in connection with such Purchase Notice or Intraday Purchase Notice have been received by the Investor.

Section 6.12 <u>Issuance of the Company's Common Shares</u>. The issuance and sale of the Common Shares to the Investor hereunder shall be made in accordance with the provisions and requirements of Section 4(a)(2) and/or Regulation D of the Securities Act and any applicable state securities law.

Section 6.13 <u>Expenses</u>. The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all expenses incident to the performance of its obligations hereunder, including but not limited to (i) the preparation, printing and filing of the Registration Statement and each amendment and supplement thereto, of each Prospectus and of each amendment and supplement thereto; (ii) the preparation, issuance and delivery of any Shares issued pursuant to this Agreement (including, for the avoidance of doubt, any fees associated with any DWAC of such Shares), (iii) all fees and disbursements of the Company's counsel, accountants and other advisors (but not, for the avoidance doubt, the fees and disbursements of Investor's counsel, accountants and other advisors), (iv) the qualification of the Shares under securities laws in accordance with the provisions of this Agreement, including filing fees in connection therewith, (v) the printing and delivery of copies of any Prospectus and any amendments or supplements thereto requested by the Investor, (vi) the fees and expenses incurred in connection with the listing or qualification of the Shares for trading on the Principal Market, or (vii) filing fees of the SEC and the Principal Market.

Section 6.14 <u>Current Report</u>. The Company shall disclose all material terms of the transactions contemplated by the Transaction Documents, and file copies of all material Transaction Documents (including exhibits thereto) as exhibits, in the Company's registration statement on Direct Listing Registration Statement (or any amendment thereto) filed in connection with the Company's direct listing. To the extent the Company is subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act and has not previously disclosed the transactions contemplated hereby in the Direct Listing Statement, the Company shall timely file with the SEC a current report on Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form required by the Exchange Act and attaching all the material Transaction Documents (including any exhibits thereto, the "<u>Current Report</u>"). The Company shall provide the Investor and its legal counsel a reasonable opportunity to comment on a draft of the Direct Listing Statement or Current Report, as applicable, prior to filing the Direct Listing Statement or Current Report, as applicable, with the SEC and shall give due consideration to all such comments. Notwithstanding anything contained in this Agreement to the contrary, the Company expressly agrees that from and after the filing of the Direct Listing Statement with the SEC, the Company shall have publicly disclosed all material, nonpublic information provided to the Investor (or the Investor's representatives or agents) by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees, agents or representatives in connection with the transactions contemplated by the Transaction Documents. The Company agrees to, upon request from the Investor, publicly disclose any and all material non-public information the Investor may have prior to the submission of any Purchase Notice or Intraday Purchase Notice. The Company retains sole discretion to disclose material, non-public information regarding the Company to its own officers, directors, employees, advisors and other insiders without the consent or approval of the Investor, and no provision of this Agreement or any Transaction Document shall be construed to require the Company to obtain the Investor's consent prior to sharing information with the Company's own insiders. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and agents not to, provide the Investor with any material, non-public information regarding the Company or any of its Subsidiaries without the express prior written consent of the Investor (which may be granted or withheld in the Investor's sole discretion). The Company understands and confirms that the Investor will rely on the foregoing representations in effecting resales of Shares.

Section 6.15 <u>Use of Proceeds</u>. Neither the Company nor any Subsidiary will, directly or indirectly, use the proceeds of the transactions contemplated herein to repay any advances or loans to any executives, directors, or employees of the Company or any Subsidiary or to make any payments in respect of any related party obligations, including without limitation any payables or notes payable to related parties of the Company or any Subsidiary whether or not such amounts are described on the balance sheets of the Company in any SEC Documents and any Subsidiary or described in any "<u>Related Party Transactions</u>" section of any SEC Documents. Neither the Company nor any of its Subsidiaries will, directly or indirectly, use the proceeds from the transactions contemplated herein, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person (a) for the purpose of funding or facilitating any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions or is a Sanctioned Country, or (b) in any other manner that will result in a violation of Sanctions or Applicable Laws by any Person (including any Person participating in the transactions contemplated by this Agreement, whether as underwriter, advisor, investor or otherwise).

Section 6.16 <u>Purchase Notice Limitation</u>. The Company shall not deliver a Purchase Notice or Intraday Purchase Notice if a shareholder meeting or corporate action date, or the record date for any shareholder meeting or any corporate action, would fall during the period beginning two Trading Days prior to the date of delivery of such Purchase Notice or Intraday Purchase Notice and ending two Trading Days following the Closing of such Purchase Notice or Intraday Purchase Notice.

Section 6.17 <u>Compliance with Laws</u>. The Company shall comply in all material respects with all Applicable Laws.

Section 6.18 <u>Market Activities</u>. Neither the Company, nor any Subsidiary, nor any of their respective officers, directors or controlling persons will, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute or result, in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Common Shares or (ii) sell, bid for, or purchase Common Shares in violation of Regulation M, or pay anyone any compensation for soliciting purchases of the Shares.

Section 6.19 <u>Selling Restrictions</u>. Except as expressly set forth below, each Investor covenants that beginning on any date a Purchase Notice or Intraday Purchase Notice is validly delivered by the Company to the Investors and ending immediately after the expiration of the corresponding Pricing Period for such Purchase Notice or Intraday Purchase Notice, as applicable (the "<u>Restricted Period</u>"), none of the Investor, any of its officers, or any entity managed or controlled by the Investor (collectively, the "<u>Restricted Persons</u>" and each of the foregoing is referred to herein as a "<u>Restricted Person</u>") shall, directly or indirectly, engage in any "short sale" (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Shares, either for its own principal account or for the principal account of any other Restricted Person. Notwithstanding the foregoing, it is expressly understood and agreed that nothing contained herein shall (without implication that the contrary would otherwise be true) prohibit any Restricted Person during the Restricted Period from: (1) selling "long" (as defined under Rule 200 promulgated under Regulation SHO) any Common Shares; or (2) selling a number of Common Shares equal to the number of Shares that such Restricted Person is unconditionally obligated to purchase under a pending Purchase Notice or Intraday Purchase Notice but has not yet received from. In addition, upon effectiveness of the Registration Statement and until termination of this Agreement pursuant to <u>Section 9.01</u> (and not solely during the Restricted Period), each Investor covenants that neither the Investor nor any of its Affiliates, officers, or any entity managed or controlled by the Investor shall, directly or indirectly, engage in any "short sale" (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Shares, whether for its own principal account or for the principal account of any other Person. Any violation of this short sale prohibition shall constitute a breach of this Agreement.

Section 6.20 <u>Assignment</u>. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. No Party shall have any power or any right to assign or transfer, in whole or in part, this Agreement, or any of its rights or any of its obligations hereunder, including, without limitation, any right to pursue any claim for damages pursuant to this Agreement or the transactions contemplated herein, or to pursue any claim for any breach or default of this Agreement, or any right arising from the purported assignor's due performance of its obligations hereunder, without the prior written consent of the other Party and any such purported assignment in contravention of the provisions herein shall be null and void and of no force or effect. Without the consent of the Investor, the Company shall not have the right to assign or transfer any of its rights or provide any third party the right to bind or obligate the Company to deliver Purchase Notices or Intraday Purchase Notices or effect the sale of Shares pursuant to a Purchase Notice or Intraday Purchase Notice.

Section 6.21 <u>No Frustration</u>. The Company shall not enter into, announce or recommend to its stockholders any agreement, plan, arrangement or transaction that would violate the terms of the Transaction Documents or prevent the Company from performing its obligations under the Transaction Documents to which it is a party, including, without limitation, the obligation of the Company to deliver the Shares to the Investor in respect of a Purchase Notice.

Section 6.22 <u>Prohibited Transactions</u>. For the avoidance of doubt, the Company may enter into, agree to enter into, or effect any Variable Rate Transaction at any time without the consent, approval, or prior notice to the Investor. Nothing in this Agreement shall restrict or prevent the Company from entering into, agreeing to enter into, or effecting any Variable Rate Transaction.

Section 6.23 <u>Direct Listing Restructuring; Successor Obligations</u>. In the event that the Company intends to consummate a direct listing or initial public offering through or by means of an Affiliate or successor entity (including, but not limited to, a holding company reorganization, merger, share exchange, or similar transaction) (such entity, the "<u>Successor Entity</u>"), the Company shall, as a condition to and no later than concurrently with the closing of such direct listing or initial public offering, cause such Successor Entity to either, at the sole discretion of the Investor, (i) execute and deliver to the Investor a new agreement on substantially the same terms and conditions as this Agreement (with such modifications as are reasonably necessary to reflect the capital structure and jurisdiction of organization of the Successor Entity) (such agreement, the "<u>Substitute ELOC</u>"), or (ii) execute and deliver to the Investor a novation agreement, in form and substance reasonably acceptable to the Investor, pursuant to which such Successor Entity shall be substituted for the Company as a party to this Agreement and shall assume all rights and obligations of the Company hereunder, and the Company shall be released from its hereunder upon the effectiveness of such novation (the "<u>Novation</u>"). The company shall provide the Investor with no less than fifteen (15) Business Days' prior written notice of any proposed restructuring transaction described in this <u>Section 6.23</u>, together with a summary of the proposed structure, and shall consult with the Investor in good faith regarding the form of Novation or Substitute ELOC.

**Article VII<br> NON-EXCLUSIVE AGREEMENT**

Subject to <u>Section 6.22</u> hereof, this Agreement and the rights awarded to the Investor hereunder are non-exclusive, and the Company may, at any time throughout the term of this Agreement and thereafter, issue and allot, or undertake to issue and allot, any shares and/or securities and/or convertible notes, bonds, debentures, options to acquire shares or other securities and/or other facilities which may be converted into or replaced by Common Shares or other securities of the Company, and to extend, renew and/or recycle any bonds and/or debentures, and/or grant any rights with respect to its existing and/or future share capital.

**Article VIII<br> CHOICE OF LAW/JURISDICTION**

Section 8.01 This Agreement, and any and all claims, proceedings or causes of action relating to this Agreement or arising from this Agreement or the transactions contemplated herein, including, without limitation, tort claims, statutory claims and contract claims, shall be interpreted, construed, governed and enforced under and solely in accordance with the substantive and procedural laws of the State of New York, in each case as in effect from time to time and as the same may be amended from time to time, and as applied to agreements performed wholly within the State of New York. The Parties further agree that any action between them shall be heard in New York County, New York, and expressly consent to the jurisdiction and venue of the Supreme Court of New York, sitting in New York County, New York and the United States District Court of the Southern District of New York, sitting in New York, New York, for the adjudication of any civil action asserted pursuant to this Agreement.

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN, THE PERFORMANCE THEREOF OR THE FINANCINGS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

**Article IX<br> TERMINATION**

Section 9.01 <u>Termination</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest of (i) the 36- month anniversary of the Effective Date, (ii) the date on which the Investor shall have made payment of Shares pursuant to any Purchase Notices or Intraday Purchase Notices under this Agreement equal to the Commitment Amount or (iii) the date any statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated, withdrawn or endorsed by any court or governmental authority of competent jurisdiction, as applicable, (which shall include the Securities and Exchange Commission), the effect of which would prohibit any of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Company may terminate this Agreement at any time, for any reason or no reason, effective upon written notice to the Investor*,* without penalty, any minimum usage or drawdown requirement, *provided,* that there are no outstanding Purchase Notices or Intraday Purchase Notices under which Common Shares have yet to be issued. This Agreement may be terminated at any time by the mutual written consent of the parties, effective as of the date of such mutual written consent unless otherwise provided in such written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Nothing in this <u>Section 9.01</u> shall be deemed to release the Company or the Investor from any liability for any breach under this Agreement, or to impair the rights of the Company and the Investor to compel specific performance by the other party of its obligations under this Agreement. The indemnification provisions contained in <u>Article V</u> shall survive termination hereunder.

**Article X<br> NOTICES**

Other than with respect to Purchase Notices or Intraday Purchase Notices, which must be in writing (which may be by email) and will be deemed delivered on the day set forth in <u>Section 2.01(b)</u>, any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by e-mail if sent on a Trading Day, or, if not sent on a Trading Day, on the immediately following Trading Day; (iii) 5 days after being sent by U.S. certified mail, return receipt requested, (iv) 1 day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications (except for Purchase Notices or Intraday Purchase Notices which shall be delivered in accordance with Exhibit B hereof) shall be:

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| | |
|:---|:---|
| If to the Company, to: | First Breach Inc. |
|  | 18450 Showalter Road |
|  | Hagerstown, Maryland 21742 |
|  | Attention: Jeffrey Low, CEO |
|  | Email: <u>jeffrey@firstbreach.com</u> |
| With copies (which shall not constitute notice or delivery of process) to: | Lucosky Brookman LLP |
|  | 101 Wood Avenue South |
|  | Woodbridge, NJ 08830 |
|  | Attention: Seth Brookman, Esq. |
|  | Email: <u>sbrookman@lucbro.com</u> |
| If to the Investor: | RK Capital Management, LLC |
|  | 2500 Weston Road Suite 211 |
|  | Weston, FL 33331 |
|  | Attention: Jordan Abisch |
|  | Email: jabisch@rkcapl.com |
|  | TQP Holdings LLC |
|  | c/o The Quarry LP |
|  | 331 Park Avenue South, 3<sup>rd</sup> Floor |
|  | Attention: Tanvir Kirpalani |
|  | Email: TQRisk@quarrylp.com |
| With copies (which shall not constitute notice or delivery of process) to: | Benesch Friedlander Coplan and Aronoff |
|  | 1301 Avenue of the Americas, 6<sup>th</sup> Floor |
|  | New York, NY 10036 |
|  | Attention: Zach Dann |
|  | Email: zdann@beneschlaw.com |

---

or at such other address and/or e-mail and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) electronically generated by the sender's email service provider containing the time, date, recipient email address or (iii) provided by a nationally recognized overnight delivery service shall be rebuttable evidence of delivery in accordance with clause (i), (ii) or (iii) above, respectively.

**Article XI<br> MISCELLANEOUS**

Section 11.01 <u>Counterparts</u>. This Agreement may be executed in identical counterparts, both which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. Facsimile or other electronically scanned and delivered signatures (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com), including by e-mail attachment, shall be deemed to have been duly and validly delivered and be valid as originals and effective for all purposes of this Agreement.

Section 11.02 <u>Entire Agreement; Amendments</u>. This Agreement supersedes all other prior oral or written agreements between each Investor, the Company, their respective affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement contains the entire understanding of the parties with respect to the matters covered herein and, except as specifically set forth herein, neither the Company nor each Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the parties to this Agreement.

Section 11.03 <u>Reporting Entity for Common Shares</u>. The reporting entity relied upon for the determination of the trading price or trading volume of the Common Shares on any given Trading Day for the purposes of this Agreement shall be either (i) Bloomberg, L.P. or any successor thereto or (ii) such other exchange data vendor authorized by the Principal Market to distribute official market data. The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity.

Section 11.04 <u>Structuring Fee</u>. Each of the parties shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby, except that the Company shall pay to the Investor a legal and structuring fee in the amount of $25,000, which has been paid prior to the date hereof.

Section 11.05 <u>Brokerage</u>. Each of the parties hereto represents that it has had no dealings in connection with this transaction with any finder or broker who will demand payment of any fee or commission from the other party. The Company on the one hand, and the Investor, on the other hand, agree to indemnify the other against and hold the other harmless from any and all liabilities to any person claiming brokerage commissions or finder's fees on account of services purported to have been rendered on behalf of the indemnifying party in connection with this Agreement or the transactions contemplated hereby.

**[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]**

**IN WITNESS WHEREOF**, the parties hereto have caused this Share Purchase Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.

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| | |
|:---|:---|
| **COMPANY:** | **COMPANY:** |
| **FIRST BREACH INC.** | **FIRST BREACH INC.** |
| By: |  |
| Name: |  |
| Title: |  |
| **INVESTOR:** | **INVESTOR:** |
| **RK CAPITAL MANAGEMENT LLC** | **RK CAPITAL MANAGEMENT LLC** |
| By: |  |
| Name: | Jordan Abisch |
| Title: | Managing Partner |
| **INVESTOR:** | **INVESTOR:** |
| **NORTH COMMERCE PARKWAY CAPITAL LP** | **NORTH COMMERCE PARKWAY CAPITAL LP** |
| By: | NCPC GP LLC |
|  | Its: General Partner |
| By: |  |
| Name: | Jordan Abisch |
| Title: | Managing Partner |
| **INVESTOR:** | **INVESTOR:** |
| **TQP HOLDINGS LLC** | **TQP HOLDINGS LLC** |
| By: | TQ Master Fund LP |
| Its: | Managing Member |
| By: | TQ Fund GP LLC |
| Its: | General Partner |
| By: |  |
| Name: | Tanvir Kirpalani |
| Title: | Authorized Signatory |

---

**ANNEX I TO THE<br> SHARE PURCHASE AGREEMENT<br> <u>DEFINITIONS</u>**

"<u>Affiliate</u>" shall have the meaning set forth in <u>Section 3.07</u>.

"<u>Agreement</u>" shall have the meaning set forth in the preamble of this Agreement.

"<u>Applicable Laws</u>" shall mean all applicable laws, statutes, rules, regulations, orders, executive orders, directives, policies, guidelines and codes having the force of law, whether local, national, or international, as amended from time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing, financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records and internal controls, including the United States Foreign Corrupt Practices Act of 1977, and (iii) any Sanctions laws.

"<u>Average Price</u>" shall mean a price per Share equal to the quotient obtained by dividing (i) the aggregate gross purchase price paid by the Investor for all Shares purchased pursuant to this Agreement, by (ii) the aggregate number of Shares issued pursuant to this Agreement.

"<u>Black Out Period</u>" shall have the meaning set forth in <u>Section 6.04</u>.

"<u>Closing</u>" shall have the meaning set forth in <u>Section 2.05</u>.

"<u>Commitment Amount</u>" shall mean $50,000,000 of Common Shares.

"<u>Commitment Period</u>" shall mean the period commencing on the Effective Date and expiring upon the date of termination of this Agreement in accordance with <u>Section 9.01</u>.

"<u>Common Shares</u>" shall have the meaning set forth in the recitals of this Agreement.

"<u>Company</u>" shall have the meaning set forth in the preamble of this Agreement.

"<u>Company Indemnitees</u>" shall have the meaning set forth in <u>Section 5.02</u>.

"<u>Condition Satisfaction Date</u>" shall have the meaning set forth in Annex II.

"<u>Disclosure Schedule</u>" shall have the meaning set forth in <u>Article IV</u>.

"<u>DTC</u>" shall mean The Depository Trust Company, or any successor performing substantially the same function for the Company.

"<u>DTC/FAST Program</u>" shall mean the DTC's Fast Automated Securities Transfer Program.

"<u>DWAC</u>" shall mean Deposit Withdrawal at Custodian as defined by the DTC.

"<u>DWAC Eligible</u>" shall mean (a) the Common Shares are eligible at DTC for full services pursuant to DTC's Operational Arrangements, including, without limitation, transfer through DTC's DWAC system, (b) the Company has been approved (without revocation) by DTC's underwriting department, (c) the transfer agent of the Company is approved as an agent in the DTC/FAST Program, (d) the Common Shares are otherwise eligible for delivery via DWAC, and (e) the transfer agent does not have a policy prohibiting or limiting delivery of the Common Shares, as applicable, via DWAC.

"<u>Effective Date</u>" shall mean the date hereof.

"<u>Environmental Laws</u>" shall have the meaning set forth in <u>Section 4.13</u>.

"<u>Exchange Act</u>" shall mean the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Exchange Cap</u>" shall have the meaning set forth in <u>Section 2.02(c)</u>.

"<u>Hazardous Materials</u>" shall have the meaning set forth in <u>Section 4.13</u>.

"<u>Indemnified Liabilities</u>" shall have the meaning set forth in <u>Section 5.01</u>.

"<u>Intraday Commencement Time</u>" shall mean 9:30 AM East Time, or, if an Intraday Purchase Notice is delivered after 9:30 AM Eastern Time, the time at which the Investor affirmatively accepts such Intraday Purchase Notice.

"<u>Intraday Purchase Price</u>" shall mean the price per Share obtained by multiplying the lowest Sale Price after the Intraday Commencement Time on the Trading Day the Intraday Purchase Notice is delivered by 99.0%.

"<u>Investor</u>" shall have the meaning set forth in the preamble of this Agreement.

"<u>Investor Indemnitees</u>" shall have the meaning set forth in <u>Section 5.01</u>.

"<u>Market Price</u>" shall mean the lowest daily VWAP of the Common Shares during the relevant Pricing Period.

"<u>Material Adverse Effect</u>" shall mean any event, occurrence or condition that has had or would reasonably be expected to have (i) a material adverse effect on the legality, validity or enforceability of this Agreement or the transactions contemplated herein, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under this Agreement.

"<u>Material Outside Event</u>" shall have the meaning set forth in Section 6.10.

"<u>Maximum Purchase Amount</u>" means, (x) with respect to a Purchase Notice electing an Option 1 Pricing Period, an amount of Common Shares equal to the lesser of (i) twenty percent (20%) of the average daily trading volume of the Common Stock of the Company during the ten (10) Trading Days immediately preceding such Purchase Notice and (ii) 250,000; and (y) with respect to a Purchase Notice electing an Option 2 Pricing Period, an amount of Common Shares equal to the lessor of (i) one hundred percent (100%) of the average daily trading volume of the Common Stock of the Company during the ten (10) Trading Days immediately preceding such Purchase Notice, and (ii) 250,000.

"<u>OFAC</u>" shall have the meaning set forth in <u>Section 4.31</u>.

"<u>Option 1 Market Price</u>" shall mean the VWAP of the Common Shares during the Option 1 Pricing Period.

"<u>Option 2 Market Price</u>" shall mean the lowest daily VWAP of the Common Shares during the Option 2 Pricing Period.

"<u>Option 1 Pricing Period</u>" shall mean the period on the applicable Share Purchase Notice Date with respect to a Purchase Notice selecting an Option 1 Pricing Period commencing (i) if submitted to the Investor prior to 9:00 AM Eastern Time on a Trading Day, the open of trading on such day, or (ii) if submitted to the Investor after 9:00 AM Eastern Time on a Trading Day, the open of trading on the immediately succeeding Trading Day, and in each case, ending on 4:00 PM Eastern Time on such applicable Trading Day; *provided*, *however*, that upon mutual consent of the Company and the Investor, a Purchase Notice selecting an Option 1 Pricing Period that is delivered after 9:00 AM Eastern Time may be deemed to have been delivered prior to 9:00 AM Eastern Time of such day. For the avoidance of doubt, the Option 1 Pricing Period shall only commence on the day upon which the Investors have received confirmation that the transfer agent of the Company has credited the Investor's account (or its designees account) at the Depository Trust Company through its Deposit Withdrawal at Custodian System or by such other means of delivery as may agreed upon by the parties hereto.

"<u>Option 2 Pricing Period</u>" shall mean the three consecutive Trading Days commencing on the Share Purchase Notice Date. For the avoidance of doubt, the Option 2 Pricing Period shall only commence on the day upon which the Investors have received confirmation that the transfer agent of the Company has credited the Investor's account (or its designees account) at the Depository Trust Company through its Deposit Withdrawal at Custodian System or by such other means of delivery as may agreed upon by the parties hereto.

"<u>Ownership Limitation</u>" shall have the meaning set forth in <u>Section 2.02(a)</u>.

"<u>PEA Period</u>" means the period commencing at 9:30 a.m., Eastern time, on the tenth (10th) Business Day immediately prior to the filing of any post-effective amendment to the Registration Statement or any subsequent Registration Statement, and ending at 9:30 a.m., Eastern time, on the Business Day immediately following, the effective date of any post-effective amendment to the Registration Statement.

"<u>Person</u>" shall mean an individual, a corporation, a partnership, a limited liability company, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

"<u>Plan of Distribution</u>" shall mean the section of a Registration Statement disclosing the plan of distribution of the Shares.

"<u>Pricing Period</u>" shall mean the Option 1 Pricing Period or Option 2 Pricing Period, as applicable; *provided,* that with respect to an Intraday Purchase Notice, the Pricing Period shall commence at the Intraday Commencement Time.

"<u>Principal Market</u>" shall mean Nasdaq Capital Market; provided however, that in the event the Common Shares are ever listed or traded on the New York Stock Exchange, or the NYSE American then the "Principal Market" shall mean such exchange (as applicable) to the extent such other market or exchange is the principal trading market or exchange for the Common Shares.

"<u>Prospectus</u>" shall mean any prospectus (including, without limitation, all amendments and supplements thereto) used by the Company in connection with a Registration Statement, including documents incorporated by reference therein.

"<u>Prospectus Supplement</u>" shall mean any prospectus supplement to a Prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act, including documents incorporated by reference therein.

"<u>Purchase Date</u>" shall mean the first Trading Day after expiration of the applicable Pricing Period for each validly issued Purchase Notice or Intraday Purchase Notice.

"<u>Purchase Notice</u>" shall mean a written notice in the form of Exhibit B attached hereto to the Investor executed by an officer of the Company and setting forth the number of Shares that the Company desires to issue and sell to the Investor or Intraday Purchase Notice.

"<u>Purchase Price</u>" shall mean (A) the price per Share obtained by multiplying the Market Price by (i) 97% in respect of a Purchase Notice with an Option 1 Pricing Period, and (ii) 97% in respect of a Purchase Notice with an Option 2 Pricing Period, or (B) with respect to an Intraday Purchase Notice, the Intraday Purchase Price.

"<u>Registration Limitation</u>" shall have the meaning set forth in <u>Section 2.02(b)</u>.

"<u>Registration Statement</u>" shall have the meaning set forth in the Registration Rights Agreement.

"<u>Registrable Securities</u>" shall have the meaning set forth in the Registration Rights Agreement.

"<u>Regulation D</u>" shall mean the provisions of Regulation D promulgated under the Securities Act.

"<u>Sanctions</u>" shall have the meaning set forth in <u>Section 4.31</u>.

"<u>Sanctioned Countries</u>" shall have the meaning set forth in <u>Section 4.31</u>.

"<u>Sale Price</u>" means any trade price for the shares of Common Stock on the Principal Market as reported by the Principal Market.

"<u>Share Purchase Notice Date</u>" shall mean each date the Company is deemed to have delivered (in accordance with <u>Section 2.01(b)</u> of this Agreement) a Purchase Notice or Intraday Purchase Notice to the Investor, subject to the terms of this Agreement.

"<u>SEC</u>" shall mean the U.S. Securities and Exchange Commission.

"<u>SEC Documents</u>" shall mean (1) any registration statement filed by the Company with the SEC, including the financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a part thereof as of the effective date of such registration statement under the Securities Act, (2) any proxy statement or prospectus filed by the Company with the SEC, including all documents incorporated or deemed incorporated therein by reference, whether or not included in a registration statement, in the form in which such proxy statement or prospectus has most recently been filed with the SEC under the Securities Act, (3) all reports, schedules, registrations, forms, statements, information and other documents filed with or furnished to the SEC by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act during the two years prior to the date hereof, including, without limitation, the Current Report, (4) each Registration Statement, as the same may be amended from time to time, the Prospectus contained therein and each Prospectus Supplement thereto and (5) all information contained in such filings and all documents and disclosures that have been and heretofore shall be incorporated by reference therein.

"<u>Securities Act</u>" shall have the meaning set forth in the recitals of this Agreement.

"<u>Settlement Document</u>" shall have the meaning set forth in Section 2.04(a).

"<u>Shares</u>" shall mean Common Shares that the Company shall issue and sell to the Investor pursuant to a Purchase Notice under the terms of this Agreement.

"<u>Subsidiaries</u>" shall mean any Person in which the Company, directly or indirectly, (x) owns a majority of the outstanding capital stock or holds a majority of the equity or similar interest of such Person or (y) controls or operates all or substantially all of the business, operations or administration of such Person, and the foregoing are collectively referred to herein as "Subsidiaries."

"<u>Trading Day</u>" shall mean any day during which the Principal Market shall be open for business.

"<u>Transaction Documents</u>" means, collectively, this Agreement, the Registration Rights Agreement, and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.

"<u>Variable Rate Transaction</u>" shall mean a transaction in which the Company (i) issues or sells any equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional Common Shares either (A) at a conversion price, exercise price, exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common Shares at any time after the initial issuance of such equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such equity or debt security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Shares (including, without limitation, any "full ratchet" or "weighted average" anti-dilution provisions, but not including any standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction), (ii) enters into an "equity line of credit," or other continuous offering or similar offering of Common Shares, or (iii) enters into or effects any forward purchase agreement, equity pre-paid forward transaction or other similar offering of securities where the purchaser of securities of the Company receives an upfront or periodic payment of all, or a portion of, the value of the securities so purchased, and the Company receives proceeds from such purchaser based on a price or value that varies with the trading prices of the Common Shares.

"<u>Volume Threshold</u>" shall mean a number of Common Shares equal to the quotient of (a) the number of Common Shares requested by the Company in a Purchase Notice divided by (b) 0.20.

"<u>VWAP</u>" shall mean for any Trading Day, the daily volume weighted average price of the Common Shares for the such Trading Day on the Principal Market during regular trading hours as reported by Bloomberg L.P. or such other exchange data vendor authorized by the Principal Market to distribute official market data.

**ANNEX II TO THE<br> SHARE PURCHASE AGREEMENT**

**<u>CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A PURCHASE NOTICE</u>**

The right of the Company to deliver a Purchase Notice or Intraday Purchase Notice and the obligations of the Investor hereunder with respect to the purchase of Shares pursuant to a Purchase Notice or Intraday Purchase Notice are subject to the satisfaction or waiver, on each Share Purchase Notice Date (a "<u>Condition Satisfaction Date</u>"), of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Accuracy of the Company's Representations and Warranties</u>. The representations and warranties of the Company in this Agreement shall be true and correct in all material respects as of the Share Purchase Notice Date, except to the extent such representations and warranties are as of another date, in which case such representations and warranties shall be true and correct as of such other date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Structuring Fee</u>. The Company shall have paid the initial structuring legal fee in accordance with Section 11.04.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Registration of the Common Shares with the SEC</u>. There is an effective Registration Statement pursuant to which the Investor is permitted to utilize the prospectus thereunder to resell all of the Common Shares issuable pursuant to such Purchase Notice or Intraday Purchase Notice and no stop order with respect to such Registration Statement shall be pending or threatened by the SEC. The Current Report shall have been filed with the SEC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Authority</u>. The Company shall have obtained all permits and qualifications required by any applicable state for the offer and sale of all the Common Shares issuable pursuant to such Purchase Notice or Intraday Purchase Notice, or shall have the availability of exemptions therefrom. The sale and issuance of such Common Shares shall be legally permitted by all laws and regulations to which the Company is subject.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Board</u>. The board of directors of the Company has approved the transactions contemplated by the Transaction Documents; said approval has not been amended, rescinded or modified and remains in full force and effect as of the date hereof. The Company shall have delivered to the Investor a secretary's certificate executed by the Secretary of the Company, dated as of the Effective Date, in the form attached hereto as Exhibit D.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>No Material Outside Event</u>. No Material Outside Event shall have occurred and be continuing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Performance by the Company</u>. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior the applicable Condition Satisfaction Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>No Injunction; Regulation</u>. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated, endorsed or withdrawn by any court or governmental authority of competent jurisdiction that prohibits or directly, materially and adversely affects any of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>No Suspension of Trading in or Delisting of Common Shares</u>. Trading in the Common Shares shall not have been suspended by the SEC, the Principal Market or FINRA, the Company shall not have received any final and non-appealable notice that the listing or quotation of the Common Shares on the Principal Market shall be terminated on a date certain (unless, prior to such date certain, the Common Shares is listed or quoted on any subsequent Principal Market), nor shall there have been imposed any suspension of, or restriction on, accepting additional deposits of the Common Shares, electronic trading or book-entry services by DTC with respect to the Common Shares that is continuing, the Company shall not have received any notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common Shares, electronic trading or book-entry services by DTC with respect to the Common Shares is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified the Company in writing that DTC has determined not to impose any such suspension or restriction).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Authorized</u>. All of the Shares issuable pursuant to the applicable Purchase Notice or Intraday Purchase Notice shall have been duly authorized by all necessary corporate action of the Company. All Shares relating to all prior Purchase Notices or Intraday Purchase Notices required to have been received by the Investor under this Agreement shall have been delivered to the Investor in accordance with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Executed Purchase Notice</u>. The representations contained in the applicable Purchase Notice shall be true and correct in all material respects as of the applicable Condition Satisfaction Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>MNPI</u>. The Company shall have publicly disclosed any and all material non-public information the Investor may have received prior to the submission of the Purchase Notice or Intraday Purchase Notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>PEA Period</u>. There shall not be an active PEA Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>DWAC Eligible</u>. The Common Shares shall be DWAC Eligible.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Opinions</u>. The Investor shall have received the opinion letter of the Company's counsel in form and substance satisfactory to the Investor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Certificates</u>. The Company shall have delivered to the Investor a certificate evidencing the incorporation and good standing of the Company in the State of Delaware issued by the Secretary of State of the State of Delaware within ten (10) Business Days of the Effective Date.

**<u>Exhibit A</u>**

**Form of Registration Rights Agreement**

[*See attached*]

**<u>Exhibit B</u>**

**Purchase Notice**

**FIRST BREACH INC.**

**Dated: ______________**

The undersigned, _______________________, hereby certifies, with respect to the sale of Common Shares of First Breach Inc. (the "<u>Company</u>") issuable in connection with this [Purchase Notice] / [Intraday Purchase Notice], delivered pursuant to that certain Share Purchase Agreement, dated as of [___], 2026 (the "<u>Agreement</u>"), as follows (with capitalized terms used herein without definition having the same meanings as given to them in the Agreement):

1. The
 undersigned is the duly elected ______________ of the Company.

2. There
 are no fundamental changes to the information set forth in the Registration Statement which
 would require the Company to file a post-effective amendment to the Registration Statement.

3. The
 Company has performed in all material respects all covenants and agreements to be performed
 by the Company contained in the Agreement on or prior to the Share Purchase Notice Date.
 All conditions to the delivery of this Purchase Notice are satisfied as of the date hereof.

4. The
 number of Shares the Company is requesting is: ___________________.

5. The
 Pricing Period for this Purchase Notice shall be [an/the] [Option 1 Pricing Period] / [Option
 2 Pricing Period] / [Intraday Purchase Commencement Time].

6. (For
 an Option 1 Pricing Period Add:) The Volume Threshold for this Purchase Notice shall be _______________.

The undersigned has executed this Purchase Notice as of the date first set forth above.

---

| |
|:---|
| **First Breach Inc.** |
| By: |
| Name: |
| Title: |

---

Please deliver this Purchase Notice by email to:

Email:   <br> Attention: <br> Telephone:

**<u>Exhibit C</u>**

**Form of Settlement Document**

**VIA EMAIL**

**First Breach Inc.** 

Attn:

Email:

---

| | |
|:---|:---|
|  | **Below please find the settlement information with respect to the Purchase Notice Date of:** |
| 1.a. | Number of Common Shares requested in the [Purchase Notice / Intraday Purchase Notice] |
| 1.b. | Volume Threshold (Number of Common Shares in (1) divided by 0.20. |
| 1.c. | Number of Common Shares traded during the Pricing Period |
| 2. | Adjusted [Purchase Notice / Intraday Purchase Notice] Amount (if applicable) |
| 3. | [Option [1] / [2] Market Price] / [Intraday Purchase Price] |
| 4. | Purchase Price ([Market Price x 97%] / [Intraday Purchase Price]) |
| 5. | Number of Common Shares due to the Investor |
| 6. | Total Purchase Price (row 4 x 5) |

---

[Please issue the number of Advance Shares due to the Investor to the account of the Investor as follows:

**INVESTOR'S DTC PARTICIPANT #:**

**ACCOUNT NAME:**

**ACCOUNT NUMBER:**

**ADDRESS:**

**CITY:**

**COUNTRY:**

**CONTACT PERSON:**

**NUMBER AND/OR EMAIL:]<sup>1</sup>**

**Agreed and approved by:**

---

| |
|:---|
| First Breach Inc. |
| By: |
| Name: |
| Title: |

---

<sup>1</sup> To be used if the Investor elects to accept a Purchase Notice without delivery of Common Shares to account.

**<u>Exhibit D</u>**

**Form of Secretary's Certificate**

This Secretary's Certificate (the "<u>Certificate</u>") is being delivered pursuant to Section (e) of Annex II of that certain Share Purchase Agreement, dated as of [______], 2026 ("<u>Agreement</u>"), by and between First Breach Inc., a Delaware corporation (the "<u>Company</u>"), RK Capital Management LLC, a Florida limited liability company, North Commerce Parkway Capital LP, a Delaware limited liability partnership, and TQP Holdings LLC, a Delaware limited liability company (together, the "<u>Investors</u>"), pursuant to which the Company may sell to the Investors up to Fifty Million ($50,000,000) of the Company's Common Stock. Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Agreement.

The undersigned, _____________, the Secretary of the Company, hereby certifies, on behalf of the Company and not in [his/her] individual capacity, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 am the Secretary of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;2. Attached
 hereto as <u>Exhibit A</u> and <u>Exhibit B</u> are true, correct and complete copies of
 the Company by-laws (" <u>Bylaws</u> ") and Certificate of Incorporation, as amended
 (" <u>Certificate of Incorporation</u> "), and no action has been taken by the
 Company, its directors, officers or stockholders, in contemplation of the filing of any further
 amendment relating to or affecting the Bylaws or Certificate of Incorporation.

&nbsp;&nbsp;&nbsp;&nbsp;3. Attached
 hereto as Exhibit C are true, correct and complete copies of the resolutions duly adopted
 by the Board of Directors of the Company by unanimous written consent effective as of ________,
 2026. Such resolutions have not been amended, modified or rescinded and remain in full force
 and effect and such resolutions are the only resolutions adopted by the Board of Directors,
 or any committee thereof, or the stockholders of the Company relating to or affecting (i)
 the entering into and performance of the Agreement, or the issuance, offering and sale of
 the Shares and (ii) and the performance of the Company of its obligations under the Transaction
 Documents as contemplated therein.

**IN WITNESS WHEREOF,** I have hereunder signed my name on this ___ day of __________, 2026.

Secretary

The undersigned, as Chief Financial Officer of **First Breach Inc**., a Delaware corporation, hereby certifies that __________________ is the duly elected, appointed, qualified and acting Secretary of First Breach Inc., and that the signature appearing above is [his/her] genuine signature.

<br>   <br> Chief Financial Officer

## Exhibit 10.24

**Exhibit 10.24** 

***Execution Version***

**<u>REGISTRATION RIGHTS AGREEMENT</u>**

**THIS REGISTRATION RIGHTS AGREEMENT** (this "<u>Agreement</u>") dated as of May 21, 2026, is made by and between RK Capital Management LLC, a Florida limited liability company, North Commerce Parkway Capital LP, a Delaware limited partnership, and TQP Holdings LLC, a Delaware limited liability company (each, the "<u>Investor</u>"), and First Breach Inc., a Delaware corporation (the "<u>Company</u>"). The Investor and the Company may be referred to herein individually as a "Party" and collectively as the "Parties."

**WHEREAS**, the Company and the Investor have entered into that certain Share Purchase Agreement, dated as of the date hereof (the "<u>Purchase Agreement</u>"), pursuant to which the Company may issue, from time to time, to the Investor up to $50 million of newly issued shares of the Company's shares of common stock, par value $0.0001 per share (the "<u>Common Shares</u>");

**WHEREAS**, pursuant to that certain Securities Purchase Agreement, entered into as of the date hereof, by and among the Company, the Investor, and the other signatories thereto (collectively, the "<u>Purchasers</u>") (such securities purchase agreement, the "<u>Note Purchase Agreement</u>"), the Company has agreed to issue and sell to the Purchasers senior secured convertible notes, in an aggregate original principal amount of $7,692,307.69, reflecting an original issue discount of thirty-five percent (35%), with each such note convertible into Common Shares in accordance with its terms.

**WHEREAS**, pursuant to the terms of, and in consideration for the Investor entering into, the Purchase Agreement, and to induce the Investor to execute and deliver the Purchase Agreement, the Company has agreed to provide the Investor with certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the "<u>Securities Act</u>").

**AGREEMENT**

**NOW, THEREFORE**, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>DEFINITIONS</u>.

Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall 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;(a) "<u>Direct Listing Registration Statement</u>" means the registration statement on Form S-1 (File No. **333-295442**) filed by the Company with the SEC in connection with its direct listing, as the same may be amended, supplemented or modified from time to time, including any post-effective amendment thereto.

&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) "<u>Effectiveness Deadline</u>" means, with respect to the initial Registration Statement filed hereunder, the 45th calendar day following the initial filing hereof, provided, however, in the event the Company is notified by the SEC that the Registration Statement will be reviewed, the 90th calendar day following the initial filing hereof; provided, further, however, that in the event the Company is notified by the SEC that the Registration will not be reviewed or is no longer subject to further review and comments, the Effectiveness Deadline as to such Registration Statement shall be the fifth business day following the date on which the Company is so notified if such date precedes the date required above.

&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) "<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

&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) "<u>Filing Deadline</u>" means, with respect to the initial Registration Statement required hereunder, the 10th calendar day following the consummation of the direct listing pursuant to the Direct Listing Registration Statement.

&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) "<u>Note Shares</u>" means the Common Shares issued or issuable upon conversion of the Senior Secured Convertible Notes in accordance with their terms.

&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) "<u>Person</u>" means a corporation, a limited liability company, an association, a partnership, an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency.

&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) "<u>Prospectus</u>" means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

&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) "<u>Required Registration Amount</u>" means, as of any time of determination, <u>1</u>00% of the maximum number of Note Shares issuable upon conversion of the Senior Secured Convertible Notes then outstanding (assuming for purposes hereof that (i) such Senior Secured Convertible Notes are convertible at the Conversion Price (as defined in the Senior Secured Convertible Notes) and (ii) any such conversion shall not take into account any limitations on the conversion of the Senior Secured Convertible Notes), subject to adjustment in the event of (x) any stock split, stock dividend or other distribution, recapitalization or similar event or otherwise, or (y) conversion or exchange into shares of capital stock of a successor entity as part of any merger or similar transaction; *provided, however,* that the Required Registration Amount shall not include any Note Shares to the extent such Note Shares are included in and registered for resale pursuant to the Direct Listing Registration Statement and such Direct Listing Registration Statement has been declared effective by the SEC and remains effective and available for the resale of such Note Shares, including pursuant to any amendment, supplement or post-effective amendment thereto.

&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) "<u>Registrable Securities</u>" means all of (i) the Shares (as defined in the Purchase Agreement) issued or issuable pursuant to the Purchase Agreement, (ii) the Note Shares, to the extent not included in and registered for resale pursuant to the Direct Listing Registration Statement (or if the Direct Listing Registration Statement is not effective or not available for the resale of such Note Shares), and (iii) any capital stock issued or issuable with respect to the Shares and the Note Shares, to the extent not included in and registered for resale pursuant to the Direct Listing Registration Statement (or if the Direct Listing Registration Statement is not effective or not available for the resale of such Note Shares), , including, without limitation, (1) as a result of any stock split, stock dividend or other distribution, recapitalization or similar event or otherwise, and (2) shares of capital stock of the Company into which the Common Shares are converted or exchanged and shares of capital stock of a successor entity into which the Common Shares are converted or exchanged.

&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) "<u>Registration Statement</u>" means any registration statement of the Company filed pursuant to this Agreement, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

&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) "<u>Rule 144</u>" means Rule 144 under the Securities Act or any successor rule thereto.

&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) "<u>Rule 415</u>" means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.

&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) "<u>Senior Secured Convertible Notes</u>" means the senior secured convertible notes issued by the Company to the Purchasers pursuant to the Note Purchase Agreement.

&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) "<u>SEC</u>" means the Securities and Exchange Commission or any other federal agency administering the Securities Act and the Exchange Act at the time.

&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) "<u>Securities Act</u>" shall have the meaning set forth in the Recitals above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>REGISTRATION</u>.

&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) The Company's registration obligations set forth in this Section 2 including its obligations to file Registration Statements, obtain effectiveness of Registration Statements, and maintain the continuous effectiveness of any Registration Statement that has been declared effective shall begin on the date hereof and continue until all the earlier of (i) the date on which the Investor has sold all of the Registrable Securities and (ii) the date of termination of the Purchase Agreement if as of such termination date the Investor holds no Registrable Securities, it being understood that the Investor shall be deemed to hold Registrable Securities for so long as it holds any Senior Secured Convertible Notes convertible into Common Shares (the "<u>Registration Period</u>"). For the purposes of clarity, any obligation to file a Registration Statement pursuant to this Agreement shall not be applicable to any and all Note Shares to the extent that such Note Shares shall have been previously included in and registered for resale pursuant to the Direct Listing Registration Statement and such Direct Listing Registration Statement remains effective and available for resale by the Investor as of the date of determination.

&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) Subject to the terms and conditions of this Agreement, the Company shall (i) as soon as practicable, but in no case later than the Filing Deadline, prepare and file with the SEC an initial Registration Statement on Form S-1 or any successor form thereto covering the resale by the Investor of the maximum number of Registrable Securities as shall be permitted to be included thereon in accordance with applicable SEC rules, regulations and interpretations so as to permit the resale of such Registrable Securities by the Investor under Rule 415 at then prevailing market prices (and not fixed prices). The Registration Statement shall contain "<u>Selling Stockholders</u>" and "<u>Plan of Distribution</u>" sections. The Company shall use its reasonable best efforts to have the Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Effectiveness Deadline. By 9:30 am on the business day following the date of effectiveness, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final Prospectus to be used in connection with sales pursuant to such Registration Statement. Prior to the filing of the Registration Statement with the SEC, the Company shall furnish a draft of the Registration Statement to the Investor for their review and comment. The Investor shall furnish comments on the Registration Statement to the Company within 48 hours of the receipt thereof from 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;(c) <u>Sufficient Number of Shares Registered</u>. If at any time all Registrable Securities are not covered by a Registration Statement filed pursuant to Section 2(a) as a result of Section 2(e) or otherwise, the Company shall use its reasonable best efforts to file with the SEC one or more additional Registration Statements so as to cover all of the Registrable Securities not covered by such initial Registration Statement, in each case as soon as practicable (taking into account any position of the staff of the SEC with respect to the date on which the Staff will permit such additional Registration Statement(s) to be filed with the SEC and the rules and regulations of the SEC). The Company shall use its reasonable best efforts to cause each such new Registration Statement to become effective as soon as reasonably practicable following the filling thereof with the SEC.

&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) During the Registration Period, the Company shall (i) promptly prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the Prospectus used in connection with a Registration Statement, which Prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, (ii) prepare and file with the SEC additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (iii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and as so supplemented or amended to be filed pursuant to Rule 424; (iv) respond as promptly as reasonably possible to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and as promptly as reasonably possible provide the Investor true and complete copies of all correspondence from and to the SEC relating to a Registration Statement (provided that the Company may excise any information contained therein which would constitute material non-public information to the Investor); and (v) comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 2(c)) by reason of the Company's filing an annual report on Form 10-K, Form 10-Q or Form 8-K, the Company shall incorporate such report by reference into the Registration Statement, if applicable, or shall file such amendments or supplements with the SEC as promptly as reasonably practicable after the Exchange Act report is filed which created the requirement for the Company to amend or supplement the Registration Statement.

&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) <u>Reduction of Registrable Securities Included in a Registration Statement</u>. Notwithstanding anything contained herein, in the event that the SEC requires the Company to reduce the number of Registrable Securities to be included in a Registration Statement in order to allow the Company to rely on Rule 415 with respect to a Registration Statement, then the Company shall reduce the number of Registrable Securities to be included in such Registration Statement (after consultation with the Investor as to the specific Registrable Securities to be removed therefrom; *provided*, *however*, that the Required Registration Amount shall be included and prioritized for registration ahead of any other Shares registered on the Registration Statement) to the maximum number of securities as is permitted to be registered by the SEC. In the event of any reduction in Registrable Securities pursuant to this paragraph, the Company shall, as soon as practicable, but in any event not later than fifteen (15) days after the date on which the Staff shall permit the filing of one or more new Registration Statements, file with the Commission one or more new Registration Statements in accordance with Section 2(c) until such time as all Registrable Securities have been included in Registration Statements that have been declared effective and the Prospectuses contained therein are available for use by the Investor.

&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) <u>Failure to File or Obtain Effectiveness of the Registration Statement or Remain Current</u>. If: (i) a Registration Statement is not filed on or prior to its Filing Deadline, or (ii) a Registration Statement is not declared effective on or prior to the Effectiveness Deadline, or the Company fails to file with the SEC a request for acceleration in accordance with Rule 461 promulgated under the Securities Act, within five business days of the date that the Company is notified (orally or in writing, whichever is earlier) by the SEC that a Registration Statement will not be "reviewed," or not subject to further review, or (iii) after the effectiveness, a Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities for which it is required to be effective, or (iv) the Investor is not permitted to utilize the Prospectus therein to resell such Registrable Securities for more than 30 consecutive calendar days or more than an aggregate of 60 calendar days during any 12-month period (which need not be consecutive calendar days), or (v) if after the date that is six months from the date hereof, the Company does not have available adequate current public information as set forth in Rule 144(c) (any such failure or breach being referred to as an "<u>Event</u>"); then in addition to any other rights the Investor may have hereunder or under applicable law, the Company shall be in breach of the term and conditions of this Agreement and such Event shall be deemed an event of default for so long as such Event remains uncured. During the period of the existence of an uncured Event, the Investor shall have no obligation to accept a Purchase Notice (as defined in the Purchase Agreement) or accept or purchase any Shares (other than any Shares purchased by the Investor prior to the occurrence of the Event).

&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) <u>No Inclusion of Other Securities</u>. In no event shall the Company include any securities other than Registrable Securities on any Registration Statement pursuant to Section 2(a) or Section 2(c) without consulting with the Investor, and receiving Investor's written consent, prior to filing such Registration Statement with the SEC.

&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) <u>Piggy-Back Registrations</u>. If at any time there is not an effective Registration Statement covering all of the Registrable Securities and the Company proposes to register the offer and sale of any Common Shares under the Securities Act (other than a registration (i) pursuant to a Registration Statement on Form S-8 (or other registration solely relating to an offering or sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit arrangement), (ii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), or (iii) in connection with any dividend or distribution reinvestment or similar plan), whether for its own account or for the account of one (1) or more stockholders of the Company and the form of Registration Statement to be used may be used for any registration of Registrable Securities, the Company shall give prompt written notice (in any event no later than five (5) days prior to the filing of such Registration Statement) to the holders of Registrable Securities of its intention to effect such a registration and, shall include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion from the holders of Registrable Securities; *provided*, *however*, that, the Company shall not be required to register any Registrable Securities pursuant to this Section 2(h) that have been sold or may permanently be sold without any restrictions pursuant to Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company's transfer agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>RELATED OBLIGATIONS</u>.

&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) The Company shall, not less than three business days prior to the filing of each Registration Statement and not less than one business day prior to the filing of any related amendments and supplements to all Registration Statements (except for annual reports on Form 10-K, supplements and amendments to update the Registration Statement solely for information reflected in the Company's annual reports on Form 10-K, quarterly reports or current reports on Form 8-K), furnish to each Investor copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the reasonable and prompt review of such Investor. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Investor shall reasonably object in good faith, such approval not to be unreasonably withheld, conditioned, or delayed; *provided that*, the Company is notified of such objection in writing no later than two (2) Trading Days after the Investor have been so furnished copies of a Registration Statement.

&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) The Company shall furnish to the Investor whose Registrable Securities are included in any Registration Statement, without charge (i) at least one copy (which may be in electronic form) of such Registration Statement as declared effective by the SEC and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, all exhibits and each preliminary prospectus, (ii) at least one copy (which may be in electronic form) of the final prospectus included in such Registration Statement and all amendments and supplements thereto, and (iii) any documents, which are not publicly available through EDGAR, as the Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

&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 Company shall use its reasonable best efforts to (i) register and qualify the Registrable Securities covered by a Registration Statement under such other securities or "blue sky" laws of such jurisdictions in the United States as any Investor reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (w) make any change to its articles of incorporation or by-laws, (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(c), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investor of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky" laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

&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) As promptly as practicable after becoming aware of such event or development, the Company shall notify the Investor in writing of the happening of any event as a result of which the Prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission and deliver one electronic copy of such supplement or amendment to the Investor. The Company shall also promptly notify the Investor in writing (i) when a Prospectus or any Prospectus supplement or post- effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to each Investor by facsimile on the same day of such effectiveness), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company's reasonable determination that a post-effective amendment to a Registration Statement would be appropriate. The Company shall respond as promptly as reasonably practicable to any comments received from the SEC with respect to a Registration Statement or any amendment thereto.

&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) The Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction within the United States of America and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

&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) Without limiting any obligation of the Company under the Purchase Agreement, the Company shall use best efforts either to cause all of the Registrable Securities covered by each Registration Statement to be listed on the Principal Market. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(f).

&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) The Company shall hold in confidence and not make any disclosure of information concerning the Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at the Investor's expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such 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;(h) The Company shall cooperate with the holders of the Registrable Securities to facilitate the timely preparation and delivery of certificates or book-entry statements representing the Registrable Securities to be sold pursuant to such Registration Statement or Rule 144 free of any restrictive legends and representing such number of Common Shares and registered in such names as the holders of the Registrable Securities may reasonably request a reasonable period of time prior to sales of Registrable Securities pursuant to such Registration Statement or Rule; provided, that the Company may satisfy its obligations hereunder without issuing physical stock certificates or book-entry statements through the use of The Depository Trust Company's Direct Registration System.

&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) The Company shall use its reasonable best efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

&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) The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.

&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) Within one (1) business day after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investor whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC.

&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) The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable Securities pursuant to a Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>OBLIGATIONS OF THE INVESTOR</u>.

&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) The Investor agrees that, upon receipt of any notice from the Company of the occurrence of any event of the kind described in Section 3(d), the Investor shall as soon as reasonably practicable discontinue disposition of Registrable Securities pursuant to any Registration Statement covering such Registrable Securities until the Investor's receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(d) or receipt of notice that no supplement or amendment is required. Notwithstanding anything to the contrary, subject to compliance with the securities laws, the Company shall cause its transfer agent to deliver unlegended certificates for Common Shares to a transferee of the Investor in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which the Investor has entered into a contract for sale prior to the Investor's receipt of a notice from the Company of the happening of any event of the kind described in Section 3(d) and for which the Investor has not yet settled.

&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) The Investor covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.

&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 Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless the Investor has notified the Company in writing of the Investor's election to exclude all of the Investor's Registrable Securities from such Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>EXPENSES OF REGISTRATION</u>.

All expenses incurred by the Company in complying with its obligations pursuant to this Agreement and in connection with the registration and disposition of Registrable Securities shall be paid by the Company, including, without limitation, all registration, listing and qualifications fees, printers, fees and expenses of the Company's counsel and accountants (except legal fees of Investor's counsel associated with the review of the Registration Statement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>INDEMNIFICATION</u>.

With respect to Registrable Securities which are included in a Registration Statement under this Agreement:

&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) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, the directors, officers, partners, employees, agents, representatives of, and each Person, if any, who controls the Investor within the meaning of the Securities Act or the Exchange Act (each, an "<u>Indemnified Person</u>"), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys' fees, amounts paid in settlement or expenses, joint or several (collectively, "<u>Claims</u>") incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto ("<u>Indemnified Damages</u>"), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other "blue sky" laws of any jurisdiction in which Registrable Securities are offered ("<u>Blue Sky Filing</u>"), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact contained in any final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading; or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation there under relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, "<u>Violations</u>"). The Company shall reimburse the Investor and each such controlling person promptly as such expenses are incurred and are due and payable, for any legal fees or disbursements that are reasonably incurred by them or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (x) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto; (y) shall not be available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus was timely made available by the Company pursuant to Section 3(b); and (z) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person.

&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) In connection with a Registration Statement, the Investor agrees to indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers, employees, representatives, or agents and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each an "<u>Indemnified Party</u>"), against any Claim or Indemnified Damages to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or is based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs (i) in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement or (ii) from the Investor's violation of any prospectus delivery requirements under the Securities Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation there under relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement; and, subject to Section 6(d), such Investor will reimburse any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld, conditioned or delayed; provided, further, however, that, absent fraud or gross negligence, the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any prospectus shall not inure to the benefit of any Indemnified Party if the untrue statement or omission of material fact contained in the prospectus was corrected and such new prospectus was delivered to each Investor prior to such Investor's use of the prospectus to which the Claim relates.

&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) Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel reasonably mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the reasonable and documented fees and expenses of not more than one (1) counsel for such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent; provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, which consent shall not be unreasonably withheld, conditioned or delayed, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

&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) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.

&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) The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>CONTRIBUTION</u>.

To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities; and (iii) no contribution shall be made under circumstances where the maker would not have been eligible for indemnification under the fault standards set forth in Section 6 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>REPORTS UNDER THE EXCHANGE ACT</u>.

With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration, and as a material inducement to the Investor's purchase of the Shares the Company represents, warrants, and covenants to the following:

&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) The Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has filed all required reports under section 13 or 15(d) of the Exchange Act during the 12 months prior to the date hereof (or for such shorter period that the issuer was required to file such reports), other than Form 6-K reports.

&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) During the Registration Period, the Company shall use its reasonable best efforts to file with the SEC in a timely manner all required reports under section 13 or 15(d) of the Exchange Act (it being understood that nothing herein shall limit the Company's obligations under the Purchase Agreement) and such reports shall conform to the requirement in all material respects of the Exchange Act and the SEC for filing thereunder.

&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 Company shall furnish to the Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration. For the avoidance of doubt, any filing available to the Investor via the SEC's live EDGAR system shall be deemed "furnished to the Investor" hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>AMENDMENT OF REGISTRATION RIGHTS</u>.

Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor. Any amendment or waiver effected in accordance with this Section 9 shall be binding upon each of the Investor and the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>MISCELLANEOUS</u>.

&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) A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities or owns the right to receive the Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.

&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) The Company shall not include any other securities on a Registration Statement which includes Registrable Securities unless otherwise agreed by the Investor.

&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) Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered pursuant to the notice provisions of the Purchase Agreement or to such other address and/or electronic mail address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) electronically generated by the sender's email service provider containing the time, date, and recipient email or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by email or receipt from a nationally recognized overnight delivery service in accordance with 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;(d) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

&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) The laws of the State of New York shall govern all issues concerning the relative rights of the Company and the Investor as its stockholder. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York, sitting in New York County, New York and federal courts for the Southern District of New York sitting New York, New York, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

&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) This Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.

&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) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

&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) This Agreement may be executed in identical counterparts, both of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. Facsimile or other electronically scanned and delivered signatures (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com), including by e-mail attachment, shall be deemed to have been duly and validly delivered and be valid and effective for all purposes of this Agreement.

&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) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

&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) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.

&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) This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

**[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]**

**IN WITNESS WHEREOF**, the Investor and the Company have caused their signature page to this Registration Rights Agreement to be duly executed as of the date first above written.

---

| |
|:---|
| **COMPANY:** |
| **FIRST BREACH INC.** |
| By: |
| Name: |
| Title: |

---

---

| | |
|:---|:---|
| **INVESTOR:** | **INVESTOR:** |
| **RK CAPITAL MANAGEMENT LLC** | **RK CAPITAL MANAGEMENT LLC** |
| By: |  |
| Name: | Jordan Abisch |
| Title: | Managing Partner |
| **INVESTOR:** | **INVESTOR:** |
| **NORTH COMMERCE PARKWAY CAPITAL LP** | **NORTH COMMERCE PARKWAY CAPITAL LP** |
| By: NCPC GP LLC | By: NCPC GP LLC |
| Its: General Partner | Its: General Partner |
| By: |  |
| Name: | Jordan Abisch |
| Title: | Managing Partner |
| **INVESTOR:** | **INVESTOR:** |
| **TQP HOLDINGS LLC** | **TQP HOLDINGS LLC** |
| By: TQ Master Fund LP | By: TQ Master Fund LP |
| Its: Managing Member | Its: Managing Member |
| By: TQ Fund GP LLC | By: TQ Fund GP LLC |
| Its: General Partner | Its: General Partner |
| By: |  |
| Name: | Tanvir Kirpalani |
| Title: | Authorized Signatory |

---

## Exhibit 10.25

**Exhibit 10.25** 

**SECURITY AGREEMENT**

This Security Agreement (the "<u>Agreement</u>") is made as of [ ], 2026 by and between First Breach Inc., a Delaware corporation (the "<u>Debtor</u>"), in favor of each of the parties listed on <u>Exhibit A</u> hereto, which may be added to from time to time (each a "<u>Secured Party</u>" and collectively the "<u>Secured Parties</u>").

**RECITALS**

The Debtor and the Secured Parties are parties to a Securities Purchase Agreement of even date with this Agreement (the "<u>Purchase Agreement</u>") pursuant to which the Secured Parties shall purchase, among other things, Notes (as defined in the Purchase Agreement) from the Debtor. The parties intend that the Debtor's obligations to repay the Notes be secured by Collateral (as defined below).

**AGREEMENT**

In consideration of the purchase of the Notes by the Secured Parties and for other good and valuable consideration, the Debtor hereby agrees with the Secured Parties as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Grant of Security Interest</u>**.** To secure the Debtor's full and timely performance of all of the Debtor's obligations and liabilities to the Secured Parties pursuant to the Notes (including, without limitation, Debtor's obligation to timely pay the principal amount of, and interest on, the Notes) (the "<u>Obligations</u>"), the Debtor hereby grants to the Secured Parties a continuing security interest (the "<u>Security Interest</u>") in and to all of the property described on <u>Exhibit B</u> to this Agreement (the "<u>Collateral</u>"). The Security Interest shall be a senior interest in all of the Collateral, subject only to the first priority security interest (the "<u>Permitted Lien</u>") of the Existing Investors (as defined in the Notes) pursuant to the Security Agreement in favor of the Existing Investors dated April 24, 2026 (the "<u>1L Security Agreement</u>"). Notwithstanding anything to the contrary contained herein or in any other Transaction Document, any Lien securing the obligations of the Company under this Note shall be subordinate and junior in priority to the Permitted Lien.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Agreement Among the Secured Parties</u>.

&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) <u>Payment Pro Rata</u>**.** Payment to the Secured Parties under the Notes shall be made in proportion to the principal and accrued interest then outstanding on any such date of payment to each, until such obligations are paid or retired in full.

&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) <u>Sharing of Payments</u>. If any Secured Party shall at any time receive any payment of principal, interest or other charge arising under a Note, or upon any other obligation of Debtor or any sums by virtue of counterclaim, offset, or other lien that may be exercised, or from any security, other than payments made on the same date to all Secured Parties, such Secured Party shall share such payment or payments ratably with the other Secured Parties as to maintain as near as possible the unpaid balance of the loans pro rata according to the Secured Parties' aggregate proportionate interests.

&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) <u>Sharing of Collateral</u>. For purposes of this Agreement, "<u>Event of Default</u>" shall have the meaning ascribed to such term in the Notes. Upon the occurrence and continuance of any Event of Default, and if the Secured Parties proceed to exercise any rights with respect to the Collateral, the Secured Parties shall share the Collateral and the proceeds of such Collateral ratably, without priority of one over the other.

&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) <u>Voting</u>. The Secured Parties agree that Secured Parties holding a majority in interest of the principal amount of Notes outstanding may act together as the agent of all Secured Parties to execute and deliver in their names such instruments, documents, statements and amendments thereto as may be necessary or appropriate to perfect or continue the perfection of the security interest granted in this Agreement.

&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) <u>Enforcement</u>. Enforcement of the Secured Parties' rights hereunder shall be taken by Secured Parties holding a majority in interest of the principal amount of Notes outstanding acting together as the agent for all of the Secured Parties. The action of such percentage taken in accordance with the preceding sentence, shall in each case bind all the Secured Parties. Each of the Secured Parties agrees that any Secured Parties acting under Sections 2(d) and 2(e) shall not be liable for any acts taken in good faith in enforcing the rights of the Secured Parties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Covenants</u>. The Debtor covenants and agrees with the Secured Parties that, from and after the date of this Agreement until the Obligations are paid or otherwise discharged in full (including, without limitation, pursuant to a conversion of the Notes in accordance with the terms thereof):

&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) <u>Other Liens</u>**.** Except for the Security Interest and Permitted Liens, the Debtor is the owner of the Collateral and will be the owner of the Collateral hereafter acquired free from any adverse lien, security interest or encumbrance (other than purchase money security interests that will be discharged upon Debtor's payment of the purchase price for the applicable property), and the Debtor will defend the Collateral against the claims and demands of all persons at any time claiming the same or any interest therein. Except in connection with the Permitted Lien, no financing statements covering any Collateral or any proceeds thereof are on file in any public office.

&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) <u>Further Documentation</u>**.** At any time and from time to time, upon the written request of the Secured Parties, and at the sole expense of the Debtor, the Debtor will promptly and duly execute and deliver such further instruments and documents and take such further action as the Secured Parties may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, filing any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the liens created hereby. The Debtor also hereby authorizes the Secured Parties to file any such financing or continuation statement without the signature of the Debtor to the extent permitted by applicable law. A reproduction of this Agreement shall be sufficient as a financing statement (or as exhibit to a financing statement on form UCC-1 for filing in any jurisdiction.

&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) <u>Indemnification</u>. The Debtor agrees to defend, indemnify and hold harmless the Secured Parties against any and all liabilities, costs and expenses (including, without limitation, legal fees and expenses): (i) with respect to, or resulting from, any delay in paying, any and all excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral, (ii) with respect to, or resulting from, any delay in complying with any law, rule, regulation or order of any governmental authority applicable to any of the Collateral or (iii) in connection with any of the transactions contemplated by this Agreement.

&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) <u>Maintenance of Records</u>. The Debtor will keep and maintain at its own cost and expense satisfactory and complete records of 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;(e) <u>Inspection Rights</u>. The Secured Parties shall have full access during normal business hours, and upon reasonable prior notice, to all the books, correspondence and other records of the Debtor relating to the Collateral, and the Secured Parties or their representatives may examine such records and make photocopies or otherwise take extracts from such records. The Debtor agrees to render to the Secured Parties, at the Debtor's expense, such clerical and other assistance as may be reasonably requested with regard to the exercise of its rights pursuant to this paragraph.

&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) <u>Compliance with Laws, etc.</u> The Debtor will comply in all material respects with all laws, rules, regulations and orders of any governmental authority applicable to any part of the Collateral or to the operation of the Debtor's business; provided, however, that the Debtor may contest any such law, rule, regulation or order in any reasonable manner which does not, in the reasonable opinion of the Debtor, adversely affect the Secured Parties' rights or the priority of their liens on 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;(g) <u>Payment of Obligations</u>. The Debtor will pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the Collateral or with respect to any of its income or profits derived from the Collateral, as well as all claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Collateral, except that no such charge need be paid if (i) the validity of such charge is being contested in good faith by appropriate proceedings, (ii) such proceedings do not involve any material danger of the sale, forfeiture or loss of any of the Collateral or any interest in the Collateral and (iii) such charge is adequately reserved against on the Debtor's books in accordance with generally accepted accounting principles.

&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) <u>Limitation on Liens on Collateral</u>. The Debtor will not create, incur or permit to exist, will defend the Collateral against, and will take such other action as is necessary to remove, any lien or claim on or to the Collateral, other than the Security Interest and the Permitted Lien, and will defend the right, title and interest of the Secured Parties in and to any of the Collateral against the claims and demands of all other persons.

&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) <u>Limitations on Dispositions of Collateral</u>. The Debtor will not sell, transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer or contract to do so, provided however that Debtor will be allowed to grant licenses to its products and related documentation in the ordinary course of business and to establish or provide for escrows of related intellectual property in connection therewith.

&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) <u>Further Identification of Collateral</u>. The Debtor will furnish to the Secured Parties from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Secured Parties may reasonably request, all in reasonable detail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Secured Parties' Appointment as Attorney-in-Fact</u>.

&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) <u>Powers</u>. The Debtor hereby appoints the Secured Parties, and any officer or agent of the Secured Parties, with full power of substitution, as its attorney-in-fact with full irrevocable power and authority in the place of the Debtor and in the name of the Debtor or in their own name, from time to time in the Secured Parties' discretion only for so long as an Event of Default has occurred and is continuing, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any instrument which may be necessary or desirable to accomplish the purposes of this Agreement. Without limiting the foregoing, so long as an Event of Default has occurred and is continuing, and subject to the subordination set forth in Section 1, the Secured Parties shall have the right, without notice to, or the consent of, the Debtor, to do any of the following on the Debtor's behalf:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to pay or discharge any taxes or liens levied or placed on or threatened against 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;(ii) to direct any party liable for any payment under any of the Collateral to make payment of any and all amounts due or to become due thereunder directly to the Secured Parties or as the Secured Parties directs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to ask for or demand, collect, and receive payment of and receipt for, any payments due or to become due at any time in respect of or arising out of any 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;(iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to enforce any right in respect of any 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;(v) to defend any suit, action or proceeding brought against the Debtor with respect to any 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;(vi) to settle, compromise or adjust any suit, action or proceeding described in subsection (v) above and, to give such discharges or releases in connection therewith as the Secured Parties may deem appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to assign any patent right included in the Collateral of Debtor (along with the goodwill of the business to which any such patent right pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Secured Parties shall in their sole discretion determine; 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;(viii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral, and to take, at the Secured Parties' option and the Debtor's expense, any actions which the Secured Parties deem necessary to protect, preserve or realize upon the Collateral and the Secured Parties' liens on the Collateral and to carry out the intent of this Agreement, in each case to the same extent as if the Secured Parties were the absolute owner of the Collateral for all purposes.

The Debtor hereby ratifies whatever actions the Secured Parties shall lawfully do or cause to be done in accordance with this Section 4. This power of attorney shall be a power coupled with an interest and shall be irrevocable.

&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) <u>No Duty on Secured Parties' Part</u>. The powers conferred on the Secured Parties by this Section 4 are solely to protect the Secured Parties' interests in the Collateral and shall not impose any duty upon them to exercise any such powers. Each Secured Party shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Secured Parties nor any of their officers, directors, employees or agents shall, in the absence of willful misconduct or gross negligence, be responsible to the Debtor for any act or failure to act pursuant to this Section 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Performance by Secured Parties of Debtor's Obligations</u>. If the Debtor fails to perform or comply with any of its agreements or covenants contained in this Agreement and the Secured Parties perform or comply, or otherwise cause performance or compliance, with such agreement or covenant in accordance with the terms of this Agreement, then the reasonable expenses of the Secured Parties incurred in connection with such performance or compliance shall be payable by the Debtor to the Secured Parties on demand and shall constitute Obligations secured by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Remedies</u>. Subject to the subordination set forth in Section 1, if an Event of Default has occurred and is continuing, the Secured Parties may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement relating to the Obligations, all rights and remedies of a secured party under the Delaware Uniform Commercial Code, as amended from time to time (the "<u>Code</u>"). Without limiting the foregoing, the Secured Parties, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon the Debtor or any other person (all of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances collect, receive, appropriate and realize upon any or all of the Collateral, and/or may sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver any or all of the Collateral (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of a Secured Party or elsewhere upon such terms and conditions as the Secured Parties may deem advisable, for cash or on credit or for future delivery without assumption of any credit risk. The Secured Parties shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase all or any part of the Collateral so sold, free of any right or equity of redemption in the Debtor, which right or equity is hereby waived or released. The Secured Parties shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable expenses incurred therein or in connection with the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Secured Parties under this Agreement (including, without limitation, reasonable attorneys' fees and expenses) to the payment in whole or in part of the Obligations, in such order as the Secured Parties may elect, and only after such application and after the payment by the Secured Parties of any other amount required by any provision of law, need the Secured Parties account for the surplus, if any, to the Debtor. To the extent permitted by applicable law, the Debtor waives all claims, damages and demands it may acquire against the Secured Parties arising out of the exercise by the Secured Parties of any of their rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least five (5) days before such sale or other disposition. The Debtor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay the Obligations and the fees and disbursements of any attorneys employed by the Secured Parties to collect such deficiency.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Limitation on Duties Regarding Preservation of Collateral</u>. The sole duty of a Secured Party with respect to the custody, safekeeping and preservation of the Collateral, under Section 9-207 of Title 6 of the Delaware Code or otherwise, shall be to deal with it in the same manner as such Secured Party deals with similar property for its own account. Neither the Secured Parties nor any of their directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of the Debtor or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Powers Coupled with an Interest</u>. All authorizations and agencies contained in this Agreement with respect the Collateral are irrevocable and powers coupled with an interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>No Waiver; Cumulative Remedies</u>. The Secured Parties shall not by any act (except by a written instrument pursuant to Section 10(a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default under the Notes or in any breach of any of the terms and conditions of this Agreement. No failure to exercise, nor any delay in exercising, on the part of the Secured Parties, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Secured Parties of any right or remedy under this Agreement on any one occasion shall not be construed as a bar to any right or remedy which the Secured Parties would otherwise have on any subsequent occasion. The rights and remedies provided in this Agreement are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Miscellaneous</u>.

&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) <u>Amendments and Waivers</u>. Any term of this Agreement may be amended with the written consent of the Debtor and of Secured Parties holding a majority in interest of the principal amount of Notes outstanding. Notwithstanding the foregoing or any other provision of this Agreement, no amendment or waiver that adversely affects a Secured Party in a manner different from all of the Secured Parties may be effected without the written consent of such Secured Party. Any amendment or waiver effected in accordance with this Section 10(a) shall be binding upon the parties and their respective successors and assigns.

&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) <u>Transfer; Successors and Assigns</u>. The terms and conditions of this Agreement shall be binding upon the Debtor and its successors and assigns and inure to the benefit of the each Secured Party and its successors and assigns. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

&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) <u>Governing Law</u>. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of 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;(d) <u>Counterparts</u>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

&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) <u>Titles and Subtitles</u>. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

&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) <u>Notices</u>. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed email, or forty-eight (48) hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party's address or email as set forth below or on <u>Exhibit A</u> hereto, or as subsequently modified by 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;(g) <u>Severability</u>. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

&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) <u>Entire Agreement</u>. This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto concerning such subject matter are expressly canceled.

The Debtor and Secured Parties have caused this Security Agreement to be duly executed and delivered as of the date first above written.

---

| |
|:---|
| **<u>DEBTOR</u>:** |
| **FIRST BREACH INC.** |
| By: |
| Name: |
| Title: |

---

Address:

Facsimile Number:  

---

| |
|:---|
| **<u>SECURED PARTIES</u>:** |
| **[SECURED PARTY]** |
| By: |
| Name: |
| Title: |

---

**<u>EXHIBIT A</u>**

**SCHEDULE OF SECURED PARTIES**

---

| | |
|:---|:---|
| **<u>Name/Address/Email</u>** | **<u>Principal Amount of Note</u>** |
| [Name] | $|
| [Address] | |
| Email | |
| [Name] | $|
| [Address] | |

---

**<u>Email</u>**

**EXHIBIT B**

**DESCRIPTION OF COLLATERAL**

The Collateral shall consist of all right, title and interest of Debtor in and to the following, whether now owned or hereafter acquired, wherever located: all accounts, chattel paper (whether tangible or electronic), deposit accounts, documents, equipment, fixtures, general intangibles (including payment intangibles and software), goods, instruments, inventory, investment property, letter-of-credit rights, supporting obligations, commercial tort claims (to the extent identified herein or in any supplement hereto), and all other personal property of Debtor, of every kind and description, together with all accessions to, substitutions and replacements for, and all proceeds and products of, any and all of the foregoing, including all insurance proceeds and all claims against third parties for loss or damage to or destruction of any of the foregoing.

## Exhibit 23.1

**Exhibit 23.1**

![](ex23-1_001.jpg)

**Consent of Independent Registered Public Accounting Firm**

We hereby consent to the inclusion in this Registration Statement on Form S-1 of our report dated March 20, 2026, relating to the financial statements of First Breach, Inc. (the "Company") as of and for the years then ended December 31, 2025 and 2024. We also consent to the reference to our firm under the heading "Experts" appearing therein.

---

| |
|:---|
| ![](ex23-1_002.jpg) |
| Grassi & Co., CPAs, P.C. |
| Jericho, New York |
| May 27, 2026 |

---

![](ex23-1_003.jpg)

## Exhibit 99.4

**Exhibit 99.4**

**CONSENT OF DIRECTOR NOMINEE**

In connection with the filing by First Breach Inc. (the "<u>Company</u>") of a registration statement on Form S-1 and all subsequent amendments and post-effective amendments or supplements thereto (the "<u>Registration Statement</u>"), with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), in connection with the initial public offering of shares of common stock of the Company, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement. I also consent to the filing of this consent as an exhibit to the Registration Statement and any amendments thereto.

Dated: April 30, 2026

---

| |
|:---|
| /s/ Andrew Pearlman |
| Name: Andrew Pearlman |

---

## Exhibit 99.5

**Exhibit 99.5**

**CONSENT OF DIRECTOR NOMINEE**

In connection with the filing by First Breach Inc. (the "<u>Company</u>") of a registration statement on Form S-1 and all subsequent amendments and post-effective amendments or supplements thereto (the "<u>Registration Statement</u>"), with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), in connection with the initial public offering of shares of common stock of the Company, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement. I also consent to the filing of this consent as an exhibit to the Registration Statement and any amendments thereto.

Dated: April 30, 2026

---

| |
|:---|
| /s/ Ori Schlank |
| Name: Ori Schlank |

---

## Exhibit 99.6

**Exhibit 99.6**

**CONSENT OF DIRECTOR NOMINEE**

In connection with the filing by First Breach Inc. (the "<u>Company</u>") of a registration statement on Form S-1 and all subsequent amendments and post-effective amendments or supplements thereto (the "<u>Registration Statement</u>"), with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), in connection with the initial public offering of shares of common stock of the Company, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement. I also consent to the filing of this consent as an exhibit to the Registration Statement and any amendments thereto.

Dated: April 30, 2026

---

| |
|:---|
| /s/ Robert Brandt |
| Name: Robert Brandt |

---

## Exhibit 99.7

**Exhibit 99.7**

**CONSENT OF DIRECTOR NOMINEE**

In connection with the filing by First Breach Inc. (the "<u>Company</u>") of a registration statement on Form S-1 and all subsequent amendments and post-effective amendments or supplements thereto (the "<u>Registration Statement</u>"), with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), in connection with the initial public offering of shares of common stock of the Company, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement. I also consent to the filing of this consent as an exhibit to the Registration Statement and any amendments thereto.

Dated: April 30, 2026

---

| |
|:---|
| /s/ David Peterson |
| Name: David Peterson |

---

## Exhibit 99.8

**Exhibit 99.8**

**CONSENT OF DIRECTOR NOMINEE**

In connection with the filing by First Breach Inc. (the "<u>Company</u>") of a registration statement on Form S-1 and all subsequent amendments and post-effective amendments or supplements thereto (the "<u>Registration Statement</u>"), with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), in connection with the initial public offering of shares of common stock of the Company, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement. I also consent to the filing of this consent as an exhibit to the Registration Statement and any amendments thereto.

Dated: April 30, 2026

---

| |
|:---|
| /s/ Larry Meyer |
| Name: Larry Meyer |

---

## Exhibit 99.9

**Exhibit 99.9**

**CONSENT OF DIRECTOR NOMINEE**

In connection with the filing by First Breach Inc. (the "<u>Company</u>") of a registration statement on Form S-1 and all subsequent amendments and post-effective amendments or supplements thereto (the "<u>Registration Statement</u>"), with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), in connection with the initial public offering of shares of common stock of the Company, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement. I also consent to the filing of this consent as an exhibit to the Registration Statement and any amendments thereto.

Dated: April 30, 2026

---

| |
|:---|
| /s/ Elbert Basolis |
| Name: Elbert Basolis |

---

## Exhibit 99.10

**Exhibit 99.10**

**CONSENT OF DIRECTOR NOMINEE**

In connection with the filing by First Breach Inc. (the "<u>Company</u>") of a registration statement on Form S-1 and all subsequent amendments and post-effective amendments or supplements thereto (the "<u>Registration Statement</u>"), with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), in connection with the initial public offering of shares of common stock of the Company, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a nominee to the board of directors of the Company in the Registration Statement. I also consent to the filing of this consent as an exhibit to the Registration Statement and any amendments thereto.

Dated: April 30, 2026

---

| |
|:---|
| /s/ Denean Williams |
| Name: Denean Williams |

---

## Ex-Filing

?xml version='1.0' encoding='ASCII'? EX-FILING FEES

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Calculation of Filing Fee Tables**  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **S-1**  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **First Breach, Inc.**  |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Security Type**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Security Class Title**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Fee Calculation or Carry Forward Rule**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Amount Registered**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Proposed Maximum Offering Price Per Unit**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Maximum Aggregate Offering Price**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Fee 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;&nbsp;&nbsp;&nbsp;&nbsp; **Amount of Registration Fee**  |
| **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** | **Newly Registered Securities** |
| Fees to be Paid | 1 | Equity | Common stock, par value $0.0001 per share | 457(a) | 25694584 | $19.13 | $491537391.92 | 0.0001381 | $67881.31 |
| Fees Previously Paid | 2 | Equity | Common stock, par value $0.0001 per share | 457(a) | 45034282 | $19.13 | $861505814.66 |  | $118973.95 |
| **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** | **Carry Forward Securities** |
| Carry Forward Securities |  |  |  |  |  |  |  |  |  |
|  |  |  | Total Offering Amounts: | Total Offering Amounts: | Total Offering Amounts: |  | $1353043206.58  |  | $186855.26  |
|  |  |  | Total Fees Previously Paid:  | Total Fees Previously Paid:  | Total Fees Previously Paid:  |  |  |  | $118973.95  |
|  |  |  | Total Fee Offsets:  | Total Fee Offsets:  | Total Fee Offsets:  |  |  |  | $0.00  |
|  |  |  | Net Fee Due:  | Net Fee Due:  | Net Fee Due:  |  |  |  | $67881.31  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Offering Note** <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <sup>1</sup> Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended. The proposed maximum offering price per share is based on a third party valuation of the Company's common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <sup>2</sup> Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended. The proposed maximum offering price per share is based on a third party valuation of the Company's common stock.

---

| |
|:---|
| |
| **Rules 457(b) and 0-11(a)(2)** |
| Fee Offset Claims |
| Fee Offset Sources |
| **Rule 457(p)** |
| Fee Offset Claims |
| Fee Offset Sources |

---